Mail Stop 7010
April 11, 2006
Clifford Lerner
Chief Executive Officer
Etwine Holdings, Inc.
366 North Broadway
Jericho, NY 11753
Re: Etwine Holdings, Inc.
Registration Statement on Form SB-2
Filed March 14, 2006
File No. 333-132401
Dear Mr. Lerner:
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
information so we may better understand your disclosure. After
reviewing this information, we may 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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. Your disclosure indicates that you are a development stage
company
issuing penny stock and you have minimal assets, revenues, and
operations. Moreover, your only officer and director, Clifford
Lerner
is the brother of Darrell Lerner. According to public disclosures,
Darrell Lerner, a shareholder and former sole officer and director
of
the company, has been associated with the following public
companies:
Universal Flirts Corp., Relocate 411.com, Inc., China Elite
Information Co., Ltd., New Medium Enterprises, Inc., Fantasy
Sports
Net Inc., and Sports Source Inc.
The periodic reports filed by these companies indicate that they
took
little or no steps to advance implementation of the business plans
described in their initial filings. Many of these companies have
entered into reverse mergers. These facts suggest that eTwine`s
business may be commensurate in scope with the uncertainty
ordinarily
associated with a blank-check company and should comply with Rule
419.
Accordingly, please revise your disclosure throughout your
registration statement to comply with Rule 419 of Regulation C or
supplementally provide a detailed explanation as to why Rule 419
does
not apply to this offering. We may have additional comments upon
review of your response.
2. We note that many of the selling shareholders also appear as
selling shareholders in other registration statements filed by
Universal Flirts Corp., Relocate 411.com, Inc., and Sports Source
Inc. Please disclose how and by whom these selling shareholders
were
identified and brought together in these transactions and describe
the connections, relationships and arrangements among them and the
promoters of the company. We may have further comment after
reviewing your response.
Prospectus Cover Page
3. The subject to completion legend required by Item 501(b)(10) of
Regulation S-K should appear on the cover page of the prospectus
rather than the facing page of the registration statement. Please
revise.
About Our Company
4. Disclose here and under Description of Business section that
you
are a shell company as defined under Rule 405 of the Securities
Act.
In this regard, we note that you have minimal operations and
assets
consisting primarily of cash. We also note that you issued shares
to
Clifford and Darrel Lerner in connection with the acquisition of
eTwine, Inc. Note that where promoters or their affiliates of a
company that would otherwise be a shell company place assets or
operations in that company which are later returned (or where
there
is an understanding that they will be returned) after a business
combination by that company, those assets or operations would be
considered "nominal" for purposes of the registrant`s shell
company
status. See SEC Release 33-8587 for more information.
5. Based on the history of your promoter, disclose whether you
intend
to engage in a reverse merger or acquisition.
6. Please disclose your prior history with your promoters and
their
affiliation with other public shell companies. Describe whether
any
of these companies were ever successful in achieving profitability
or
carrying out their business plan. For example, disclose Darrell
Lerner`s affiliation with Universal Flirts, Inc., an online dating
service, and that this company entered into a reverse merger with
a
Chinese company engaged in the unrelated business of designing
cell
phones three months after the registration statement went
effective
in December 2004.
7. Please describe in greater detail the purpose and material
terms
of the 2005 exchange agreement.
Risk Factors
8. Some of your risk factors use language like "we cannot assure
you," "no assurance can be given" or "we cannot guarantee."
Please
delete this language; the real risk is not your inability to
assure,
but the condition described.
9. Please avoid language in risk factors like "material adverse
effect." Instead, please state what the specific impact will be on
your financial condition or results of operations.
10. Please add risk factors that address the following:
* The risks associated with being a shell company with nominal
assets
and operations, including that you may enter into a reverse merger
with a private company in an unrelated business without approval
from
the unaffiliated shareholders and the competition you face in
seeking
merger candidates with other shell companies that may be owned by
your promoters.
* Your promoters are affiliated with other shell companies and
describe whether any of these companies were ever successful in
achieving profitability.
* Sales of a substantial number of shares of your common stock
into
the public market by Clifford Lerner may result in significant
downward pressure on the price and the ability of your
shareholders
to realize any current trading price.
We have a limited operating history . . .
11. The statement that investors must consider the problems,
expenses, difficulties, etc. frequently encountered by a small
developing company is vague. To the extent that these items make
this offering risky, you must specifically describe them in your
risk
factor section. Please revise.
Selling Shareholders
12. Disclosure in the table that Clifford Lerner will own 100% of
the
company`s stock after the offering appears to be an error. Please
revise.
13. Please disclose any material relationships between the selling
shareholders and the company or its promoters. See Item 507 of
Regulation S-B.
14. Describe how each selling shareholder acquired the securities
they are selling.
15. Please disclose whether any of the selling shareholders are
broker-dealers or affiliates of a broker-dealer. We note, for
example, that the Universal Flirts filing disclosed that Darrell
Lerner is a registered representative with PMG Securities Corp., a
registered broker-dealer. If a selling shareholder is a broker-
dealer, the prospectus should state that the seller is an
underwriter. If a selling stockholder is an affiliate of a
broker-
dealer, provide the following representations in the prospectus:
(1)
the seller purchased in the ordinary course of business, and (2)
at
the time of the purchase of the securities to be resold, the
seller
had no agreements or understandings, directly or indirectly, with
any
person to distribute the securities. If you cannot provide these
representations, state that the seller is an underwriter.
