ARION GROUP CORP.
18401 Collins Ave., #1220
Sunny Isles Beach, FL 33160
Tel. (786) 577-7070
Email:ariongroup2016@yandex.com
April 19, 2017
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549
Attention: Ms. Katherine Bagley
Re: Arion Group Corp.
Registration Statement on Form S-1
Filed March 23, 2017
File No. 333-216895
Dear Ms. Katherine Bagley:
This letter sets forth the responses of Arion Group Corp. (the "Company") to the comments of the reviewing staff (“Staff”) of the Securities and Exchange Commission (“Commission”) in connection with the above referenced filing as set forth in the comment letter of April 17, 2017. Each numbered paragraph below responds to the comment having the same number in the April 17, 2017 comment letter.
General
1. Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications.
Response: The Company has not availed itself of Section 5(d) and there are no written communications in reliance on that section.
2. Please provide us with your analysis as to whether you are a shell company, as defined in Rule 405 under the Securities Act. In this regard, we note that you appear to have nominal operations and assets consisting only of cash and cash equivalents. Please refer to Rule 405 under the Securities Act of 1933, as amended. If you conclude that your company is a shell company, please revise your prospectus to disclose that you are a shell company and disclose the consequences of that status, such as the restrictions on your ability to use registration statements on Form S-8, the limitations on the ability of your security holders to use Rule 144, and the potential reduced liquidity or illiquidity of your securities. Also, please disclose your shell company status on your prospectus cover page and add a related risk factor.
Response: We do not believe that Arion Group Corp. is a “shell company” as defined in Securities Act Rule 405 of Regulation C under the Securities Act, as amended. Rule 405 of Regulation C defines a “shell company” as a registrant that has: (1) no or nominal operations; and (2) either (i) no or nominal assets; assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets.
Specifically, we do not believe that Arion Group Corp. can be classified as having “no or nominal operations”. We have carefully considered our company and believe that the company is an operating company, not a shell company. There is a focused business plan to distribute cedar phyto barrels. Our management has specific knowledge and background experience in our line of business as stated in the S-1. From inception, Arion Group Corp. devoted a significant amount of time to the development of its business. In furtherance of the planned business, Arion Group Corp. investigated the market demand for cedar phyto barrels and started negotiation with potential suppliers. Additionally, we have started to negotiate agreements with potential customers and have already received prepayments for cedar phyto barrels in the amount of $10,300. Our assets consist of not solely of cash, and while our assets and operations are not yet large in size, they are more than “nominal.” The assets and contracts that we have are sufficient for our business at this stage of development. We do not believe that such activities and the various other activities we have undertaken in the furtherance of our planned business can be classified as having “no or nominal operations”. We feel that we better fit the definition of a “start-up” company than a “shell company.”
3. It appears that you may be a blank check company as defined by Rule 419 under the Securities Act of 1933, as amended. In this regard, we note the following:
* your disclosure indicates that you are a development stage company issuing penny stock;
* you have not commenced operations and it is unclear whether you will be able to do so in the next 12 months;
* you have a net loss of $3,080 to date and you have not generated any revenues to date;
* you disclose that you have assets of only $4,583, consisting solely of cash and deposits; and
* your registration statement contains very general disclosure related to the nature of your business and your business plan.
In the adopting release of Rule 419, the Commission stated that “it will scrutinize registered offerings for attempts to create the appearance that the registrant is not a development stage company or has a specific business plan, in an effort to avoid the application of Rule 419.” Please provide a detailed analysis addressing each of the issues described above in explaining why you believe the company is not a blank check company. Alternatively, please revise the registration statement to comply with the requirements of Rule 419 and prominently disclose that you are a blank check company.
Response: We are not a blank check corporation. Section 7(b)(3) of the Securities Act of 1933, as amended defines the term “blank check company” to mean, any development stage company that is issuing a penny stock that, “(A) has no specific plan or purpose, or (B) has indicated that its business plan is to merge with an unidentified company or companies.” We have a specific plan and purpose. Our business purpose is distribution of cedar phyto barrels and we have already started our operations. In Securities Act Release No. 6932 which adopted rules relating to blank check offerings, the Securities and Exchange Commission stated in II DISCUSSION OF THE RULES, A. Scope of Rule 419, that, “Rule 419 does not apply to . . . start-up companies with specific business plans . . . even if operations have not commenced at the time of the offering.” Further, we included a statement on the cover page of the prospectus that we are nota blank check company and wehave no plans to engage in a merger or acquisition with another entity.
4. We note that your company’s name is similar to that of another established company, Arion Group. In this regard, please include information to eliminate any misleading inference as to your business, and a risk factor acknowledging this similarity and discussing the potential risks associated with the same, including any potential exposure to future legal proceedings because of your name. See Item 501(b) of Regulation S-K.
Response: We aren’t aware of another company named Arion Group.EDGAR search reflects none and the Nevada Secretary of State reflects none. We clearly state that we are a Nevada corporation through out of prospectus.
Prospectus Summary, page 5
5. You indicate in your Prospectus Summary that you are a development stage company who has yet to commence operations; however, on page 2 you indicate that you have “recently started [your] operation.” Please revise for consistency and make conforming changes throughout your registration statement.
Response: We have revised that we have started our operations throughout our registration statement.
Dilution, page 15
6. Please provide dilution disclosures assuming 25% of the shares are sold in the offering or tell us why such disclosure is not provided.
Response: We have provided dilution disclosures assuming 25% of the shares are sold in the offering.
