Secure It Corp.
548 Market St. # 59722
San Francisco, CA 94104-5401
Tel: (866) 766-4202
Fax (866) 897-2396
June 8, 2012
Via Edgar
Susan Block
Attorney-Advisor
Securities and Exchange Commission
Washington, DC 20549
Re: Secure It Corp.
Registration Statement on Form S-1
Filed on March 20, 2011
File No. 333-180230
Dear Ms. Block:
Secure It Corp., acknowledges receipt of the letter dated May 23, 2012 (the "Staff Letter") from the staff (the "Staff") of the Division of Corporation Finance of the United States Securities and Exchange Commission (the "SEC"). Per the instructions in your letter, we have amended our Registration Statement on Form S-1 (the "Amended Draft") and have tracked all changes in the Edgarized document for ease of review. The following is an item-by-item response to the Staff’s comments.
We appreciate the Staff's comments as well as the opportunity this process provides to improve the content of our SEC filings. Where we agree to make requested revisions to our disclosures in future filings with the SEC, such agreement and any such revisions to disclosures made in future filings should not be taken as an admission that prior disclosures were in any way deficient. We have noted in our responses below the disclosures that we anticipate will be affected by this internal review process insofar as they may be applicable to the Staff's comments. Any changes in our future SEC filings made as a result of this review process should not be taken as an admission that prior disclosures were in any way deficient.
We acknowledge that we are responsible for the adequacy and accuracy of the disclosure in our filing and that Staff comments or changes to disclosures in response to Staff comments do not foreclose the SEC from taking any action with respect to the filing. We also represent that we will not assert Staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States.
Set forth below are the Staff's comments contained in the Staff Letter (in bold face type) followed by our responses.
General
1. Since you appear to qualify as an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, please revise your prospectus to:
— Describe how and when a company may lose emerging growth company status;
— Briefly describe the various exemptions that are available to you, such as exemptionsfrom Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934; and
— Since you have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1), provide a risk factor explaining that this election allows you to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. Please state in your risk factor that, as a result of this election, your financial statements may not be comparable to companies that comply with public company effective dates. Include a similar statement in your critical accounting policy disclosure.
In addition, consider describing the extent to which any of these exemptions are availableto you as a Smaller Reporting Company.
Response.Revised. We have described at length the impact of the JOBS Act on the company and have added appropriate language and risk factors. Please see Amended Draft.
2. We note your response to our prior comment 3 and reissue. Please revise to disclose yourstatus as a shell company, or tell us why you believe you do not meet the definition of ashell company as outlined in Rule 405 of the Securities Act. In that regard, explain why youbelieve you should not be deemed to have “no or nominal operations¨ and “no or nominal assets¨.
Response.We do not believe that we are a shell company and have provided additional information within the prospectus. Please see Amended Draft.
3. Please update the financial statements as required by Rule 8-08 of Regulation S-X.
Response.Financial Statements are updated as required. Please see Amended Draft.
4. A currently dated accountant’s consent should be included as an exhibit to any futureamendments to the Form S-1 registration statement.
Response. An accountant statement is included. Please see Amended Draft.
Fee Table
5. We note your response to our prior comment 2. Given that you are registering a numberof shares, please revise to indicate that you are registering under Rule 457(a).
Response.The fee table has been revised. Please see Amended Draft.
Prospectus Cover Page
6. Please revise your cover page disclosure to disclose that you are an emerging growthcompany under the JOBS Act, rather than you “may be considered¨ to be one.
Response.We have revised the covered page to disclose that we are an emerging growth company under the JOBS Act. Please see Amended Draft.
7. We note your response to our prior comment 9 and reissue in part. You disclose you willnot employ an escrow account. Please describe the potential effects on investors of not having an escrow account. Refer to Item 501(b)(8)(iii) of Regulation S-K.
Response.We have revised and indicated that investors (especially early investors) could lose their entire investment since we are not using an escrow account and will utilize funds as they come in. Please see Amended Draft.
8. We note your response to our prior comment 8 and reissue in part. Consistent with yourdisclosure on page 6, please revise to also disclose here any possible extensions.
Response.We have revised and noted our ability to extend for an additional 90 days. Please see Amended Draft.
Summary Information, page 5
9. We note your response to our prior comment 14 and your revised disclosure as to yourbelief that vehicle wrapping is becoming an increasingly popular method of advertising.As advertising via vehicle wrapping or selling vehicle wrapping for advertising purposes does not appear to be the focus of your business, please balance the disclosure here tomake that clear, as this is your introductory paragraph.
