Mail Stop 0511
April 6, 2005
Mark Poulsen, Chief Executive Officer
Fit for Business International, Inc.
3155 E. Patrick Lane
Suite 1
Las Vegas, Nevada 89120-3481
RE: Fit for Business International, Inc.
Registration Statement on Form SB-2
Filed: March 7, 2005
File No. 333-123176
Dear Mr. Poulsen:
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. We note that your registration statement registers the resale
of
up to 2,870,000 shares of common stock by selling shareholders.
We
also note that there is currently no market for your common
shares.
Given this, please revise your prospectus cover page, the risk
factors section, and the plan of distribution section to provide
that
selling security holders will sell at a stated, fixed price until
the
securities are quoted on the OTC Bulletin Board and, thereafter,
the
selling security holders may sell at prevailing market prices or
privately negotiated prices. This includes the shares registered
for
resale in connection with the issuance of common shares upon the
exercise of outstanding common stock options. See Item 16 of
Schedule A to the Securities Act of 1933. Recalculate your
registration fee, if necessary, based upon this offering price.
2. We note the registration of 2,000,000 shares of common stock to
be
issued "in connection with the conversion of options issued to
Fort
Street Equity." You are reminded that it is the position of the
staff that the securities underlying securities that were sold
privately must also be converted privately pursuant to an
exemption
from registration. They are part of the same transaction. Only
the
resales of the underlying securities may be registered by this
registration statement and the exercise or conversion transaction
between the selling shareholders and the company remains private,
subject to the limitations of available exemptions. Please revise
disclosure throughout the prospectus accordingly.
3. Revise your disclosure referencing your intent to have the
company`s securities listed on the OTC Bulletin Board to clarify
that
there is no assurance that such securities will be listed for
trading
on the OTC Bulletin Board.
4. Please provide the disclosure required by Item 510 of
Regulation
S-B, Disclosure of Commission Position on Indemnification for
Securities Act Liabilities.
Prospectus Cover Page
5. Please limit your disclosure on the cover page to that
information
required by Item 501 of Regulation S-B. For example, consider
removing the reference to the state of incorporation, the par
value
of the common stock, and the information contained in the third
paragraph. Since the information in the third paragraph will be
addressed later in the prospectus, you do not need to include this
disclosure on the cover page. Also, please remove all
parenthetically defined terms such as "the Company," "the
Offering,"
and "the Initial Offering Period." The use of these defined terms
inhibits the readability of the cover page.
6. Please limit the outside front cover of the prospectus to one
page. Refer to Item 501(a) of Regulation S-B.
7. Please disclose the type of offering by the company. For
instance, is this a self-underwritten no minimum, minimum-maximum
or
all-or-none? Also, please disclose whether there are any minimum
purchase requirements and whether or
not there are any arrangements to place the funds in an escrow,
trust
or similar account, as required by Item 501(a)(9)(iii) of
Regulation
S-B.
8. Clarify what you mean when you disclose that the company`s
shares
"are not listed on any recognized exchange." Tell us what you
mean
by the term "recognized exchange."
9. Revise your cross-reference to the risk factors section by
including a page number where the risk factors section appears in
the
prospectus. See Item 501(a)(5) of Regulation S-B.
10. Please provide the disclosure required by Item 501(a)(9)(iv)
of
Regulation S-B.
11. We do not understand the following disclosure: "This
registration
statement will be amended and completed from time to time, as
necessary." Supplementally advise.
Inside Front and Outside Back Cover Page
12. Please provide the dealer prospectus delivery obligation as
required by Item 502(b) of Regulation S-B.
Prospectus Summary
13. Please add summary financial data.
14. Please add disclosure addressing the company`s going concern
qualification.
About Us
15. Clarify your disclosure in this section regarding the
corporate
history of the registrant. For example, when addressing the
acquisition of all of the issued and outstanding shares of Fit for
Business (Australia) Pty Limited, consider disclosing that Mark A.
Poulsen and Mark Poulsen & Associates Pty. Ltd were, as it
currently
appears, 100% owners of Fit for Business (Australia). Also, in
the
second paragraph, explain your use of the term "wholly owned
subsidiary" as it relates to the reverse merger. Revise similar
disclosure in the "Business" section. Are your operations
conducted
through your subsidiary? If so, please make this explicit.
Securities Offered By Us
16. Please add disclosure addressing the nature of the secondary
offerings.
