March 9, 2020
Guy Nissenson
Chief Executive Officer and Chief Financial Officer
Creations, Inc.
c/o Sichenzia Ross Ference LLP
1185 Avenue of the Americas, 37th Floor
New York, NY 10036
Re: Creations, Inc.
Draft Registration Statement on Form S-1
Submitted February 12, 2020
CIK No. 0001795938
Dear Mr. Nissenson:
We have reviewed your draft 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 providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. 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 the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary
Company Overview, page 1
1. You disclose that Yetsira Investment House was incorporated in November
2018 on page
1 and in November 2016 on page 13 under Management's Discussion and
Analysis of
Financial Condition and on page F-18 in Results of Operations Overview
and Note 1
General. Please revise your next amendment, as applicable.
Risk Factors, page 4
2. Please add a risk factor to discuss Guy Nissenson's potential conflict
of interests as your
Guy Nissenson
FirstName Inc.
Creations, LastNameGuy Nissenson
Comapany NameCreations, Inc.
March 9, 2020
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sole officer and director and significant shareholder.
3. Please add a risk factor that discusses the risks associated with the
concentration of AUM
among the five mutual funds that you currently manage. In this regard,
we note that the
assets of two such mutual funds comprised the substantial majority of
your AUM as of
September 30, 2019.
Special Note Regarding Forward-Looking Statements, page 10
4. On page 9 you disclose that you may be a penny-stock issuer. As such,
the safe harbor of
the Private Securities Litigation Reform Act does not apply to this
offering. Please revise
your disclosure to remove references to the PSLRA.
Capitalization, page 12
5. We note several inconsistencies between your capitalization table and
your financial
statements. Please revise the following items accordingly:
You disclose that as of September 30, 2019 there are 2,289,744
shares of common
stock issued and outstanding, which is not consistent with the
amount appearing in
Note 6 Share Capital G. Issued, authorized and outstanding on
page F-9 of
2,262,144;
You disclose on page 12 total stockholders' equity of $1,511 at
September 30, 2019
and its components, which is not consistent with the amount of
shareholders' equity
of $1,479 and its components appearing on page F-2; and
Please disclose the amount of common shares authorized, issued and
outstanding as
of December 31, 2018. In addition, we note that the components of
stockholders'
equity are not consistent with the components appearing on page
F-14.
Dilution, page 13
6. Please revise to disclose what the dilution would be assuming that all
outstanding warrants
were exercised.
Overview - Results of Operations for the Nine Months Ended September 30, 2019
and 2018,
page 14
7. Given the significance of revenues from assets under management (AUM)
to your
operations, please provide a rollforward of AUM in your next
amendment, showing the
beginning balance, gross inflows, gross outflows and market
appreciation/depreciation to
arrive at an ending AUM balance for all periods presented.
Compensation and Related Costs to Employees, page 14
8. Please revise to discuss in greater detail the nature of the payments
to the founders and the
additional employee, as referenced in the third paragraph on page 14.
Business, page 16
Guy Nissenson
FirstName Inc.
Creations, LastNameGuy Nissenson
Comapany NameCreations, Inc.
March 9, 2020
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FirstName LastName
9. Please revise your disclosure in this section to provide all of the
material information
required by Item 101(h)(4) of Regulation S-K. Additional disclosure
topics which appear
material include, without limitation, your dependence on one or a few
major customers
and the number of total employees and number of full-time employees.
In addition, we
note your disclosure that on January 11, 2017, Yetsira received an
investment portfolio
manager license from the ISA. Please disclose the material terms or
conditions of such
license, including any expiration date. Refer to Item 101(h)(4)(vii)
of Regulation S-K.
10. You state that you generate revenue "primarily from management fees"
paid by your
unitholders. Please revise to clarify any other sources of revenue. In
addition, please
clarify the extent, if any, to which you currently engage in private
portfolio management
services. If applicable, provide quantified disclosure related
thereto, including the total
AUM.
11. We note your disclosure that you "exercise effective control over the
operations of Yetsira
pursuant to a series of contractual arrangements, under which [you]
are entitled to receive
substantially all of its economic benefits." Please revise to describe
such contractual
arrangements in greater detail and file the same as exhibits to the
registration statement to
the extent applicable. Refer to Item 601(b)(10) of Regulation S-K.
Please also revise to
disclose in greater detail the material terms and conditions of the
Hosting Agreement,
including, without limitation, the management fees and termination
provisions thereunder.
12. Please supplement your disclosure on page 17 to briefly explain the
nature of the
"different categories" of the five mutual funds that you currently
manage. In addition,
please provide updated disclosure in the fourth paragraph on page 18
regarding the
managed mutual funds market in Israel.