Response.We have revised to indicate that vehicle wrapping for advertising purposes is not a focus of our business. Please see Amended Draft.
10. Refer to the last two sentences of the first paragraph in this section. Please delete thereference to the television sitcom.
Response. Deleted. Please see Amended Draft.
11. Please disclose in the summary section that you currently do not have any agreements to obtain vehicle wraps from a third party manufacturer.
Response.We have revised our disclosure to disclose that we do not have any agreement in place with any wrap manufacturer. Please see Amended Draft.
12. We note your response to our prior comment 10 and reissue in part. In addition to disclosing your projected burn rate following the offering, please revise to disclose your current monthly burn rate and how long you anticipate your present capital will last at that rate.
Response.We have revised to demonstrate our current burn rate and how long our capital will last. Please see Amended Draft.
13. We note your response to our prior comment 14 and reissue in part. Please providesupport for your belief that most of the existing vehicle wrapping services are marketingto the end user and not the garages and car accessory providers. Alternatively, revise toremove this assertion.
Response.This section has removed. Please see Amended Draft.
14. We note your response in regards to our prior comment 15 and your revised disclosurethat you intend to charge a nominal fee for vehicle wrapping. To the extent practicable, please quantify what you anticipate the nominal fee will be so that investors can assessthe disclosure.
Response.Revised. Please note the nominal fee is for virtually designing a car wrap on our web site, not for the car wrap itself. Please see Amended Draft.
We intend to become subject to the periodic reporting requirements, page 9
15. We note your response to our prior comment 17 and reissue in part. Please provide anestimate of the additional costs you expect to incur as a public company. Please alsoinclude disclosure in this risk factor, as you indicate on page 22, that with your current funds you will not be able to maintain a reporting status past 12 months.
Response. We haverevised to show the additional costs and to indicate that with current funds we will not be able to maintain reporting status beyond 12 months. Please see Amended Draft.
Failure to raise additional capital to fund future operations could harm our business, page 8
16. We note your response to our prior comment 22. Please revise the heading and the bodyof the risk factor to also quantify the dollar amount of additional capital you require todevelop your business and minimally carry out your business plan.
Response.We have revised to quantify that we require a minimum raise of $28,125 (25%) of the maximum offering to minimally carry out our business plan. Please see Amended Draft.
Since Our Company’s Directors, page 10
17. Given the percentage ownership of your directors, please also include, in the nonexclusive list of discretionary powers, the ability of the controlling shareholders toauthorize the issuance of additional shares, which may have a dilutive effect on existingshareholders.
Response.We have appropriately revised. Please see Amended Draft.
If We Do Not Generate Enough Revenue or Referral Commissions, page 12
18. It is not clear what “Referral Commissions¨ is referring to in this risk factor subheading. Please revise for clarity.
Response.We have revised to define “Referral Commissions”. Please see Amended Draft.
Use of Proceeds, page 15
19. It appears that the gross proceeds column in the table does not accurately reflect theproceeds you will raise if you sell 25%, 50% or 75% of the shares at $0.15. For example, if you sold 50% of the shares, or 375,000, at $0.15 it would seem that the proceeds raisedwould be $56,250 and not $50,000. Please revise the table for accuracy.
Response.The table has been appropriately revised for accuracy. Please see Amended Draft.
20. In addition, please reconcile your disclosure just under the table that you have cash onhand of $22,000 to cover any shortfalls, with your disclosure on page 5 that you have$11,950 cash on hand as of April 30, 2012.
Response.The disclosure has been appropriately revised to indicate the correct amount of cash on hand. Please see Amended Draft.
Plan of Distribution, page 15
21. Refer to the first paragraph where you indicate that the Company is registering shares for possible “resale¨ Please revise to eliminate the reference to registering shares for resale, as you do not appear to be registering shares for resale in this registration statement or advise.
Response.Revised. Please see Amended Draft.
Description of Business, page 18
22. We note your reply to our prior comment 31 and reissue. Please expand your disclosureto discuss the competitive business conditions and your competitive position in theindustry and methods of competition.
Response.This section has been expanded and revised. Please see Amended Draft.
The Product Vinyl Car Wrap, page 18
23. Please provide support for your statement that a car wrap properly applied and removed will not damage paint, but will protect it. Please also disclose the risk to the vehicle if the car wrap is improperly applied or removed, particularly since you are offering instructions that may encourage customers to do so.