17. Please explain the statement on page 8 that "you will be
purchasing our shares from us and not our selling security
holders."
This registration statement includes the resale of the selling
security holders.
Risk Factors
18. Please add an introductory paragraph that states all
"material"
risks are disclosed in this section.
19. Revise your risk factor subheadings to ensure that your
subheadings clearly reflect the material risk disclosed in the
narrative. For example, the subheading for risk factor 4 merely
states the fact your business is subject to extensive government
regulation. Please revise your subheadings so that they
adequately
describe the specific risk that results from the stated fact. To
assist you in this regard, we refer you to "A Plain English
Handbook
- - How to Create Clear SEC Disclosure Documents," issued by the
Office
of Investor Education and Assistance, which is available on our
website at www.sec.gov, and the updated version of Staff Legal
Bulletin No. 7, dated June 7, 1999.
20. In the first risk factor, disclose the circumstances under
which
the stated risk could materialize. For example, describe the
circumstances under which the company could lose these key
personnel.
Also, explain why these persons are "essential" to you operations
and
growth. What are the roles and responsibilities of these
individuals?
21. Please avoid the generic conclusion you reach in many of your
risk factors that the risk could negatively impact or have an
adverse
effect on your business or your business could suffer negative
consequences. Instead, replace this language with specific
disclosure of how your business and operations would be affected.
22. Consider combining the fourth and fifth risk factor, as they
both
focus on the governmental regulations regarding your business and
Herbalife.
23. Please remove risk factors six and nine, as they are generic
risks.
24. Please add risk factors discussing dilution to investors in
this
offering, risks associated with doing business in a foreign
country,
currency fluctuations, and the going concern raised by the
independent auditors.
Use of Proceeds
25. To the extent practicable, please provide more specific
disclosure regarding the allocation of the use of proceeds. For
each
enumerated use, add disclosure discussing the items that comprise
each use. We specifically refer you to the Multi-Media Training
Programs; Marketing, Promotion Literature and Brand Campaign
Costs;
and International Market Development. Currently, the disclosure
is
vague. Also, provide more specificity concerning the amount
allocated to working capital.
26. We note your statement that the "[t]he net proceeds may be
reallocated among the categories set forth above or otherwise
depending upon the state of our business operations and other
factors, many of which are beyond our control." Be advised that
you
may change the use of proceeds provided such reservation is due to
certain contingencies that are specifically discussed and the
alternatives to such use are indicated. Refer to Instruction 7 to
Item 504 of Regulation S-K for guidance. Please revise your
disclosure accordingly.
27. Please discuss the allocation of proceeds if you raise less
than
$1 million.
28. State whether any of the proceeds will be used to compensate
officers and directors. We note the reference to allocation of
working capital to salaries. If so, please name the officer or
director and state the amount so allocated.
29. Reconcile the disclosure regarding how long the maximum
offering
will sustain your business. You refer in this section to both 12
and
18 months.
Management`s Discussion and Analysis
General
30. The disclosure in the last sentence of the first paragraph is
repetitive. Revise as appropriate.
31. The disclosure in the second paragraph is confusing. For
example, we do not understand the statement that you "believe that
the effect implementation of our business plan will result in our
position as a provider of wellness programs to the business . . .
.."
Please revise.
Results of Operations and Liquidity and Capital Resources
32. Please explain the statement that you have conducted
operations
since 1998 when your business was not incorporated until 2001.
Please include disclosure required by Item 101(a) of Regulation S-
B
regarding all predecessors.
33. Given your current cash position, explain how you intend to
pay
the costs associated with this offering which you estimate to be
$300,000, especially since there is no minimum and you may be able
to
raise only nominal funds from this offering.
34. On page 17, clarify your use of the term "groupings."
35. Please disclose the cash on hand as of the most recent
practicable date.
36. Please clarify the reference to commencing product sales in
the
first quarter of 2005. The first quarter of your fiscal year has
already been completed.
37. Revise to describe the nature and terms of the license that
you
sold in Australia. Tell us supplementally if the license
discussed
in this disclosure is the same as the one with LR Global, as
disclosed in the notes to the financial statements.
38. We note the disclosure that "program sales will commence in
the
first quarter of 2005." Please provide us with a supplemental
response explaining your basis for anticipating first quarter
revenues or revise to eliminate this disclosure.
39. Revise to disclose the reason for the increases in general and
administrative expenses during the December 31, 2004 quarter.
