August 6, 2010
Via FACSIMILE
Securities and Exchange Commission
Mail Stop 4561
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Jan Woo, Staff Attorney, Maryse Mills-Apenteng, Special Counsel
RE: BENEFIT SOLUTIONS OUTSOURCING CORP.
AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON FORM S-1
FILED JULY 1, 2010
FILE NO. 333-167917
Ms. Woo & Ms. Mills-Apenteng:
This letter responds to comments of the Staff (the "Staff") of the
Securities and Exchange Commission (the "Commission") contained in the letter
from the Staff to Benefit Solutions Outsourcing, Corp. (the "Company") dated
July 28, 2010 regarding the above-referenced Registration Statement on Form S-1
(as amended) (the "Registration Statement").
For your convenience, we have included each of the Staff's comments
before each of the Company's responses. References in this letter to "we," "our"
or "us" mean the Company as the context may require.
STAFF COMMENT 1:
As there is currently no public trading market, and one may never develop,
please remove the statement in the second paragraph that reads, "The offering
price of $0.01 per share may not reflect the market price of the shares after
the offering." Alternatively, revise the statement to clarify that the offering
price was arbitrarily determined and that a market for your securities may never
develop.
RESPONSE:
We concur with the Staff and have removed the sentence pertaining to the
offering price.
STAFF COMMENT 2:
It appears that the risk factors section begins on page 6 rather than on page 5
as indicated on the cover page and in the summary section on page 4. Please
revise.
RESPONSE:
We concur with the Staff and have updated the risk factors' page references.
STAFF COMMENT 3:
Revise to present the information specified by Item 502(b) of Regulation S-K
regarding the prospectus delivery obligation of dealers. Additionally, please
remove the portions of the table of contents relating to portions of the
registration statement that are not part of the prospectus.
RESPONSE:
We concur with the Staff and have added the prospectus delivery obligation of
dealers. We also confirmed that the table of contents has been revised to remove
those portions that are not part of the prospectus."
STAFF COMMENT 4:
We note your statements on page 5 that you have not generated any revenue from
your business operations and that your auditors have expressed substantial doubt
about your ability to continue as a going concern. Please revise the summary
section so that this information is prominently disclosed on the first page of
the summary and clarify that you presently have no operations.
RESPONSE:
We concur with the Staff and have added the disclosure about our auditor's doubt
about our going concern. We have also added a reference that we have operations;
however we do agree that they are minimal at this time.
STAFF COMMENT 5:
Please revise the text discussing the number of shares outstanding after the
offering to disclose the number of shares outstanding if 50% of the shares are
sold in this offering.
RESPONSE:
We concur with the Staff and have revised the disclosure to reflect the number
of shares outstanding if only 50% of the offering is sold.
STAFF COMMENT 6:
Please revise the last sentence of the first full paragraph on page 4 to remove
the implication that you do not have an obligation to update your prospectus for
material changes. Please confirm your understanding in this regard.
RESPONSE:
We concur with the Staff and have removed the reference to not update the
prospectus with material changes. We fully understand and confirm we will update
the prospectus with material changes.
STAFF COMMENT 7:
Please disclose in this section that even if you sell all the shares being
registered in this offering, the proceeds from the offering will not be
sufficient to complete your business and marketing plans which you estimate to
be $150,000.
RESPONSE:
We concur with the Staff and have added a disclosure to address the capital
required to complete the business and marketing plan and the associated risk if
all of the shares are not sold in this offering.
STAFF COMMENT 8:
Please disclose whether your office in Roseville, California is leased and
provide any other information that will inform investors as to the suitability
and adequacy of the facilities. We note your disclosure on page 24 that you are
operating in a "very small space" and that you have not incurred any rent
expenses. Refer to Item 102 of Regulation S-K.
RESPONSE:
We concur with the Staff and have updated the disclosure around the company's
facilities to correspond with Item 102 of Regulation S-K.
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STAFF COMMENT 9:
The risk factors should be tailored to your business and should not be so
generic as to apply readily to other businesses. Please revise any such risk
factors, including the risk factor subheadings, if applicable, to state specific
material risks to your company or to the purchasers in this offering. By way of
example only, and not intended as an exhaustive list, we refer you to the first
and second risk factors on page 11.
RESPONSE:
We concur with the Staff and have revised or deleted the risk factors so that
they remaining risk factors are specific to our business or the purchasers in
this offering.
