August 2, 2006
By facsimile to (604) 687-6314 and U.S. Mail
Mr. Robert Fraser
President and Chief Executive Officer
Lions Gate Lighting Corp.
200-375 Water Street
Vancouver, British Columbia, Canada V6B-5C6
Re: Lions Gate Lighting Corp.
Registration Statement on Form SB-2
Filed July 12, 2006
File No. 333-135717
Dear Mr. Fraser:
We reviewed the filing and have the comments below.
Where indicated, we think that you should revise the document
in
response to the comments. If you disagree, we will consider your
explanation why a comment is inapplicable or a revision is
unnecessary. Be as detailed as necessary in your explanation. To
understand better your disclosure, we may ask you in some comments
to
provide us supplemental information. We may raise additional
comments after reviewing this information.
Our review`s purpose is to assist you in your compliance with
applicable disclosure requirements and to enhance the overall
disclosure in your document. We look forward to working with you
to
achieve these objectives. We welcome any questions that you may
have
about comments or any other aspect of our review. You may call us
at
the telephone numbers listed at the end of this letter.
1. Please provide updated financial statements and related
disclosures, as necessary, to comply with Item 310(g) of
Regulation
S-B.
2. Please provide updated consents from your independent
accountants
in each amendment to your registration statement.
Prospectus Summary, page 5
3. Make it clear at the outset that Lions Gate Lighting is a non-
exclusive distributor of lighting and signage products
manufactured
by Sunway Lighting Technology Co., Ltd. in the People`s Republic
of
China. We note the disclosures in the risk factors and business
sections.
4. Clarify that Lions Gate Lighting focuses primarily on the
market
for lighting and signage products in British Columbia while
maintaining a presence on the Internet with its website. We note
the
disclosure on page 22.
5. Information about Lions Gate Lighting`s subsidiary, LG Lighting
Corp., included in the first paragraph is repeated in the second
paragraph under "Our Business." Please revise.
Risk Factors, page 6
6. Include in each risk factor`s discussion information necessary
to
assess the risk, including its magnitude. For example:
* The fourth risk factor states that Lions Gate Lighting must
subsidize sample orders. If possible, quantify the amount of
sample
orders subsidized by Lions Gate Lighting during the periods
presented
in the financial statements.
* The seventh risk factor addresses the risks involved with
potential
uncertainties relating to informal, verbal agreements with two
consultants. It further states that you intend to enter into more
informal, verbal agreements in the future. Please explain why
Lions
Gate Lighting does not intend to formalize the verbal agreements
to
writing. Please also identify the consultants and describe their
relationship to Lions Gate Lighting. We note the disclosures in
the
plan of operation and certain relationships and related
transactions
section.
* The eleventh risk factor states that the establishment and
maintenance of wholesale and distribution relations will be
essential
to the success of Lions Gate Lighting`s business. Clarify what
wholesale and distribution relations, if any, that Lions Gate
Lighting has established as of the date of the prospectus and
whether
Lions Gate Lighting is substantially dependent on any of the
wholesale and distribution relationships. If Lions Gate Lighting
is
substantially dependent on any of the wholesale and distribution
relationships, disclose whether Lions Gate Lighting has entered
into
agreements with those wholesalers and distributors. Advise what
consideration Lions Gate Lighting has given to the filing of any
agreements with wholesalers and distributors as exhibits to the
registration statement. See Item 601(b)(10) of Regulation S-B.
Transfer Agent and Registrar, page 17
7. Disclosure states that Lions Gate Lighting intends to appoint a
stock transfer agent before the prospectus` effectiveness.
Identify
the stock transfer agent.
Directors, Executive Officers, Promoters and Control Persons, page
17
8. In the biographical paragraph of Mr. Robert Fraser, describe
briefly his business experience during the past five years. See
Item
401(a)(4) of Regulation S-B.
Experts, page 21
9. Include the name and address of counsel giving the legality
opinion. See Schedule A(23) to the Securities Act.
Description of Property, page 21
10. Identify the director providing executive and head office to
Lions Gate Lighting at no cost. Disclose whether Lions Gate
Lighting
expects the director to charge rent for the space in the future.