40. You state that your business needs an additional $185,000 to
carry it through from April to June 2005. Revise to disclose
whether
the $185,000 cash requirement is on top of the $382,250 that is
due
to you by LR Global by May 31, 2005. Disclose the due date of the
accounts receivable in MD&A.
41. You state, "[i]n order to become profitable, we may need to
secure additional debt or equity funding". Please revise to
clarify
how additional debt or equity funding will improve your
profitability.
42. You state that if you do not receive funding from this stock
offering, "public offerings of equity" will be necessary. Revise
to
disclose if you have a plan to file another registration statement
and if not, clarify the meaning of the disclosure.
43. Please provide the disclosure required by Item 303(b) of
Regulation S-B regarding your results of operations. The
Management`s Discussion and Analysis ("MD&A") section is one of
the
most critical aspects of Form SB-2. As such, we ask that you
revise
this section to discuss the events, trends, and uncertainties that
management views as most critical to the company`s revenues,
financial position, liquidity, plan of operations and results of
operations. In an effort to assist you in this regard, please
refer
to the Commission Guidance Regarding Management`s Discussion and
Analysis of Financial Condition and Results of Operations, Release
Nos. 33-8350 (December 19, 2003) at
http://www.sec.gov/rules/interp/33-8350.htm. This guidance is
intended to elicit more meaningful disclosure in MD&A in a number
of
areas, including the overall presentation and focus of MD&A, with
general emphasis on the discussion and analysis of known trends,
demands, commitments, events and uncertainties, and specific
guidance
on disclosures about liquidity, capital resources and critical
accounting.
Plan of Operation
44. The disclosure contained on pages 18 and 19 regarding the
company`s activities for the past three months is vague. Please
provide more specific disclosure as it relates to the following
concepts:
a. "Continuing to enhance and further develop our Web based
management information systems;"
b. "Providing input and direction for further wellness program
selection, features, benefits and design of programs planned to be
supplied to our various customer groupings;" and
c. "Establishing appropriate segmented marketing approaches and
contact databases for the planned sale of our programs wellness
programs to these markets."
45. Given your limited operating history and generation of
revenues,
the company is required to provide a detailed plan of operation
for
the next 12 months. Substantially revise this section to discuss
with greater specificity the steps you intend to take in
furtherance
of your plan of operation. Please provide a potential investor
with
comprehensive disclosure of the direction in which you plan to
take
your company in the next twelve months of operation. Given that
there is so little context to your discussion of your operations,
please revise your disclosure so that a potential investor may
clearly understand the concept of your business and how you intend
to
commence and sustain meaningful operations. You should provide as
much background as necessary while ensuring that your disclosure
is
not repetitive of information appearing elsewhere in the
prospectus.
You should focus your discussion in monthly or quarterly
increments
and discuss the steps necessary for, the costs associated with,
and
projected timeframes for achieving sustained first revenues.
Currently, you identify several specific milestones; however, your
disclosure is vague and does not provide an investor with vital
information that he or she needs to evaluate the methods by which
you
intend to achieve your stated objectives. We may have additional
comment after reviewing your revised disclosure.
46. Please update to disclose whether you have any material
commitments for capital expenditures as required by Item
303(b)(iii)
of Regulation S-B.
47. Explain how you intend to develop "brand awareness" and how
you
intend to commence "market building activities." In addition to
the
referenced TV program, what are "market building activities" and
what
are the costs associated with them?
48. Disclose the costs associated with your 13 episode TV program
and
specifically explain how you intend to bring this program to
fruition. Clarify the nature of the program and the amount of
funds
that will be necessary to pay for it. Are there any agreements in
place with respect to the production of the program? If so,
disclose
the material terms of the agreement and file the agreements as
material exhibits.
49. On page 19, explain your use of the term "sales pipeline."
50. Describe all of steps and costs associated with opening "new
country markets."
Business
51. Throughout the Business section, you discuss "customer service
representatives" and "account executives". Revise to clarify the
differences between the two positions. If the positions are one in
the same, please clarify this in the document.
52. Explain the issuance of shares to "former officers and
directors"
on May 30, 2001 the date the company was incorporated.
53. Please disclose the state and date of incorporation for Fit
For
Business (Australia) Pty Limited.
54. Disclose the material terms of the exchange agreement.
Discuss
whether any finders` fees were paid or whether any other
consideration was paid, directly or indirectly.
