Suite 1210 - 777 Hornby Street macdonald
Vancouver, BC tuskey TM
V6Z 1S4 CANADA CORPORATE AND SECURITIES LAWYERS
Telephone: (604) 689-1022
Facsimile: (604) 681-4760
Reply Attention of KONRAD MALIK
Direct Tel. 604.648-1671
EMail Address kmalik@wlmlaw.ca
Our File No. 1033-1 / W0055883
May 21, 2010
VIA EDGAR
- ---------
Securities and Exchange Commission
100 F. Street, NE
Washington, D.C. 20549-7410
ATTENTION: JAY WILLIAMSON
DIVISION OF CORPORATE FINANCE
Dear Sirs:
RE: OBSCENE JEANS CORP. (THE "COMPANY")
REGISTRATION STATEMENT ON FORM S-1
FILE NO. 333-166064
FILED APRIL 14, 2010
------------------------------------------------------------------
We are the solicitors for the Company. We refer to your letter of May 7, 2010
addressed to the Company with your comments on the Company's Registration
Statement on Form S-1, filed April 14, 2010. For your ease of reference, our
responses to your comments are numbered in a corresponding manner:
PROSPECTUS COVER PAGE
- ---------------------
1. PLEASE REVISE THE COVER PAGE TO INDICATE, CONSISTENT WITH YOUR DISCLOSURE
ELSEWHERE, THAT YOUR OFFERING WILL BE CONDUCTED AT A FIXED PRICE FOR THE
DURATION OF THE OFFERING.
Response: The Company has revised its disclosure on the Prospectus cover page of
its amended Registration Statement on Form S-1 filed concurrently with this
response to add:
"The shares will be offered at a fixed price of $0.0175 per share for the
duration of the offering."
2. IN THE SECOND FULL PARAGRAPH YOU INDICATE THE OFFERING WILL CONTINUE FOR
THE "LONGER OF 90" DAYS OR UNTIL SUCH TIME AS ALL OF THE SHARES HAVE BEEN SOLD.
IT APPEARS THAT THIS SHOULD BE "EARLIER OF" WHICH IS CONSISTENT WITH THE
DISCLOSURE ELSEWHERE. PLEASE ADVISE OR REVISE.
Response: The Company has revised its disclosure on the Prospectus cover page of
its amended Registration Statement on Form S-1 filed concurrently with this
response to state:
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 2 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
"This offering will continue for the earlier of: (i) 90 days after this
registration statement becomes effective with the Securities and Exchange
Commission, or (ii) the date on which all 3,000,000 shares registered
hereunder have been sold."
3. WE NOTE THAT YOU HAVE PROVIDED PART OF THE "SUBJECT TO COMPLETION"
LANGUAGE FROM ITEM 502(B)(10) OF REGULATION S-K. PLEASE PROVIDE THE ENTIRE
LANGUAGE REQUIRED BY THIS ITEM.
Response: The Company has revised its disclosure on the Prospectus cover page of
its amended Registration Statement on Form S-1 filed concurrently with this
response to ad:
"The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not
permitted."
4. WE NOTE YOUR STATEMENT THAT THE "INFORMATION CONTAINED [YOUR] PROSPECTUS
IS ACCURATE ONLY AS OF THE DATE ... REGARDLESS OF THE TIME OF DELIVERY OF TH[E]
PROSPECTUS OR OF ANY SALE OF [Y]OUR COMMON SHARES." PLEASE REMOVE THE LATTER
PORTION OF THIS STATEMENT OR ADVISE WHY SUCH STATEMENT IS APPROPRIATE. SIMILAR
REVISIONS SHOULD BE MADE THROUGHOUT THE DOCUMENT. WE DIRECT YOUR ATTENTION TO
THE ITEM 512 UNDERTAKINGS REGARDING THE COMPANY'S DUTY TO UPDATE INFORMATION IN
THE PROSPECTUS.
Response: The Company has revised its disclosure on the Prospectus cover page
and under the heading "Where You Can Find More Information" in its amended
Registration Statement on Form S-1 filed concurrently with this response to
remove the following sentence:
"The information contained in this prospectus is accurate only as of the
date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of our common shares."
SUMMARY INFORMATION, PAGE 1
- ---------------------------
5. PLEASE REVISE TO BRIEFLY INDICATE, AS DISCLOSED ON PAGES 12 AND 29, THAT
YOU WILL NEED TO RAISE AN ADDITIONAL $500,000 TO IMPLEMENT YOUR BUSINESS PLAN
OVER THE NEXT 18 MONTHS AND THAT THE FUNDS RAISED IN THIS OFFERING, EVEN
ASSUMING YOU SELL ALL THE SHARES, WILL BE INSUFFICIENT TO COMMERCIALIZE YOUR
PRODUCT OR DEVELOP YOUR BUSINESS STRATEGY.
