June 29, 2006
Mr. Qiong Wang
Chief Executive Officer
Bodisen Biotech, Inc.
North Part of Xinquia Road, Yang Ling AG
High-Tech Industries Demonstration Zone
People`s Republic of China 712100
Re: Bodisen Biotech, Inc.
Registration Statement on Form SB-2
Filed April 10, 2006
File No. 333-133177
Form 10-KSB for the Fiscal Year Ended December 31, 2005
Filed March 28, 2006, as amended
File No. 01-32616
Form 10-QSB for the Fiscal Quarter Ended March 31, 2006
Filed May 9, 2006
Dear Mr. Wang:
We have limited our review of the above filings and response
letter dated June 9, 2006 to only the areas upon which we have
issued
comments. Where indicated, we think you should revise your
documents
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 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
filings.
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.
Form 10-KSB for the Fiscal Year Ended December 31, 2005, as
amended
History, page 4
1. We note from your response to prior comment number six that you
"revised the Company`s disclosure, under this heading, within the
Management`s Discussion and Analysis, and in the notes to the
Company`s financial statements, to clearly explain the sequence of
events that led to the formation of the Company`s business."
Based
on review of your MD&A, we note no significant changes from your
previous filing. Please explain how you have revised this
section.
2. As previously requested in prior comment number six, please
tell
us where and how you have reported the sale of Stratabid.com
Online
within your financial statements. In this regard, we note your
disclosure on page F-18 that "In consideration of the sale, Mr.
Wasson returned 750,000 Common Shares to Stratabid for
cancellation.
In addition, Mr. Wasson forgave all indebtedness owed by Stratabid
to
Mr. Wasson. Other than indebtedness of BII, Stratabid had no
indebtedness or other liability of any kind or nature after the
sale
of the business to Mr. Wasson, save and except for liabilities
incurred in connection with the Merger."
Management`s Discussion and Analysis or Plan of Operation, page 10
Significant Accounting Polices
3. We have given further consideration to our prior comment number
eight and your response to the comment. Please revise the title
of
this section to read Critical Accounting Policies instead of
Significant Accounting Policies to avoid investor confusion. In
addition, expand your disclosure under the Use of Estimates to
clearly indicate that the items identified below involve, if true,
accounting estimates and assumptions that may be material to the
Company due to the levels of subjectivity and judgment involved.
Intangible assets
4. We note from your response to prior comment number nine that
your
disclosure surrounding goodwill was made in error. However, you
did
not eliminate the erroneous disclosure from your amended filing.
Please revise your disclosure, as appropriate, in light of your
response.
Year Ended December 31, 2005 compared to Year Ended December 31,
2004, page 12
5. We note that the version of your amended Form 10-K filed on our
website does not contain disclosure included in the redline
version
filed under Correspondence on Edgar in response to prior comment
number ten. Please amend your filing to include the disclosure
contained in your response letter, as follows: "Gross profit is
calculated by deducting from revenues the raw materials used to
produce the finished products as well as charges for depreciation,
employee welfare, repairs to machinery and equipment, all
inventoriable costs and all other costs incident to or necessary
for
the production of our products."
Report of Independent Registered Public Accounting Firm, page F-1
6. We note that the audit report now opines on the "financial
statement schedule listed in the accompanying index." Please tell
us
whether or not your auditors performed additional procedures
requiring a dual dated audit report.
Consolidated Statement of Stockholders` Equity, page F-4
7. We have reviewed the schedule provided in response to prior
comment number 14. Please tell us why you have multiplied the
applicable shares by a "4 post split of Stratabid," as we are
unable
to locate any previous discussion surrounding this split. In
addition, please expand the disclosure in the applicable sections
of
the filing to clearly disclose the pertinent terms of the split,
including without limitation, the date when this split became
effective.
Note 1 - Organization and Basis of Presentation, page F-6
8. We note from your response to prior comment number 15 that you
have "revised Note 1 to incorporate the Staff`s comments." Based
on
review of the revised disclosure under the Organization and Line
of
Business, we note no other changes to the disclosure other than
the
addition of the sentence "As a result of the two reverse merger
transactions described above (BBST with BII and BII with
Stratabid)
the historical financial statements presented are those of BBST,
the
operating entity." As such, please readdress the following
additional comments under this section.
9. Revise your footnote one disclosure to ensure consistency with
the
entities you identified under the Business heading on page four.
For
instance, we note that you identify Yang Ling Bodisen Biology
Science
and Technology Development Company Limited as "Yang Ling" on page
four but as "BBST" on page F-6. You also identify Bodisen
International, Inc. as "Bodisen International" on page four but as
"BII" on page F-6.
10. It appears that you disclose a merger between Bodisen
International, Inc. and Yang Ling Bodisen Biology Science and
Technology Development Company Limited that occurred on December
15,
2003 within footnote one but not within the History section on
page
four. For consistency, please add similar disclosure to page four
of
your filing and your MD&A, as appropriate.
11. In response to our fourth bullet point of prior comment 15,
wherein we requested i) an explanation as to how the 12,000,000
shares of Stratabid that were exchanged in the reverse merger were
reflected in your Consolidated Statement of Stockholders` Equity,
and
ii) an explanation for the contrasting disclosure on page 5, where
you indicate that the Company issued "3 million shares of its
Common
Stock to the holders of BII shares," we do not find your response
helpful. In this regard, your response merely cites disclosure on
page F-6 verbatim and does not provide information as to why you
have
multiplied the applicable shares by a "4 post split" as indicated
in
your response to prior comment number 14. Therefore, we reissue
the
fourth bullet point to prior comment number 15 and request a
detailed
explanation to this comment in your supplemental response. That
bullet point, revised for current disclosure, is as follows:
We note your statement on page F-6 that "On February 24, 2004, BII
consummated a merger agreement with Strabid.com, Inc.
("Stratabid"),
a Delaware corporation, to exchange 12,000,000 shares of Stratabid
to
the stockholders of BII, in which BII merged into Bodisen
Holdings,
Inc. (BHI), an acquisition subsidiary of Statrabid, with BHI being
the surviving entity." Please tell us how this stock exchange is
reflected in your Consolidated Statement of Stockholders` Equity
on
page F-4. In addition, contrast this disclosure with page 4,
where
you indicate that the Company issued "3 million shares of its
Common
Stock to the holders of Bodisen International shares."
12. We find that your response to the fifth bullet point of prior
comment 15 contains disclosure included in your filing verbatim
with
no additional clarifying explanation to help us understand the
question raised in our comment. Therefore, we reissue our
comment,
as follows:
We note that you incurred expenses of $651,000 relating to the
private placement in March 2005. Please confirm, if true, that
none
of these expenses were paid directly to the investor in the
convertible instrument or otherwise advise. In this regard, the
Task
Force observed, in paragraph 22 of EITF 00-27, that "(a) issuance
costs are limited to incremental and direct costs incurred with
parties other than the investor in the convertible instrument and
(b)
any amounts paid to the investor when the transaction is
consummated
represent a reduction in the proceeds received by the issuer (not
issuance costs).
13. As previously requested in the seventh bullet point of prior
comment 15, tell us and clarify within your disclosure, what you
mean
by the statement that "The net proceeds from this offering were
sent
to China towards capital contribution of the registration of a
wholly-owned Bodisen subsidiary by the name of "Yang ling Bodisen
Agricultural Technology Co., Ltd. ("Agricultural")."
Financial Statement Schedule - Parent Only Financial Statements,
page
F19
14. Please tell us why you have only presented the Statement of
Operations and Cash Flows for the year ended December 31, 2005.
In
this regard, Rule 12-04 of Regulation S-X requires condensed
financial information "for the same periods for which audited
consolidated financial statements are required."
15. Please revise your Balance Sheet and Statement of Cash Flows
for
the following items such that the line item description is
consistent
with the financial information reported in the line item:
* Revise line item from Retained earnings to Retained deficit;
* Revise line item from Net income to Net loss.
Controls and Procedures, page 15
16. We note from your response to prior comment number 19 that you
"have revised the disclosure to clarify that there were no changes
in
the Company`s internal control over financial reporting." As we
are
unable to locate this change, we reissue prior comment number 19
in
its entirety.
You state that there were no "significant changes" in your
internal
control over financial reporting. Please note that Item 308(c) of
Regulation S-B requires that you disclose any change in your
internal
control over financial reporting identified in connection with the
evaluation required by paragraph (d) of Exchange Act Rules 13a-15
or
15d-15 that occurred during the fourth fiscal quarter that has
"materially affected, or is reasonably likely to materially
affect,
the small business issuer`s internal control over financial
reporting." See also Regulation S-B, paragraph 4(d) of Exhibit
31.
Please review your disclosure and revise as appropriate.
Exhibits 31.1 and 31.2
17. We note from your response to prior comment number 20 that you
"have revised the certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 so that they precisely match the
language
set forth in the Act." However, it does not appear that you have
revised your certifications as represented. Therefore, we reissue
prior comment number 19 in its entirety.
We note that the wording of your certifications pursuant to
Section
302 of the Sarbanes-Oxley Act of 2002 does not precisely match the
language set forth in the Act. In this regard, your
certifications
include references throughout the certification to both annual and
quarterly reports and your paragraph 5 appears to contain outdated
certification language. Refer to Item 601(b)(31) of Regulation S-
B
for the exact text of the required Section 302 certification, and
amend your exhibits as appropriate.
Form 10-QSB for the Fiscal Quarter Ended March 31, 2006
General
18. Please revise your interim report on Form 10-QSB as necessary
to
comply with all applicable comments written on your annual report
above. As applicable, your revisions should include enhanced
disclosure to MD&A, the financial statements, and notes to the
financials statements.
Consolidated Statements of Cash Flows, page 4
19. Please revise your caption for Net cash provided by operating
activities, since operating activities resulted in the use of net
cash for the quarter ended March 31, 2005.
Note 9 - Stock Options and Warrants, page 12
20. Please expand your disclosure to include the minimum
disclosure
requirements of paragraph A240 of SFAS 123(R). In this regard, it
appears that you need to address, without limitation, the
disclosure
for the aggregate intrinsic value of your outstanding and
exercisable
stock options and the assumptions used during the year to estimate
the fair value of the awards. See paragraphs A240(c) and (e) of
SFAS
123(R). Please ensure that you address all disclosure
requirements
identified by the standard.
Closing Comments
As appropriate, please amend the above filings in response
to
these comments. You may wish to provide us with a marked copy 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.
Please contact Jennifer Goeken at (202) 551-3721 or, in her
absence, Jill Davis, Branch Chief, at (202) 551-3683 if you have
questions regarding comments on the financial statements and
related
matters. Please contact Jason Wynn at (202) 551-3756 or, in his
absence, me at (202) 551-3740 with any other questions. Direct
all
correspondence to the following ZIP code: 20549-7010.
Sincerely,
H. Roger Schwall
Assistant Director
cc: J. Wynn
J. Goeken
J. Davis
via facsimile
Marc J. Ross, Esq.
Sichenzia Ross Friedman Ference LLP
(212) 930-9725
Mr. Qiong Wang
Bodisen Biotech, Inc.
June 29, 2006
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF CORPORATION FINANCE
MAIL STOP 7010