55. Please disclose the activities that Fort Street Equity, Inc.
has
performed for the company in connection with this registration
statement.
56. We do not fully understand the nature of your business and it
is
not clear what activities the corporate entity undertakes since it
appears that the account representatives and customer service
representatives are the individuals who market and distribute
Herbalife products. It further appears that the account
executives
and customer service representatives are obligated to provide the
company with a portion of the earnings generated from the sale of
the
Herbalife products. To this extent, we ask that you thoroughly
revise your disclosure in this section and throughout your
registration statement to clarify the current status of your
operations and your proposed business operations. Your current
description of your business and the services the company provides
is
vague and difficult to comprehend. Clearly disclose the business
activities the company engages in, the precise activities your
company will, in the future, engage in and describe and explain
the
precise relationship between account executives and the company.
We
may have further comment after reviewing your revised disclosure.
57. Describe the company`s precise relationship with Herbalife
International, Inc. Is Herbalife aware of the company`s business?
Does Herbalife permit such a network marketing system? If so,
describe any restrictions that Herbalife imposes on your
operations
or those of your account executives and customer service
representatives. Please substantiate your responses.
58. You refer to account executives and customer service
representatives. Specifically disclose the difference, if any,
between these two roles. Also, describe how the precise
relationship
between the company and the account executives and customer
service
representatives. Clear disclosure of how these individuals impact
your operations is required. Also, disclose whether any of your
officers and directors are account executives or customer service
representatives. We may have further comment.
59. Disclose whether or not the company maintains an internet
site.
Corporate Wellness Solution Program
60. Explain the reference to "ISO9001 quality assured" program
when
first mentioned.
61. We note your statement that you intend to supply businesses
with
a proactive solution to attempt to address their productivity,
stress
and absenteeism issues . . . ." Please elaborate.
Living Well Program
62. Please elaborate on your use of the term "royalty overrides."
63. Please revise to clarify how the "account executive downline
organizations" work. You state that sponsors receive royalty
overrides. Disclose who these sponsors are. Revise to disclose
how
the sponsors receive these royalty overrides. Revise this
paragraph
in its entirety.
Products and Services
64. You state that customer service representatives follow-up with
individual customers on the "first, third, seventh, fourteenth and
twenty-first day of the program and regularly thereafter." In
"Costs" on page 35, you state that each individual program lasts
for
one month. Clarify in this section the length of all programs. If
the program length is particular to each contract, please disclose
this. Also consider disclosing the average length of each
contract,
if relevant.
Fit For Business Program Return and Buy-Back Policies
65. Please disclose the "specified documentation requirements"
referenced on page 27. Also, explain why you believe your buy-
back
policy "addresses a number of the regulatory compliance issues
pertaining to network marketing systems."
Network Marketing System
66. We note that you offer a structured work force whereby account
executives must be sponsored by existing account executives.
Please
add disclosure to discuss in detail this aspect of your business.
Provide substantial detail regarding the payment structure of
these
transactions and provide examples as necessary. Disclose the
amount
and percent of revenues to date that are attributed to this aspect
of
your business. Also, a pyramid sales structure may be considered
a
security or inherently fraudulent under federal law. See Release
no.
33-9387 (November 1971). In addition, these sales structures may
be
illegal under state law. Supplementally, with a view to
disclosure
in your prospectus, please address whether your sales structure
involves a security under federal law or is illegal under federal
or
state law ot under Australian law. We may have further comment.
67. What are the contents of an "account executive kit" referenced
on
page 28?
68. Further elaborate on your "international sponsorship program"
and
explain why you believe it "provides a significant advantage to
our
account executives as compared with account executives in some
other
network marketing organizations."
Geographic Profiles and Sales Trends
69. On page 28, explain why you expect "an initial period of rapid
growth in sales" as you enter new countries. Also provide a
reasonable basis for your assertion.
70. Please provide a basis for the following assertion: "We
believe
that a significant factor affecting these markets has been the
opening of other new markets within the same geographic region or
with the same or similar language or cultural bases, and the
corresponding tendency of some account executives to focus their
attention on the business opportunities provided by new markets
instead of developing their established downline organizations in
existing markets." Also, explain your use of the term "downline
organizations."
Fit For Business Program Distribution
71. Please expand your disclosure regarding your web-based
management
information system. What does it entail and how does it impact
your
operations?
Governmental Regulation
72. We note the discussion of the US regulation of your business.
Please indicate whether any of your business or intended business
will occur in the United States. Discuss whether you have
generated
any revenues from sales in the United States.
73. A significant portion of the disclosure in this section is
boilerplate and does not sufficiently capture how your company`s
operations are impacted by the myriad governmental regulations
that
you are subject to. Revise your disclosure to provide specific
information about how each facet of your company is affected by
existing or probable governmental regulations. See Item 101(a)(8)
of
Regulation S-B. Also discuss the laws of the jurisdiction(s)
where
you conduct or plan to conduct your business.
Retail Sales
74. You state that "retail sales represent the gross sales amounts
reflected on our invoices by our account executives." A few
sentences later in the paragraph, you state that "[t]he retail
sales
price of our programs is reflected in account executive invoices
as
the prices charged to customers together with, in most cases, a
deduction for the corresponding account executive profit." Please
reconcile these statements and revise the disclosure accordingly.
75. In multiple areas of the Business section, you state that the
company retains 15% of gross receipts while 85% of the proceeds go
to
the customer service representative which includes the customer
service representative compensation of 35% of gross receipts.
However, in the "Retail Sales" section, you state that net sales
represents the actual purchase price paid to the company by the
account executive after account executive profits which total
approximately 35% of the retail sales prices (and freight and
handling). Please revise the disclosures to clarify how the
retail
sales receipts are distributed to the various people and entities
involved in the sales process. Also, ensure consistent disclosure
throughout the document with respect to this matter.
76. Revise to clarify the disclosure that states, "[b]eginning
January 1, 2001, we adopted a new accounting pronouncement in
Australia, which requires handling and freight income charged to
account executives to be included in net sales." Tell us
supplementally the specific accounting standard referred to in
this
statement and whether the Australian accounting pronouncement is
in
accordance with U.S. GAAP.
Costs
77. Please expand your disclosure to specifically discuss what the
benefits, products, and services a customer receives if he or she
purchases a particular program.
Employees
78. Please disclose the total number of employees, as well as the
number of full-time employees. See Item 101(b)(12) of Regulation
S-
B.
79. Disclose the positions and responsibilities of each of your
four
employees. Also, disclose all material terms of the employment
agreements and file the agreements as material exhibits.
Independent Account Executives and Customer Service
Representatives
80. Expand your disclosure about your "code of conduct and quality
assured procedures."
Australian License Agreement
81. Please expand your disclosure regarding the purpose of the
license agreement with LR Global Marketing Pty Ltd. Also, explain
how the license agreement impacts your operations, financial and
otherwise, and identify the principals behind this entity. In the
"Certain Relationships and Related Transactions" section, you
disclose that LR Global Marketing acts as trustee for Fit for
Business Australia/New Zealand Trust. Who are the principals
behind
LR Global? Please explain.
82. You disclose that LR Global has the right to use your logo,
your
management information system, and "other material." Explain
"other
material."
83. Please substantiate your disclosure that "LR Global will
receive
a five (5%) percent commission directly from Herbalife on the
sales
of the Herbalife products generated by `LR Global.`" Has
Herbalife
agreed to this commission?
84. Please disclose whether there is any relationship between LR
Global and your company, its officers, directors or affiliates.
Intellectual Property
85. Please elaborate on your disclosure regarding patents,
trademarks, licenses, etc. Have you obtained intellectual
property
rights for your technology? If so, please identify the patents,
trademarks, licenses, etc., discuss the information they cover,
and
please disclose their duration. To the extent intellectual
property
rights have not been obtained, disclose the costs associated with
obtaining the rights. Also, for each item for which you are
seeking
intellectual property, specifically disclose how the item fits
within
your business concept and how it impacts your operations. Your
current disclosure is very general in nature. See Item 101(b)(7)
of
Regulation S-B.
Description of Property
86. Please disclose the costs associated with your leasing of
office
space from Mark Poulsen & Associates Pty Ltd. and from Incorp
Services.
Directors, Executive Officers, Promoters, and Control Persons
87. Pleases clarify whether the company has a Chief Executive
Officer. On page 40, you identify Mr. Poulsen as the CEO. In the
table, however, you name him as the company`s President and
Chairman
of the Board. Advise or revise your disclosure as appropriate.
