October 10, 2019
David Soto
President
Celexus, Inc
8275 S. Eastern Ave. Suite 200
Las Vegas, Nevada 89123
Re: Celexus, Inc
Amendment No. 1 to 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 September 26, 2019 response to our comment letter
and
Amendment No. 1 to Form 10-K filed October 3, 2019, 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. Unless we note otherwise, our references to prior comments are to
comments in our
September 11, 2019 letter.
Amendment No. 1 to Form 10-K for the Fiscal Year Ended March 31, 2019
Business , page 4
1. We note your response to our prior comment 2. However, although you have
stated that
the company is heavily regulated at both the state and federal levels,
you provide little
disclosure of the nature of the regulations outside of the need for
licensing. Please revise
to provide a separate subsection focused on regulatory issues with a more
robust
discussion of the nature of the regulations the business will have to
deal with and how
they will impact your business.
David Soto
FirstName LastNameDavid Soto
Celexus, Inc
Comapany NameCelexus, Inc
October 10, 2019
October 10, 2019 Page 2
Page 2
FirstName LastName
Risk Factors, page 6
2. We note your response to prior comment 4. Please provide risk factor
discussions
regarding the various risks entailed in the implementation of your
business plan and the
future operations of HempWave.
Management's Discussion and Analysis of Financial Conditions and Results of
Operations, page
10
3. We note your response to our prior comment 8. Please revise your
discussion to provide a
fuller discussion of your plan of operation, including the timing of
the consummation of
the HempWave acquisition, and other major 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.
Item 9. Changes in and Disagreements with Accountant on Accounting and
Financial Disclosure,
page 11
4. We note your response to prior comment 10; however, it does not appear
that your Form
10-K/A has been revised to address this comment. As previously
requested, please amend
to disclose the disagreement with your predecessor auditor Michael
Gillespie
& Associates PLLC, consistent with your revised disclosure in your
amended Item 4.01
Form 8-K filed on August 12, 2019.
Security Ownership of Certain Beneficial Owners, page 14
5. We note your disclosure that Lisa Averbuch has voting control over
Global Services
Unlimited Group and Kings Gate Management Inc. Please revise the table
to show that
she is the beneficial owner of the shares held by these entities, and
show her total
percentage of control.
6. Identify the natural person who has voting and investment control over
European Trade
Partners LLC.
Item 14. Principal Accountant Fees and Services, page 15
7. We note your response to prior comment 13; however, it does not appear
that your Form
10-K/A was revised to address this comment. Therefore we reissue our
prior comment to
explain the basis for your disclosure of audit fees for Michael
Gillespie & Associates and
BF Borgers CPA PLLC. Given that BF Borgers audited your financial
statements for the
years ended March 31, 2019 and 2018, it is unclear why you disclose
that they didn't
render (or bill for) any audit-related services for fiscal 2019 and
2018. It is also unclear
what the BF Borgers $1,500 amount in the 2019 column represents.
Finally, please clarify
why you disclose $3,350 in Gillespie audit fees for 2019 and none in
2018. 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. Please refer to Item 14
of Form 10-K.
David Soto
Celexus, Inc
October 10, 2019
Page 3
Statements of Cash Flows, page F-5
8. We note your response to prior comment 14; however, it does not appear
that your Form
10-K/A was revised to address this comment. As previously requested,
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 financial
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
9. We note your prior response to comment 15; however, it does not appear
that your
disclosures were revised to address this comment. As previously
requested, please revise
your filing as necessary to address inconsistencies between your
disclosures on page 5,
page F-12 and in your Form 8-K filed August 6, 2019 regarding the date
you entered into
an agreement to acquire Hempwave. 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 close, and how you intend to account for the transaction.
Please similarly
address these issues on page 15 of your Form 10-Q for the period ended
June 30, 2019.
Refer to ASC 855-10-55-2.
10. We note your response to prior comment 16; however, it does not appear
that your Form
10-K/A was revised to address this comment. As previously requested,
please amend
your financial statements and related disclosures elsewhere in the
filing to give retroactive
effect to the 1-90 reverse split that occurred after the latest
reported balance sheet but
before the release of the financial statements. Please refer to ASC
260-10-55-12 and SAB
Topic 4.C. Please similarly address this issue in your Form 10-Q for
the period ended
June 30, 2019.
General
FirstName LastNameDavid Soto
11. We note that your response letter dated September 26, 2019 was signed by
Lisa Averbuch
Comapany NameCelexus, Inc although she had previously resigned as President.
Please ensure
in the capacity of CEO,
October 10,all future response letters are signed by the current Principal
Executive Officer.
that 2019 Page 3
FirstName LastName
David Soto
FirstName LastNameDavid Soto
Celexus, Inc
Comapany NameCelexus, Inc
October 10, 2019
Page 4
October 10, 2019 Page 4
FirstName LastName
Form 10-Q for the Period Ended June 30, 2019
Statements of Stockholders' Deficit (Unaudited), page 8
12. We note your response to prior comment 17; however, it does not appear
that your Form
10-Q was revised to address this comment. As previously requested,
please explain why
the book value of your common stock and your additional paid-in
capital for the periods
ended March 31, 2019 and 2018 are not consistent with the amounts
presented on page F-
4 of your amended Form 10-K , or revise your filing accordingly. It
appears that you have
not revised the par value of your common stock and the number of
shares authorized to
retroactively account for the 1 to 90 reverse stock split that
occurred in April 2019.
Notes to Consolidated Financial Statements
Note 3 - Debt - Related Party, page 14
13. Please refer to ASC 850-10-50 and revise your footnote as follows:
Describe the related party relationship with Securities Compliance
Group, Ltd.;
Explain the source of the additional $20,669 of related party debt
during the three
months ended June 30, 2019 and the terms associated with this new
borrowing; and
Include Note 7 regarding related parties or remove the reference.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources, page 16
14. We note your response to prior comment 9 and your revised disclosures
on page 10 of
your amended Form 10-K for the year ended March 31, 2019. As
previously requested,
please similarly revise the MD&A in your Form 10-Q to address your
capital needs for the
next twelve months, the material uncertainties surrounding your
liquidity, and the impact
that those uncertainties could have on your business. Refer to Item
303 of Regulation S-
K.
You may contact Robert Shapiro, Senior 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 Greg
Dundas,
Attorney-Advisor, at (202) 551-3436 or Celeste Murphy, Legal Branch Chief, at
(202) 551-3257
with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Elaine Dowling, Esq.