Response: The Company has revised its disclosure in the Business Summary
sections of its amended Registration Statement on Form S-1 filed concurrently
with this response to ad:
"We need to raise an additional $500,000 to implement our business plan
over the next 18 months and the funds raised in this offering, even
assuming we sell all the shares being offered, will be insufficient to
commercialize our product or develop our business strategy."
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 3 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
6. PLEASE RECONCILE THE DISCLOSURE ON PAGE SIX THAT YOU WILL MANUFACTURE YOUR
PRODUCTS WITH THE DISCLOSURE ON PAGES NINE AND 23 THAT YOU PLAN TO OUTSOURCE THE
MANUFACTURING OF YOUR PRODUCTS TO CONTRACT MANUFACTURERS. ALSO, PLEASE RECONCILE
THE STATEMENT ON PAGE SIX THAT YOU WILL MARKET AND DISTRIBUTE YOUR PRODUCTS WITH
THE DISCLOSURE ON PAGE 22, WHICH INDICATES YOU WILL OUTSOURCE THIS ASPECT OF
YOUR BUSINESS PURSUANT TO SALES AGENCY OR DISTRIBUTION AGREEMENTS WITH
INDEPENDENT AGENTS. PLEASE REVISE THE DISCLOSURE THROUGHOUT THE PROSPECTUS
ACCORDINGLY.
Response: The Company has revised the disclosure on page six of its amended
Registration Statement on Form S-1 filed concurrently this response to state:
"We intend to design and distribute a high-end women's collection of
"Obscene Brand Jeans" including t-shirts, jackets and sweatshirts to
compliment the core of our intended collection of jeans."
and
"We intend to design our products internally and enter into outsourcing
agreements for the manufacturing, marketing, selling and distributing
agreements with independent agents, each of whom is granted exclusive
rights to market and sell "Obscene Brand Jeans" in its respective
territory. We currently have no such agreements in place with commissioned
sales agents and distributors in the United States and Italy."
Additionally, under the heading "Description of Business" in the Prospectus, the
Company has revised its disclosure on intended business activities to state:
"We intend to design our woman's line of jeans branded as "Obscene Brand
Jeans" internally and enter into outsourcing agreements for the
manufacturing, marketing, selling and distributing agreements with
independent agents, each of whom is granted exclusive rights to market and
sell "Obscene Brand Jeans" in its respective territory. We currently have
no such agreements in place with commissioned sales agents and
distributors in the United States and Italy."
and deleted the following from the same section:
"We intend to design, develop, manufacture, wholesale, market, sell and
distribute our products by attendance at industry and trade shows and by
entering into sales agency or distribution agreements with independent
agents, each of whom will be granted exclusive rights to market and sell
"Obscene Brand Jeans" in their respective territories. We currently have
no such agreements in place with commissioned sales agents and
distributors in the United States."
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 4 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
RISK FACTORS, PAGE 8
- --------------------
7. PLEASE REVISE TO ADDRESS POTENTIAL BARRIERS TO ENTRY INTO THE HIGH END
BOUTIQUE AND DEPARTMENT STORE SALES CHANNELS ASSOCIATED WITH BEING A NEW ENTRANT
WITH NO TRACK RECORD.
Response: The Company has revised its amended Registration Statement on Form S-1
filed concurrently with this response to add the following risk factor:
"OUR PRODUCTS MAY NOT FIND ACCEPTANCE FOR OUR PRODUCTS IN HIGH END
BOUTIQUES AND DEPARTMENT STORES.
We are a new company with no established visibility or recognition in the
clothing industry. We anticipate our jean products to be positioned as a
high end product with a corresponding price point. However, since our
brand is not established and our products are not going to be recognized
within the industry, we may have trouble placing our products with
distributors who cater to high end boutiques and department stores. If we
are not able to have our products sold at high end boutiques and
department stores, we may not be able to generate revenues and our
business plan may fail."
8. PLEASE EXPAND UPON YOUR LAST RISK FACTOR ON PAGE 11 TO DISCUSS MS.
STARK-CAPPELLI'S ABILITY TO ACCOMPLISH OR RATIFY ACTIONS AT THE SHAREHOLDER
LEVEL WHICH WOULD OTHERWISE IMPLICATE HER FIDUCIARY DUTIES IF DONE AT THE BOARD
LEVEL. ALSO, PLEASE REVISE THE STATEMENT THAT SHE "MAY" HAVE CONTROL OVER YOU TO
INDICATE THAT SHE WILL HAVE CONTROL OVER YOU EVEN IF THE MAXIMUM IS RAISED IN
THIS OFFERING OR ADVISE WHY SUCH REVISION IS UNNECESSARY.
