United States securities and exchange commission logo
May 6, 2020
Ian E. Gilbey
Chief Executive Officer
Beyond Wellness International, Inc.
303 East 4th Street
Los Angeles, CA 90013
Re: Beyond Wellness
International, Inc.
Amendment No. 1 to
Offering Statement on Form 1-A
Filed April 24,
2020
File No. 024-11173
Dear Mr. Gilbey:
We have reviewed your amended offering 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 offering 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 offering statement and the
information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our April
1, 2020 letter.
Amendment No. 1 to Form 1-A filed April 24, 2020
Offering Circular Cover Page, page 1
1. We note your response
to comment 2, and while it appears from your Offering Circular
that you are seeking to
qualify the common shares and Series B Common Stock Purchase
Warrants comprising
your units and the common shares underlying your warrants, Item 4.
of Part I of your Form
1-A lists only the common shares and shares underlying the
warrants. Therefore,
please amend Item 4. of Part I of your Form 1-A to state that you are
seeking to qualify the
warrants. To do so, please check the box next to "Option, warrant
or other right to
acquire another security" under "Types of Securities Offered in this
Offering Statement" in
Item 4 of Part I, to indicate that you are seeking to qualify warrants
in addition to the
common shares and common shares underlying the warrants.
Ian E. Gilbey
FirstName LastNameIan E. Gilbey
Beyond Wellness International, Inc.
Comapany NameBeyond Wellness International, Inc.
May 6, 2020
Page 2
May 6, 2020 Page 2
FirstName LastName
Risk Factors
"There is Presently No Public Trading Market for the Company's Shares", page 14
2. We note your response to comment 5, and your amended disclosure on
page 14, where
you disclose that you will either seek quotation on the OTC Markets,
or listing on
Nasdaq. You also disclose that "upon Qualification [y]our Common Stock
will be eligible
for a NASDAQ listing if [you] are otherwise qualified under NASDAQ
listing
standards." However, to be listed on Nasdaq, you must file a Form 8-A
to register a class
of your securities pursuant to Section 12(b), and your filed Form 8-A
currently seeks to
register your securities pursuant to Section 12(g). Therefore, if you
intend to continue to
disclose that you may seek listing on Nasdaq, please file a revised
Form 8-A to register a
class of securities pursuant to Section 12(b). Alternatively, please
remove references to
potentially listing on Nasdaq from your filing, or revise your
disclosure to clarify that you
will need to amend your Form 8-A to be eligible for Nasdaq listing.
Dilution, page 17
3. Please revise your disclosure to present amounts as of the most recent
interim period
contained in the offering statement, which is December 31, 2019. Also,
your calculation
of net tangible book value should exclude intangible assets and
intellectual property.
Finally, your calculation of pro forma net tangible book value should
consider the net
proceeds from the offering rather than the gross proceeds.
The Proposed Joint Venture Transaction, page 21
4. We note your response to comment 8, and your amended disclosure that
you will be
required to invest a total of $5,000,000 over a three-year period.
Please clarify how you
intend to raise the $5,000,000 you are required to invest in your
joint venture. In this
regard, we note your disclosure on page 24 that "[b]ased upon [y]our
current financial
condition, [you] do not have sufficient cash to operate [y]our
business at the current level
for the next twelve months," and on page 25 that "[you] have incurred
a cumulative net
loss of $721,739 as of December 31, 2019 and $492,480 as of March 31,
2019 and used
substantially all of [y]our cash in our operating activities since
inception."
Description of Rights of Classes of Stock and Warrants, page 23
5. Your disclosure indicates that at December 31, 2019, the Company had
outstanding
3,100,000 Class A common stock purchase warrants exercisable at $1 per
share, 668,000
Class B common stock purchase warrants exercisable at $4 per share,
668,000 Class C
common stock purchase warrants exercisable at $5 per share and 668,000
Class D
common stock purchase warrants exercisable at $6 per share, all of
which will expire on
December 31, 2022. Please revise the notes to your financial
statements to disclose the
nature and significant terms of the transactions in which these stock
warrants were issued.
Your revised disclosure should also explain how you valued the stock
warrants including
the method and significant assumptions used.
Ian E. Gilbey
FirstName LastNameIan E. Gilbey
Beyond Wellness International, Inc.