13. Please revise your disclosure at the bottom of page 18 to describe
your growth strategy in
greater detail. As examples only, please discuss:
the estimated time, costs and steps involved to execute on your
growth strategy;
any "technological means" that you will need to acquire or
develop, as well as your
resources for doing so; and
the material expenses you expect to incur in connection with your
growth strategy,
including public relations and advertising activities.
Management, page 19
14. Please provide the disclosure required by Item 401(e)(1) of Regulation
S-K regarding the
specific experience, qualifications, attributes, or skills that led to
the conclusion that Guy
Nissenson should serve as your director in light of your business and
structure. In
addition, please include the disclosure required by Item 407(a) of
Regulation S-K relating
to director independence and clarify whether you have compensation,
audit, or nominating
committees, as required by Item 407(a) of Regulation S-K.
Guy Nissenson
FirstName Inc.
Creations, LastNameGuy Nissenson
Comapany NameCreations, Inc.
March 9, 2020
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FirstName LastName
Executive Compensation, page 21
15. Please provide the disclosure required by Item 402(m) (r) of
Regulation S-K for your
two most highly compensated executive officers other than Guy
Nissenson. In this regard,
please note that:
disclosure regarding the executive officers of your subsidiaries
may be appropriate.
See Instruction 2 to Item 402(m)(2) of Regulation S-K; and
each of your "key employees," as disclosed on pages 19 20, may
qualify as an
"executive officer" as defined under Exchange Act Rule 3b-7.
Please revise or provide us an analysis of how you determined that no
other individual,
including each of your key employees, is a "named executive officer"
as defined under
Item 402(m)(2) of Regulation S-K. Alternatively, if none of your other
employees' total
compensation met the threshold contained in Instruction 1 to Item
402(m)(2), please
advise. In addition, please revise to disclose how the bonus amounts
in the table were
determined. Refer to Item 402(o) of Regulation S-K.
16. Please revise to describe in greater detail the material terms and
conditions of your
employment agreement with your Chief Executive Officer and Chief
Financial Officer,
Guy Nissenson, as referenced on page 21.
Certain Relationships and Related Transactions
Related Party Transactions, page 22
17. We note that your disclosure refers to transactions with related
persons that exceed
$120,000. Please note that as a smaller reporting company, you must
disclose transactions
that exceed the lesser of $120,000 or one percent of the average of
your total assets at
year-end for the last two completed fiscal years. Based on your
audited financial
statements, it appears that the threshold for you to disclose related
party transactions is
significantly less than $120,000. Refer to Item 404(d) of Regulation
S-K, and revise as
necessary to describe the correct threshold and all related party
transactions meeting that
threshold. In addition, please revise to discuss whether you have any
policies or
procedures regarding entering into transactions with related parties.
To the extent you
have none, please add related risk factor disclosure.
18. We note that on July 1, 2019, Guy Nissenson received in exchange for
his Yetsira
Holdings shares 379,435 warrants to purchase shares of common stock
exercisable at
$1.50 per share, which was the same price as all outstanding warrants.
This disclosure is
not consistent with the disclosure appearing in the last paragraph on
page F-9 under the
title Note 5 Loan from related company and Note 9 Events
subsequent to balance
sheet date on page F-24 that warrants with an exercise price of $1.00
were exchanged.
Please revise or advise, as applicable.
Security Ownership of Certain Beneficial Owners and Management, page 22
Guy Nissenson
FirstName Inc.
Creations, LastNameGuy Nissenson
Comapany NameCreations, Inc.
March 9, 2020
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FirstName LastName
19. Please note that the definition of beneficial ownership under Item 403
of Regulation S-K
includes natural persons and entities with direct or indirect voting
or investment power
over the shares. In this regard, please identify the person or persons
with voting or
investment power over the shares held by Rising Moon Assets Inc.
Plan of Distribution, page 24
20. To the extent that you are reserving the ability to change your plan
of distribution, such as
paying compensation to other parties, please revise to clarify and
acknowledge your
understanding of Item 512(a)(1)(iii) of Regulation S-K.
21. In your plan of distribution, you indicate that the selling
stockholders may offer their
shares through short sales. Please tell us whether the selling
stockholders have any open
short positions. Also please provide the staff with an analysis of the
selling stockholders'
ability to engage in short sales under Regulation M.
Financial Statements
Creations, Inc. and Subsidiaries September 30, 2019 and 2018
Consolidated Statements of Comprehensive Income, page F-3
22. Please revise the Per share data Basic and Diluted loss in your next
amendment to
reflect the net loss for the period divided by the weighted average
number of basic and
diluted shares.