Response: The Company has revised its amended Registration Statement on Form S-1
filed concurrently with this response to amend the above risk factors to read as
follows:
"SINCE OUR SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 100% OF THE
OUTSTANDING COMMON STOCK, INVESTORS MAY FIND THAT HER DECISIONS ARE
CONTRARY TO THEIR INTERESTS YOU SHOULD NOT PURCHASE SHARES UNLESS YOU ARE
WILLING TO ENTRUST ALL ASPECTS OF MANAGEMENT TO OUR SOLE OFFICER AND
DIRECTOR, OR HER SUCCESSORS
Our sole officer and director, Rachel Stark-Cappelli, owns 9,000,000
shares of common stock representing 100% of our outstanding stock. Ms.
Stark-Cappelli will own 9,000,000 shares of our common stock after this
offering is completed representing 75% of our outstanding shares, assuming
all securities are sold. As a result, she will have control of us even if
the full offering is subscribed for and be able to choose all of our
directors. Her interests may differ from the ones of other stockholders.
Factors that could cause her interests to differ from the other
stockholders include the impact of corporate transactions on the timing of
business operations and her ability to continue to manage the business
given the amount of time she is able to devote to us.
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 5 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
All decisions regarding the management of our affairs will be made
exclusively by her. Purchasers of the offered shares may not participate
in our management and, therefore, are dependent upon her management
abilities. The only assurance that our shareholders, including purchasers
of the offered shares, have that our sole officer and director will not
abuse her discretion in executing our business affairs, is her fiduciary
obligation and business integrity. Such discretionary powers include, but
are not limited to, decisions regarding all aspects of business
operations, corporate transactions and financing. Ms. Stark-Cappelli also
has the ability to accomplish or ratify actions at the shareholder level
which would otherwise implicate her fiduciary duties if done as one of the
members of our board of directors.
Accordingly, no person should purchase the offered shares unless willing
to entrust all aspects of management to the sole officer and director, or
her successors. Potential purchasers of the offered shares must carefully
evaluate the personal experience and business performance of our
management."
9. PLEASE PROVIDE THE BASIS FOR THE STATEMENT THAT "WE ANTICIPATE 18 MONTHS
OF OPERATIONAL LOSSES AT APPROXIMATELY $7,000 PER MONTH BEFORE WE CAN GENERATE
ADEQUATE CASH FLOW TO COVER OPERATIONS" OR REMOVE GIVEN THE DEVELOPMENT STAGE OF
THE COMPANY AND THAT THERE IS NO GUARANTEE YOU WILL BE ABLE TO GENERATE REVENUES
MUCH LESS ACHIEVE SUFFICIENT CASH FLOW TO COVER OPERATIONS. WE NOTE SIMILAR
DISCLOSURE ON PAGE 29.
Response: The Company has removed the referenced disclosure both is the "Risk
Factors" section and page 29 of its amended Registration Statement on Form S-1
filed concurrently with this response.
10. PLEASE REVISE TO CONSOLIDATE THE RISK FACTOR ON PAGE 15 BEGINNING "AS WE
MAY BE UNABLE TO CREATE OR SUSTAIN A MARKET ... " WITH THE RISK FACTOR ON PAGE
14 BEGINNING "BECAUSE THERE IS NO PUBLIC MARKET ... " OR REVISE TO MORE CLEARLY
EXPLAIN THE UNIQUE RISKS ADDRESSED IN EACH PARAGRAPH.
Response: The Company has removed the risk factor beginning "As we may be unable
to create or sustain a market ... " and added the following disclosure to the
related risk factor in the amended Registration Statement on Form S-1 filed
concurrently with this response:
"Our stock may be listed or traded only to the extent that there is
interest by broker-dealers in acting as a market maker. Despite our best
efforts, it may not be able to convince any broker/dealers to act as
market-makers and make quotations on the OTC Bulletin Board. We may
consider pursuing a listing on the OTCBB after this registration becomes
effective and we have completed our offering."
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 6 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
11. ON PAGE 16 YOU INDICATE YOU "DO NOT KNOW WHETHER [Y]OUR SECURITIES WILL BE
REGISTERED OR EXEMPT FROM REGISTRATION UNDER THE LAWS OF ANY STATE." PLEASE
EXPLAIN.
