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SEC Company Response from Professional Diversity Network, Inc. (IPDN) (CIK 0001546296) (IPDN) — Jul 20, 2012

Professional Diversity Network, Inc. (IPDN) (CIK 0001546296)
Date: July 20, 2012 · CIK: 0001546296 · Accession: 0001193125-12-309390

AI Filing Summary & Sentiment

File numbers found in text: 333-181594

Referenced dates: June 29, 2012

Date
July 20, 2012
Author
Assistant Director
Form
CORRESP
Company
Professional Diversity Network, Inc. (IPDN) (CIK 0001546296)

Letter

Division of Corporation Finance Securities and Exchange Commission Registration Statement on Form S-1 June 12, 2012 File No. 333-181594

Re: Professional Diversity Network, LLC

Dear Ms. Jacobs:

By letter dated June 29, 2012 (the “SEC Letter”), the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) provided comments on the Registration Statement on Form S-1/A (the “Amendment”) submitted by Professional Diversity Network, LLC (the “Company”).

In order to facilitate your review, this letter responds to each of the comments set forth in the SEC Letter on a point-by-point basis. The numbered paragraphs set forth below respond to the Staff’s comments and correspond to the numbered paragraphs in the SEC Letter.

General

1. Please supplementally provide us with any written materials that you or anyone authorized to do so on your behalf provides in reliance on Section 5(d) of the Securities Act to potential investors that are qualified institutional buyers or institutional accredited investors. Similarly, please supplementally provide us with any research reports about you that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.

Response

No materials were given to potential investors that are qualified institutional buyers or institutional accredited investors in reliance on Section 5(d) of the Securities Act. Similarly, there are no research reports about us that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in our offering.

Prospectus Cover Page

2. It appears that you have included disclosure regarding the Customer Stock Ownership Plan on the cover page of the prospectus. Please tell us why you believe that this information is appropriate on the cover page and necessary to understand the offering that you are registering in this prospectus.

July 20, 2012

Page

Response

We have included a reference to the Customer Stock Ownership Plan (the “CSOP”) on the cover page of the prospectus because we are conducting our initial public offering through two prospectuses, one that is being offered under this registration statement and one that is being offered under a separate CSOP registration statement. We believe it is appropriate to disclose the existence of a simultaneous offering under the CSOP to prospective investors so that an investor can understand the offering in the aggregate.

3. Please consider disclosing on the cover page that your directors, executive officer and significant stockholders will continue to hold a significant amount of shares and will continue to have substantial control over corporate matters. This appears to be key information that should be disclosed on the prospectus cover page.

Response

We added disclosure on the cover page to state that directors, executive officers and significant stockholders will continue to hold a significant amount of shares and will continue to have substantial control over corporate matters.

Prospectus Summary, page 1

4. Please refer to prior comment 4 and move the defined terms, such as “professionals,” “users,” and “diverse”) to a section of the prospectus that is not subject to the plain English requirements of Rule 421(d) of Regulation C, such as the Management’s Discussion and Analysis of Financial Condition and Results of Operations section.

Response

As requested by the Staff, we have moved the defined terms to the Management’s Discussion and Analysis of Financial Condition and Results of Operations section.

5. We note your response to prior comment 11 that you will organize as a Delaware corporation as soon as practicable after your registration statement is effective and the underwriting agreement is signed but prior to the closing the offering. Please tell us whether you intend to rely on Rule 414 of the Securities Act and, if so, what consideration you have given to providing disclosure that the Delaware corporation will succeed to the obligations of the LLC. Further, tell us whether there is a binding contractual obligation that provides that the members of the company will contribute 100% of their membership interests of the LLC to the newly formed corporation, other than an understanding that these members will exchange their notes for shares of the common stock. If not, tell us what will occur if the conversion does not occur and the impact that this will have on the company and this offering.

