David Lubin & Associates, PLLC
10 Union Avenue, Suite 5
Lynbrook, New York 11563
Telephone: (516) 887-8200
Facsimile: (516) 887-8250
November 15, 2011
Via EDGAR
Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.W.
Washington, D.C. 20549-0406
Mail Stop 3030
Attention: Mara Ransom, Assistant Director
Re: DarkStar Ventures, Inc.
Registration Statement on Form S-1
Filed September 23, 2011
File No. 333-176969
Dear Ms. Ransom:
DarkStar Ventures, Inc. (the “Company”) herewith files with the Securities and Exchange Commission (the "Commission") Amendment No. 1 to the registration statement on Form S-1 (the "Amended Registration Statement") in response to the Commission's comments, dated October 19, 2011, with reference to the Company's registration statement on Form S-1 (the "Registration Statement") filed with the Commission on September 23, 2011.
In addition to the Amended Registration Statement, the Company supplementally responds to all the Commission's comments as follows:
General
| 1. | Given the nature of the offering and the size of the offering relative to the number of shares outstanding held by non-affiliates, it appears that these securities are being offered by or on behalf of the registrant. Therefore, the offering is not eligible to be conducted on a continuous or delayed basis pursuant to Rule 415(a)(l)(i) of Regulation C. Further, the company is not eligible to make an at-the-market offering under Rule 415(a)(4) of Regulation C because it is not eligible to make an offering under Rule 4l5(a)(l)(x) of Regulation C. Please revise your registration statement to state that the selling shareholders will offer their securities at the fixed price for the duration of the offering and identify the selling shareholders as underwriters, and make conforming changes to your prospectus accordingly, including your cover page, summary and plan of distribution sections. For guidance, refer to Compliance and Disclosure Interpretations, Securities Act Rules, 612.09, available on our website at www.sec.gov. |
Response: In accordance with the comments of the Commission, the Amended Registration Statement provides that all offers and sales will be made at the fixed price of $0.05 per share and that the selling shareholders are considered underwriters, including an acknowledgment of the seller’s prospectus delivery requirements. We note that the resale represents the sale by shareholders holding only 35% of the outstanding shares of the Company, and none of the shares held by the Company's officers or directors are included in the Amended Registration Statement. Furthermore, none of the selling shareholders are in the business of underwriting securities or has any relationship with the Company. All proceeds from the sales of the shares included in the registration are solely for the benefit of the selling shareholders. |
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2. Please provide the dilution disclosure required by Item 506 of Regulation S-K.
Response: We note the Commission’s comment and the Amended Registration Statement includes a section entitled "Dilution" containing the disclosure required by Item 506 of Regulation S-K. |
| 3. | The status of your business operations is unclear. For example, you make numerous statements in your filing indicating that you are currently "offering eco-friendly health and wellness products", but you also state on page 27 that you "have not commenced planned principal operations." Furthermore, we note that you have no revenues to date, and as more fully discussed below, your website does not appear to be fully functional. Please revise your filing throughout to accurately reflect your current operating status. If appropriate, remove any indication that you are currently offering products and ensure that you change all applicable disclosure from present tense to future tense. |
Response: The Amended Registration Statement has been revised to clarify that the Company currently markets eco-friendly health and wellness products of its one merchant partner. The website of the Company is fully functional, and if a prospective customer desires to purchase one of the products offered by the Company a customer may do so.
| 4. | You indicate throughout your filing that you "have a specific business plan," however on page 26 you also state that your management does not have sufficient experience to "create...an effective business plan" and that you plan to "seek out a consulting firm(s)" to assist in such regard. Please clarify the status of your business plan. |
Response: The Amended Registration Statement has been revised to clarify that although the Company has a very specific, defined business objective, its current managers may not have the proper expertise to effectuate the business plan. Accordingly, the Company may need to engage other consultants, if feasible, to assist in the further development of its business.
Registration Statement Cover Page, page 2
| 5. | Please relocate your Prospectus "Subject to Completion Legend" from your registration statement cover page to the outside front cover page of your prospectus. See Item 501(b)(10) of Regulation S-K. |
Response: The Prospectus "Subject to Completion Legend" has been relocated to the outside front cover page of the prospectus.
Prospectus Cover Page, page 3
| 6. | We note that the third paragraph on page 3 states that your Risk Factors begin on page 3, but they begin on page 7. Please revise. Please make a conforming change to your Risk Factor reference on page 6. In addition, please state on your prospectus cover page that your auditor has issued a going concern opinion. |
Response: We note the Commission’s comment. The Amended Registration Statement has been revised to reflect the correct page references to the beginning of the Risk Factors as well as stating on the prospectus cover page that the auditor has issued a going concern opinion.
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Prospectus Summary, page 5
| 7. | Please revise the second sentence of the third paragraph on page 5, if accurate, to reflect that you did not have any business activity prior to May 2011. Please make conforming changes to the second sentence of the first paragraph on page 22. Please also revise both sections to briefly describe the activity that commenced in May 2011. |
Response: The Amended Registration Statement has been revised in accordance with the Commission’s comments.