Response: Though the Company is filing to have its securities registered under
federal laws and with the Commission, the Company has not reviewed every state's
applicable securities laws and as such, it does not know whether the Company's
shares will meet with the respective 'blue sky' laws of these states.
Additionally, the Company is not certain whether it will have the time and
resources to have it listed in generally accepted corporate guides such as
Standard and Poor's Corporate Records.
USE OF PROCEEDS, PAGE 17
- ------------------------
12. PLEASE DISCLOSE THE USE OF PROCEEDS IF YOU RAISE LESS THAN 25% OF THE
OFFERING.
Response: The Company has revised its disclosure in the 'Use of Proceeds'
section of the amended Registration Statement on Form S-1 filed concurrently
with this response to add the following:
"If we are only able to sell less than 25% of the securities we are
offering, substantially all of the funds raised by this offering will be
spent on assuring that we meet our corporate and disclosure obligations so
that we remain in good standing with the State of Florida and maintain our
status as a reporting issuer with the SEC."
13. PLEASE REVISE TO ADDRESS INSTRUCTION 3 TO ITEM 504 OF REGULATION S-K OR
INCLUDE A CROSS REFERENCE TO SUCH DISCUSSION.
Response: The Company has revised its disclosure in the 'Use of Proceeds'
section of the amended Registration Statement on Form S-1 filed concurrently
with this response to add the following:
"Even if we are able to sell all of the securities being offered in this
Prospectus, we will still require approximately $450,000 to cover our
anticipated expenses over the next 18 months. Please review our disclosure
titled "Plan of Operations" in the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" elsewhere in this
Prospectus. Please note that there can be no assurance that we will be
able to raise such funds."
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 7 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES, PAGE 18
- ------------------------------------------------------
14. PLEASE REVISE THE THREE TABLES ON PAGE 18 TO MORE CLEARLY PRESENT THE
INFORMATION REQUIRED BY ITEM 506 OF REGULATION S-K ASSUMING ALL, 75%, 50, AND
25% OF THE SHARES ARE SOLD.
Response: The Company has revised the dilution disclosure in the amended
Registration Statement on Form S-1 filed concurrently with this response to read
as follows:
PERCENTAGE OF SHARES SOLD
DILUTION TO NEW SHAREHOLDERS -----------------------------------
---------------------------- 25% 50% 75% 100%
------- ------- -------- -------
Per share offering price ................. $0.0175 $0.0175 $ 0.0175 $0.0175
Net tangible book value per share before
offering ................................. $ 0.001 $ 0.001 $ 0.001 $ 0.001
Net tangible book value per share after
offering ................................. $0.0023 $ 0.003 $ 0.0043 $0.0051
Increase in book value attributable to new
shareholders ............................. $0.0013 $ 0.002 $ 0.0033 $0.0041
Dilution to new shareholders ............. $0.0152 $0.0145 $0.00132 $0.0124
BUSINESS DESCRIPTION, PAGE 22
- -----------------------------
15. YOUR CURRENT DISCLOSURE DOES NOT APPEAR TO ADDRESS THE DESIGN STAGE OF
YOUR BUSINESS PLAN. PLEASE REVISE TO ADDRESS WHO WILL DESIGN YOUR CLOTHES, WHERE
SUCH DESIGN WORK WILL BE DONE, AND UNDER WHAT CONTRACTUAL TERMS. IN ADDITION,
REVISE TO ADDRESS HOW LONG SUCH DESIGN PROCESS WILL TAKE AND ANY PLANS THE
COMPANY HAS TO TEST ITS DESIGNS PRIOR TO MARKETING OR PRODUCING. PLEASE REVISE
TO INDICATE WHETHER MS. STARK-CAPPELLI HAS ANY DESIGN EXPERIENCE.
Response: The Company has revised the disclosure in its amended Registration
Statement on Form S-1 filed concurrently with this response to add the
following:
"Our jeans are going to be designed by Ms. Stark-Cappelli at our offices
in Sarasota Florida. Ms. Stark-Cappelli served as President of Excentrix
s.r.l in Florence, Italy where she designed, tested and sourced production
of the company's jean collection as well as t-shirts, jackets and sweat
shirts for distribution throughout Europe, Asia and the USA in Florence,
Italy from January 1998 to June 2006.
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 8 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
We anticipate that the design and testing of "Obscene Brand" jeans will
take up to 9 months. Once the jeans are designed and tested, we can move
onto engaging companies to distribute and market our products. We do not
currently have a management or design agreement in place with Ms.