Description of Business, page 22
11. Disclosure in the fourth paragraph under "Current Business"
states that "LED Lighting products have a life span that is up to
ten
times that of fluorescent signs and up to thirty times that of
neon
and halogen signs of similar design." For factual information
such
as this statement relating to Lions Gate Lighting`s business,
indicate whether the source of the information is management`s
belief, industry data, scientific reports, general articles, or
another source. If the information is based upon management`s
belief, so indicate and provide an explanation for the belief`s
basis. If the information is based upon other sources, provide us
copies of those sources. Also tell us whether the information
represents the most recently available data.
12. Disclosure under "Growth Strategy" states that Lions Gate
Lighting plans:
* To increase its product offerings and marketing efforts for each
products.
* To diversify and offer new, innovative, and energy efficient
products.
Indicate Lions Gate Lighting`s schedule and known or estimated
costs
for executing its plans.
Plan of Operation, page 26
13. You state that during the first two years of your agreement
with
Sunway you must purchase 10,000 units of product or Sunway can
terminate the agreement at its discretion. Since you only
purchased
3,544 units at almost 13 months into the contract, please discuss
whether you anticipate that you will meet the 10,000 unit minimum
and
the steps that you will take to do so.
14. Disclosure states that sales and marketing costs were $22,540
for
the period ending February 27, 2006 and that Lions Gate Lighting
expects this to increase over the next 12 month period. Please
reconcile this with disclosure on page 27 that you expect to spend
between $10,000 and $20,000 in the next 12 months on marketing.
Liquidity and Capital Resources, page 27
15. We note your analysis of cash flows on page 28. Please
reconcile
the amount that you are disclosing for cash flows from investing
activities to your statement of cash flows on page 41.
Revenue Processing, page d29
16. Disclosure in this section says that your sales are processed
by
cheque or PayPal which facilitates electronic payment over the
Internet. However, on page 24, in the business section, you say
that
you have reformatted your website so that it only provides
information about your products and does not give the option of
online payment. Please reconcile the disclosures.
Reports to Security Holders, page 34
17. Disclosure states that Lions Gate Lighting is required to file
annual, quarterly, and current reports, proxy statements, and
other
information with the Commission. Clarify here and in the where
you
can find more information section that Lions Gate Lighting is not
required to make the filings before its registration statement
becomes effective.
Note 4 - Capital Stock, page 44
18. We note from your disclosures here and on page 28 that you
sold
stock to your directors at a significantly lower price than was
used
in your May and June 2005 private placement. Given that the sale
of
stock to your directors and the sale of stock in your private
placement occurred within a few weeks of each other, it is unclear
to
us why the stock prices were different. Please advise. Given
that
you appear to have sold stock to your directors at a price below
the
fair market value of your stock, as evidenced by your private
placement, please provide us with an analysis of whether this
lower
price represents compensation to your directors.
Note 5 - Related Party Transactions, page 45
19. We read that the loans from your directors do not bear
interest
and we note from your statement of operations that you have not
recorded any interest expense related to these loans. Please tell
us
how you determined that you did not need to impute interest on
these
loans. Refer to APB 21.
Note 7 - Commitment, page 45
20. We note the description of your distributor agreement with
Sunway
Lighting. Please revise your footnote also to disclose, if true,
that this agreement requires you to order and maintain minimum
stock
levels that are necessary to support distribution efforts, as
determined by Sunway Lighting, even after you have met your 10,000
unit minimum purchase requirement. Refer to page 23.
Exhibit Index
21. Include an exhibit index immediately before the exhibits filed
with the registration statement. See Rule 102(d) of Regulation S-
T.
This exhibit index and Item 27 of Form SB-2 are not synonymous.
Exhibits
22. Please file as exhibits written descriptions of the material
terms of your verbal agreements. Refer to Interpretation I.85 in
our
July 1997 "Manual of Publicly Available Telephone Interpretations"
that is available on the Commission`s website at www.sec.gov.
Exhibit 5.1
23. We note the statement that "We assume no obligation to revise
or
supplement this opinion letter should the laws of such
jurisdiction
be changed after the date hereof by legislative action, judicial
decision or otherwise." Delete this language. Alternatively,
file a
new opinion immediately before the registration statement`s
effectiveness.
24. Counsel must consent also to being named in the registration
statement. See Rule 436 of Regulation C under the Securities Act,
and revise.
