Blueprint
February 24,
2017
VIA EDGAR
David
L. Orlic
Special
Counsel - Office of Mergers and Acquisitions
Division
of Corporation Finance
U.S.
Securities & Exchange Commission
100 F
Street, NE
Washington, D.C.
20549
Re:
|
Paybox Corp
Amendment No. 1 to Schedule 13E-3
Filed February 2, 2017
File No. 005-78531
Revised Preliminary Proxy Statement on Schedule 14A
Filed February 2, 2017
File No. 000-20660
|
Dear
Mr. Orlic:
Paybox
Corp (the “Company”) submits this
letter in response to the comment letter (the “Comment Letter”), dated
February 15, 2017, from the Staff (the “Staff”) of the Securities
and Exchange Commission (the “Commission”) with respect
to the Company’s above-referenced Amendment No. 1 to Schedule
13E-3 and Revised Preliminary Proxy Statement on Schedule
14A.
For
ease of reference, set forth in bold below, are the comments to the
Revised Preliminary Proxy Statement on Schedule 14A, as reflected
in the Comment Letter. The Company’s responses are set forth
below each comment. The revisions to the filing described below are
reflected in second amendments (the “Amendments”) to the
Revised Preliminary Proxy Statement on Schedule 14A referenced
above (as so amended, including all exhibits thereto, the
“Preliminary Proxy
Statement”) and Amendment No. 1 to Schedule 13E-3,
each being filed simultaneously with this letter. We are providing
by email a copy of the Amendments marked to show changes from the
Revised Preliminary Proxy Statement on Schedule 14A and the
Amendment No. 1 to Schedule 13E-3.
General
1.
Please
revise your disclosure to clarify whether the charter amendment
will leave the number of authorized shares untouched, thereby
increasing the number of authorized but unissued shares. If so,
please provide appropriate disclosure regarding the effects of this
action.
Response:
The
Preliminary Proxy Statement has been revised in response to the
Staff’s comment. See pages 2, 6 and 29.
General
2.
We
note your response to prior comment 3. You appear to have updated
your registration statement on Form S-8 for the fiscal year ended
December 31, 2016 and therefore a Form 10-K for that fiscal year
appears to be required. Please confirm, or provide an analysis as
to why this is not necessary.
Response:
In making its
determination not to file a Form 10-K for the fiscal year ended
December 31, 2016, the Company will be relying on a substantial
body of no-action letters in which the Staff has granted no-action
relief in similar or analogous circumstances. The Company concedes
that on a literal reading of Rule 12h-3, the Company would be
required to file its 2016 Form 10-K, because the Company’s
Form S-8 (file number 333-197655) was automatically updated in 2016
by the filing of the Company's Form 10-K of the fiscal year ended
December 31, 2015. In numerous no-action letters, however, the
Staff has agreed that it would not take action against an issuer
that suspends its reporting requirements notwithstanding the
automatic update of a registration statement, where the
registration has represented the satisfaction of the following
conditions: (i) the registrant has fewer than 300 security holders
of record (or fewer than 500 security holders of record where the
registrant has had assets of less than $10 million in each of the
three preceding fiscal years); (ii) the registrant has filed all
reports under the Securities Exchange Act for the most recent three
years and the current fiscal year preceding the filing of the Form
15; (iii) post-effective amendments have been filed terminating the
registration statement that have been automatically updated;
and (iv) shares
have not been issued under the registration statement since the
automatic update. See, e.g., Circle Entertainment Inc. (May
13, 2015); Greer Bancshares Incorporated (March 3, 2015 (relying on
the 1,200 holder threshold for Bank holding companies; Orbit
International Corp. (November 13, 2014); Madison Bancorp, Inc. (May
27, 2014); Gasco Energy, Inc. (March 31, 2014); Actavis, Inc.
(February 26, 2014); China Shenghuo Pharmaceutical Holdings, Inc.;
(July 20, 2012); Mango Capital, Inc. (March 28, 2012). See also
Interline Brands (August 24, 2015) (no-action relief granted where
securities cease to be outstanding following a
merger).
The
Company satisfies each of these criteria. Following the reverse
stock split, the Company will have fewer than 300 stockholders of
record (the Company could also rely on the 500 holder threshold,
since its assets have been less than $10 million in each of the
last three fiscal years). The Company is current in its financial
reporting under the Exchange Act. The Company will be terminating
its Form S-8 by filing a post-effective amendment, and shares have
not been issued under the S-8 since the automatic
update.
Accordingly, the
Company respectfully submits that the filing of the 2016 Form 10-K
will not be required. However, should it be determined that the
Company is required to file the 2016 Form 10-K, it will do
so.
Opinion of Kidron, page 20
3.
We
note the response to prior comment 2. Please disclose the
information required by Item 1015(b)(3) of Regulation M-A, the
method of selection of the financial advisor.
Response:
The
Preliminary Proxy Statement has been revised in response to the
Staff’s comment. See page 20.
Comparable Company Analysis, page 21
4.
We
note your response to prior comment 8. Please include the
information in the response regarding Versapay Corporation in your
disclosure.
Response:
The
Preliminary Proxy Statement has been revised in response to the
Staff’s comment. See page 21.
Annex B
5.
We
note your response to prior comment 13, regarding the statement
that the financial analysis should not be construed as creating any
fiduciary duty on the part of Kidron to any party. Please revise
your disclosure to add an explanation that clarifies:
●
the
basis for Kidron’s belief that shareholders cannot rely on
its opinion, including (but not limited to) whether Kidron intends
to assert the substance of the disclaimer as a defense to
shareholder claims that might be brought against it under
applicable state law;
●
whether
the governing state law has addressed the availability of such a
defense to Kidron in connection with any such shareholder claim; if
not, a statement must be added that the issue necessarily would
have to be resolved by a court of competent jurisdiction;
and
●
that
the availability or non-availability of such a defense will have no
effect on the rights and responsibilities of the board of directors
under governing state law, or the rights and responsibilities of
the board or Kidron under the federal securities laws.
See
the Excerpt from Current Issues and Rulemaking Projects Outline
(November 14, 2000), available on our website.
Response:
The
Preliminary Proxy Statement has been revised in response to the
Staff’s comment. See page 22.
* * * *
*
Lastly,
in responding to the Staff’s comments, the Company
acknowledges the following:
●
the Company is
responsible for the accuracy and adequacy of the disclosures in the
filing;
●
Staff comments or
changes to disclosure in response to Staff comments 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.
If you
have any questions, or if we may be of any assistance, please do
not hesitate to contact the undersigned at 954-510-3765 or Abbe
Dienstag at 212-715- 9280.
Very
truly yours,
/s/ Lowell Rush
Lowell
Rush
Chief
Financial Officer of Paybox Corp
cc:
Scott Rosenblum, Kramer Levin Naftalis & Frankel
LLP
Abbe L. Dienstag,
Kramer Levin Naftalis & Frankel LLP