Stark-Cappelli."
16. WITH A VIEW TO DISCLOSURE, PLEASE ADVISE WHETHER THE DISCUSSION UNDER
MARKET ON PAGE 25 IS ENTIRELY PULLED FROM THE SAME MAY 22, 2009 LOS ANGELES
TIMES ARTICLE AND CLARIFY WHETHER THE REFERENCE TO NPD GROUP WAS CONTAINED WITH
SUCH ARTICLES.
Response: The Company advises that indeed the discussion under Market was
entirely sourced from the Los Angeles Times article of May 22, 2009. The
reference to NPD Group was also sourced from this article.
17. PLEASE PROVIDE SUPPORT FOR YOUR PAGE 26 STATEMENT THAT THE INDUSTRY IS
FRAGMENTED. IN ADDITION, PROVIDE BASES FOR THE BELIEFS EXPRESSED IN THE PAGE 26
PARAGRAPH BEGINNING "WE BELIEVE THAT OUR COMPETITIVE STRENGTHS ... "
Response: The Company has revised the disclosure in its amended Registration
Statement on Form S-1 filed concurrently with this response to eliminate the
reference to the industry being fragmented.
The Company believes that its competitive strengths lie with Ms. Stark-Cappelli
who has extensive experience in this industry in Italy. The Company believes
that Ms. Stark-Cappelli's experience and knowledge, gained by working with
Italian craftsman experienced in design, fabric, embroidery, washing and
stitching techniques, will allow it to compete effectively in the jean industry.
18. PLEASE REVISE YOUR PAGE 26 STATEMENT THAT YOU WILL NEED TO "CONTINUE
DEVELOPING OUR RELATIONSHIPS WITH MAJOR DISTRIBUTORS." IT DOES NOT APPEAR THAT
YOU HAVE ANY RELATIONSHIPS CURRENTLY.
Response: The Company revised its disclosure in the amended Registration
Statement on Form S-1 filed concurrently with this response to replace the
referenced statement with the following:
"develop relationships with major distributors ... "
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, PAGE 28
- --------------------------------------------------------------------------
19. PLEASE REMOVE THE REFERENCE TO "REVENUES" GENERATED FROM THE PROCEEDS OF
LOANS ON PAGE 29, AS LOANS ARE NOT CHARACTERIZED AS REVENUES.
Response: The Company has revised its disclosure in the amended Registration
Statement on Form S-1 filed concurrently with this response to remove the
reference to 'revenue'.
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 9 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
20. THE DISCLOSURE ON PAGES 6 AND 13 STATES THAT THE $52,500 TO BE RAISED IN
THIS OFFERING WILL BE USED TO "FORMULATE THE BUSINESS AND MARKETING PLAN."
PLEASE PROVIDE A MORE DETAILED DISCUSSION OF THE FORMULATION OF THE BUSINESS AND
MARKETING PLAN. WE MAY HAVE FURTHER COMMENT.
Response: The reference to 'formulat(ing)' a business and marketing plan was
made in error. The Company intended to disclose that the funds would be used to
begin implementing the business and marketing plan. The Company has revised its
disclosure to reflect this change in the referenced pages as well as throughout
the amended Registration Statement on Form S-1 filed concurrently with this
response.
21. YOU DISCLOSE ON PAGE 29 THAT YOU DO NOT HAVE ADEQUATE FUNDS TO SATISFY
YOUR WORKING CAPITAL REQUIREMENTS FOR THE NEXT TWELVE MONTHS AND YOU ALSO STATE
THAT THE PROCEEDS FROM THIS OFFERING WILL SATISFY YOUR CASH REQUIREMENTS FOR UP
TO 6 MONTHS. GIVEN THAT THERE IS NO MINIMUM TO THIS OFFERING, PLEASE DISCLOSE
HOW LONG YOU CAN SATISFY YOUR WORKING CAPITAL REQUIREMENTS BASED UPON YOUR
CURRENT CASH BALANCE. ALSO, PLEASE UPDATE THE CASH ON HAND AS OF THE MOST RECENT
PRACTICABLE DATE.
Response: The Company has revised its disclosure in the amended Registration
Statement on Form S-1 filed concurrently with this response to add:
"As of May 24, 2010 we had $9,000 cash on hand. This cash will not cover
the expenses of this offering or our working capital requirements for even
one month given the undertaking of this offering and the expenses
involved."