Plan of Distribution
16. As noted in your risk factors, please describe the risks
relating
to finding a market maker to list your shares on the OTCBB.
17. Please disclose that the selling shareholders may be
underwriters
with respect to the shares that they are offering for resale.
Directors and Executive Officers
18. Please provide the dates for the positions that Clifford
Lerner
held during the past five years.
Description of Securities
19. Describe the provisions of Delaware law that may delay, defer
or
prevent a change of control.
Description of Business
Revenue Streams
20. Please disclose what you mean by "a critical mass of users"
and
"a reasonable number of users."
21. Clarify, if true, that the advertisements on your website that
have generated your revenue were placed there in connection with
the
"Google AdSense" program you reference in your summary section.
Briefly explain how this program works.
Management Discussion and Analysis
22. Consistent with disclosure in your summary section, please
explain how you generate revenue using the Google AdSense program,
as
this appears to be the sole means by which you earned revenue as
of
the end of 2005. If you have an agreement regarding this program,
please file it as an exhibit, as it seems that you are
substantially
dependent upon it at this time.
23. Disclose the specific dates for the timetable to which you
refer.
For example:
* What month do you intend to implement a major upgrade to eTwine?
* When do you expect the major upgrade to be completed?
* What month do you expect to develop a marketing plan?
* When in the third quarter do you expect to launch additional
websites?
24. In the risk factors you state that you will need to raise
additional funds through public or private debt or sale of equity
to
achieve your current plan of operations. Describe your cash
requirements and financing plans, including timing, and how they
specifically correlate to your business plan.
25. Since you show revenues in each of the last two fiscal years,
please provide the disclosure required by Item 303(b) of
Regulation
S-B.
26. Based on information in your financial statements, please
provide
a detailed description of:
* the sources of your cash,
* professional fee expenses,
* consulting expenses and the two year consulting agreement,
* research and development expenses,
* non-cash investing and financing activities from 2004 to date,
* the advances from shareholders, and
* the convertible note payables.
Please also file any agreement related to the above as exhibits.
Description of Property
27. Disclose, if true, that this property is leased.
Certain Relationships and Related Transactions
28. Please provide disclosure relating to Darrell Lerner since he
appears to be a promoter, as required under Item 404(d) of
Regulation
S-B.
29. Please disclose the nature and amount of anything of value
received or to be received by each promoter, directly or
indirectly,
from the issuer. For example, disclose any fees or notes payable
to
Darrell Lerner. See Item 404(d) of Regulation S-B.
30. Describe the stock purchase agreement and share exchange
agreement dated December 25, 2005.
31. Disclose in detail the purpose and use of the $92,648 paid to
eTwine by Darrell Lerner prior to the merger.
32. Please file the promissory note as an exhibit.
Report of Independent Registered Public Accounting Firm
33. Please advise us about the following:
* We were unable to confirm that your independent accountant, Webb
&
Company is currently licensed in New York.
* We assume that the operations and assets of your company are
located in New York. Tell us why you selected a Florida accounting
firm to perform your audit.
* Tell us if the audit was performed in New York or Florida.
* Tell us how you have met the requirements to provide financial
statements audited by an auditor who meets the requirements of
Rule
2-01(a) of Regulation S-X.
* Tell us what consideration you have given to New York state laws
governing audits of New York companies performed by accountants
who
are licensed by other states.
34. The first paragraph of your accountants report states that
they
have audited the statements of operations, changes in
stockholders`
deficiency and cash flows for the period from "7, 2004
(inception)."
Please revise as appropriate to reference the correct date.
Note 2. Website, page 9
35. Please provide us with a more comprehensive description of the
nature of the costs you have capitalized related to the
development
of your website. In this regard, please also tell us the
timeframe
over which such costs were incurred.
Part II. Item 26. Recent Sales of Unregistered Securities
36. For each transaction, disclose the total offering price or
describe the transaction and the type and amount of consideration
received by the company. See Item 701 of Regulation S-B.
37. Please expand your disclosure to include an analysis of why
you
believe Section 4(2) is an appropriate exemption for the private
placement to over 40 individuals.
38. Please include all securities you have sold within the past
three
years and list each transaction separately. See Item 701 of
Regulation S-B. For example, as disclosed in the financial
statements:
* the shares privately placed in 2004 and 2005,
* the shares sold for subscription receivables, consulting and
legal
fees, and other services,
* the convertible notes.
Exhibits
39. Please file the stock purchase agreement and share exchange
agreement between you and eTwine, Inc. dated December 25, 2005.
Exhibit 5.1 - Legal Opinion
40. The legal opinion states that counsel is representing Sports
Source, Inc. Please revise.
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 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 filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment 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 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 Patricia Armelin at (202) 551-3747 or in her
absence, John Cash at (202) 551-3768 if you have questions
regarding
comments on the financial statements and related matters. Please
contact Brigitte Lippmann at (202) 551-3713 or in her absence, me
at
(202) 551-3760 if you have any other questions.
Sincerely,
Pamela A. Long
Assistant Director
cc: Gregg E. Jaclin, Esq.
Anslow & Jaclin, LLP
195 Route 9 South, Suite 204
Manalapan, NJ 07726
Clifford Lerner
Etwine Holdings, Inc.
April 11, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE