Jody M. Walker
Attorney At Law
7841 South Garfield Way
Tel: 303-850-7637 Centennial, CO 80122 Fax: 303-482-2731
May 5, 2008, 2008
Indira Lall
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549-3561
RE: Tri-Mark MFG, Inc.
Registration Statement on Form S-1
Filed March 5, 2008
File No. 333-149546
Dear Ms. Lall:
Pursuant to your comment letter dated April 2, 2008, please note the
following responses.
General
1. Please check the box for securities that will be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933.
The box has been checked.
2. Please revise to include a pro forma balance sheet that reflects
the stockholders' deficit accounts as contributed capital of December
31, 2007 as a result of your termination of the Subchapter S election.
In this regard, we assume any undistributed earnings or losses will be
reclassified to paid-in capital in the pro forma disclosure pursuant to
SAB Topic 4:B. If our understanding is not correct, please clarify.
Footnote 9 has been revised as follows:
Termination of Subchapter S Corporate Status
- --------------------------------------------
The Company is in the process of terminating its Subchapter S
election of the Internal Revenue Code.
Stock Split
- -----------
On February 15, 2008, the Company held a special shareholder
meeting and approved to increase the number of authorized common
shares from 1,000 to 25,000,000, and also approved a forward
stock split of 8,000 to 1 common shares.
After the termination of the Subchapter S, and the stock split on
February 15, 2008, the retroactive stockholder's deficit section
on the balance sheet would be affected as follows:
2
As of 2007 2006
Stockholders' Deficit
Common stock, $0.0001 par value,
25,000,000 shares authorized;
8,000 shares issued and outstanding
for both years $ 1 $ 1
Paid-in capital (42,000) 8,549
-------- --------
Total Stockholders' Deficit $(42,219) $ 8,550
======== ========
Cover Page of the Prospectus
3. Please highlight your cross-reference to the risk factors section
by prominent type or in another manner. See Item 501(b)(5) of
Regulation S-K.
The cross-reference to the risk factors section is in bold on the
hard copy, as evidenced in the courtesy copies provided.
4. Please indicate whether there may be any extensions to the offering
and, if so, the duration of such extensions.
The disclosure has been revised as follows:
The offering will commence on the effective date of this
prospectus and will terminate on or before June 30, 2009, unless
extended by us for an additional 90 days.
Prospectus Summary
5. Please indicate that Mr. Sytner currently owns and will continue to
own sufficient shares to control the operations of the company.
The fact that Mr. Sytner currently owns and will continue to own
sufficient shares to control the operations of the company has
been disclosed.
6. Please focus the summary on the current business of the company.
Please briefly explain operations since formation. Please identify the
one company to whom you sold all of your products for the year ended
December 31, 2007. If you have not sold jewelry to each of jewelry
chain stores, discount stores, department stores, television home
shopping networks and wholesalers, please delete the references to the
businesses with which you have not yet sold your merchandise. You
should make these revisions throughout the prospectus. Also disclosure
that you have received a going concern opinion and state the amount of
accumulated losses to date. Please revise the business section
accordingly.
The summary has been revised as follows:
Operations
- ----------
Tri-Mark is a designer, marketer, and manufacturer of affordable
branded jewelry in the United States. Since inception, we have
been focusing on the expansion of our jewelry line and getting
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exhibit space in the major jewelry shows. We exhibited our
jewelry line at the MJSA Expo in New York on April 13-15, 2008
and will be exhibiting our jewelry line at JCK in Las Vegas on
May 31 - June 4, 2008.
We began production in early December 2007 and had sold our
jewelry to one jewelry wholesaler, jewelry by HAV as of December
31, 2007. We currently have twelve wholesale customers and a
major retail customer, Zale Corporation.
We offer a large selection of jewelry styles, consistent product
quality, and prompt delivery of product orders. Our principal
product line is a wide assortment of earrings, pendants, and
rings. Our jewelry is targeted towards the middle market, which
generally retails between $19.99 to $49.99. We offer over 2,000
styles of earrings, pendants, and rings.
We have an accumulated deficit of $(27,119) as of December 31,
2007. In their opinion on our financial statements as of and for
the year ended December 31, 2007, our auditors have indicated
that there is substantial doubt about our ability to continue as
a going concern.
Risk Factors
7. Some of your risk factors appear to be generic because the
information could apply to many companies in your industry or even in
other industries. Please revise to specifically indicate how the
stated risk currently applies to your company, or delete these risk
factors:
- Adverse economic cycles and retail industry..., page 9
- Our quarterly results could fluctuate..., page 11
- Our insurance may not cover all of our future liabilities, page
11
- If we are unable to manage our growth effectively..., page 11
Please note that these are examples only. Please review your entire
risk factor section and revise as necessary.
The risk factors have been deleted and the entire risk factor
section reviewed and revised as necessary.
8. Please revise the caption of risk factor 1 to clarify that you
have received a going concern opinion.
The caption of risk factor 1 has been revised to clarify that
Tri-Mark has received a going concern opinion.
9. In risk factor 4, provide us with support for the statement that
you are operating in a "rapidly developing market and industry."
The statement "rapidly developing market and industry" has been
deleted.
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10. Please remove mitigating language from your risk factors, such as
the statements in risk factor 7 that "we believe that our lower-priced
jewelry may sell better than higher-priced jewelry in a recessionary
period" and in risk factor 8 indicating that "we attempt to stay
abreast of emerging fashion preferences affecting the jewelry
industry." Please revise the risk factors section to remove all
mitigating language.
All mitigating language has been removed.
11. Revise Risk Factor 10 to clearly identify the customer you have
referenced. Please state that this customer accounted for 100% of your
sales for the year end December 31, 2007.
We currently have 13 customers. The risk factor has been deleted.
12. In your risk factor "We have only operated for a short period...",
it may be more useful for the reader if you discuss whether the company
is likely to generate revenues in the next 12 months. Please include
this disclosure or advise us why no revision is necessary.
Upon further review, the risk factor has been deleted. The risk
has already been covered in Risk Factor #1.
13. With respect to risk factor 16, please clarify where you currently
outsource production or delete this risk factor.
This risk factor has been deleted.
Plan of Distribution
14. Please revise your disclosure to describe the selling efforts of
your officers and directors. Discuss whether they intend to sell the
shares to the public or to investors they have prior relationships with
and discuss how they will conduct these selling efforts.
The disclosure has been revised as follows:
We will sell the common shares ourselves and do not plan to use
underwriters or pay any commissions. We will be selling our
common shares using our best efforts and no one has agreed to buy
any of our common shares. This prospectus permits our officers
and directors to sell the common shares directly to the public,
with no commission or other remuneration payable to them for any
common shares they may sell. There is no plan or arrangement to
enter into any contracts or agreements to sell the common shares
with a broker or dealer. Our officers and directors will sell
the common shares and intend to offer them to friends, family
members and business acquaintances. There is no minimum amount
of common shares we must sell so no money raised from the sale of
our common shares will go into escrow, trust or another similar
arrangement.
5
Business Operations
15. Please thoroughly revise and expand this section to better
describe your business. As examples only, and not an exhaustive list,
please address the following:
- You state that your primary competitive advantage is your
manufacturing method. Please provide more detail on how your
manufacturing method allows you to substantially reduce costs and
provides better quality.
The disclosure has been revised to provide more detail on the
manufacturing method.
- Your current disclosure does not provide a clear description of
your business model detailing how your business operates. Please
provide more detail on your business model that would better inform
investors of your order and delivery processes.
A breakdown of the business model has been provided.
16. Provide us with support for the statement that you are a high-
volume manufacturer given your limited sales to date.
The statement has been removed for accuracy.
17. Disclose that you have received a going concern opinion on your
financial statements and discuss your plans as to the matters that
raise substantial doubt about your ability to continue as a going
concern.
The disclosure has been expanded as follows:
Going Concern
- -------------
Our financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business. In the near term, Tri-Mark expects operating costs to
continue to exceed funds generated from operations. As a result,
we expect to continue to incur operating losses and may have
insufficient funds to grow its business iin the near future. We
can give no assurance that it will achieve profitability or be
capable of sustaining profitable operations. As a result,
operations in the near future are expected to continue to use
working capital.
We are actively increasing marketing efforts to increase
revenues. The ability of Tri-Mark to continue as a going concern
is dependent on its ability to meet our financing arrangement and
the success of our future operations.
18. You state that you can create specifically designed products in
response to requests or pictures that your customers submit. Please
expand your disclosure to discuss whether you currently create custom
6
products and the percentage of total revenue or sales contributed by
such products.
The disclosure has been expanded as follows:
- Additionally, we can create specially designed products in
response to requests or pictures submitted to us by customers.
This variety and flexibility allows us to meet a wide variety of
our customers' jewelry needs. Currently, specifically designed
products constitute approximately 2% of our business.
19. You state that you plan to focus your efforts on increasing your
customer base through selective acquisitions. Please describe further
your expansion plans by discussing the costs of these proposed
acquisitions, how you will be able to fund them and whether you have
identified any potential targets.
Disclosure regarding these efforts has been deleted as it is not
foreseen in the next 18-24 months.
20. You state that you obtain proprietary protection for your products
and designs. Please expand your disclosure to discuss how you obtain
proprietary protection for your products and designs given that you do
not have any patents, trademarks or licenses.
We are in the process of obtaining copyrights to our new product
line.
21. You state that you have a contract with a major television
shopping network. Please disclose the name of the television network
and file the contract as an exhibit to the registration statement.