22. PLEASE CLARIFY THE HEADING "PROJECTED TIME FRAME" IN THE MILESTONES TABLE.
IT APPEARS THAT THE MILESTONES ARE DEPENDENT UPON ADDITIONAL FUNDING. PLEASE
PROVIDE CLEAR DISCLOSURE AS TO THE IMPACT UPON THE TIMING OF THE MILESTONES
BASED UPON THE INABILITY OF THE COMPANY TO OBTAIN ADDITIONAL FUNDING. ALSO,
PLEASE PROVIDE MORE SPECIFICITY REGARDING THE PROJECTED TIME FRAME FOR THE
MILESTONES. FOR INSTANCE, IT APPEARS THAT SOME MILESTONES ARE DEPENDENT UPON THE
COMPLETION OF AN EARLIER MILESTONE. HOWEVER, YOU HAVE ONLY IDENTIFIED EACH TIME
FRAME AS EITHER 0-9 MONTHS OR 9-18 MONTHS. LASTLY, PLEASE CLARIFY WHETHER YOU
WILL IMPLEMENT PARTS OF YOUR MILESTONES TO THE EXTENT YOU ARE ABLE TO RAISE SOME
FUNDING BUT LESS THAN THE $500,000.
Response: The Company has revised the heading "Projected Time Frame" to
"Projected Time to Completion" in its amended Registration Statement on Form S-1
filed concurrently with this response. Additionally the Company has added the
following disclosure:
"Many of the developments enumerated in Phase 2 are dependent on the
completion of objectives in Phase 1 and both Phases are dependent on us
securing additional financing even if we are able to sell all of the
securities offered by this Prospectus. There can be no assurance that we
will be able to sell any of the securities offered by this Prospectus or
secure additional financing. If we are able to raise some, but not all
funds required to undertake the developments in Phase 1 and Phase 2, our
management will re-examine our proposed business activities to use our
resources most efficiently."
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 10 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
23. WE NOTE THE STATEMENT OF PAGE 31 THAT YOUR SOLE OFFICER AND DIRECTOR
"UNDERTAKES TO PROVIDE [YOU] WITH INITIAL OPERATING AND LOAN CAPITAL TO SUSTAIN
[Y]OUR BUSINESS PLAN OVER THE NEXT EIGHTEEN (18) MONTHS." PLEASE ADVISE US OF
THE MEANING OF THIS STATEMENT. IF SHE IS CONTRACTUALLY OBLIGATED TO ADVANCE YOU
FUNDS, REVISE TO FILE THE AGREEMENTS(S); IF NO SUCH AGREEMENT IS IN PLACE,
REVISE YOUR DISCLOSURE TO ADDRESS THE ENFORCEABILITY OF SUCH UNDERTAKING AND THE
POSSIBILITY THAT SHE WOULD DECLINE TO ADVANCE FUNDS. ALSO, GIVEN YOUR FUTURE
CAPITAL NEEDS, ESTIMATED AT $500,000, REVISE TO ADDRESS HER ABILITY MAKE SUCH
ADVANCES AND WHICH EXPENSES SHE HAS AGREED TO COVER FOR THE NEXT 18 MONTHS.
Response: The Company has revised its amended Registration Statement on Form S-1
to eliminate the following disclosure:
"Our sole officer and director Rachel Stark-Cappelli, undertakes to
provide us with initial operating and loan capital to sustain our business
plan over the next eighteen (18) month period."
The Company has also revised related disclosure in the Management's Discussion
and Analysis in the amended Registration Statement on Form S-1 filed
concurrently with this response.
24. PLEASE PROVIDE A BASIS FOR YOUR PAGE 32 STATEMENT THAT YOU BELIEVE YOU MAY
BE ABLE TO ISSUE NOTES OR DEBT IN ORDER TO START EXECUTING YOUR BUSINESS PLAN.
Response: The referenced statement is conditioned with the word 'may'. Ms.
Stark-Cappelli has expressed a readiness to provide some, as of this point
undetermined, funds to the Company in the form of debt notes if the Company is
not able to raise sufficient funding from investors. Due to the fact that the
Company has not entered into any agreements with Ms. Stark-Cappelli for this
financing, the Company has stated that it 'may' be able to issue notes or debt
in order to start executing its business plan.
Additionally, the Company has added the following disclosure to its Liquidity
and Capital Resources section of the amended Registration Statement on Form S-1
filed concurrently with this response:
"However, there can be no assurance that we will be able to raise money in
this fashion and have not entered into any agreements that would obligate
a third party to provide us with capital."
25. PLEASE FILE ANY DOCUMENT EVIDENCING YOUR OFFICER'S AGREEMENT TO REFRAIN
FROM DRAWING A SALARY. IF NO AGREEMENT EXISTS, REVISE TO STATE SO.