Management’s Discussion and Analysis or Plan of Operation
Plan of Operation, page 19
7. We note the sentence in the middle of the first paragraph under Plan of Operations which indicates that if you sell more than 50% of the shares in the offering, that you believe the money will last more than a year. This appears to contradict your disclosure in the above paragraph that $100,000 from this offering will last one year, your use of proceeds disclosure on page 14, and your plan of operations which indicates that you will use all of the net proceeds from your offering in the next 12 months if you sell 75% or 100% of the shares in your offering. Please either clarify your disclosure or revise as appropriate, and make conforming changes to your filing.
Response: We have revised as appropriate.
Liquidity and Capital Resources, page 23
8. We note your disclosure throughout your document that you require minimum funding of $50,000 to conduct your business over the next twelve months and continue as a going concern. We also note that your plan of operations assumes at least 50%, or $50,000, is raised in your offering. We further note your disclosure which states that if you fail to sell less than 25% of shares in this offering, that you would be forced to scale back or completely abort the implementation of your twelve month plan of operations. Please disclose here, or in an appropriate place in your filing, what would occur if you sold less than 50%, but more than 25% of shares in your offering. In doing so, please disclose what would occur if no additional funding was secured either through Ms. Kriukova or other investors.
Response: We have revised to indicate that should the Company fail to sell less than 50% of its shares under this offering the Company would be forced to scale back or abort completely the implementation of its 12-month plan of operation.
Description of Business, page 23
9. We note your principal executive offices are located in the state of Florida in the United States, and that upon completion of the offering you plan to set up an office in Ecuador. Thus, it appears that you will have a non-U.S. resident officer and director. If applicable, in an appropriately captioned subsection of the business section, or in the risk factor section, please disclose an investor’s ability:
· to effect service of process within the United States against your non-U.S. resident officer or director;
· to enforce U.S. court judgments based upon the civil liability provisions of the U.S. federal securities laws against any of the above referenced foreign persons in the United States;
· to enforce in an Ecuadorian court U.S. court judgments based on the civil liability provisions of the U.S. federal securities laws against the above foreign persons; and
· to bring an original action in an Ecuadorian court to enforce liabilities based upon the U.S. federal securities laws against the above foreign persons.
Additionally, as applicable, please provide disclosure regarding the risks associated with your bank account being located in a non-U.S. jurisdiction and how that might affect investors’ ability to enforce judgments and civil liabilities.
Response: In response to this comment we have added a risk factor. Please be advised that the Company’s bank account in the U.S.
10. Please disclose how you plan to obtain your supply of cedar phyto barrels, and the names of any principal suppliers if known. For guidance, refer to Item 101(h)(4)(v) of Regulation S-K.
Response: We have disclosed how we plan to obtain our supply of cedar phyto barrels.
Product and Influence of Phyto barrels on the human body, page 24
11. Please supplementally provide us with your sources and support for the following statements, among other statements made in this section:
· “[p]hytosaunas are becoming more popular at home;”
· “there is virtually no organ in the human body, which would not have felt the positive impact of the adoption of phytosaunas;” and
· “[p]hytosaunas [are] a kind of herbal medicine, and if used properly they can cure many diseases, improve condition of the body and rejuvenate it, not to mention the fact that it can release . . . fatigue, depression and stress.”
Please disclose whether these statements are based upon management’s belief, industry data, reports, articles or any other source. If the statement is based upon management’s belief, please indicate that this is the case and include an explanation for the basis of such belief. Alternatively, if the information is based upon reports or articles, please disclose the source of the information in your filing and provide copies of these documents to us, appropriately marked to highlight the sections relied upon.
Response: We have disclosed that these statements are based upon management’s belief based on our experience andnumerous Internet articles.
Director, Executive Officer, Promoter, and Control Person, page 26
12. Please disclose the name and geographic location of Ms. Kriukova’s home and garden products distribution business. Also, please tell us whether she will continue to conduct this business while she plans and organizes the activities of Arion Group Corp.
Response: We have disclosed the name and geographic location of Ms. Kriukova’s home and garden products distribution business. She will continue to conduct this business while she plans and organizes the activities of Arion Group Corp.
Certain Relationships and Related Transactions, page 28
13. We note your disclosure elsewhere in your filing thatthe estimated cost of this registration statement is $8,000 and that Ms. Kriukova has verbally agreed to loan the company funds to complete the registration process. Please describe this currently proposed transaction under this heading. For guidance, refer to Item 404(a) of Regulation S-K.
Response: We have described this proposed transaction under this heading.
Plan of Distribution
Procedures for Subscribing, page 30
14. Please revise to describe the manner in which investors will subscribe for and receive their shares. Please file your form of subscription agreement as an exhibit to this filing. See Item 601(b)(10) of Regulation S-K.
Response:In responseto this comment we have filed our form of subscription agreementas an exhibit to this filing. We have also disclosed that if a shareholder decides to subscribe for any shares in our offering, he must:
-
execute and deliver a subscription agreement which is filed as an exhibit to this prospectus; and
-
deliver a check or certified funds to us for acceptance or rejection.
All checks for subscriptions must be made payable to “Arion Group Corp.” The Company will deliver stock certificates attributable to shares of common stock purchased directly to the purchasers.
Undertakings, page 45
15. Please revise the undertaking under your section (a)(5)(i) to be consistent with the undertaking provided Item 512(a)(6)(i) of Regulation S-K.
Response: We have revised the undertaking under our section (a)(5)(i) to be consistent with the undertaking provided Item 512(a)(6)(i) of Regulation S-K.
Please direct any further comments or questions you may have to the company atariongroup2016@yandex.com.
Thank you.
Sincerely,
/S/ Nataliia Kriukova
Nataliia Kriukova, President