Response.This section has been expanded and revised. Please see Amended Draft.
Manufacturers of Car Wraps Material, page 18
24. We note your response to our prior comment 38, and your disclosure regarding the claims by 3M and Avery Graphics that the wraps can last “as long as five years.¨ This appears to show only the best case scenario, but not what one could expect on average in regards to the useful life of the wraps. Please revise to clarify and balance your disclosure. If addition, please revise to disclose the length of the warranties provided by 3M and Avery
Graphics for the wraps or otherwise clarify what you mean by “reasonable warranties.¨
Response.Revised. Please see Amended Draft.
Market Opportunity, page 18
25. We note your response to our prior comment 39 and reissue it part. Please provide support for your belief that “every” garage engaged in vehicle repair or an auto relatedstore is a candidate for purchasing your intended car wraps or revise accordingly. It would appear that some garages, particularly those that offer specialized services, may not be a candidate for your product since they, for example, would need to hire or train someone to ensure the wrap is installed to professional standards, which deviates from their area of concentration, or other garages may not want to offer car wrapping. Please revise to balance your disclosure accordingly.
Response.We have expanded and clarified this section. Please see Amended Draft.
Target Customers, page 18
26. We note your response to our prior comment 43. Please reconcile your disclosure thatyou are “currently designing [y]our website¨ with your disclosure that assuming you raisethe required funds in this offering you will “commence the web design.¨ Please clarify with more specificity what, if any, material steps have begun or have been completed in regards to the development of your website. In addition, please provide greater clarity here about the financing required to complete each material step.
Response.Revised. Please see Amended Draft.
Target Customer, page 18
27. Please clarify the geographical location of your target customers. Is it the US and Israel?
Response.Wehave revised to indicate that our initial target market is Israel. Please see Amended Draft.
Competitive Advantages, page 19
28. We note your response to our prior comment 44 and reissue in part. Please providesupport for these expected competitive advantages given your limited resources andmanagement’s limited experience in the area of car wraps. Also balance your disclosurehere by indicating you currently have limited resources and that your management haslimited experience in the area of car wraps.
Response.We have revised to show the competitive advantages and indicated management lack of experience in car wraps. Revised. Please see Amended Draft.
Plan of Operations, page 21
29. For the timetable disclosure, please provide the anticipated needed amount of financingfor each of the timeframes. Refer generally to our prior comment 47.
Response.Revised. Please see Amended Draft.
30. Please revise to clarify that using SEO on your website does not guarantee that yourwebsite will come up on the first page, or even on the first ten pages, of the search website.
Response.We have revised to disclose that the use of an SEO does not guarantee success or that the website will readily appear during a search. Please see Amended Draft.
31. Please clarify how you determined that you will have a 20% profit margin on car wrapssold to garages. For example, it is unclear if you expect that suppliers will provide you with the wraps at a wholesale price that provides for such 20% margin, or if you plan to charge garages 20% more than they would otherwise pay if they purchased the wrap directly from the suppliers.
Response.We have revised to disclose that we intend to charge up 20%. Please see Amended Draft.
32. We note your response to our prior comment 47 and reissue in part. Please explain yourintent for this business including what portion of your overall operations will be for sales of car wrap products as compared to revenue from website advertising and how plan to attract website advertising to your website. In that regard, please clarify that there is noguarantee that you will generate meaningful advertising revenue from utilizing Google AdSense.
Response.We have appropriate revised. Please see Amended Draft.
33. The last three paragraphs of this section are almost identical to the three paragraphs that precede them. Please revise to remove such repetition.
Response.The repetitive paragraphs have been removed. Please see Amended Draft.
Election under JOBS Act of 2012, page 22
34. We note the disclosure indicating that the company has chosen to opt-in and make use of the extended transition period for complying with new or revised accounting standardspursuant to Section 107(b) of the JOBS Act of 2012. Please revise the discussion on page 22 to include a statement indicating that as a result of this election, your financial statements may not be comparable to companies that comply with public company effective dates.
Response.We have added new sections dealing with the impact of the JOBS Act on the company – both from a regulatory and accounting perspective. Please see Amended Draft.
We trust that the responses provided above address the issues raised in the Staff Letter. If you have any questions or require further clarification, please do not hesitate to contact our counsel, Jonathan Strum at Tel: 202 362-9027/ jdstrum@jdstrumlaw.com.
| Sincerely, |
| /s/ |
| Ofir Ben Arzi |
| President |
| cc: | John Stickel |
| Justin Dobbie |