Response: Because it does not have a definitive agreement in place with Ms.
Stark-Cappelli, the Company has revised disclosure in its amended Registration
Statement on Form S-1 filed concurrently with this response to state as follows:
"To date, the Company has managed to keep our monthly cash flow
requirement low for two reasons. First, our sole officer does not draw a
salary at this time. Second, the Company has been able to keep our
operating expenses to a minimum by operating in space owned by our sole
officer and will be only paying the direct expenses associated with our
business operations."
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 11 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
26. WE NOTE YOUR STATEMENT ON PAGE 32 THAT "THE CURRENT FUNDS AVAILABLE TO THE
COMPANY WILL NOT BE SUFFICIENT TO CONTINUE MAINTAINING A REPORTING STATUS."
PLEASE ADD A RISK FACTOR.
Response: The Company has added the following risk factor to its amended
Registration Statement on Form S-1 filed concurrently with this response:
"WE DO NOT HAVE SUFFICIENT CAPITAL TO CONTINUE MAINTAINING OUR REPORTING
STATUS.
As of the date of this Prospectus, the current funds available to us will
not be sufficient to continue maintaining our reporting status with the
SEC. Our management believes that if we cannot maintain our reporting
status with the SEC we will have to cease all efforts directed towards
developing our company. As such, any investment could be lost in its
entirety."
MANAGEMENT, PAGE 35
- -------------------
27. PLEASE REVISE TO PROVIDE THE DISCLOSURE CONTEMPLATED BY ITEM 401(E) OF
REGULATION S-K. IN ADDITION, PLEASE CONFIRM THAT YOUR DISCLOSURE UNDER "OTHER
DIRECTORSHIPS" COVERS THE TIME PERIOD REQUIRED BY ITEM 401.
Response: The Company has revised the disclosure in its amended Registration
Statement on Form S-1 filed concurrently with this response to state:
"Ms. Stark-Cappelli does not hold, and has not held during the past five
years, any other directorships in any company with a class of securities
registered pursuant to section 12 of the Exchange Act or subject to the
requirements of section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940."
28. PLEASE DISCLOSE THE AMOUNT AND PERCENT OF TIME MS. STARK-CAPPELLI
CURRENTLY DEVOTES TO THE COMPANY.
Response: Ms. Stark-Cappelli devotes approximately 10-25 hours per week to the
Company.
29. PLEASE EXPAND YOUR PAGE 36 DISCLOSURE TO ADDRESS HOW YOU ANALYZED THE
CONCLUSION "THAT YOU DO NOT FORESEE A DIRECT CONFLICT OF INTERESTS WITH [Y]OUR
SOLE OFFICER AND DIRECTOR" GIVEN YOUR CURRENT STRUCTURE.
Response: The Company has revised the disclosure regarding conflicts of interest
experienced by Ms. Stark-Cappelli in its amended Registration Statement on Form
S-1 filed concurrently with this response by replacing the prior disclosure in
its entirety with the following:
"Ms. Stark-Cappelli is not obligated to commit her full time and attention
to our business and, accordingly, she may encounter a conflict of interest
in allocating her time between our operations and those of other
businesses. In the course of her other business activities, she may become
aware of investment and business opportunities which may be appropriate
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 12 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
for presentation to us as well as other entities to which she owes a
fiduciary duty. As a result, she may have conflicts of interest in
determining to which entity a particular business opportunity should be
presented. She may also in the future become affiliated with entities that
are engaged in business activities similar to those we intend to conduct.
In general, officers and directors of a corporation are required to
present business opportunities to the corporation if:
* the corporation could financially undertake the opportunity;
* the opportunity is within the corporation's line of business; and
* it would be unfair to the corporation and its stockholders not to bring
the opportunity to the attention of the corporation."
30. PLEASE REVISE THE DISCLOSURE THROUGHOUT TO MORE CONSISTENTLY AND
ACCURATELY PRESENT INFORMATION WITH RESPECT TO YOUR BOARD. WE NOTE, FOR EXAMPLE,
REFERENCES TO YOUR "BOARD OF DIRECTORS" AND ACTIONS BEING "UNDERTAKEN BY THE
ENTIRE BOARD AS A WHOLE" DESPITE THE FACT THAT YOUR BOARD CONSISTS OF ONLY ONE
PERSON, WHO IS ALSO AN OFFICER AND CONTROLLING SHAREHOLDER. PLEASE SUBSTANTIALLY
REVISE THIS SECTION TO ADDRESS.
Response: The Company has revised the disclosure relating to its sole director
and officer throughout this section in its amended Registration Statement on
Form S-1 filed concurrently with this response. The Company has retained some
references to the Company's board of directors where it felt they were
appropriate.
31. PLEASE CLARIFY THE REFERENCE TO BLACK HAWK IN YOUR DISCLOSURE.
Response: The reference to Black Hawk was made in error. The Company has revised
this disclosure in the amended Registration Statement on Form S-1 filed
concurrently with this response to eliminate the reference to Black Hawk.
WHERE YOU CAN FIND MORE INFORMATION, PAGE 42
- --------------------------------------------
32. WE NOTE YOUR STATEMENT THAT IF A "CONTRACT OR DOCUMENT IS FILED AS AN
EXHIBIT TO THE REGISTRATION STATEMENT, THE CONTRACT OR DOCUMENT IS DEEMED TO
MODIFY [IT] ... [AND] YOU MUST REVIEW THE EXHIBITS THEMSELVES FOR A COMPLETE
DESCRIPTION OF THE CONTRACT OR DOCUMENT." PLEASE REVISE TO REMOVE THIS STATEMENT
OR DISCLOSE THAT YOU HAVE SUMMARIZED ALL MATERIAL TERMS ASSOCIATED WITH THESE
EXHIBITS.
Response: The Company has removed this disclosure from its amended Registration
Statement on Form S-1 filed concurrently with this response.
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 13 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
FINANCIAL STATEMENTS
- --------------------
GENERAL
- -------
33. PLEASE PROVIDE A CURRENTLY DATED CONSENT IN ANY AMENDMENT AND ENSURE THE
FINANCIAL STATEMENTS ARE UPDATED AS REQUIRED BY ARTICLE 8-08 OF REGULATION S-X.
Response: The Company has filed a currently dated consent from its auditor and
included the latest available financial statements in the amended Registration
Statement on Form S-1 filed concurrently with this response.
PART II
- -------
RECENT SALES OF UNREGISTERED SECURITIES
- ---------------------------------------
34. IT WAS UNCLEAR HOW YOUR DISCUSSION BEGINNING "EACH PROSPECTIVE INVESTOR
WAS GIVEN ... " MATCHES THE TRANSACTION DESCRIBED IN THIS SECTION GIVEN THAT THE
ONLY INVESTOR WAS THE FOUNDER. PLEASE ADVISE OR REVISE.
Response: The Company has revised its disclosure in the amended Registration
Statement on Form S-1 filed concurrently with this response as to eliminate the
following:
"Each prospective investor was given a private placement memorandum
designed to disclose all material aspects of an investment in us,
including the business, management, offering details, risk factors,
financial statements and use of funds. The investors were business
acquaintances, family members, or friends of, or personally known to, our
officers and directors."
Additionally, the Company revised the disclosure to refer to Ms. Stark-Cappelli
as the only current investor.
EXHIBITS
- --------
EXHIBIT 4
- ---------
35. THE SPECIMEN STOCK CERTIFICATE OF OBSCENE JEANS CORP. YOU FILED APPEARS TO
BE FOR A PENNSYLVANIA CORPORATION NAMED CLARION COUNTY COMMUNITY BANK AND NOT
YOURS. PLEASE REVISE TO FILE A FORM OF THE COMPANY'S STOCK CERTIFICATE.
Response: The Company has included a revised specimen stock certificate with the
amended Registration Statement on Form S-1 filed concurrently with this
response.
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.
Page| 14 macdonald
tuskey TM
CORPORATE AND SECURITIES LAWYERS
________________________________________________________________________________
EXHIBIT 99
36. THIS DOCUMENT APPEARS TO BE A SUBSCRIPTION AGREEMENT FOR A PRIVATE
OFFERING. IT WAS UNCLEAR HOW IT RELATED TO YOUR CURRENT OFFERING AND WHETHER YOU
WOULD REQUIRE INVESTORS TO SIGN SUCH AGREEMENT PRIOR TO INVESTING. PLEASE ADVISE
US OF THE PURPOSE OF THIS AGREEMENT. WE MAY HAVE FURTHER COMMENTS.
Response: The Company has included a revised subscription agreement with the
amended Registration Statement on Form S-1 filed concurrently with this
response.
Yours truly,
W.L. MACDONALD LAW CORPORATION
Per: /s/ Konrad Malik
Konrad Malik
________________________________________________________________________________
Macdonald Tuskey is an association of law corporations with lawyers called in
the Provinces of British Columbia and Alberta and the State of New York.