September 11, 2019
David Soto
President
Celexus, Inc
8275 S. Eastern Ave. Suite 200
Las Vegas, Nevada 89123
Re: Celexus, Inc
Form 10-K for the Fiscal Year Ended March 31, 2019
Filed July 15, 2019
Form 10-Q for the Period Ended June 30, 2019
Filed August 20, 2019
File No. 000-52069
Dear Mr. Soto:
We have reviewed your filings 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 these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year Ended March 31, 2019
Cover Page
1. Please delete all reference to the company as an emerging growth company
on the cover
page and throughout the filing, as your company does not qualify as one.
Business, page 4
2. Please revise to discuss the nature of the regulations the business will
have to deal with
and how they will impact your business. We refer you to Item
101(h)(4)(ix) of Regulation
S-K.
David Soto
FirstName LastNameDavid Soto
Celexus, Inc
Comapany 11, 2019
September NameCelexus, Inc
September 11, 2019 Page 2
Page 2
FirstName LastName
Risk Factors, page 6
3. Please include a discussion of the risk that the company's business
plan is dependent upon
the acquisition of HempWave and the risk that this acquisition may not
be consummated.
4. Please provide appropriate risk factors relating to the business of
HempWave.
5. Please add risk factor disclosure addressing your management's lack of
experience
running a public company.
6. Discuss the company's need to raise capital to carry out its business
plan and the attendant
risks.
Properties, page 9
7. You state here that the company does not own or lease any property,
while in the Form S-
1 filed 8/29/19 you state that you lease your principal offices.
Please revise or advise.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of
Operations, page 10
8. Please revise to discuss in greater detail your plan of operation,
including the steps needed
to make the company operational and generating revenues. Similarly
revise the Form 10-
Q for the period ended June 30, 2019, including any updates to the
company's
implementation of its plan.
Liquidity and Capital Resources, page 10
9. Please revise your MD&A to address the material uncertainties
surrounding your liquidity
and the impact that those uncertainties could have upon your business.
For example, we
note risk factor disclosure on page 6 that you expect to generate
operating losses and
experience negative cash flows for the immediate future and it is
uncertain if you will
achieve future profitability. Please also revise to clarify that you
may not have enough
funds to sustain the business until it becomes profitable. Quantify
the company's needs
for additional capital in order to fund operations through, at a
minimum, the next 12
months. Please similarly revise the MD&A in your Form 10-Q for the
period ended June
30, 2019. Refer to Item 303 of Regulation S-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial
Disclosure, page 11
10. Please amend to disclose the disagreements with your predecessor
auditor Michael
Gillepsie & Associates, PLLC, consistent with the revised disclosure
in your amended
Item 4.01 Form 8-K filed on August 12, 2019.
David Soto
FirstName LastNameDavid Soto
Celexus, Inc
Comapany 11, 2019
September NameCelexus, Inc
September 11, 2019 Page 3
Page 3
FirstName LastName
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Management's Report on Internal Control over Financial Reporting, page 12
11. Please amend to provide management's assessment of the effectiveness
of disclosures and
procedures (DC&P) and internal control over financial reporting (ICFR)
at March 31,
2019. We note that your evaluations of DC&P and ICFR were as of July
12, 2019 rather
than year end. Refer to Items 307 and 308 of Regulation S-K.
Security Ownership of Certain Beneficial Owners, page 14
12. Please identify the natural person who has voting and investment
control over Kings Gate
Management Inc.
Item 14. Principal Accountant Fees and Services, page 15
13. Please explain the basis for your disclosure of audit fees for Michael
Gillespie
& Associates and BF Borgers or revise your disclosures accordingly. We
note that prior
to their termination on March 27, 2019, Gillespie issued a report on
your financial
statements for the year ended March 31, 2018. We also note that this
Form 10-K includes
BF Borgers opinion on your financial statements for the years ended
March 31, 2018 and
2019. It is unclear why you disclose audit fees of $3,350 to Gillespie
for the year ended
March 31, 2019 (which they did not appear to audit) but nothing for
the previous year. It
is also unclear why you have not disclosed any audit fees from BF
Borgers for the year
ended March 31, 2018. Refer to Item 14 of Form 10-K and Item 9(e) of
Schedule 14A.
Statements of Cash Flows, page F-5
14. Please tell us how you determined that $58,500 in loans from a
shareholder should be
classified within operating activities or amend to present as a
component of financing
activities. Please similarly address this comment with respect to the
Statement of Cash
Flows in your Form 10-Q for the period ended June 30, 2019. Refer to
ASC 230-10-45-
14.
Notes to Consolidated Financial Statements for the Years Ended March 31, 2019
and 2018
Note 8 - Subsequent Events, page F-12
15. You disclose that you entered into an agreement to acquire HempWave in
May 2019.
However, this is inconsistent with your disclosures on page 5 and in
your Form 8-K filed
August 6, 2019, which indicate that the original agreement to acquire
HempWave was
signed in February 2019. Please either revise your filing to describe
the differences
between the February 2019 and May 2019 agreements or correct any
typographical errors
as necessary. Since this pending acquisition would be material to
Celexus, please also
revise your footnote disclosure to describe the significant terms of
the proposed
transaction, the involvement of related parties, the date the
transaction is expected to
David Soto
Celexus, Inc
September 11, 2019
Page 4
close, and how you intend to account for the transaction. Please
similarly address this
issue on page 15 of your Form 10-Q for the period ended June 30, 2019.
Refer to ASC
855-10-50-2.
16. It appears that a 1-90 reverse stock split occurred after the latest
reported balance sheet but
before the release of the financial statements. Please amend your
financial statements and
related disclosures elsewhere in the filing to give retroactive effect to
the reverse split.
Please refer to ASC 260-10-55-12 and SAB Topic 4.C.
Form 10-Q for the Period Ended June 30, 2019
Statements of Stockholders' Deficit (Unaudited), page 8
17. Please explain why the book value of your common stock and your
additional paid in
capital for the years ended March 31, 2018 and 2019 are not consistent
with the amounts
presented on page F-4 of your Form 10-K for the year ended March 31, 2019
or revise
your filing accordingly. It appears that you may not have revised the par
value of your
common stock and the number of shares authorized to retroactively account
for the 1-90
reverse stock split that occurred in April 2019.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Robert Shapiro, Staff Accountant, at (202) 551-3273 or
Lisa Etheredge,
Senior Staff Accountant, at (202) 551-3424 if you have questions regarding
comments on the
financial statements and related matters. Please contact Gregory Dundas,
Attorney Adviser, at
(202) 551-3436 or Celeste Murphy, Legal Branch Chief, at (202) 551-3257 with
any other
questions.
Sincerely,
FirstName LastNameDavid Soto
Division of
Corporation Finance
Comapany NameCelexus, Inc
Office of
Telecommunications
September 11, 2019 Page 4
cc: Elaine Dowling, Esq.
FirstName LastName