The disclosure has been deleted for accuracy.
22. Please revise this section so it describes your current
circumstances. Any change from your present situation should be
accompanied by a discussion of the cost and the time involved to
realize the improvement. Descriptions of your proposed expansion,
manufacturing and marketing plans should be accompanied by an
explanation of how you will achieve your plans in enough detail so that
investors can make a judgment about how viable your business plan is.
Please clarify whether you have engaged in all of the marketing efforts
to date. If not, remove the marketing efforts that are not applicable.
All disclosure has been revised so that it describes the current
circumstances of Tri-Mark.
23. Please describe the duties of the independent contractors. In
addition, please discuss what actions you have taken to date to retain
contractors or to determine their availability to the company.
Further, please include a risk factor discussing your limited
operational ability in this regard.
The disclosure has been revised to discuss the various types of
independent contractors. No risk factor has been added.
7
Reports to Security Holders
24. Please revise the information to reflect the change in the address
of the Securities and Exchange Commission to 100 F Street N.E.,
Washington, D.C. 20549. Please also make this change in the section
titled "Where You Can Find More Information."
The disclosure has been revised.
Determination of Offering Price
25. Please disclose the factors you considered to arrive at the $1.00
per share offering price. See Item 505 of Regulation S-K.
It has been previously disclosed that the price was arbitrarily
determined without regard to book or market value.
Management's Discussion and Analysis of Financial Condition and Results
of Operations
26. Please revise this section to provide a balanced, executive-level
discussion of the most important matters on which you focus in
evaluating your financial condition and operating performance. In this
regard, please expand this section to discuss known material trends,
demands, commitments, events, or uncertainties that will have, or are
reasonably likely to have, a material impact on your financial
condition, operating performance, revenues, and/or income, or results
in your liquidity decreasing or increasing in any material way. Please
provide additional information about the quality and variability of
your earnings and cash flows so that investors can ascertain the
likelihood of the extent past performance is indicative of future
performance. Please discuss whether you expect your financial position
to remain at its current level or to increase or decrease. Also, you
should consider discussing the impact of any changes to your earnings.
Further please provide in reasonable detail:
- economic or industry-wise factors relevant to your company, and
- material opportunities, challenges, and risks in the short and
long term and the actions you are taking to address them.
See SEC release no. 33-8350.
The disclosure has been revised.
27. In your plan of operations, discuss the business activities you
will undertake based upon raising funds at the levels you discussed in
the use of proceeds. Also, discuss the anticipated timing for
expenditures.
The disclosure has been corrected.
28. The net loss you disclose in the discussion of the results of
operations for the year ended December 31, 2007 does not agree with net
loss stated in the statement of operations for the year ended December
31, 2007. Please revise or advise.
The disclosure has been corrected.
8
29. Please discuss the nature of your provision for taxes of $800. In
this regard, there is little disclosure of income taxes in your
financial statements. Please consider the disclosure requirements of
paragraphs 43-49 of SFAS 109 to the extent applicable.
Footnote 6 has been added in the financial statements.
Provision of income tax consists of a minimum state franchise tax
of $800 and $100 for the year ended December 31, 2007 and 2006,
respectively.
Liquidity and Capital Resources
30. Please clarify and expand on your statement on page 30 of your
intent to secure a market share in the livestock and inanimate
identification industry. It is unclear what you are trying to
communicate.
The language has been revised for clarity.
Directors, Executive Officers and Control Persons
31. Please provide a discussion of each officer's and director's
business background for the past five years without including
superfluous descriptions, such as "(t)hese designs can be found in
major retailers, "the increase in the percentage of profits at Rockwell
Salvage, the increase in sales at F.W. Wookworth, the $9 billion
modernization initiative and the $3 billion retail chain. Also clarify
the capacity in which Ms. Soumekh worked with each of the companies
listed during the period of 1994 to 2004.
The disclosure has been revised.
Executive Compensation
32. We note that you have currently provided an incomplete summary
compensation table and you have not provided the table currently
required by the rules. Please provide the complete table required by
Item 402(n)(1) of Regulation S-K.
The current required table has been included.
Related Party Loan
33. Disclosure whether the transactions and agreements with related
persons were comparable to terms you could have obtained from
unaffiliated third persons. Also, if written, please file all related
party contracts as exhibits.
The disclosure has been revised as follows.
Related Party Loan
- ------------------
At December 31, 2007 and 2006, Barry Sytner, an officer and
director made loans to Tri-mark in the amounts of $130,971 and
$1,450, respectively. No interest is being accrued and there is
no formal repayment plan. Mr. Sytner is our chief executive
officer and majority shareholder. Management is of the opinion
9
that the advances were comparable to terms we could have obtained
from unaffiliated third persons. Mr. Sytner did not provide any
non-cash contributions
34. Please disclose the terms of the loan you describe in this section
and when it has to be repaid. Also disclose that the
officer/shareholder is your president and majority shareholder.