Comapany NameBeyond Wellness International, Inc.
May 6, 2020
Page 3
May 6, 2020 Page 3
FirstName LastName
Report of Registered Independent Public Accounting Firm, page 42
6. Please explain your auditor's consideration of the guidance in
paragraph .05 of PCAOB
Auditing Standard 3110 related to dual dating of their report. In this
regard, we note that
various changes were made to the audited financial statements
subsequent to the original
audit report date. However, it is not clear for which specific events
or financial statement
changes that have occurred subsequent to the original report date the
independent auditors
are limiting their responsibility by dual dating their report. Please
revise the audit report
to clarify the events or transactions to which the dual dating of the
report is applicable.
Also refer to paragraph .12 of PCAOB Auditing Standard 4101.
Statement of Cash Flows, page 46
7. We reviewed your revisions to the financial statements and reissue
prior comment
21. Please tell us your basis or rationale for classifying the
proceeds received from note
payable to shareholder as cash flows from financing activity. Refer to
ASC 230-10-45-
14b.
8. Please explain why the stock issued for the conversion of the note
resulted in an
adjustment to reconcile net loss to net cash provided by operating
activities. Your current
disclosure suggests that you recorded a loss on conversion of the
notes.
Intangible Assets, page 47
9. We reviewed your revisions related to comment 22 but do not believe
they fully addressed
our prior comment. Please revise to disclose the following additional
items or explain
why you do not believe this is required:
The gross carrying amount and accumulated amortization for your
intangible assets,
in total and by major intangible asset class;
The aggregate amortization expense for the period; and
The estimated aggregate amortization expense for each of the five
succeeding fiscal
years.
Refer to ASC 350-30-50-2.
Part III - Exhibits
Exhibit 4.1 Form of Subscription Agreement, page 64
10. We note that the exclusive forum provision in your subscription
agreement has been
amended to state that "[t]his provision shall not be applicable to any
claims or cause of
action arising under the Securities Act or the Exchange Act." Please
amend your offering
circular to clearly describe the provision, including that it does not
apply to federal
securities law claims. Please include risk factor disclosure
including, but not limited to,
Ian E. Gilbey
Beyond Wellness International, Inc.
May 6, 2020
Page 4
increased costs to bring a claim and that this provision can discourage
claims or limit
investors' ability to bring a claim in a judicial forum that they find
favorable.
Exhibit 11.1, page 64
11. Please remove the March 5, 2020 date from the consent. Please note that
pursuant to
Securities Act Rule 252(f)(1)(ii), a filer must include an updated and
currently dated
consent when it revises its audited financial statements in an amended
filing. Also, please
ensure that the consent references the appropriate audit report date
after consideration of
the comment included above with respect to the audit report.
Exhibit 12.1 Opinion of Peter Berkman, Esq., page 64
12. We note that your legal opinion references "6,000,000 shares of the
Company's common
stock, $ .0001 par value per share (the "Common Stock") and 6,000,000
Class B Common
Stock Purchase Warrants." Further, counsel opines that "the shares of
6,000,000 shares of
the Company's common stock, and the Common Stock issuable upon the
exercise of the
6,000,000 Class B Common Stock Purchase Warrants will, when issued, be
validly issued,
fully paid and nonassessable." However, it appears from your offering
circular that you
are seeking to qualify 2,000,000 common shares, 2,000,000 warrants, and
2,000,000
shares underlying the warrants. Please amend your legal opinion to opine
on the correct
number of each security. Please also provide an opinion of counsel with
respect to
whether the warrants are a binding obligation of the registrant under the
law of the
jurisdiction governing the warrants. See Section II.B.1.f. of Staff Legal
Bulletin 19,
available on our public website.
You may contact Anthony Watson at (202) 551-3318 or Linda Cvrkel at
(202) 551-
3813 if you have questions regarding comments on the financial statements and
related
matters. Please contact Katherine Bagley at (202) 551-2545 or Mara Ransom at
(202) 551-
3264 with any other questions.
Sincerely,
FirstName LastNameIan E. Gilbey
Division of
Corporation Finance
Comapany NameBeyond Wellness International, Inc.
Office of Trade &
Services
May 6, 2020 Page 4
cc: Peter Berkman
FirstName LastName