July 20, 2012

Page

Response

We intend to reorganize into a Delaware corporation substantially simultaneously with the effectiveness of the registration statement. Immediately prior to the reorganization, the successor entity, Professional Diversity Network, Inc., will have no assets or liabilities other than nominal assets or liabilities, and the reorganization will be effected by a merger or similar succession pursuant to statutory provisions. The successor entity will acquire all of the assets and assume all of the liabilities and obligations of the predecessor entity. Because we will reorganize substantially simultaneously with the effectiveness of the registration statement, we would not be subject to the Exchange Act at the time of the reorganization. Therefore, our reorganization will be approved by our three outstanding security holders, but we will not be filing a proxy statement pursuant to Section 14(a) or information statement pursuant to Section 14(c) of the Exchange Act pursuant to Rule 414, as we would not be subject to the Exchange Act at the time of such approval.

We have provided disclosure that the successor entity will succeed to the obligations of the predecessor entity. We intend to have a binding agreement in place prior to effectiveness that provides that the members of the predecessor company will contribute 100% of their membership interests of the LLC to the newly formed corporation.

Risks Associated with Our Business, page 8

6. Please tell us whether you will be deemed a “controlled company” as defined by Nasdaq Rule 5615(a) and, if so, whether you intend to rely on any exemptions as a controlled company. If applicable, disclose on your prospectus cover page and prospectus summary that you are a controlled company and add a risk factor that discusses the effect, risks and uncertainties of being designated a controlled company.

Response

Since our offering price has not been determined, and we currently do not know how many shares of our common stock will be offered, we currently do not know whether we will be a controlled company as defined by Nasdaq Rule 5615(a) following the offering. Nevertheless, we will not rely on any exemptions as a controlled company, and will have a majority independent board of directors, and an audit committee, a nominating committee and a compensation committee comprised solely of independent directors. We have added disclosure on the cover page and prospectus summary, as well as an additional risk factor disclosing the possibility that we may be a controlled company, and that we may, in the future, decide to rely on an exemption from such corporate governance requirements.

Summary Financial Data, page

7. Please revise your balance sheet data table on page 13 to include a “Pro forma” column and a “Pro forma as adjusted” column, both reflecting respective adjustments, as described, similar to the presentation in the capitalization table on page 30 (as adjusted for the Staffs comment below).

Response

We have revised our balance sheet data table to include a “Pro forma” column and a “Pro forma as adjusted” column as per the Staff’s request.

July 20, 2012

Page

Capitalization, page 30

8. In order to provide a clearer presentation to investors, please further revise your capitalization table by combining the second and third bullet points where you describe the “pro forma basis” adjustments into one bullet point so that each bullet will correspond to a specific column in the table. Further revise the title of the “Reorganization Adjustments” column to “Pro forma” so as to use terminology that is consistent with that in your bullet point description.

Response

We have revised our capitalization table to combine the second and third bullet points and also revised the title of the columns.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Overview, page 34

9. We note your revised disclosures regarding recruitment and advertising revenue in response to prior comment 22. However, it remains unclear that your ability to generate additional recruitment revenue will be limited unless job posts exceed certain thresholds, which to date, they have not or unless you can renew your agreement on more favorable terms. Please further clarify this in your disclosures noting the potential impact on future operations. For example, you state that if you renew your agreement with Monster Worldwide, you will seek favorable modifications to amounts payable by Monster. Please clarify that to the extent you are unable to negotiate such terms, your recruitment revenues may experience, minimal or no growth.

Response

We have clarified our disclosure to note the potential impact of our potential inability to meet certain thresholds or to renew our agreement on more favorable terms.

10. With regards to your revised advertising disclosure on page 35, you state that unless you earn additional advertising revenue from clients outside of the higher education sector, your ability to generate additional “recruitment” revenue is limited. Please clarify whether this should say your ability to generate additional advertising revenue is limited and if so, please revise.

Response

We have revised our disclosure to say advertising revenue.

July 20, 2012

Page

Key Components of Our Results of Operations, page 36

11. We note your response to prior comment 24 and your revised disclosure on page 39 regarding the condominium in Miami. You refer to these payments as “guaranteed payments” and it is unclear to whom these payments are guaranteed, i.e., Mr. Kirsch, the bank, or another party. Please explain to us specifically what arrangement the company has entered into related to this transaction and tell us what payments are required and to whom the company is obligated to make such payments. To the extent you are a guarantor within the scope of ASC 460, please tell us how you considered disclosing this transaction pursuant to ASC 460-10-50. If the arrangement is not within the scope of ASC 460, but you otherwise have an obligation to make payments either directly to Mr. Kirsch or to others on his behalf, please tell us your consideration to disclose that arrangement pursuant to the guidance in ASC 440. Lastly you note on page 68 that the company will no longer pay the condominium costs effective as of a certain date in 2012. Please explain whether these are the terms under the current agreement, whether you intend to amend the current agreement, or whether you otherwise determined you will stop paying these costs. Please revise your disclosures accordingly to clarify such terms.