Note 1 - General, page F-5
23. Throughout your document we not spelling inconsistencies and date
inconsistencies.
Below are examples of inconsistencies noted. Please revise
accordingly.
You have labeled the financial statements as those of Yetzira
Holdings Ltd and
subsidiary on pages F-14 - F-17 while the audit opinion refers to
Yetsira Holdings
Ltd. and subsidiaries;
Disclosure in the notes refer to both Guy Nissenson and Guy
Nissensohn;
Under the title Acquisition of Yetsira Investment House Ltd.
("Investment") you
disclose that in Note 1 on January 28, 2018, the company acquired
Investment
through a share exchange at which time it became a wholly-owned
subsidiary of the
company. This disclosure is not consistent with the date of
January 29, 2018
appearing in Note 1 D. Merger of entities under common control;
and
You disclose on page F-5 that, in January 2018, the stockholders of
the company
established Yetsira Holdings. You disclose on page F-18 that, in
February 2018,
Yetsira Holdings was established.
Note 2 - Significant Accounting Policies
C. Merger of entities under common control, page F-6
24. Please expand the disclosure to finish the first sentence of the third
paragraph. Also, you
Guy Nissenson
FirstName Inc.
Creations, LastNameGuy Nissenson
Comapany NameCreations, Inc.
March 9, 2020
March 9, 2020 Page 6
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FirstName LastName
disclose that common control was established between the entities on
01/07/2019, the date
of incorporation of Creations, Inc. and therefore, this transaction
was recorded as if the
merger occurred on 01/07/2019 (the "Merger Date"). We note that on
page 1 you disclose
that Creations, Inc. was incorporated in May 2019. Please revise or
advise, as applicable.
G. Issued, authorized and outstanding, page F-9
25. We note that the amount of share capital at September 30, 2018 is not
consistent with the
amount disclosed in the consolidated balance sheet. Please revise or
advise, as applicable.
Note 5 - Loan from related company, page F-9
26. You disclose under the title Loan terms that Guy Nissenson will lend
the company up to 3
loans with each loan carrying a 15% interest rate which is not
consistent with the loan
agreement entered into on January 29, 2018 with an annual interest
rate of 10%. Please
tell us in your response why the terms are different from the
agreement with Mr.
Nissenson.
Note 6 - Share Capital, page F-9
27. Please provide the information required by section 210.3-04 of
Regulation S-X for the
current and comparative year-to-date periods, with subtotals for each
interim period. Refer
to Article 8-03(5) regarding the financial statements of smaller
reporting companies.
H. Issuance of stock options, page F-10
28. Please disclose the amount of three year warrants received by
purchasers to purchase
ordinary shares at an exercise price of $1.00 per share (subject to
adjustments) here and in
Note 7 Subsequent events.
Yetsira Holdings Ltd. and Subsidiary
Consolidated Financial Statements as of December 31, 2018 and 2017
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm, page F-13
29. Please revise the reference to the Statements of Operations under the
title Opinion on the
Financial Statements to be to the Statements of Comprehensive Income.
In addition,
revise the title on page F-15.
Notes to Consolidated Financial Statements
Note 7 - Share Capital, page F-23
30. We note that the amounts of share capital at December 31, 2018 and
December 31, 2017
do not appear to be consistent with the amounts presented on the face
of the consolidated
balance sheets. Please revise or advise, as applicable.
General
Guy Nissenson
Creations, Inc.
March 9, 2020
Page 7
31. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
32. Your Certificate of Incorporation indicates that your common stock par
value is $.0001.
Please reconcile this with the disclosure in the Fee Table and cover
page of the
prospectus.
33. Please add disclosure to the prospectus which addresses:
the property information required by Item 102 of Regulation S-K;
the company's legal proceedings, as required by Item 103 of
Regulation S-K; and
the selling security holder information required by Item 507 of
Regulation S-K.
34. Please revise to include the dealer prospectus delivery obligation on
the outside back
cover page of the prospectus. See Item 502(b) of Regulation S-K.
You may contact Chris Harley, Staff Accountant, at (202) 551-3695 or
David Irving,
Staff Accountant, at (202) 551-3321 if you have questions regarding comments on
the financial
statements and related matters. Please contact David Lin, Staff Attorney, at
(202) 551-3552 or
Michael Clampitt, Senior Counsel, at (202) 551-3434 with any other questions.
FirstName LastNameGuy Nissenson Sincerely,
Comapany NameCreations, Inc.
Division of
Corporation Finance
March 9, 2020 Page 7 Office of
Finance
FirstName LastName