Corporate Background, page 5
| 8. | We note that your website does not appear to be fully operational. For example, when the "Buy Now" button is clicked for a product, users are redirected to the same product on the website of Green Nest (www.greennest.com), a company that you identify on page 24 of your filing as a competitor, or to a page indicating that the link is inactive. We also note that the "Privacy Policy" and "Terms of Use" hyperlinks do not work. Please revise the disclosure in the first paragraph of this section to clearly state the current status of your website. Please make conforming changes to your Description of Business section beginning on page 22. |
Response: We note the Commission’s comment and the Amended Registration Statement has been revised to reflect that the Company’s website is currently fully operational.
| 9. | In light of the fact that at least certain attempted purchases on your website are redirected to www.greennest.com, please revise your filing to describe the nature of your relationship with Green Nest. Please ensure that you also describe the manner in which you plan to earn revenues pursuant to this relationship. Please make conforming changes to your Description of Business section beginning on page 22. |
Response: The Amended Registration Statement has been revised to describe the nature of the Company's relationship with Green Nest.
| 10. | We note your disclosure in the last paragraph on page 22 that you offer products "through affiliate agreements with numerous suppliers...." Please file any affiliate agreements you have entered into with Green Nest, or any other supplier, with your next amendment. See Item 101(h)(4)(ii) of Regulation S-K, and Item 601(b)(10) of Regulation S-K. |
Response: The affiliate agreement with Shareasale.com has been described in the Amended Registration Statement and filed as an agreement.
| 11. | Please revise your disclosure beginning on page 5 and in your Description of Business section beginning on page 22 to clearly reflect, if accurate, that you will not offer any products directly and will not maintain inventory, but rather your website will serve as a conduit to products offered through other vendors, such as Green Nest. |
Response: We note the Commission’s comment and the Amended Registration Statement has been revised to reflect that the Company will be offering products directly to customers and that the website of the Company serves as an channel for the products of its merchant partners.
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The Offering, page 6
| 12. | You state that you "will likely rely upon related party debt or equity financing in order to ensure the continuing existence of the business." Here and in your Liquidity and Capital Resources discussion on page 26, please clarify, if true, that you currently do not have in place any arrangements or plans pursuant to which you will receive related party debt or equity financing. |
Response: The Amended Registration Statement has been revised to reflect that the Company currently does not have in place any arrangements or plans pursuant to which it will receive financing.
Risk Factors Relating to Our Company, page 8
We Are In Competition With Companies..., page 8
13. This risk factor appears to be incomplete; please revise.
Response: We note the Commission’s comment and have completed the risk factor appropriately.
We Face Legal Uncertainties Relating to the Internet.... page 9
| 14. | The above referenced risk factor on page 9 is largely duplicative of the first full risk factor on page 12 that begins "Government Regulation of the Internet...." Please revise to remove the duplicative disclosure. |
Response: We note the Commission’s comments and the Amended Registration Statement has been revised to remove the risk factor relating to Government Regulation of the Internet.
In Order To Increase Net Sales.... page 10
15. Please revise this risk factor to describe fully the risk to your company.
Response: The Amended Registration Statement has been revised to remove the risk factor relating to Government Regulation of the Internet.
As Our Two Officers.... page 11
| 16. | Your first risk factor on page 11 references the sale of bio-fuel products. Please revise or advise. |
Response: We note the Commission’s comment and the Amended Registration Statement has been revised to delete the reference to bio-fuel.
The Continued Disruption..., page 11
| 17. | It appears that the last two paragraphs of this risk factor describe a different risk than is referenced in the title of the risk factor. Please revise. |
Response: The Amended Registration Statement has been revised to clearly identify the separate risk factors in accordance with the Commission’s comment.
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Selling Shareholders, page 17
| 18. | Please correct your description of "investment power" on page 17. See Rule 13d-3(a)(2) under the Securities Exchange Act of 1934. Please make conforming changes to the last paragraph on page 29. |
Response: The Amended Registration Statement has been revised in accordance with the comment of the Commission to correct the description of investment power.
Description of Business, page 22
| 19. | Please disclose the timeline for when you expect your website to be fully operational. See Item 101(h)(4) of Regulation S-K. |
Response: We note the Commission’s comment and have revised the Amended Registration Statement to clarify that our website is currently fully operational.
| 20. | We note your disclosure in the last paragraph on page 23 that you offer products "through [your] participation in affiliate programs with numerous vendors." Please revise you business disclosure to specifically identify your principal vendors and/or suppliers, and to describe briefly your agreements with them, including how you earn revenues under such agreements. See Item 101(h)(4)(v) of Regulation S-K. Please also reconcile this disclosure with the disclosure on page 24 that you "do not have any agreements or arrangements with any parties regarding" affiliate programs. |
Response: The Amended Registration Statement has been revised to provide that we currently only offer products through Green Nest as a result of the Affiliate Service Agreement between the Company and Sharesale.com.
| 21. | Please provide us with independent supplemental materials, with appropriate markings and page references in your response, supporting the quotes and statistics you reference in the fifth full paragraph on page 22 and the second and fourth full paragraphs on page 23. |
Response: Attached to this letter please find the Forrester quote from its web site as well as the Consumers Behavior Report referenced in the Amended Registration Statement. Since the Company was not able to locate the source of the information from Forrester, the Amended Registration Statement includes different information regarding online retail sales.
| 22. | Please revise the last paragraph on page 22 to either specifically describe why your website is "state of the art", or remove this reference. |
Response: The Amended Registration Statement has been revised to remove the reference to “state of the art” in accordance with the comments of the Commission.