Response

We have reviewed the Staff’s comment relating to the guaranteed payments to Mr. Kirsch. For the sake of clarity, we wish to advise the Staff that we make “guaranteed” payments to Mr. Kirsch as a member of the LLC. These payments are reported as compensation and are treated as “guaranteed” payments for income tax purposes under IRS Tax Code Section 707-C. The guaranteed payments that we make to Mr. Kirsch include a fixed contractual component specified in the LLC operating agreement and a discretionary component that includes payments of interest and expenses on the condominium which Mr. Kirsch personally owns to 3rd parties. The discretionary components of these payments are not being made pursuant to a “guaranty” (as opposed to a “guarantee” arrangement) The Company intends to discontinue paying the condominium costs prior to the closing of the offering; however, we retain the right to discontinue these payments at any time. Additionally, in order to provide a clearer presentation to investors, we have changed the term “guaranteed payments” to “additional compensation payments” throughout the document.

The Company has not issued, signed, committed to or entered into any “guaranty” arrangements (written or oral) with the bank that financed Mr. Kirsch’s purchase of the condominium, or any other third parties for that matter. Accordingly, the company is not a guarantor within the scope of ASC 460 as this is not a guarantee of 3rd party financial, performance or indemnification debt. The Company has no direct or indirect obligation, contractually or otherwise to make such payments. The payments made on behalf of Mr. Kirsch are compensatory in nature and do not relate to a guarantee. The Company at its own discretion pays the costs of the condominium on behalf of Mr. Kirsch; however the Company retains the right to discontinue making these payments. Accordingly, we believe that Mr. Kirsch does not have an enforceable right to these payments that would constitute a commitment in accordance with ASC 440. Nonetheless, we have revised our disclosure to describe this arrangement in Note 8, Commitments and Contingencies in our Financial Statements.

Liquidity and Capital Resources, page 50

12. We note your response to prior comment 26 where you state that the payment terms from your two primary customers, Monster Worldwide and Apollo Group are 45 and 60 days, respectively and your Day Sales Outstanding was 105 days for 2011 and 92 days for the

July 20, 2012

Page

three months ended March 31, 2012. It appears that disclosing this information and explaining the reason for the significant difference between the payment terms and the actual collection periods would be beneficial information to investors in understanding your large accounts receivable balance as well as your overall liquidity position. Please revise your disclosures accordingly.

Response

We have revised our disclosures to include the payment terms and the average days to pay for our two primary customers instead of disclosing our days sales outstanding as we feel that this is a more meaningful disclosure. Our average sales per day increased significantly in 2011, by more than 25%, and by about 7.5% in the first quarter of 2012. While our two primary customers may have historically paid beyond the specified payment terms, our experience has been that they are credit worthy customers and to date we have had no collections issues with either one.

Executive Compensation

Guaranteed Payments, page 66

13. We note your revised disclosure in response to prior comment 35 that the guaranteed payments to Mr. Kirsch in 2010 and 2011 were pursuant to a 2004 agreement in which Mr. Kirsch was guaranteed payments equal to 30% of the total debt payments made towards the Ladurini Family. Please disclose this arrangement and the payments made to Mr. Kirsch as a related party transaction. Notwithstanding your cross-reference to the executive compensation disclosure, it appears that this transaction should be more explicitly disclosed on page 68. Further, please tell us, with a view toward disclosure, the business purpose for the guaranteed payments to Mr. Kirsch. Finally, tell us what consideration you have given to filing the 2004 agreement as a related party agreement pursuant to Item 601(b)(10)((ii)(A) of Regulation S-K.

Response

We have added the

Show Raw Text
CORRESP
1
filename1.htm

CORRESP

 July 20, 2012

 Barbara C. Jacobs

 Assistant Director

 Division of Corporation Finance

 Securities and Exchange Commission

100 F. Street, N.E.

 Washington, D.C. 20549

Re:
Professional Diversity Network, LLC

Registration Statement on Form S-1

June 12, 2012

File No. 333-181594

 Dear
Ms. Jacobs:

 By letter dated June 29, 2012 (the “SEC Letter”), the staff (the “Staff”) of the Securities and
Exchange Commission (the “Commission”) provided comments on the Registration Statement on Form S-1/A (the “Amendment”) submitted by Professional Diversity Network, LLC (the “Company”).

In order to facilitate your review, this letter responds to each of the comments set forth in the SEC Letter on a point-by-point basis. The numbered
paragraphs set forth below respond to the Staff’s comments and correspond to the numbered paragraphs in the SEC Letter.

 General

1.
Please supplementally provide us with any written materials that you or anyone authorized to do so on your behalf provides in reliance on Section 5(d) of the
Securities Act to potential investors that are qualified institutional buyers or institutional accredited investors. Similarly, please supplementally provide us with any research reports about you that are published or distributed in reliance upon
Section 2(a)(3) of the Securities Act of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.

Response

 No materials were given to
potential investors that are qualified institutional buyers or institutional accredited investors in reliance on Section 5(d) of the Securities Act. Similarly, there are no research reports about us that are published or distributed in reliance
upon Section 2(a)(3) of the Securities Act of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in our offering.

Prospectus Cover Page

2.
It appears that you have included disclosure regarding the Customer Stock Ownership Plan on the cover page of the prospectus. Please tell us why you believe that
this information is appropriate on the cover page and necessary to understand the offering that you are registering in this prospectus.

 July 20, 2012

 Page
 2

 Response

We have included a reference to the Customer Stock Ownership Plan (the “CSOP”) on the cover page of the prospectus because we are
conducting our initial public offering through two prospectuses, one that is being offered under this registration statement and one that is being offered under a separate CSOP registration statement. We believe it is appropriate to disclose
the existence of a simultaneous offering under the CSOP to prospective investors so that an investor can understand the offering in the aggregate.

3.
Please consider disclosing on the cover page that your directors, executive officer and significant stockholders will continue to hold a significant amount of shares
and will continue to have substantial control over corporate matters. This appears to be key information that should be disclosed on the prospectus cover page.

 Response

 We added disclosure on the cover page to state that directors, executive officers
and significant stockholders will continue to hold a significant amount of shares and will continue to have substantial control over corporate matters.

 Prospectus Summary, page 1

4.
Please refer to prior comment 4 and move the defined terms, such as “professionals,” “users,” and “diverse”) to a section of the
prospectus that is not subject to the plain English requirements of Rule 421(d) of Regulation C, such as the Management’s Discussion and Analysis of Financial Condition and Results of Operations section.

Response

 As requested by the Staff, we
have moved the defined terms to the Management’s Discussion and Analysis of Financial Condition and Results of Operations section.

5.
We note your response to prior comment 11 that you will organize as a Delaware corporation as soon as practicable after your registration statement is effective and
the underwriting agreement is signed but prior to the closing the offering. Please tell us whether you intend to rely on Rule 414 of the Securities Act and, if so, what consideration you have given to providing disclosure that the Delaware
corporation will succeed to the obligations of the LLC. Further, tell us whether there is a binding contractual obligation that provides that the members of the company will contribute 100% of their membership interests of the LLC to the newly
formed corporation, other than an understanding that these members will exchange their notes for shares of the common stock. If not, tell us what will occur if the conversion does not occur and the impact that this will have on the company and this
offering.

 July 20, 2012

 Page
 3

 Response

We intend to reorganize into a Delaware corporation substantially simultaneously with the effectiveness of the registration statement. Immediately prior
to the reorganization, the successor entity, Professional Diversity Network, Inc., will have no assets or liabilities other than nominal assets or liabilities, and the reorganization will be effected by a merger or similar succession pursuant to
statutory provisions. The successor entity will acquire all of the assets and assume all of the liabilities and obligations of the predecessor entity. Because we will reorganize substantially simultaneously with the effectiveness of the registration
statement, we would not be subject to the Exchange Act at the time of the reorganization. Therefore, our reorganization will be approved by our three outstanding security holders, but we will not be filing a proxy statement pursuant to
Section 14(a) or information statement pursuant to Section 14(c) of the Exchange Act pursuant to Rule 414, as we would not be subject to the Exchange Act at the time of such approval.

We have provided disclosure that the successor entity will succeed to the obligations of the predecessor entity. We intend to have a binding agreement in
place prior to effectiveness that provides that the members of the predecessor company will contribute 100% of their membership interests of the LLC to the newly formed corporation.

 Risks Associated with Our Business, page 8

6.
Please tell us whether you will be deemed a “controlled company” as defined by Nasdaq Rule 5615(a) and, if so, whether you intend to rely on any exemptions
as a controlled company. If applicable, disclose on your prospectus cover page and prospectus summary that you are a controlled company and add a risk factor that discusses the effect, risks and uncertainties of being designated a controlled
company.

 Response

 Since our offering price has not been determined, and we currently do not know how many shares of our common stock will be offered, we currently do not know whether we will be a controlled company as
defined by Nasdaq Rule 5615(a) following the offering. Nevertheless, we will not rely on any exemptions as a controlled company, and will have a majority independent board of directors, and an audit committee, a nominating committee and a
compensation committee comprised solely of independent directors. We have added disclosure on the cover page and prospectus summary, as well as an additional risk factor disclosing the possibility that we may be a controlled company, and that
we may, in the future, decide to rely on an exemption from such corporate governance requirements.

 Summary Financial Data, page
12

7.
Please revise your balance sheet data table on page 13 to include a “Pro forma” column and a “Pro forma as adjusted” column, both reflecting
respective adjustments, as described, similar to the presentation in the capitalization table on page 30 (as adjusted for the Staffs comment below).

 Response

 We have revised our balance sheet data table to include a “Pro forma”
column and a “Pro forma as adjusted” column as per the Staff’s request.

 July 20, 2012

 Page
 4

 Capitalization, page 30

8.
In order to provide a clearer presentation to investors, please further revise your capitalization table by combining the second and third bullet points where you
describe the “pro forma basis” adjustments into one bullet point so that each bullet will correspond to a specific column in the table. Further revise the title of the “Reorganization Adjustments” column to “Pro forma”
so as to use terminology that is consistent with that in your bullet point description.

 Response

We have revised our capitalization table to combine the second and third bullet points and also revised the title of the columns.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Overview, page 34

9.
We note your revised disclosures regarding recruitment and advertising revenue in response to prior comment 22. However, it remains unclear that your ability to
generate additional recruitment revenue will be limited unless job posts exceed certain thresholds, which to date, they have not or unless you can renew your agreement on more favorable terms. Please further clarify this in your disclosures noting
the potential impact on future operations. For example, you state that if you renew your agreement with Monster Worldwide, you will seek favorable modifications to amounts payable by Monster. Please clarify that to the extent you are unable to
negotiate such terms, your recruitment revenues may experience, minimal or no growth.

 Response

We have clarified our disclosure to note the potential impact of our potential inability to meet certain thresholds or to renew our agreement on more
favorable terms.

10.
With regards to your revised advertising disclosure on page 35, you state that unless you earn additional advertising revenue from clients outside of the higher
education sector, your ability to generate additional “recruitment” revenue is limited. Please clarify whether this should say your ability to generate additional advertising revenue is limited and if so, please revise.

 Response

We have revised our disclosure to say advertising revenue.

 July 20, 2012

 Page
 5

 Key Components of Our Results of Operations, page 36

11.
We note your response to prior comment 24 and your revised disclosure on page 39 regarding the condominium in Miami. You refer to these payments as “guaranteed
payments” and it is unclear to whom these payments are guaranteed, i.e., Mr. Kirsch, the bank, or another party. Please explain to us specifically what arrangement the company has entered into related to this transaction and tell us what
payments are required and to whom the company is obligated to make such payments. To the extent you are a guarantor within the scope of ASC 460, please tell us how you considered disclosing this transaction pursuant to ASC 460-10-50. If the
arrangement is not within the scope of ASC 460, but you otherwise have an obligation to make payments either directly to Mr. Kirsch or to others on his behalf, please tell us your consideration to disclose that arrangement pursuant to the
guidance in ASC 440. Lastly you note on page 68 that the company will no longer pay the condominium costs effective as of a certain date in 2012. Please explain whether these are the terms under the current agreement, whether you intend to amend the
current agreement, or whether you otherwise determined you will stop paying these costs. Please revise your disclosures accordingly to clarify such terms.

 Response

 We have reviewed the Staff’s comment relating to the
guaranteed payments to Mr. Kirsch. For the sake of clarity, we wish to advise the Staff that we make “guaranteed” payments to Mr. Kirsch as a member of the LLC. These payments are reported as compensation and are treated as
“guaranteed” payments for income tax purposes under IRS Tax Code Section 707-C. The guaranteed payments that we make to Mr. Kirsch include a fixed contractual component specified in the LLC operating agreement and a discretionary
component that includes payments of interest and expenses on the condominium which Mr. Kirsch personally owns to
3rd parties. The discretionary components of these
payments are not being made pursuant to a “guaranty” (as opposed to a “guarantee” arrangement) The Company intends to discontinue paying the condominium costs prior to the closing of the offering; however, we retain the right to
discontinue these payments at any time. Additionally, in order to provide a clearer presentation to investors, we have changed the term “guaranteed payments” to “additional compensation payments” throughout the
document.

 The Company has not issued, signed, committed to or entered into any “guaranty” arrangements (written
or oral) with the bank that financed Mr. Kirsch’s purchase of the condominium, or any other third parties for that matter. Accordingly, the company is not a guarantor within the scope of ASC 460 as this is not a guarantee of 3rd party financial, performance or indemnification debt. The Company
has no direct or indirect obligation, contractually or otherwise to make such payments. The payments made on behalf of Mr. Kirsch are compensatory in nature and do not relate to a guarantee. The Company at its own discretion pays the costs of
the condominium on behalf of Mr. Kirsch; however the Company retains the right to discontinue making these payments. Accordingly, we believe that Mr. Kirsch does not have an enforceable right to these payments that would constitute a
commitment in accordance with ASC 440. Nonetheless, we have revised our disclosure to describe this arrangement in Note 8, Commitments and Contingencies in our Financial Statements.

 Liquidity and Capital Resources, page 50

12.
We note your response to prior comment 26 where you state that the payment terms from your two primary customers, Monster Worldwide and Apollo Group are 45 and 60
days, respectively and your Day Sales Outstanding was 105 days for 2011 and 92 days for the

 July 20, 2012

 Page
 6

three months ended March 31, 2012. It appears that disclosing this information and explaining the reason for the significant difference between the payment
terms and the actual collection periods would be beneficial information to investors in understanding your large accounts receivable balance as well as your overall liquidity position. Please revise your disclosures accordingly.

 Response

We have revised our disclosures to include the payment terms and the average days to pay for our two primary customers instead of disclosing our days
sales outstanding as we feel that this is a more meaningful disclosure. Our average sales per day increased significantly in 2011, by more than 25%, and by about 7.5% in the first quarter of 2012. While our two primary customers may have
historically paid beyond the specified payment terms, our experience has been that they are credit worthy customers and to date we have had no collections issues with either one.

 Executive Compensation

 Guaranteed Payments, page 66

13.
We note your revised disclosure in response to prior comment 35 that the guaranteed payments to Mr. Kirsch in 2010 and 2011 were pursuant to a 2004 agreement in
which Mr. Kirsch was guaranteed payments equal to 30% of the total debt payments made towards the Ladurini Family. Please disclose this arrangement and the payments made to Mr. Kirsch as a related party transaction. Notwithstanding your
cross-reference to the executive compensation disclosure, it appears that this transaction should be more explicitly disclosed on page 68. Further, please tell us, with a view toward disclosure, the business purpose for the guaranteed payments to
Mr. Kirsch. Finally, tell us what consideration you have given to filing the 2004 agreement as a related party agreement pursuant to Item 601(b)(10)((ii)(A) of Regulation S-K.

Response

 We have added the