88. With respect to Mr. Poulsen`s experience, you disclose that he
"started his own marketing and distribution company." Name the
company and provide more specific disclosure about its marketing
and
distribution. For example, what did the company market and
distribute? Was it Herbalife products?
89. Please disclose each person`s term of office as a director and
the period during which the person has served. See Item 401(a)(3)
of
Regulation S-B.
90. For the last five years or for any longer period of time that
you
voluntarily cover, present the following for each member of
management:
- - the title of each position held;
- - the duties of each position if not clear from the title;
- - the beginning and ending dates by month and year of each
position;
- - the name of the entity with whom the position was held; and
- - the activities of the entity.
91. With respect to Mr. Ralston`s experience, please describe the
business nature of Ingeus Limited.
92. With respect to Ms. Wendt`s experience, identify the privately
owned companies for which she is responsible for the "financial
control." Also, explain your use of this term.
93. Please name all promoters of the company. Refer to the
definition of "promoter" in Rule 405 of Regulation C.
94. Please discuss the potential conflicts of interest with
management. Discuss whether the company has adopted a policy
regarding conflicts of interest. Consider adding a risk factor.
Executive Compensation
95. We note reference to footnote (1) in the tabular presentation
yet
there is no corresponding textual information. Revise or advise.
Executive Compensation
96. Explain to us why the information contained in this section is
not included in the Summary Compensation Table. If these
agreements
were entered into after the last fiscal year, please disclose the
date.
97. Explain the company`s basis for awarding Mr. Poulsen a
$388,250
bonus to be paid with 30 days after the listing of the company`s
common stock on the over-the-counter bulletin.
98. Does Mr. Poulsen`s employment agreement contemplate benefits
or
other bonuses? If so, please describe.
99. Please describe the "benefits and bonus" that are part of
Messrs.
Ralston`s and Head`s employment agreements.
100. Explain why the company will be obligated to pay a recruiting
fee for the placement of Mr. Ralston to Hudson Global Resources?
What is the business nature of Hudson Global Resources and what is
nature of Mr. Ralston`s potential affiliation with that company.
Principal Stockholders
101. We note the following statement: "[t]o the knowledge of our
officers and directors . . . ." Explain to us why you are
qualifying
the disclosure in such a manner.
102. The substance of Footnote 1 does not appear to correspond.
Please revise your disclosure as appropriate. We refer you to the
placement of the footnote in column 2.
103. We note that Kamaneal Investments Pty. Ltd. owns 10.7 million
shares of common stock, or 51.2% of the outstanding common stock.
Please disclose whether Kamaneal Investments is a parent of the
company, as defined in Rule 405 of Regulation C. If so, please
supplementally advise the availability of the small business forms
to
the issuer. We refer you to Item 10(a)(1) of Regulation S-B.
104. Include disclosure in this section regarding Mr. Poulsen`s
ownership of 1 million shares of preferred stock and the voting
rights in connection with these shares.
Dilution
105. Please update the disclosure as of the most recent financial
statements.
106. Please provide the dilution information at various levels of
proceeds received in this offering.
107. In the Dilution section, we note that you assume a $0.05
exercise price per share for the 2,000,000 options issued to Fort
Street Equity. However in the Note 4 to the financial statements,
you state that the exercise price of these options is to be at
least
$0.50 per share. Please reconcile the two disclosures and revise
the
document accordingly.
Selling Shareholders
108. Please reconcile the amount being registered for resale by
selling shareholders as listed in the table with the disclosure on
the cover page.
109. Disclose whether or not any of the selling shareholders are
broker-dealers or affiliates of broker-dealers. Specifically tell
us
about Fort Street Equity, Inc.
110. For all selling shareholders that are not natural persons,
please identify the individual with voting or investment control.
111. Please disclose how you propose to reflect any changes in
selling security holders.
Description of Securities
Common Stock
112. We note the statement that "all shares of common stock now
outstanding are fully paid, validly issued and non-assessable."
Please describe the basis for your assertion given that counsel`s
opinion only pertains to the shares covered by this registration
statement or remove.
Plan of Distribution
113. Please name each officer and director who will be selling the
shares for the company and state how they comply with the safe
harbor
of Rule 3a4-1.
Certain Relationships and Related Transactions
114. Please disclose the exemption relied upon in transferring the
shares from Mr. Poulsen to the individuals in the table on pages
47
and 48.
115. We note the loans from related parties in the financial
statements. Please disclose in this section.
