MAIL STOP 3561
January 12, 2006
Sara Preston, President
Bella Trading Company, Inc.
945 E. 10th Ave.
Bloomfield, CO 80020
Re: Bella Trading Company, Inc.
Amendment No. 3 to Registration Statement on
Form SB-2
Filed November 30, 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.
Risk Factors, page 4
1. We note your response to prior comment seven of our letter
dated
August 9, 2005 that you believe that there is only one risk that
being the decrease of stock price. We also note that the risk
factor
disclosure appears to bundle the listed risks into one risk
factor.
Please refer to the Division of Corporation Finance`s Updated
Staff
Legal Bulletin 7A, which is located at
http://www.sec.gov/interps/legal/cfslb7a.htm for your convenience
and
revise your disclosure accordingly.
2. Please revise the EDGAR version of your amended registration
statement. We are not able to locate your means of identification
for the risk factor subheadings.
Management`s Discussion and Analysis an Plan of Operation, page 10
3. We note the additional disclosure that your gross profits
decreased during the year ended September 20, 3005 because you had
to
provide discounts in order to maintain sales. Please revise to
discuss your outlook on these discounts so that investors can
understand the likelihood of this being a recurring event.
4. We note your response to prior comment 14. We also not that
your
previous amendment disclosed that you "had paid" $18,000 of cash
received from your private placement. Because you disclosed in
your
financial statements that you only netted $16,000 from the private
placement, the prior comment was issued to obtain an understanding
of
the discrepancies between the disclosure and the actual amount you
received in the private placement. On page 7, such disclosure has
changed in this amendment to reflect that you have now only paid
$10,600. Please ensure that the figures disclosed in your
prospectus
are reconciled with your financial statements.
5. We note the lack of disclosure regarding your operating
expenses.
A discussion of your operating expenses is material to an
investor`s
understanding of your business. For instance, costs that are
fixed
and those that are variable inform investors about the flexibility
you have in adjusting your spending depending on changes in
revenue.
Also, elaboration on your operating expenses also informs
investors
of expenses that will be recurring in future periods. Please
revise
to elaborate on your operating expenses for the disclosed period.
6. We note your response to prior comment 15. The prior comment
did
not ask "how the flyers" would be prepared, but was more concerned
with the timeline for which the additional marketing efforts would
be
initiated and if additional personnel would be needed.
Additionally,
disclosure of the scope as to which the flyers would be
disseminated
would allow investors to understand the extent of the company`s
efforts. Please revise your disclosure accordingly.
Business, page 11
7. We note your response to prior comment 19. The disclosure in
this
section pursuant to Item 101 of Regulation S-B requires a
discussion
and description of your products. Merely referencing a competitor
as
a means of describing an issuer`s products is not appropriate. It
is
not evident from your disclosure that you sell platinum, gold, or
other diamond jewelry. Furthermore it is not evident that you
sell
jewelry that is typically in the price range of those sold at the
jewelers you identified in your prospectus. The initial
description
in the summary section and the disclosure in this section are
appropriate. Please revise to remove the reference to Zales and
Whitehall in describing your products.
8. We note your response to prior comment 21. The comment was
issued
to obtain an understanding as to how your products are designed
and
manufactured. If you take no role in the design of your products,
such disclosure enhances an investor`s understanding of your
operations. Additionally, if the contemporary products` design is
generic in nature it would appear your sole method of competition
is
through the pricing of your products. If such is the case,
disclosure of this fact would also be appropriate. Considering
your
size and product offerings, a full understanding of your company
is
essential to investors` evaluation of the risk and reward they
will
assume by investing in your company. Please revise your
disclosure
accordingly.
9. We note your response to prior comment 22. To the extent that
you
would fill the orders, you may only have to pay a fee to have your
products listed. To the extent that the catalogue company would
fill
the order, they may take a cut in the sale which would reduce your
revenue per sale. In either event or any other type of structure,
an
understanding as to how you intend to earn revenue is material to
investors as it is part of your plan of operations. Please revise
accordingly.
Executive Compensation ,page 16
10. We note your response to prior comment 24 that the
compensation
that is not paid will not accrue. Please revise to clarify how
this
arrangement is carried out. Each officer is paid $12,000 per
year.
Revise to clarify if the non accrual is evaluated monthly, yearly,
or
some other definite period. For instance, if compensation is not
paid for three months, clarify if such amount of compensation is
not
recoverable.
Transactions with Related Parties, page 17
11. We note your response to prior comment 25. Please be aware
that
your previous amendment disclosed that you had paid $18,000 worth
of
offering expenses and your general and administrative expenses
with
your private placement proceeds which only totaled $16,000.
Because
of the discrepancies, we issued the prior comment.
Offering by Bella, page 18
12. We note your response to prior comment 27. We note your
reference to two companies that have recently gone effective. The
two referenced offerings are both firm commitment underwritten
offerings in which the proceeds to be received by the company will
be
paid upon effectiveness of the respective registration statements.
The disclosure requirements for such offerings are different from
yours. Please review and compare Item 508 (a) and (c) of
Regulation
S-B. We reissue the comment. While such outline may be brief, it
should be complete. We note that you can terminate the offering
before the disclosed termination date. Discuss the factors
considered to terminate the offering "sooner" if all the shares
have
not been sold. Please be aware that the comments issued only seek
to
provide a full picture of the details of this offering.
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.
January 12, 2006
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