See response above.
35. Disclose whether the officer provided any non-cash contributions.
See response above.
Shares Eligible for Future Sale
36. We note your disclosure that upon the effectiveness of this
registration statement and subsequent exercise of warrants, up to an
additional 9,591,251 common shares may be eligible for immediate resale
in the public market. Please revise your disclosure to include
information with respect to the warrants. Please file the warrant
agreement as an exhibit to the registration statement.
The disclosure has been deleted for accuracy.
Financial Statements
37. Please tell us in detail your consideration of the applicability
of the financial accounting and reporting requirements in SFAS 7 with
respect to development stage enterprises. In this regard it appears
your planned principal operations have commenced but there has been no
significant revenue there from. See paragraphs 8-9 of SFAS 7. We may
have further comment.
The disclosure has been revised to indicate that Tri-Mark is a
development stage enterprise.
38. Please revise to give retroactive effect and disclosure of the
change in capital structure resulting from the stock split that
occurred on February 15, 2008 noted on page 34 under the caption Common
Shares. Refer to paragraph 54 of SFAS 128, paragraph 4 of SFAS 129 and
SAB Topic 4:D.
Note 9 - Subsequent Events has been revised as follows:
Termination of Subchapter S Corporate Status
- --------------------------------------------
The Company is in the process of terminating its Subchapter S
election of the Internal Revenue Code.
Stock Split
- -----------
On February 15, 2008, the Company held a special shareholder
meeting and approved to increase the number of authorized common
shares from 1,000 to 25,000,000, and also approved a forward
stock split of 8,000 to 1 common shares.
After the termination of the Subchapter S, and the stock split on
February 15, 2008, the retroactive stockholder's deficit section
on the balance sheet would be affected as follows:
As of 2007 2006
Stockholders' Deficit
Common stock, $0.0001 par value,
25,000,000 shares authorized;
8,000 shares issued and outstanding
for both years $ 1 $ 1
Paid-in capital (42,000) 8,549
-------- --------
Total Stockholders' Deficit $(42,219) $ 8,550
======== ========
Independent Auditors' Report
39. Please have your independent auditor review the spelling of their
name in their electronic signature.
The electronic signature of the auditor has been revised for
accuracy.
Note 1 - Nature of Business and Summary of Significant Accounting
Policies
40. There appears to be a typographical error in the fifth full
paragraph on page 45. Please carefully review the document to ensure
any such errors are corrected.
The typographical error has been corrected.
Note 2 - Going Concern
41. This note contains an adequate disclosure of the registrant's
financial difficulties. It is however lacking in appropriate and
prominent disclosure of the registrant's viable plan(s) to overcome
these difficulties. Please refer to Section 607.02 of the Financial
Reporting Codification.
The note has been revised as follows:
NOTE 2 - GOING CONCERN
The Company has incurred substantial losses and has no revenue.
Those matters raise substantial doubt about the Company's ability
to continue as a going concern. Management of the Company is
developing a plan to commence its operations by obtaining an
infusion of capital through either public or private investment.
The ability of the Company to continue as a going concern is
dependent on its managements successful planning for its
operations and successful capital infusion.
The ability of the Company to continue as a going concern is
dependent on its ability to meet its financial arrangement and
the success of its future operations. The financial statements
do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.
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Note 4 - Notes Payable to Related Parties
42. Please disclose the terms and the manner of settlement of the
notes payable. Refer to paragraph 2.d of SFAS 57.
The note has been revised as follows:
NOTE 3 - NOTE PAYABLE TO RELATED PARTIES
Note Payable to related parties at December 31, 2007, and 2006
consists of loans from the CEO of the Company in the amounts of
$130,171 and $1,450, respectively. The note is due on demand and
has no interest provisions.
43. Please note the updating requirements of Rule 8-08 of Regulation
S-X.
Noted.
Undertakings
44. Furnish the information required by Item 512(a)(5) of Regulation
S-K, as applicable.
The required information has been provided.
Signatures.
45. The date that appears in the signatures section of the
registration statement is February 25, 2008. However, the registration
statement was filed on March 5, 2008. Please revise the date in the
signatures section to match the filing date.
The date has been revised to match the filing date.
45. The registration statement must be signed by the principal
financial officer and controller or principal accounting officer. See
Instruction 1 to Signatures to Form S-1
All required signatures have been provided.
Exhibits
47. We note that your articles of incorporation state that you have
the authority to issue 1,000 shares. However, you state that you have
8,000,000 shares of common stock outstanding. Please revise or advise.
The appropriate amendment has been filed as an exhibit to this
amendment.
Very truly yours,
/s/Jody M. Walker
- ------------------
Jody M. Walker