Hometown International, Inc.
25 E. Grant Street
Woodstown, NJ 08098
October 19, 2015
VIA EDGAR
Mara L. Ransom,Assistant Director
Division of Corporation Finance
Securities and Exchange Commission
100 F Street N.E.
Washington, D.C. 20549
Re: | Hometown International, Inc. | |
Amendment No. 1 to Draft Registration Statement on Form S-1 | ||
Submitted August 31, 2015 | ||
CIK No. 0001632081 |
Dear Ms. Ranson:
We are in receipt of your comment letter dated September 14, 2015 regarding the above referenced filing. As requested in your letter, we have provided responses to the questions raised by the Staff. For your convenience, the matters are listed below, followed by the Company’s responses:
General
1. | We note that the private placement pursuant to which the selling shareholders received their shares is ongoing. Please provide us with an analysis of why your private placement offering should not be integrated with this registered offering and, specifically, whether this registration statement constitutes a general solicitation for purposes of the ongoing private offering. In this regard, please see Question 139.25 of our Securities Act Compliance and Disclosure Interpretations, located at our website. |
RESPONSE: We respectfully note the Staff’s comment and advise the Staff that the Company is not a shell company. Following our submission of the Amendment No. 1 to the Draft Registration Statement on Form S-1 and correspondence to the Staff, we executed our lease agreement for our physical store location, a space provided by a related party. In addition, we submitted a credit application with a supplier who would provide the deli meats for our menu offering, as well as received a bill for certain inventories we purchased earlier. We respectfully attach the lease agreement as an exhibit to Amendment No. 2 to Draft Registration Statement on Form S-1.
As of the date hereof, we currently maintain ten employees on staff in addition to the owners. We kicked off a soft opening of our restaurant as of October 14, 2015. A grand opening has also been planned for mid-November. Promotion and marketing of our deli has been primarily through word of mouth, signage in front of our physical store location, articles and ads to be placed in the local newspaper (the Record Today), sponsorship of the glasses for an annual Wine Festival planned on November 21, 2015 with Your Hometown Deli info printed on the side of glass. We are currently working to launch our website and Facebook page. Our menu offering has been set to include cold sandwiches, subs, wraps and salads. We have submitted a credit application to use Dietz and Watson as our primary supplier for various deli meats, cheeses and salads. Also available for purchase are items such as pastas, sauces, oils, vinegars, spices and authentic Italian treats.
Because the Company is in full operation and is not a shell company, the selling shareholders should not be deemed as underwriters in this offering.
2. | We note your responses to prior comments 4 and 14 and are unable to agree with your conclusion that this offering is not an indirect primary offering. As noted above, we believe that you are a shell Company and accordingly that your selling shareholders are considered underwriters in connection with any resale of those shares of common stock. In the event you provide further analysis on that issue, we have also followed-up on this issue. |
In response to comment 4 we note that you state, “[i]t has been more than fourteen months since the initial subscription as the private placement offering is still on-going.” Please disclose the dates that the shares were sold to selling shareholders. Refer to Item 701 of Regulation S-K. We may have further comment upon reviewing your response. Alternatively, revise your prospectus to disclose that the selling shareholders will offer the shares at a fixed price for the duration of the offering and name the selling shareholders as underwriters.
RESPONSE:As noted in our response to comment #1, we respectfully advise the Staff that this offering is a resale offering by the selling shareholders. Because Company has an on-going operation and is not a shell Company, the selling shareholders should not be deemed as underwriters in this offering. We also respectfully provide the dates of the subscription of Company’s shares by the selling shareholders below, which includes the first subscription date of June 25, 2014, or about sixteen months prior to the date hereof.
Selling Shareholders | Subscription Date | |
Alt, Jeannene | 2/21/2015 | |
Beaurline, Anne L. | 6/25/2014 | |
Benchmark Capital LLC | 8/28/2014 | |
Blount, Marvin K. III & Rebecca C. (Joint Tenants) | 2/4/2015 | |
Bullins, Ronnie R. | 1/15/2015 | |
Chan, Amy H. | 12/18/2014 | |
Coker, Peggy Lee | 10/12/2014 | |
Dietz, Patricia A. | 10/20/2014 | |
Dietz, Scott C. | 10/20/2014 | |
Duggins, Adam W. | 1/16/2015 | |
Duggins, J. Nathan III | 1/16/2015 | |
Dunn, Dina C. | 10/6/2014 | |
Dunn, Dina C. | 6/30/2015 | |
Fredrick, Robert E. | 6/4/2015 | |
Harberger, Deborah L. | 5/26/2015 | |
London Fall Protection LP | 12/18/2014 | |
London, Joseph Tony | 12/18/2014 | |
McCaskill, T. Gray | 1/16/2015 | |
Moavenzadeh, Leyla Diana | 7/18/2015 | |
Moran, Sara E. | 6/25/2014 | |
Ohio Blasting Equipment & Media Inc. (William P. Witt) | 2/4/2015 | |
Papp, Nancy L. | 6/10/2015 | |
Patten, John L. (John L. Patten Trust DTD 9/4/12) | 7/19/2014 | |
Patten, Kathleen N. | 6/25/2014 | |
Phoenix Associates, Inc. (Luther H. Hodges) | 3/18/2015 | |
Randolph, Kimberly | 10/20/2014 | |
Reichard, Lawrence | 10/15/2014 | |
Reichard, Lawrence | 1/9/2015 | |
Rice, Mary C. | 6/25/2014 | |
Stat Constructors LP | 12/18/2014 | |
Sussman, April | 9/7/2015 | |
Sussman, Max | 9/7/2015 | |
Swenson, Larry R. | 10/20/2014 | |
Wilson, John C. | 10/9/2014 | |
Witt, William P. | 2/21/2015 | |
Yoder, David W. | 10/11/2014 |
The Offering, page 2
3. | Reference is made to your disclosure that you could receive up to $589,180 in the event the Warrants are exercised for cash. Please show us how this amount was calculated and reconcile your calculation to your disclosure throughout the filing that there are 471,344 warrants outstanding with an exercise price of $2.50 per share. |
RESPONSE:In response to the Staff’s comment, we respectfully revise our disclosure in the draft registration statement to indicate the maximum amount of proceeds the Company may receive from the exercise of the Warrants. As of the date hereof, we have sold 242,340 Units, with each Unit containing two Warrants that may be exercised at $2.50 per share. 242,340 Units therefore include a total of 484,680 Warrants, and the exercise of all of these Warrants will result a proceeds of $1,211,700 to the Company. We respectfully revise our disclosure relating to the proceeds of the Warrants throughout the registration statement.
Use of Proceeds, page 8
4. | We note your response to comment 8. Please revise your disclosure here, and on pages 1 and 2 where you reference proceeds from the warrants to disclose the exercise price of the warrants to provide context as to when it might be economically viable for holders to exercise the warrants. |
RESPONSE:We respectfully note the Staff’s comment. Each warrant gives the Warrant holder the option to purchase one additional share of common stock of the Company until such expires. We anticipate that it will be economically viable for and in the best interest of the Warrant holders to exercise their Warrants once the price of our common stock trade above the exercise price of the Warrant, or at $2.50 per share.
Hometown International, Inc. | ||
By: | /s/ Paul F. Marina | |
Name: Paul F. Marina | ||
Title: Chief Executive Officer |