Description of Property, page 24
| 23. | You state that you "do not believe that at this stage in our development we need physical space," but on page 22 you indicate that your offices are located in New York and on page 30 you indicate that you "maintain [y]our corporate offices" and utilize "space" in New York. Please revise your disclosure so that it is consistent and clear. |
Response: The Amended Registration Statement has been revised to clarify that although we do not maintain a physical office, our current mailing address is at 410 Park Avenue, 15th Floor, New York, NY 10022, the offices of our consultant. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations, page 26
| 24. | Please revise the second full paragraph on page 26 to confirm that you will update your forward-looking statements as required by federal securities and any other applicable law. |
Response: The Amended Registration Statement has been revised in accordance with the Commission’s comment.
| 25. | We note from your statement of operations, cash flows and disclosure on page 37 that operations were dormant from inception to May 1, 2011. Please revise your discussion to explain and clarify the reasons why there were no operations or activity for that period. |
Response: We note the Commission’s comment and the Amended Registration Statement has been revised to include the reason why there were no operations or activity from inception to May 1, 2011.
Plan of Operations, page 26
| 26. | We note your statement on page 26 that you intend "to seek out a consulting firm(s) that specializes in this arena." Please revise your disclosure to clarify whether First Line Capital, LLC, with which you have entered into a consulting agreement per your disclosure at the bottom of page 26, is such a consultant. |
Response: The Amended Registration Statement has been revised in accordance with the comments of the Commission to clarify that the Company would need to engage another consultant other than First Line Capital.
| 27. | Please revise to indicate the amount of capital you anticipate requiring to continue as a going concern over the next twelve months, including a breakdown of the expected uses of such capital. |
Response: The Amended Registration Statement has been revised in accordance with the comments and to include the information requested by the Commission.
Directors. Executive Officers. Promoters and Control Persons, page 28
| 28. | Please briefly describe Mr. Povarsky's business experience for the past five years. We note that you disclose his position with the company since 2007, and his current occupation, but you do not clarify his experience over the last five years. See Item 401(e)(1) of Regulation S-K. |
Response: The Amended Registration Statement has been revised in accordance with the comments of the Commission to describe Mr. Povarsky’s business experience for the past five years.
Note 1 - Summary of Significant Accounting Policies, page 37
| 29. | Please disclose your accounting policy for website development costs. Refer to FASB ASC 350-50-25. |
Response: Our accounting policy for website development costs has been disclosed in Note 1 to the financial statements.
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Note 2 - Going Concern, page 39
| 30. | Please note that financial statements will be considered false and misleading if those financial statements are prepared on the assumption of a going concern but should more appropriately be based on the assumption of liquidation. Financial statements containing audit reports that contain such going concern language should contain prominent disclosure of the registrant's viable plans to overcome such difficulties. We are unclear how your disclosed plan represents a viable plan to continue as a going concern for the next 12 months. When discussing mitigating factors, your disclosure should describe viable plans to overcome the company's financial difficulties. You disclose that the company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. In light of the fact that this offering is a selling shareholder offering for which the company will not receive any proceeds, it is not clear how or when an offering to raise additional capital would be undertaken. If such an offering is not completed in a foreseeable timeframe with sufficient proceeds, disclose how the company intends to support its working capital needs for a reasonable period of time. To the extent applicable, please indicate the extent to which proceeds from private sales of common stock are likely or unlikely to occur. Please consider our preceding points in your revised management's plans or explain in detail why you consider your plan to be viable. |
Response: Note 2 to the financial statements regarding the Company's going concern uncertainty has been revised accordingly. Note 6(b) has been added describing the oral agreement made by the officers and directors to provide funding as needed over the next 12 months.
Signatures
| 31. | In the second signature block, please clarify that Mr. Lapin also is signing the registration statement in his individual capacities as principal financial officer and principal accounting officer. See the Instructions to Signatures on Form S-l. |
Response: The Amended Registration Statement has been revised in accordance with the comments of the Commission to indicate that Mr. Lapin is signing as the principal financial and accounting officer.
Please address any further questions or comments to the undersigned at the above-referenced telephone and fax numbers. Thank you very much.
| Very truly yours, | |||
| By: | /s/ David Lubin | ||
| David Lubin | |||
cc: Chizkyau Lapin
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