Exhibit 10.3
25. Absent an order granting confidential treatment, Item
601(b)(10)
of Regulation S-B requires the filing of material contracts,
including attachments, in their entirety. Attachments include,
for
example, annexes, appendices, exhibits, and schedules. Since you
did
not file appendix A, refile the exhibit in its entirety.
Exhibit 21
26. You did not file the exhibit. Further, you must include the
state or other jurisdiction of incorporation or organization of
each
subsidiary. See Item 601(b)(21) of Regulation S-B, and file the
exhibit.
Other
27. We note the statement on the home page of your website,
www.lglcorp.com, that "Lions Gate Lighting Corporation is a joint
Canadian - Chinese venture." Notwithstanding the disclaimer that
information contained in your website does not form part of the
prospectus, tell us why the information on the website appears
inconsistent with disclosures in the registration statement. More
specifically, we note disclosure in section 9.1 of exhibit 10.3
states that "Nothing in this Agreement shall be deemed to create
an
agency, partnership or joint venture."
28. We note the statements on the home page of your website,
www.lglcorp.com, that:
* "We have over 25 years of experience in architectural and
decorative lighting applications that use a variety of light
sources
to create illumination."
* " We have also been involved directly with the sign and
advertising
industry for more than 25 years."
Notwithstanding the disclaimer that information contained in
your website does not form part of the prospectus, tell us why
the
information on the website appears inconsistent with disclosures
in
the registration statement. More specifically, we note that Lions
Gate Lighting did not begin operations until May 2005 and
Lions
Gate Lighting and Sunway Lighting did not enter into an
agreement until May 2005.
Closing
File an amendment to the SB-2 and in response to the
comments.
To expedite our review, Lions Gate Lighting may wish to provide us
three marked courtesy copies of the amendment. Include with the
filing any supplemental information requested and a cover letter
tagged as correspondence that keys the responses to the comments.
If
Lions Gate Lighting thinks that compliance with any of the
comments
is inappropriate, provide the basis in the letter. We may have
additional comments after review of the amendment, the responses
to
the comments, and any supplemental information.
We urge all persons responsible for the accuracy and adequacy
of
the disclosure in the registration statement reviewed by us to
ensure
that they have provided all information investors require for an
informed decision. Since Lions Gate Lighting and its management
are
in possession of all facts relating to the disclosure in the
registration statement, they are responsible for the adequacy and
accuracy of the disclosures that they have made.
If Lions Gate Lighting requests acceleration of the
registration statement`s effectiveness, Lions Gate Lighting should
furnish a letter at the time of the request acknowledging that:
* Should the Commission or the staff acting by delegated authority
declare the registration statement effective, it does not
foreclose
the Commission from taking any action on the filing.
* The action of the Commission or the staff acting by delegated
authority in declaring the registration statement effective does
not
relieve Lions Gate Lighting from its full responsibility for the
adequacy and accuracy of the registration statement`s disclosures.
* Lions Gate Lighting may not assert our comments or the
declaration
of the registration statement`s effectiveness as a defense in any
proceedings initiated by the Commission or any person under the
United States` federal securities laws.
The Commission`s Division of Enforcement has access to all
information that Lions Gate Lighting provides us in our review of
the
registration statement or in response to our comments on the
registration statement.
We will consider a written request for acceleration of the
registration statement`s effectiveness under Rule 461 of
Regulation C
under the Securities Act as confirmation that those requesting
acceleration are aware of their responsibilities under the
Securities
Act and the Exchange Act as they relate to the proposed public
offering of the securities specified in the registration
statement.
We will act on the request and by delegated authority grant
acceleration of the registration statement`s effectiveness.
You may direct questions on accounting comments to Jennifer
K.
Thompson, Staff Accountant, at (202) 551-3737 or W. John Cash,
Accounting Branch Chief, at (202) 551-3768. You may direct
questions
on other comments and disclosure issues to Edward M. Kelly, Senior
Counsel, at (202) 551- 3728 or me at (202) 551-3760.
Very truly yours,
Pamela A. Long
Assistant Director
cc: Incorp. Services
Agent for Service, Lions Gate Lighting Corp.
50 West Liberty, Suite 880
Reno, NV
Cam McTavish, Esq.
Clark Wilson LLP
885 West Georgia Street, Suite 800
Vancouver, British Columbia, Canada V6C 3H1
Mr. Robert Fraser
August 2, 2006
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE