Commodore Applied Technologies, Inc.
150 East 58th Street, Suite 3238
New York, NY 10155
December 15, 2004
Pamela A. Long, Esq.
Assistant Director
Division of Corporate Finance
Securities and Exchange Commission
450 Fifth Street, N.W., Mail Stop 4-4
Washington, D.C. 20549-0404
Re: Commodore Applied Technologies, Inc. (the "Company")
Preliminary Proxy Statement on Schedule 14A
File No. 1-11871
Dear Ms. Long:
Thank you for your correspondence dated December 8, 2004.
We appreciate the Staff's assistance with compliance with the
applicable disclosure requirements.
We have filed a revised preliminary proxy statement on
Schedule 14A on EDGAR that we believe incorporates the
appropriate revisions in response to your comments. We would
appreciate your expedited review of the revised proxy statement
in order to permit us to meet our revised meeting timetable.
Our responses to your comments are set forth below. Please
note that our responses are keyed to your comments.
Preliminary Proxy Statement on Schedule 14A
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General
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1. Disclose the number of record holders as of the most recent
practical date. Please also tell us how the computation was made;
in this regard we direct your attention to Phone Interp. M.30 of
the 1997 Telephone Interpretations Manual that is available on
our website (www.sec.gov).
COMPANY RESPONSE: We have included this disclosure on
page 1 of the revised proxy statement in the fourth
sentence under the caption "Who is
Entitled to Vote?". Please note that the computation
of shareholders of record has been made in accordance with
Exchange Act Rule 12g5-1 and Phone Interp. M.30 of the
1997 Telephone Interpretations Manual.
2. Please clarify whether the preferred shareholders have any
voting rights and, if so, describe.
COMPANY RESPONSE: We have disclosed that the preferred
shareholders have no voting rights in the last sentence
under the caption "Who is Entitled to Vote?" on page 1 of
the revised proxy statement. This disclosure is also
included in the last sentences under the captions "What
is the Effect of the Reverse Stock Split on Series E
Convertible Preferred Stock?," "What is the Effect of
the Reverse Stock Split on Series F Convertible Preferred
Stock?," and "What is the Effect of the Reverse Stock
Split on Series H Convertible Preferred Stock?," on pages
14 and 15.
3. Please revise the beneficial ownership table to reflect the
number of shares beneficially owned by officers and directors as
a group. It would also appear that the Shaar Group should be
included in the beneficial ownership table as a 5% owner since,
as described in the proxy statement, a change in control of the
company may occur if the Shaar Group exercises their conversion
privileges on the Preferred Stock.
COMPANY RESPONSE: We have revised the beneficial
ownership table on page 34 to reflect the beneficial
ownership of officers and directors as a group and the
beneficial ownership of The Shaar Fund.
4. Please provide the information required under Item 404 of
Regulation S-K.
COMPANY RESPONSE: We have included this disclosure on
page 37 of the revised proxy statement.
Proposal 1 - Election of Directors & Director Biographies
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5. Please disclose whether the companies listed for each
director nominee are public companies. If information about
these companies is not publicly available, then briefly describe
their operations.
COMPANY RESPONSE: We have revised the disclosure on
pages 3 through 5 of the revised proxy statement to note
whether the companies are public or private and to
briefly describe the operations of the private companies.
Proposal 2
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6. Please include the information required by Item 13 of
Schedule 14A and comply with Instruction 2 to Item 13 of Schedule
14A. Note that, since you
are not S-3 eligible, this information may only be incorporated
by reference if the required information is delivered to
shareholders in accordance with Item 13(b) of Schedule 14A.
COMPANY RESPONSE: We have included the information
required by Item 13 of Schedule 14A by incorporation by
reference in accordance with Item 13(b). In accordance
with Item 13(c)(2), the revised proxy statement
identifies on the last pages (pages 39 and 40) the
information incorporated by reference. This will also
confirm that (i) the previously filed statements or
reports incorporated by reference will be delivered to
security holders with the proxy statement as required by
Item 13(b)(2) of Schedule 14A, and (ii) a manually signed
copy of the accountant's report will be filed with the
definitive proxy statement.
7. Please include a prominent special considerations section
setting forth the negative features of the transaction, e.g.,
that it may force your equity holders to sell at a time not of
their choosing and that the forced sale may be at a depressed
market price.
COMPANY RESPONSE: This disclosure is included on pages
11 and 12 of the revised proxy statement under the
caption "What are the Risk Factors and Other Special
Considerations Relating to the Reverse Stock Split?".
8. Please explain why the board thinks this transaction is fair
to the shareholders being forced out at a time and price not of
their choosing. Please disclose why the board settled upon the
proposed range for the reverse split.
COMPANY RESPONSE: This disclosure regarding why the
board thinks the transaction is fair to shareholders
being forced out is included on pages 10 and 11 of the
revised proxy statement under the caption "Why Does the
Board Think the Transaction is Fair to the
Shareholders?". The disclosure regarding why the board
settled upon the proposed range for the reverse split is
included in page 10 of the revised proxy statement under
the caption "How did the Board Decide on the Range of 1-
10 to 1-20 for the Reverse Split?".
9. You state that the board has discretionary authority to
implement the reverse stock split and reserves the right, even
after stockholder approval, to forego the transaction. Please
discuss the factors and circumstances that the board will
consider in determining whether to adopt the proposal.
COMPANY RESPONSE: This disclosure is included on page
12 of the revised proxy statement under the caption "What
Factors will the Board consider in Determining Whether
and When to effect the Reverse Stock Split?".
10. Please disclose the factors the board will consider in
determining when to effect the reverse split and whether the
board has in fact determined the timing of the split.
COMPANY RESPONSE: This disclosure is included on page
12 of the revised proxy statement under the caption "What
Factors Will the Board consider in Determining Whether
and When to effect the Reverse Stock Split?".
11. Please disclose in a table, assuming the approval of
Proposed 2 (for both a 1-for-10 and a 1-for-20 reverse stock
split), the number of common shares that will be:
* issued and outstanding,
* authorized and reserved for issuance, and
* authorized but unreserved.
COMPANY RESPONSE: This disclosure is included on
page 12 of the revised proxy statement under the caption
"How Many Shares Will Result after the Reverse Split?".
12. We note your disclosure that you believe the low per share
market price of your common stock is due to the overall weakness
in the stock market. Please describe the other factors that are
contributing to your low share price in light of the data in the
stock performance graph that shows an improvement in the stock
market.
COMPANY RESPONSE: This disclosure is included on page 9
of the revised proxy statement under the caption "What
are the Reasons for the Board's Recommendation?".
13. Please be more specific about the policies and practices
that discourage broker-dealers from dealing with low-priced
stocks, if you are referring to the penny stock restrictions,
then so state and provide a brief description of those
restrictions.
COMPANY RESPONSE: This disclosure is included on pages
10 and 11 of the revised proxy statement under the
captions "What are the Reasons for the Board's
Recommendations?" and "What are the Risk Factors and
Other Special Considerations Relating to the Reverse
Stock Split?".
14. In light of your current share price, please disclose
whether your stock will likely be classified as penny stock
following a reverse split.
COMPANY RESPONSE: This disclosure is included on page
11 of the revised proxy statement under the caption "What
are the Risk Factors and Other Special Considerations
Relating to the Reverse Stock Split?".
What is the Effect on Fractional Shares?
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15. In the example in the second paragraph of this section you
state that stockholders with fewer than four shares will be
cashed out in a 1-for10 reverse split. However, it would appear
that holders with fewer than ten shares would be cashed out.
Please advise.
COMPANY RESPONSE: This disclosure has been corrected in
the revised proxy statement to provide that stockholders
with fewer than ten shares would be cashed out.
What is the Effect of the Reverse Stock Split on the Series E and
F Convertible Preferred Stock?
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16. You disclose under the section related to potential
disadvantages to the transaction that the reverse stock split may
not increase the price of your common stock. However, in these
sections you disclose that there is no effect on the conversion
of the Preferred Shares. Please disclose that if the share price
does not increase, the Series E and F Convertible Preferred Stock
will convert into a larger percentage of the outstanding shares
and the effect on the company and its shareholders.
COMPANY RESPONSE: This disclosure has been included on
page 14 of the revised proxy statement under the captions
"What is the Effect of Reverse Stock Split on Series E
Convertible Preferred Stock" and "What is the Effect of
Reverse Stock Split on Series F Preferred Stock?".
Proposal 3
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17. Please provide the accounting fees billed for each of the
two fiscal years.
COMPANY RESPONSE: This disclosure has been provided on
pages 18 and 31 of the revised proxy statement.
Securities Authorized for Issuance under Equity Compensation
Plans
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18. Please provide a description of the material features of the
plans that have not been approved by security holders.
COMPANY RESPONSE: This disclosure has been provided on
page 25 of the revised proxy statement.
Ten Year Option Repricings
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19. Please include the new exercise price in the table.
COMPANY RESPONSE: The new exercise price has been
included in the table in the revised proxy statement.
The Company hereby acknowledges that:
* the Company is responsible for the adequacy and accuracy of
the disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose
the Commission from taking any action with respect to the filing;
and
* the Company may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under
the federal securities laws of the United States.
Please contact the undersigned at (212) 308-5800 or our
counsel, Daniel B. Nunn, Jr., of McGuireWoods LLP, at (904) 798-
2654 if we can be of any service. Again, we appreciate your
expedited review of the revised proxy statement.
Very truly yours,
/s/ James M. DeAngelis
James M. DeAngelis
Chief Financial and Administrative
Officer