MAIL STOP 3561
August 9, 2005
Sara Preston, President
Bella Trading Company, Inc.
945 E. 10th Ave.
Bloomfield, CO 80020
Re: Bella Trading Company, Inc.
Amendment No. 2 to Registration Statement on
Form SB-2
Filed June 13, 2005
File No.: 333-121034
Dear Ms. Preston:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. In your next amendment filed on EDGAR, please include page
numbers.
Registration Statement Cover Page
2. We note your response to comment one of our letter dated March
11,
2005 that you will rely upon Rule 416 to cover any additional
shares
that will result from a stock split. Please advise how Rule
416(a)
of Regulation C applies to your securities. If paragraph (a) of
the
rule does not apply, it would appear that you have to amend the
registration statement prior to the offering of such additional
securities as required by paragraph (b) of the Rule. Please see
Rule
416(b) of Regulation C of the Securities Act of 1933.
Prospectus Summary
3. We note that all of your products are "imported from Nepal."
Please revise to reconcile that with your disclosure in the
business
section.
Risk Factors
4. We reissue comment three. The disclosure in the MD&A section
indicates that you will not be "listed on the OTC Bulletin Board"
until "four months after [the] date of this prospectus." The
cover
page appears to indicate the offering will end before the four
month
anniversary of this offering.
5. We note your response to comment two. The EDGAR version of
your
registration statement does not distinguish between the
subheadings
and narratives. Please revise accordingly.
6. We note your response to comment six. Please revise the
subheading of risk factor six to include the fact that your
auditors
have a "substantial doubt" as to your ability to continue as a
going
concern.
7. We note your response to comment seven and reissue the comment.
If the listed items encompass material risks, please revise to
discuss each as a separate risk factor or relocate the disclosure
to
the appropriate section of your prospectus.
8. We note your response to comment eight. The risk factor does
not
appear to have a narrative discussing the risk and effects that
would
occur should such risk materialize. Please revise to include a
narrative to risk factor seven.
Use of Proceeds
9. We note your response to comment 13. It appears your revisions
have resulted in an incomplete sentence. Please review the
sentence
that begins with "Bella`s anticipated marketing expenditures may
increase or decrease depending on its level of sales, since
additional sales." and revise accordingly.
10. We note the additional disclosure that if you can "increase
sales" without increasing marketing efforts, you may "decrease
marketing expenditures." If you decide to decrease marketing
expenditures, please revise to clarify how doing so will further
your
business objectives.
Management`s Discussion and Analysis and Plan of Operation
11. We note the additional disclosure regarding your sales for the
six months ended March 31, 2005. We note from inception to
September
30, 2004 you had gross revenues of $6,800 and from October 1, 2004
to
March 31, 2005 you had gross revenues of $2,920. Please revise to
explain the apparent decrease of sales.
12. We note the disclosure of gross profit in terms of the
percentage
of gross revenues. Please revise to quantify your gross profits
for
the disclosed periods.
13. We note the additional disclosure that the increase in gross
profit as a percent of gross revenues was due to your increase in
prices during the Christmas season. Please revise to clarify if
you
are continuing to charge the "Christmas" prices.
14. We note the following:
* You have used $9,787 in cash for operations since inception.
($3163
+ $6624)
* You have total revenues of approximately $9,720 since inception.
* You paid $9,000 in cost relating to the private placement and
current offering.
* Your use of proceeds disclosure indicates that you have paid
$18,000 in cost relating to this offering from your private
placement.
Revise your disclosure in the use of proceeds section to clarify
the
portion of the $18,000 offering expense that was paid by private
placement funds. In this section, please revise to disclose the
amount of cash you netted from your private placement. Also,
revise
to disclose the amount of cash you have on hand as of the most
practicable date and your operating expenses for the disclosed
periods and reasons behind such expenses.
15. We note your response to comment 16. In the business section,
you have not discussed how you will improve the website. Will you
need to hire additional personnel? Is current management able to
improve your website on their own? Will current management be the
ones undertaking the "mailing" activities and "charity events"
visits? Have you already prepared advertising flyers to be used
in
conjunction with your "mailing lists"? If not, when do you and
anticipate preparing such flyers and who will conduct the
preparations? Please revise accordingly.
16. Considering your management is engaged in full-time employment
elsewhere, please revise to clarify how they will be able to
attend
and sell your products at craft shows, private showings, and local
art studios.
17. Please clarify if management has conducted any research
regarding
the efforts it would take to have your products "listed in
catalogues
which cater to small boutique jewelry and accessory consumers."
It
would appear that having your products listed in a catalogues
would
be considered a marketing/advertising activity. Please advise.
18. We note your response to comment 19 that if you are not able
to
obtain additional financing, you will continue to operate in your
"present mode." Please revise to disclose your cash requirements
for
the next 12 months if you were to operate in the "present mode."
Business
19. We note your responses to comments 23 and 24 that your
reference
to Zales and Whitehall jewelers is appropriate. We reissue the
comments. Instead of referencing to national chains, please
revise
to describe and define your use of the term "contemporary
jewelry."
20. We note that there are a substantial number of vendors in
Nepal
and Thailand which provide traditional ethnic products which are
similar to yours. Please revise to clarify if that also applies
to
your "contemporary jewelry." Also, please substantiate the noted
disclosure.
21. We note your response to comment 27. Please revise to explain
how your "contemporary" products are designed since it appears
they
are not designed based on the origin of the product.
22. We note that you could sell through "catalogues." It would
appear from your plan of operations disclosure that you are
referring
to catalogues owned or run by other entities. Please revise to
clarify how catalogue orders are structured. Does the catalogue
actually allow customers to purchase from you or would they be
required to purchase from the catalogue company which then routes
the
order to you?
23. Please revise to update the date at which you intend to
commence
sales over the internet.
Executive Compensation
24. We note your response to comment 40. Please revise to clarify
if
such compensation would just accrue if you are not able to raise a
sufficient amount of funds from this offering. If so, clarify if
the
salary would accrue interest also.
Transactions with Related Parties
25. It is not clear how you were able to use the funds from the
private placement to pay both the expenses of this offering and
some
of your general and administrative expenses. Please revise to
clarify.
Offering By Bella
26. We note your response to comment 42. Please review Rule 3a4-
1(a)(4)(ii) of the Securities Exchange Act of 1934. If after your
review, you continue to assert that you will not rely upon Rule
3a4-1
in conducting this offering, please provide us with a detailed
analysis of how your officers are able to conduct this offering
without being a registered broker/dealer or relying upon the
exemption provided by Rule 3a4-1.
27. We note your response to comment 43. We note you do not have
any
criteria set for accepting or rejecting subscriptions and you only
"anticipate" subscriptions to be accepted within 10 days. We do
not
understand how you can file a registration statement if you have
not
set the parameters of the offering. Your Item 508 of Regulation
S-B
disclosure should outline your plan of distribution. While such
outline may be brief, it should be complete. Please revise your
disclosure accordingly or advise.
28. We note the additional disclosure that any "subscription may
be
withdrawn prior to its acceptance by Bella." Please revise to
explain how this works. If the "mailbox" rule will govern the
acceptance, withdrawal, revocation and rejection of any offers to
buy
or offers to sell, please revise to explain the mechanics so that
investors can fully understand their options.
29. We note your response to comment 44 that you will not use a
subscription agreement. Please revise to clarify how purchasers
will
send you "subscriptions." Please file the document that will
evidence a purchaser`s acceptance of your offer to sell.
30. We reissue comment 45. It appears that the company only has
available to it $16,000 to pay $18,000 in current and outstanding
expenses. Please revise to explain how the available funds will
be
enough to pay for the current expenses.
Financial Statements, F-2
31. We reviewed your response to our prior comment 49 and noted
the
restatement of the financial statements. In conjunction with this
restatement, provide a note to the financial statements that
explains
all revisions made, in accordance with paragraph 37 of APB 20.
Obtain an updated audit report, as necessary to comply with AICPA
Auditing Standards Section 561.06a, with dual dating of the audit
report necessary in some circumstances.
Part II
Recent Sales of Unregistered Securities
32. We note your response to comment 48. The comment was seeking
revision in Part II of the Registration Statement. Please revise
accordingly. Also, please supplementally provide us a copy of the
Form D that documents this transaction.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Any questions regarding the financial statements may be
directed to Brian Bhandari at (202) 551-3390. Questions on other
disclosure issues may be directed to Duc Dang at (202) 551-3386.
Sincerely,
John Reynolds
Assistant Director
cc: William T. Hart, Esq.
Fax: (303) 839-5414
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Sara Preston, President
Bella Trading Company, Inc.
August 9, 2005
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