STAFF COMMENT 10:
It appears that there is a material risk that the company will lack sufficient
capital resources to discharge the significant additional expenses that would be
expected once it becomes a reporting company subject to the requirements of
Section 15(d) of the Exchange Act. Please add a separate risk factor alerting
investors to the apparent substantial increases in administration costs that
will be experienced after the effective date. In this regard, we note your
estimate on page 23 that you expect $25,000 will be used for costs relating to
becoming a public reporting company.
RESPONSE:
We concur with the Staff and have added an additional risk factor to address the
lack of sufficient capital for the expenses associated for a public reporting
company.
STAFF COMMENT 11:
Please explain why you have referenced an audit report dated June 22, 2010
considering the report of your independent auditor, included herein, is dated
June 30, 2010.
RESPONSE:
We concur with the Staff and have updated the reference to the auditor's report
to June 30, 2010. This was a typographical error.
STAFF COMMENT 12:
The subheading of the risk factor suggests that you will be able to generate
sufficient funds from this offering to continue operating. Please revise the
heading of this risk factor to clearly state, if true, that the proceeds from
this offering will not be sufficient to develop your business and marketing
plans. Also, disclose the minimum number of months that you will be able to
operate with available capital resources, assuming the sales of 25%, 50%, 75%,
and 100% of the securities in this offering.
RESPONSE:
We concur with the Staff and revised the subheading to reflect that if all
securities are not sold in this offering we will be not able to complete the
business and marketing plans. In addition, we added the number of months we can
operate and the impact on our plans if 25%, 50%, 75% and 100% of the securities
in this offering are sold.
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STAFF COMMENT 13:
You state on page F-11 that the sole officer and director may, in the future,
become involved in other business opportunities that become available and that
he may face a conflict in selecting between the company and other business
interests. You also disclose that the company has not formulated a policy for
the resolution of such conflicts. Please expand the risk factor or include a
separate risk factor to discuss any potential conflicts of interest and to
disclose that you do not have a policy for resolving any such conflicts that may
arise.
RESPONSE:
We concur with the Staff and have updated the risk factor to include the fact
there is conflict and to state the company does not have a policy for a conflict
should one arise.
STAFF COMMENT 14:
You state on page 14 that you anticipate the costs associated with public
company requirements such as "audit, SEC filings, and reporting" to be
approximately $5,000-$6,000. On page 23, you estimate the expenses related to
filing legal and accounting expenses to be $21,000. Please reconcile these
statements and tell us what "reporting" expenses refer to and whether they are
different from expenses related to "SEC filings".
RESPONSE:
We concur with the Staff and have reconciled the public company costs which we
expect to be approximately $20,000. The reference to reporting and SEC filings
are the same, we therefore removed the redundancy.
STAFF COMMENT 15:
Please provide the calculations that support the "book value per share after the
offering" assuming 75%, 50%, and 25% of the shares are sold. Please ensure that
your calculation assume that 11,250,000, 10,500,000 and 9,750,000 shares will be
outstanding if only 75%, 50% and 25%, respectively of the total offering shares
are sold. In addition, explain further why you have not factored in the expenses
of this offering when calculating the "book value per share after your offering"
or revise your calculations accordingly.
RESPONSE:
We concur with the Staff and have updated the table to reflect the correct
calculations on table 15 and we included expenses in our calculation.
STAFF COMMENT 16:
Please revise your disclosure in the second paragraph to discuss the possibility
of a trading market developing once the registration statement is declared
effective by the SEC. Ensure consistent disclosure throughout. In addition, we
note several statements in the second paragraph that suggest that each step in
the process "will" occur. Rather than describe the process of becoming an OTCBB
company as a process that is within your control, please revise your statements
in the second paragraph to appropriately reflect the uncertainty associated with
the process.
RESPONSE:
We concur with the Staff and have updated the second paragraph to reflect the
process is not in our control and that there is no certainty that it will occur.
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STAFF COMMENT 17:
We note your statements on page 17 that "BSO offers a variety of services" and
that it "provides specialized expertise." Given that you have not yet started
operations, statements that suggest that you are currently offering these
services are inappropriate. Please revise accordingly.
RESPONSE:
We concur with the Staff and have updated these references to state that the
Company plans to offer these services and expertise in the future.
STAFF COMMENT 18:
You state here and elsewhere in your document that you intend to develop
"products and services." In your Plan of Operations discussion on page 22, you
state that you expect to complete product development within 24 months. Please
describe these types of products that you plan to offer.
RESPONSE:
We concur with the Staff and have specifically stated the Company's specific
product and services which include COBRA/HIPPA, flexible spending account, and
group health care plan administration.
