Mail Stop 4561
February 14, 2018
Joseph P. Stingone, Sr.
Chief Executive Officer
Webstar Technology Group, Inc.
4231 Walnut Bend
Jacksonville, Florida 32257
Re: Webstar Technology Group, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed January 18, 2018
File No. 333-222325
Dear Mr. Stingone:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Prospectus Cover Page
1. Please revise to state that you are a controlled company and that James
Owens owns
97,000,000 shares of your common stock representing 99.7% of the total
votes on which
shareholders are entitled to vote. Separately, we note that Mr. Owens
owns an 80%
interest in Soft Tech and controls the voting rights of Webstar Networks
Corporation.
Please tell us whether Mr. Owens holds all his interests through a
holding company,
including whether there are other entities for which he holds ownership
interests. To the
extent he holds all the controlling interests in all the entities
through a holding company,
please revise your disclosure in the summary section to provide the
organizational chart
and discuss related conflict of interests.
Joseph P. Stingone, Sr.
Webstar Technology Group, Inc.
February 14, 2018
Page 2
Prospectus Summary, page 5
The Offering, page 7
2. Please note that an issuer that files a registration statement under the
Securities Act
becomes subject to the Exchange Act reporting obligations upon the
effectiveness of the
registration statement through Section 15(d) of the Exchange Act. In
this regard, we note
your disclosure that you are not subject to the requirements of the
Exchange Act by
reason of this offering. Please revise to delete.
Use of Proceeds, page 24
3. You indicate that a material portion of the net proceeds will be used to
pay for the
licensing of Gigabyte Slayer and WARP-G. Please revise to disclose that
the transaction
is with affiliated entities, name the entities you will be acquiring the
assets from and your
relationship with them, including that you are under common control of
James Owens.
Also provide a cross reference to the related party transaction section.
Refer to
Instruction 5 to Item 504 of Regulation S-K. Additionally, to the extent
you are able to
raise more than the minimum of $3 million but less than 50% of the
maximum, please
revise (for example, by footnote) to indicate the order of priority of
your proposed uses.
4. You state that, since inception, you have been funded by shareholder
loans, and James
Owens, your controlling shareholder, loaned you a net total of $30,147
for the period
from March 10, 2015 (Inception) to June 30, 2017. Please clarify whether
you intend to
use a portion of the net proceeds to repay the loans; and, if so, please
revise to set forth
the interest rate and maturity of such indebtedness, as applicable.
Where applicable,
please revise to discuss the material terms of the loan and file related
agreements as
exhibits to the registration statement. Refer to Item 601(b) and
Instruction 4 to Item 504
of Regulation S-K.
5. You state that working capital and general corporate purposes include
payment of
accrued liabilities, sales and marketing costs, salaries and benefits
and operating expense.
Please expand to quantify the amount you intend to use to pay deferred
compensation to
the executive officers, directors, and consultants.
Joseph P. Stingone, Sr.
Webstar Technology Group, Inc.
February 14, 2018
Page 3
Capitalization, page 24
6. Please revise to clarify that the issuance of both the 17.0 million
shares for the acquisition
of Webstar eCampus software and the 3.0 million shares to executives,
directors and
consultants for services rendered are conditioned upon the sale of a
minimum of 3.0
million shares in this offering, and disclose the related deadlines, if
any. Also,
considering such conditions, revise to include the impact of the
intellectual property
acquisition in the pro forma as adjusted minimum column rather than in a
separate
column.
7. Please revise to include a footnote to your capitalization table to
describe how your
capitalization may be impacted assuming you sell the maximum number of
shares in the
offering and enter into the license agreements to acquire Gigabyte
Slayer and WARP-G
software.
Dilution, page 26
8. You state that you plan to issue options to purchase 15,000,000
unregistered shares of
your common stock to Soft Tech as partial consideration for information
technology
consulting services. You also state that you will award options to
certain members of
your board of directors to purchase up to 300,000 shares of common
stock. Please revise
your table (for example, by footnote) to reflect the options to be
issued. Refer to Item
506 of Regulation S-K.
Description of Business, page 29
9. Please revise to provide the reasonable basis, and provide us with
support, for all
quantitative and qualitative business and industry data used in the
registration statement.
We note on pages 31 and 33, without limitation, the following examples:
"Leadership that can position those offerings as innovative
solutions which enable
corporate growth and longevity, and position us as a market
leader"; (emphasis
added)
"We are not aware of any data compression products or services
that can increase
data throughput up to six times on mobile devices, as the
proprietary Gigabyte
Slayer software";
"We are not aware of any product or services that can allow data
to be transmitted,
uploaded and downloaded, at speeds of up to 110 MBPS (megabytes
per second),
as the proprietary WARP-G software";
"...we believe the licensed Gigabyte Slayer and WARP-G software
solutions will
become pioneering innovative disruptive technologies to
significantly reduce the
constraints of data delivery and data commerce facing the
public";
Joseph P. Stingone, Sr.
Webstar Technology Group, Inc.
February 14, 2018
Page 4
"Our growth strategy is to capitalize on our position as a
global leader in our
primary markets..."; (emphasis added) and
"...In the global cable industry, 27 countries have already
successfully moved
into this model of transforming data usage into a utility
business..."
Clearly mark the specific language in the supporting materials that
supports each
statement. Please tell us if any of the supporting materials were
prepared specifically
for you in connection with this offering.
Technology Services Agreement, page 30
10. Please file the form of the technology services agreement as an exhibit
to the registration
statement. Refer to Item 601(b)(10) of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
36
11. Please revise your disclosure here or in the business section to
describe your plan of
operation for the remainder of the fiscal year. Provide details of your
specific plan of
operation, including detailed milestones, the anticipated time frame for
beginning and
completing each milestone, categories of expenditures and the expected
sources of such
funding. Please explain how the company intends to meet each of the
milestones if it
cannot receive funding.
Employees, page 35
12. You state that your president and chief executive officer is the only
officer devoting his
full time to the business, while the remaining executive officers
provide services on a part
time basis. Section 2.2. of Exhibit 10.1 indicates that the executive
should devote his full
working time and attention to the business of the company. Please revise
to reconcile
your disclosure and file all executive employment agreements referenced
on pages 49 and
50 as exhibits to the registration statement. Refer to Item 601(b) of
Regulation S-K. To
the extent your executives work on a part-time basis, please revise to
discuss all
commitments of senior management, including how their time will be
allocated between
you and their other commitments, including the amount of time each
devotes to the
company on a weekly basis. Finally, please clarify, if true, that the
executive
compensation discussed on page 49 is based on such part-time employment.
Liquidity, Going Concern and Uncertainties, page 37
13. You state that based on the current business plans and your operating
requirements,
management believes that the existing cash at June 30, 2017 will not be
sufficient to fund
operations for at least the next twelve month. Please disclose the
minimum number of
Joseph P. Stingone, Sr.
Webstar Technology Group, Inc.
February 14, 2018
Page 5
months that you will be able to conduct your planned operations using
currently available
capital resources. Refer to Item 303(a)(1) and (2) of Regulation S-K and
Section IV of
Interpretive Release 33-8350 for additional guidance.
Directors and Executive Officers, page 42
14. You state that James Owens is a member of your board of directors.
Please revise to
provide the information required by Item 401 of Regulation S-K for Mr.
Owens.
Certain Relationships and Related Transactions, page 52
15. Please revise to identify your promoter(s) and expand your disclosure to
the extent
necessary to comply with all material requirements of Item 404(c) of
Regulation S-K.
See Item 404(d)(2) of Regulation S-K.
16. You state that your board of directors has not established any
committees, including an
audit committee, and the functions of disclosed committees are being
undertaken by your
board as a whole. We note your disclosure that when transactions with
related parties
arise, they are referred to the audit committee for consideration for
referral to your board
of directors for its consideration. Please revise.
17. Please revise to discuss the principle followed in determining the
transaction prices in
your arrangements with Soft Tech and Webstar Networks, including who
made such
determinations and whether the prices were similar to what would have
been obtained in
an arm's length transaction. To the extent the prices are more or less
favorable than
would have been obtained in an arm's length transaction, please revise
to so state and add
a risk factor disclosing that the licenses you will receive from your
affiliates may not be
worth the disclosed prices because the agreements were negotiated by
related parties and
were not negotiated at arm's length.
Item 15. Recent Sales of Unregistered Securities, page 60
18. We refer to your disclosure on pages F-12 and F-13 with respect to the
consulting
services agreement with iTV Partners.tv, Inc. and Blue Water
Acquisitions, LLC-Series
4. Please provide the information required by Item 701 of Regulation S-K
with respect to
the shares to be issued pursuant to the March 24, 2015 and November 1,
2015
agreements, and file the agreements as exhibits to the registration
statement or tell us why
they are not material. Refer to Item 601(b) of Regulation S-K.
General
19. It appears that you are a shell company as defined in Securities Act
Rule 405, because
your only asset consists of cash and cash equivalents, and you have
nominal operations
and no revenues since inception. Accordingly, please revise your
prospectus, including
the cover page and prospectus summary, to disclose that you are a shell
company. Please
Joseph P. Stingone, Sr.
Webstar Technology Group, Inc.
February 14, 2018
Page 6
further disclose in appropriate places, including the risk factors
section, the
consequences, challenges and risks of that status, such as the
restrictions on your ability
to use registration statements on Form S-8, the limitations on the
ability of your security
holders to use Rule 144 and the potential reduced liquidity or
illiquidity of your
securities. Also include the undertaking required by Item 512(a)(6) of
Regulation S-K.
You may contact Brittany Ebbertt, Staff Accountant, at (202) 551-3572
or Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 if you have questions
regarding comments
on the financial statements and related matters. Please contact Matthew Derby
at (202) 551-
3334 or me at (202) 551-3673 with any other questions.
Sincerely,
/s/ Folake Ayoola
Folake Ayoola
Special Counsel
Office of
Information
Technologies and
Services
cc: Lazarus Rothstein, Esq.
Legal & Compliance, LLC