SEC Comment Letter for Ameritek Ventures, Inc. (ATVK) (CIK 0001530185) (ATVK) — Dec 19, 2011
Ameritek Ventures, Inc. (ATVK) (CIK 0001530185)
Date: Dec. 19, 2011 · CIK: 0001530185 · Accession: 0000000000-11-072566
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-176909
Referenced dates: November 22, 2011
Letter
December 19, 2011 Via Facsimile
J. Chad Guidry Chief Executive Officer ATVROCKN 1813 Winners Cup Dr. Las Vegas, NV 89117 Re: ATVROCKN Amendment No. 2 to Registrati on Statement on Form S-1 Filed December 5, 2011 File No. 333-176909 Dear Mr. Guidry:
We have reviewed your responses to the co mments in our letter dated November 22, 2011 and have the following additional comments. All page numbers below correspond to the marked version of your filing. General
Registration Statement Cover Page
1. We note your response to our prior comment 4 a nd reissue in part. Refer to footnote 2. Please revise the third sentence to clarify that the preferred stock and common stock, respectively, being offered by the selling stockho lder will be sold at fixed prices for the duration of the offering. For each registered security and accompanyi ng registration fee, please revise to clarify the specific provisi on of Rule 457 of the Securities Act of 1933 relied upon to calculate the accompanying regi stration fee. Additionally, we were not able to locate footnote 5. Please revise. Prospectus Cover Page
2. We note your response to our prior comment 7 and reissue. Revise to define the capitalized term, “Offering,” the first instan ce it is used in the third paragraph or, alternatively, remove the capitalization and revise the prospectus throughout, as applicable, to revise any references and disclosure related to such defined term.
3. We note your response to our prior comment 10 and reissue. Please revise the fourth paragraph to clarify the duration of th e offering being conducted by the selling stockholder. For guidance, refer to Rule 415( a)(2) of the Securities Act of 1933. Please also revise the first risk factor on page 12 and the pros pectus throughout accordingly.
J. Chad Guidry ATVROCKN December 19, 2011 Page 2
4. We note your response to our prior comment 11 and reissue in part. We note disclosure which states that “Neither [y]our preferre d stock nor common stoc k are not quoted on any exchange or in the over-the-counter market.” Please revise the fifth sentence of the sixth paragraph to clarify that ther e is no trading market for your preferred stock or common stock. Prospectus Summary, page 3
Our Company, page 3
5. We note your response to our prior comment 15. Please clarify in the fourth paragraph how amounts for principle, interest, the buyback of the preferred sh ares and security interest in the tooling mold, and any related pe nalties associated with the promissory note issued to Dan Berger are factored into the cas h flow needs described here. If such are not factored into this discussi on, please revise to incorporat e the impact of these and the associated timing of payments. Your discus sion should also include the operation of the second maturity milestone date of May 23, 2013 for the note, as described elsewhere in the filing. Please also conform th e risk factors “We may not be able to attain profitability without additional funding” and “We have an outstanding promi ssory note in the principal amount of $25,000” that are both on page 7.
6. We note your response to our prior comment 17 and reissue. Please reconcile the net loss amounts disclosed in the third and forth paragr aphs with your financial statements. In this regard, we note that you have incurred a “net loss” and a “net loss applicable to common shareholders” of $25,133 and $139,002, respectively, from inception on December 27, 2010 through your interim peri od of August 31, 2011. Also specifically describe the loss to which you refer to in the third paragraph. Furt her, please note that the amount referred to in the fourth paragr aph as “net loss” should be described as “operating loss,” as it is derived from “revenue” less “expenses” as shown on the statement of operations. As an additiona l note, amounts “from in ception to August 31, 2011” are unaudited and should be described as such. Please also revise the first risk factor on page 7 and the pros pectus throughout accordingly. The Offering, page 4
7. We note your response to our prior comment 19 and reissue. Please revise to more clearly distinguish between the offerings be ing conducted by the co mpany and the selling stockholder. We note that you are offering shares of common stock and the selling shareholder is offering shares of preferred stock and common stock. We note that under certain subheadings, you solely refer to your common stock or preferred stock. For example, under “Offering Price” you only referred to the offering price of your common stock. Please revise.
J. Chad Guidry ATVROCKN December 19, 2011 Page 3
8. Refer to the “Fixed Price” paragraph. Please revise to disclose the fixed prices to the public of the preferred stock and common stoc k, respectively, being offered by the selling stockholder. Please also re vise the final paragraph in this section accordingly.
9. Refer to the “Termination of Offering” paragrap h. Please revise to cl arify the duration of the offering being conducted by the selling stockholder. Selected Financial Data, page 5
10. We note your response to our prior comment 21 and reissue. Please refer to the Income Statement Data. We note that the info rmation under the column “From Inception (December 27, 2010) to May 31, 2011 (audited)” does not correspond to your financial statements for the referenced periods. In this regard, we note that the information appears to correspond to the period from incepti on to August 31, 2011 which was unaudited. Please revise the column heading or re vise the information as applicable. Risk Factors, page 6
If we fail to maintain an effective system of internal controls, page 14
11. Please revise the second paragraph to address th e assessment of internal controls as of the most recent period presented in the filing, which currently is August 31, 2011. Use of Proceeds, page 16
12. We note your response to our prior comment 27 and reissue in part. Please revise the table to begin with gross proceeds, then subt ract anticipated offering expenses, and then detail the net shortfall under each funding s cenario. To the extent cash on hand in the past was used to prepay certain offering e xpenses, please revise to include appropriate footnote disclosure to detail those amounts. In this regar d, please delete the “Pre-paid Offering Expenses**” row and the “Use of Proceeds” rows, e.g., the “Marketing Expenses,” “Sales Brochures,” and “S ub Total Use of Net Proceeds” rows.
13. Please reconcile the “Net Shortfall” row as the net shortfall amounts do not appear to be correctly calculated based upon th e gross proceeds and total offering expenses as detailed under each funding scenario.
14. Please revise the final paragraph in this se ction to discuss with more specificity how management intends to use the proceeds from the offering, e.g., the cash returned to the balance sheet. In this regard, we note th at management intends to use certain amounts from use of proceeds to cr eate sales brochures and to cover marketing expenses.
J. Chad Guidry ATVROCKN December 19, 2011 Page 4
Determination of Offering Price, page 19
15. We note your response to our prior comment 32 and reissue. We note that certain registered securities are being offered by you and others by the selling stockholder. Please revise to clarify how the offering pr ice of the registered preferred and common stock by each respective party was determine d. Refer to Item 505 of Regulation S-K. Plan of Distribution, page 19
The Offering, page 19
16. We note your response to our prior comment 34 and reissue in part. Please refer to the sixth paragraph. Please reconcile the disclosure in the firs t and second sentences as the offering period appears inconsistent. Description of Business, page 28
Company History, page 28
17. Please clarify how amounts for principle, inte rest, the buyback of the preferred shares and security interest in the tooling mold, and any related penalties associated with the Berger promissory note are factored into the cash fl ow needs described here. If such are not factored into this discussi on, please revise to incorporat e the impact of these and the associated timing of payments. The discussi on should also include the operation of the second maturity milestone date of May 23, 2013 for the note. Please also conform the discussion under “Liquidity and Cap ital Resources” on page 35 and “Cash Requirements” on page 36 accordingly. Pricing of Product, page 30
18. Based on information elsewhere in the filing in regard to the cost of the units recently sold, it appears the cost in cluded shipping. Please conform all such disclosures throughout the filing for consistency. Management’s Discussion and Analysis or Plan of Operation, page 32
Results of Operations, page 35
From December 27, 2010 (Inception) through August 31, 2011, page 35
19. Please clarify that the “net loss” sinc e inception through August 31, 2011 of $139,002 is actually “net loss applicable to common share holders” as presented in the statement of operations for this period included in the filing.
J. Chad Guidry ATVROCKN December 19, 2011 Page 5
Financial Statements, page 45
20. Please note that if your filing is not eff ective by January 13, 2012 you will need to update the financial statements and all related disclosures for your interim period ended November 30, 2011 pursuant to Rule 3-12(a) and (g)(1)(ii) of Regulation S-X. Statement of Operations , pages F-3a and F-2b
21. Please note that the subtotal currently described as “net loss” should be described as “operating loss.” Revise accordingly. Notes to Financial Statements, pages F-6a and F-4b
22. Please refer to notes 4 and 9 of the audited annual statements, and notes 4 and 6 of the unaudited interim financial statements in connection with your responses to prior comments 50, 51 and 52. Please clarify whether the prepayment penalty amount consists of (i) $25,000 for the principal amount of th e note plus (ii) $5,000 penalty plus (iii) $30,000 for buyback of the preferred shares and s ecurity interest in the tooling mold, all of which total to $60,000. If the total is a lesser amount, please clearly describe how the prepayment penalty is determined. Please conf orm the disclosure in the risk factor “We have an outstanding promissory note in the principal amount of $25,000” on page 7.
23. In connection with the preceding comment, please clarify whethe r the total penalty associated with the second maturity m ilestone of May 23, 2013 is $5,000 or $10,000 (that is, $5,000 additive to the $5,000 penalty for the first milestone of May 23, 2012). Conform the disclosure in the risk factor “W e have an outstanding promissory note in the principal amount of $25,000” on page 7. Exhibit 10.1
24. Article 5 of the “Promissory Note between ATVRockN and Dan Berger dated May 23, 2011” specifies events of defau lt. As the note has two maturity milestone dates, please clarify which date prevails as an event of default and the actions that will occur on that date in the event of default. If the 2012 date is the event of default, and buyback of the preferred stock and security inte rest in the mold occu rs relative to that default, please explain to us and in your di sclosure the operation of the second milestone maturity date and associated prepayment penalties.
J. Chad Guidry ATVROCKN December 19, 2011 Page 6
You may contact Aamira Chaudhry at (202) 551-3389 or Doug Jones at (202) 551-3309 if you have questions regarding comments on the financial statements and related matters. Please contact Donald E. Field at (202) 551- 3680 or me at (202) 551-3642 with any other questions. Sincerely,
/s/ Loan Lauren P. Nguyen
Loan Lauren P. Nguyen Special Counsel cc: Via Facsimile
Thomas C. Cook, Esq.
Show Raw Text
December 19, 2011 Via Facsimile J. Chad Guidry Chief Executive Officer ATVROCKN 1813 Winners Cup Dr. Las Vegas, NV 89117 Re: ATVROCKN Amendment No. 2 to Registrati on Statement on Form S-1 Filed December 5, 2011 File No. 333-176909 Dear Mr. Guidry: We have reviewed your responses to the co mments in our letter dated November 22, 2011 and have the following additional comments. All page numbers below correspond to the marked version of your filing. General Registration Statement Cover Page 1. We note your response to our prior comment 4 a nd reissue in part. Refer to footnote 2. Please revise the third sentence to clarify that the preferred stock and common stock, respectively, being offered by the selling stockho lder will be sold at fixed prices for the duration of the offering. For each registered security and accompanyi ng registration fee, please revise to clarify the specific provisi on of Rule 457 of the Securities Act of 1933 relied upon to calculate the accompanying regi stration fee. Additionally, we were not able to locate footnote 5. Please revise. Prospectus Cover Page 2. We note your response to our prior comment 7 and reissue. Revise to define the capitalized term, “Offering,” the first instan ce it is used in the third paragraph or, alternatively, remove the capitalization and revise the prospectus throughout, as applicable, to revise any references and disclosure related to such defined term. 3. We note your response to our prior comment 10 and reissue. Please revise the fourth paragraph to clarify the duration of th e offering being conducted by the selling stockholder. For guidance, refer to Rule 415( a)(2) of the Securities Act of 1933. Please also revise the first risk factor on page 12 and the pros pectus throughout accordingly. J. Chad Guidry ATVROCKN December 19, 2011 Page 2 4. We note your response to our prior comment 11 and reissue in part. We note disclosure which states that “Neither [y]our preferre d stock nor common stoc k are not quoted on any exchange or in the over-the-counter market.” Please revise the fifth sentence of the sixth paragraph to clarify that ther e is no trading market for your preferred stock or common stock. Prospectus Summary, page 3 Our Company, page 3 5. We note your response to our prior comment 15. Please clarify in the fourth paragraph how amounts for principle, interest, the buyback of the preferred sh ares and security interest in the tooling mold, and any related pe nalties associated with the promissory note issued to Dan Berger are factored into the cas h flow needs described here. If such are not factored into this discussi on, please revise to incorporat e the impact of these and the associated timing of payments. Your discus sion should also include the operation of the second maturity milestone date of May 23, 2013 for the note, as described elsewhere in the filing. Please also conform th e risk factors “We may not be able to attain profitability without additional funding” and “We have an outstanding promi ssory note in the principal amount of $25,000” that are both on page 7. 6. We note your response to our prior comment 17 and reissue. Please reconcile the net loss amounts disclosed in the third and forth paragr aphs with your financial statements. In this regard, we note that you have incurred a “net loss” and a “net loss applicable to common shareholders” of $25,133 and $139,002, respectively, from inception on December 27, 2010 through your interim peri od of August 31, 2011. Also specifically describe the loss to which you refer to in the third paragraph. Furt her, please note that the amount referred to in the fourth paragr aph as “net loss” should be described as “operating loss,” as it is derived from “revenue” less “expenses” as shown on the statement of operations. As an additiona l note, amounts “from in ception to August 31, 2011” are unaudited and should be described as such. Please also revise the first risk factor on page 7 and the pros pectus throughout accordingly. The Offering, page 4 7. We note your response to our prior comment 19 and reissue. Please revise to more clearly distinguish between the offerings be ing conducted by the co mpany and the selling stockholder. We note that you are offering shares of common stock and the selling shareholder is offering shares of preferred stock and common stock. We note that under certain subheadings, you solely refer to your common stock or preferred stock. For example, under “Offering Price” you only referred to the offering price of your common stock. Please revise. J. Chad Guidry ATVROCKN December 19, 2011 Page 3 8. Refer to the “Fixed Price” paragraph. Please revise to disclose the fixed prices to the public of the preferred stock and common stoc k, respectively, being offered by the selling stockholder. Please also re vise the final paragraph in this section accordingly. 9. Refer to the “Termination of Offering” paragrap h. Please revise to cl arify the duration of the offering being conducted by the selling stockholder. Selected Financial Data, page 5 10. We note your response to our prior comment 21 and reissue. Please refer to the Income Statement Data. We note that the info rmation under the column “From Inception (December 27, 2010) to May 31, 2011 (audited)” does not correspond to your financial statements for the referenced periods. In this regard, we note that the information appears to correspond to the period from incepti on to August 31, 2011 which was unaudited. Please revise the column heading or re vise the information as applicable. Risk Factors, page 6 If we fail to maintain an effective system of internal controls, page 14 11. Please revise the second paragraph to address th e assessment of internal controls as of the most recent period presented in the filing, which currently is August 31, 2011. Use of Proceeds, page 16 12. We note your response to our prior comment 27 and reissue in part. Please revise the table to begin with gross proceeds, then subt ract anticipated offering expenses, and then detail the net shortfall under each funding s cenario. To the extent cash on hand in the past was used to prepay certain offering e xpenses, please revise to include appropriate footnote disclosure to detail those amounts. In this regar d, please delete the “Pre-paid Offering Expenses**” row and the “Use of Proceeds” rows, e.g., the “Marketing Expenses,” “Sales Brochures,” and “S ub Total Use of Net Proceeds” rows. 13. Please reconcile the “Net Shortfall” row as the net shortfall amounts do not appear to be correctly calculated based upon th e gross proceeds and total offering expenses as detailed under each funding scenario. 14. Please revise the final paragraph in this se ction to discuss with more specificity how management intends to use the proceeds from the offering, e.g., the cash returned to the balance sheet. In this regard, we note th at management intends to use certain amounts from use of proceeds to cr eate sales brochures and to cover marketing expenses. J. Chad Guidry ATVROCKN December 19, 2011 Page 4 Determination of Offering Price, page 19 15. We note your response to our prior comment 32 and reissue. We note that certain registered securities are being offered by you and others by the selling stockholder. Please revise to clarify how the offering pr ice of the registered preferred and common stock by each respective party was determine d. Refer to Item 505 of Regulation S-K. Plan of Distribution, page 19 The Offering, page 19 16. We note your response to our prior comment 34 and reissue in part. Please refer to the sixth paragraph. Please reconcile the disclosure in the firs t and second sentences as the offering period appears inconsistent. Description of Business, page 28 Company History, page 28 17. Please clarify how amounts for principle, inte rest, the buyback of the preferred shares and security interest in the tooling mold, and any related penalties associated with the Berger promissory note are factored into the cash fl ow needs described here. If such are not factored into this discussi on, please revise to incorporat e the impact of these and the associated timing of payments. The discussi on should also include the operation of the second maturity milestone date of May 23, 2013 for the note. Please also conform the discussion under “Liquidity and Cap ital Resources” on page 35 and “Cash Requirements” on page 36 accordingly. Pricing of Product, page 30 18. Based on information elsewhere in the filing in regard to the cost of the units recently sold, it appears the cost in cluded shipping. Please conform all such disclosures throughout the filing for consistency. Management’s Discussion and Analysis or Plan of Operation, page 32 Results of Operations, page 35 From December 27, 2010 (Inception) through August 31, 2011, page 35 19. Please clarify that the “net loss” sinc e inception through August 31, 2011 of $139,002 is actually “net loss applicable to common share holders” as presented in the statement of operations for this period included in the filing. J. Chad Guidry ATVROCKN December 19, 2011 Page 5 Financial Statements, page 45 20. Please note that if your filing is not eff ective by January 13, 2012 you will need to update the financial statements and all related disclosures for your interim period ended November 30, 2011 pursuant to Rule 3-12(a) and (g)(1)(ii) of Regulation S-X. Statement of Operations , pages F-3a and F-2b 21. Please note that the subtotal currently described as “net loss” should be described as “operating loss.” Revise accordingly. Notes to Financial Statements, pages F-6a and F-4b 22. Please refer to notes 4 and 9 of the audited annual statements, and notes 4 and 6 of the unaudited interim financial statements in connection with your responses to prior comments 50, 51 and 52. Please clarify whether the prepayment penalty amount consists of (i) $25,000 for the principal amount of th e note plus (ii) $5,000 penalty plus (iii) $30,000 for buyback of the preferred shares and s ecurity interest in the tooling mold, all of which total to $60,000. If the total is a lesser amount, please clearly describe how the prepayment penalty is determined. Please conf orm the disclosure in the risk factor “We have an outstanding promissory note in the principal amount of $25,000” on page 7. 23. In connection with the preceding comment, please clarify whethe r the total penalty associated with the second maturity m ilestone of May 23, 2013 is $5,000 or $10,000 (that is, $5,000 additive to the $5,000 penalty for the first milestone of May 23, 2012). Conform the disclosure in the risk factor “W e have an outstanding promissory note in the principal amount of $25,000” on page 7. Exhibit 10.1 24. Article 5 of the “Promissory Note between ATVRockN and Dan Berger dated May 23, 2011” specifies events of defau lt. As the note has two maturity milestone dates, please clarify which date prevails as an event of default and the actions that will occur on that date in the event of default. If the 2012 date is the event of default, and buyback of the preferred stock and security inte rest in the mold occu rs relative to that default, please explain to us and in your di sclosure the operation of the second milestone maturity date and associated prepayment penalties. J. Chad Guidry ATVROCKN December 19, 2011 Page 6 You may contact Aamira Chaudhry at (202) 551-3389 or Doug Jones at (202) 551-3309 if you have questions regarding comments on the financial statements and related matters. Please contact Donald E. Field at (202) 551- 3680 or me at (202) 551-3642 with any other questions. Sincerely, /s/ Loan Lauren P. Nguyen Loan Lauren P. Nguyen Special Counsel cc: Via Facsimile Thomas C. Cook, Esq.