STAFF COMMENT 19:
Please disclose the number of full-time and part-time employees. See Item
101(h)(4)(xii) of Regulation S-K.
RESPONSE:
We concur with the Staff and have updated the registration statement to reflect
full and part time employee headcount.
STAFF COMMENT 20:
Please include a discussion of the government laws and regulations that are
applicable to your business. This section should provide a meaningful
description of the nature of the government regulation to which the company's
proposed business will be subject in order to initiate the activities in your
proposed business plan. See Item 101(h)(4)(ix) of Regulation S-K. Also, consider
whether a risk factor is warranted regarding these government regulations.
RESPONSE:
We concur with the Staff and have added a risk disclosure on government laws and
regulations.
STAFF COMMENT 21:
Please revise this section to provide a brief description of your current
competitive position in the industry. See Item 101(h)(4)(iv) of Regulation S-K.
We note that you have named companies with operations and resources
significantly greater than your own. Consider revising your disclosure to
identify instead those companies with which you expect to compete more directly.
RESPONSE:
We concur with the Staff and have updated the competitive landscape overview to
identify the specific competitors that we anticipate that we will compete with
and how we plan to compete and differentiate ourselves in the market.
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STAFF COMMENT 22:
We note your reference to a website that will be "linked to other popular
sites." Please indicate whether you have a website that is currently operational
and, if so, disclose the website address.
RESPONSE:
We concur with the Staff and have revised the language to specify that we plan
to have a website, but we have yet to launch our website.
STAFF COMMENT 23:
Please provide a more detailed description of the actions and timing of your
planned operations over the next 12 months toward the development, completion
and execution of your business plan. Explain how long it will take to complete
the business and marketing plan, when you expect to begin to offer services,
when you expect to begin to offer product, and when you expect to begin to
generate revenue. Include a discussion of the number of employees/consultants
needed to begin offering the services you describe, including the operations of
a call center. To the extent your staffing requirements will materially change
to service employers with as few as 10 employees or as many as 500 employees,
please include a discussion of your plans for staffing your operations as these
various levels.
RESPONSE:
We concur with the Staff and have revised our plan of operations to include
timeframes, resources, and costs to start generating revenues. At this time,
staffing requirements are unknown and will be determined as we build our
business.
STAFF COMMENT 24:
You state on page 23 that you need $125,000 in order to execute your business
plan over the next 12 months which includes $100,000 for production and design,
marketing and technical work, and an additional $25,000 for working capital
purposes. However, you state on page 6 and 7 that you need $150,000 to complete
the marketing and business plan and for operational expenses. Please reconcile
this disclosure. Further, tell us whether the $100,000 costs related to the
"product development strategy" are separate and in addition to the costs to
complete and execute the business and marketing plan.
RESPONSE:
We concur with the Staff and have reconciled the costs with our business. In
addition, the completion of the business and marketing plan costs are separate
from the product and service offering development costs.
STAFF COMMENT 25:
Please disclose here the minimum number of months that you will be able to
conduct planned operations using currently available capital resources, assuming
the sale of 25%, 50%, 75% and 100% of the securities in this offering.
RESPONSE:
We concur with the Staff and have updated the liquidity and capital resources
section to reflect the minimum months of operations from available capital
resources based on 25%, 50%, 75% and 100% of the shares sold in this offering.
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STAFF COMMENT 26:
Please revise to give the specific date and employment history for Mr. Mills for
the past five years and indicate whether such work was considered a full-time
position. See Item 401(e) of Regulation S-K.
RESPONSE:
We concur with the Staff and have revised the employment history of Mr. Mills.
STAFF COMMENT 27:
You do not appear to have filed any documents related to the unregistered sale
of the 9,000,000 shares of common stock to Mr. Mills. Please provide us with
your analysis as to how you determined not to file any such documents as
exhibits to the registration statement. Refer to Item 601(b)(10)(ii)(A) of
Regulation S-K.
RESPONSE:
The issuance of the shares was made to the sole officer and director of the
Company and an individual who is a sophisticated and accredited investor,
therefore, the issuance was exempt from registration of the Securities Act of
1933 by reason of Section 4 (2) of that Act. This issuance is fully disclosed in
the registration statement.
We trust that you will find the foregoing responsive to the comments of
the Staff Comments. Please direct any comments or questions regarding this
letter or the Registration Statement to the undersigned at 530-306-1365.
Sincerely,
/s/ Jamie Mills
Jamie Mills
Chief Executive Officer
Enclosure
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