Financial Statements
Reverse Merger
116. Immediately following a reverse merger, the balance of common
stock should consist of the total of the par value of the shares
issued by the accounting acquiree as consideration for the merger
plus the par value of the accounting acquiree`s common stock that
was
outstanding prior to the merger, assuming no other stock
transactions
occurred in conjunction with the merger. The balance of Additional
Paid-in Capital should consist of the amounts in excess of par
value
of the transactions described above plus the transfer of the
accounting acquiree`s accumulated deficit and the transfer of the
balances of the accounting acquirer`s common stock and additional
paid-in capital accounts plus or minus a balancing adjustment, as
necessary. The accumulated deficit of the accounting acquirer
should
be brought forward and that of the accounting acquiree should be
eliminated. Please revise your financial statements accordingly.
117. We note that your Loss per Common Share as of September 30,
2004
and 2003 is 0.03 and 179.6, respectively. Reverse mergers should
be
recorded when they are effected and must be retroactively
reflected
for the earlier Balance Sheets presented. Please revise your
financial statements accordingly.
Statement of Operations
118. Basic and diluted net loss per share should be rounded to the
nearest cent in order not to imply a greater degree of precision
than
exists. Please revise the Statement of Operations.
Stockholders` Equity
119. Revise the Statement of Stockholders` Equity to reclassify
$7,500 shown as (Deficit) Accumulated during Development Stage to
Additional Paid-in Capital and delete the $7,500 shown as (Aus)
Capital Stock.
120. In "Business - Our Company" and in Note 4 - Issuance of
Common
Stock, you state that on May 30, 2001 you issued 5,000,000 shares
of
common stock for services rendered. We do not see this
transaction
on the Statement of Stockholder Equity during the year ended June
30,
2001. Please update the Statement or revise the disclosure to
clarify why this transaction is not accounted for on the
Statement.
Also, explain to us supplementally the nature of the 5,000,000
shares
you have described on the Statement as Recapitalization of FFBI
common stock. We could not find any explanation for this
transaction
in the notes to the financial statements. Tell us if there is a
relationship between the 5,000,000 shares that you state were
issued
on May 30, 2001 with the shares you show as a recapitalization of
FFBI common stock for the period ended September 30, 2004.
Note 1 - Summary of Significant Accounting Policies
Revenue Recognition
121. You state that you recognize revenue from products and
services
"at the time of completion of each transaction or related contract
service". This statement does not appear to be in compliance with
SAB 104. Please review your accounting policy in conjunction with
the Staff Accounting Bulletin and modify your disclosure
accordingly.
122. Revise to disclose your accounting policy for recognizing
licensing revenues.
Concentrations of Risk
123. SFAS 105 has been superseded by SFAS 133 and various other
Statements of Financial Accounting Standards. Please revise your
disclosure accordingly.
Fiscal Year-End
124. You have presented audited annual Balance Sheets, Statements
of
Operations and Statements of Cash Flows as of September 30.
However,
you state that your fiscal year-end is June 30. Please explain to
us
why your fiscal year-end is June 30 if you are presenting audited
annual financial information as of September 30 and revise your
disclosures as necessary. Also, update the Statement of
Stockholder`s Equity to provide year end balances of September 30,
2004 so that it presents year-end financial information that is
consistent with the other financial statements.
Accounts Receivable
125. Revise to provide the company`s accounting policy on accounts
receivable and allowances.
Note 3 - Convertible Debt
126. Tell us supplementally why you believe there is no beneficial
conversion feature related to the conversion feature of the notes.
Note 5 - Income Taxes
127. Revise to disclose the expiration dates for the net operating
loss carryforwards as required by SFAS 109.
Note 6 - Related Party Transactions
128. Revise to disclose the nature of the transaction that gave
rise
to the amounts owed to Mark Poulsen & Associates Pty. Ltd. Also,
disclose in the notes to the financial statements the terms and
manner of settlement of the amounts owed. If there is no due date
for the amounts owed, please disclose this. Refer to SFAS 57.
Note 8 - License Agreement
129. With respect to the LR Global agreement, you state that the
amount of income recognized during the period ended September 30,
2004 was $4,570. This implies that there should be $495,430 in
deferred revenue since the total obligation due to the company is
$500,000. Please tell us supplementally why the Balance Sheet
reflects only $449,975 in deferred revenue, and update the notes
to
the financial statements as necessary. Tell us supplementally how
you determine the amount of revenue to recognize in each period
and
provide us supplementally with your calculations for the $4,570
and
$11,363 in revenue recognized for the periods ending September 30,
2004 and December 31, 2004, respectively. Also, please identify
any
related party revenues as such on the face of the Statements of
Operations.
Note 9 - Commitments and Contingencies
130. In "Description of Property", we note the leased shared
office
space in Las Vegas, Nevada. Revise to update the notes to the
financial statements in accordance with SFAS 13.
131. With respect to the Insource Pty. Ltd. software services
agreement, revise the disclosure to state the due date and
accounting
treatment for the $30,500 contract price and the duration of the
agreement with the company.
132. In the interim financial statements, you state that for the
period ending December 31, 2003 the company recorded compensation
expense amounting to $31,300. However, in the financial
statements
as of September 30, 2004, you state that for the years ended
September 30, 2004 and 2003, the company recorded compensation
expense amounting to $53,605 and $40,259, respectively. It
appears
that in the three months ended December 31, 2003, 58% of the
compensation expense for the entire 12 month period was recorded.
Please supplementally explain to us when compensation expense is
recorded in the Statement of Operations and the reason for the
fluctuations in the various periods reported.
Interim Financial Statements
133. Accumulated other comprehensive (loss) does not roll forward
properly from September 30, 2004 to December 31, 2004. Please
reconcile or explain.
134. Revise the interim financial statements and notes thereto to
conform to the requested changes to the annual financial
statements
as applicable.
135. Disclose in a note to the interim financial statements, the
assertion of management that is required by Instruction 2 to Item
310(b) of Regulation S-B.
General
136. Please note the updating requirements of Item 310(g) of
Regulation S-B.
137. A currently dated consent of the independent public
accountant
should be provided in all amendments to the registration
statement.
Part II - Information Not Required in Prospectus
Other Expenses of Issuance and Distribution
138. We note that you have estimated $224,426 in miscellaneous
fees.
Specifically describe the fees that constitute "miscellaneous
fees."
139. We note that you have not included any estimated expenses for
printing costs. Supplementally advise us why there are no
printing
costs associated with the offering. We may have further comment.
Recent Sales of Unregistered Securities
140. We note that on September 20, 2004, the company issued
420,000
shares of common stock in connection with the conversion of
certain
unsecured convertible promissory notes. Please disclose the
exemption from registration relied upon for the issuance of the
underlying convertible debentures. We may have further comment.
141. We note that on September 29, 2004, the company issued
450,000
shares of common stock in connection with the conversion of
certain
unsecured convertible promissory notes. Please disclose the
exemption from registration relied upon for the issuance of the
underlying convertible debentures. We may have further comment.
142. Refer to page F-5 and tell us why you have not included in
this
section the issuance of shares that took place on September 14,
2004.
143. Refer to page F-12 and tell us why you have not included in
this
section the issuance of the convertible securities described on
page
F-12.
144. Please address the financial sophistication of the purchasers
in
the transactions for which you claim the exemption from
registration
contained in section 4(2) of the Securities Act.
145. Please disclose recent sales of unregistered securities
issued
by any predecessors of your business for the past three years.
Exhibits
Exhibit 3.1
146. Please file the complete copy of the articles of
incorporation
as amended.
Exhibit 3.2
147. Tell us why you have provided the by-laws of an entity called
Lunettes, Et Al, Inc. and file the bylaws for your company.
Exhibit 5.1
148. Please revise the legality opinion to opine on the shares
that
cover the primary offering.
Exhibit 10.3
149. Please file an executed copy of the license agreement with LR
Global Marketing Pty. Ltd.
Undertakings
150. Tell us your basis for including the undertaking provided in
Item 512(f) of Regulation S-B.
Signatures
151. Please have the principal accounting officer sign in this
capacity. See Instructions to Signatures, Form SB-2.
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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
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.
You may contact Babette Cooper at (202) 824-5069 if you have
questions regarding comments on the financial statements and
related
matters. Questions on other disclosure issues may be directed to
Jay
Ingram at (202) 942-2791, or to Pamela Howell, who supervised the
review of your filing, at (202) 942-1954.
Sincerely,
John Reynolds
Assistant Director
Office of Emerging Growth Companies
cc. Richard Anslow, Esq.
(732) 577-1188
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Fit For Business International, Inc.
April 6, 2005
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