SOUTH BEACH SPIRITS, INC.
2690 Weston Road, Suite 200
Weston, Florida 33331
September 22, 2015
VIA EDGAR
United States Securities and Exchange Commission
Washington, D.C.
Attention: Tom Kluck, Esq
Rahul Patel, Esq.
Re: South Beach Spirits, Inc. (f/k/a CME Realty, Inc.)
Form 8-K
Filed August 31, 2015
File No. 001-36549
Gentlemen:
In response to the Staff's comment letter dated September 10, 2015, South Beach
Spirits, Inc. (the "COMPANY") hereby advises the Staff as follows:
1. (a) The Company respectfully disagrees with the Staff's comment that it
appears that the Company was a "shell company" within the meaning of Rule 12b-2
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). The
Company consummated an initial public offering pursuant to a Registration
Statement on Form S-1 (File No. 333-18755) filed under the Securities Act of
1933, as amended, declared effective by the Commission on October 2, 2013.
Following consummation of the initial public offering, the Company became a
fully reporting company under the Exchange Act by registering its common stock
under Section 12 (g) thereof through the filing of a Form 8-A with the
Commission on July 16, 2014. Since that time, the Company has fulfilled all of
its reporting obligations under the Exchange Act.
As set forth in the Registration Statement and subsequent Exchange Act reports,
the Company's initial plan of operations was to engage in providing real estate
services for the Las Vegas residential market. The Company was unable to
implement this plan of operations for a number of reasons, including without
limitation, the inability to raise sufficient additional capital, the need for
which was disclosed in both the Registration Statement and subsequent Exchange
reports. Accordingly, in February 2015, the Company determined that it would be
in its shareholders' best interests to redirect the Company's business into the
development, marketing and distribution of alcoholic beverages. In connection
therewith, a "CHANGE IN CONTROL" transaction occurred which was reported on a
Current Report on Form 8-K and subsequently, on April 22, 2015, the Company
entered into a letter of intent to acquire all of the capital stock of Rock N'
Roll Imports, Inc., a California corporation ("RNR") engaged in alcoholic
beverage development, marketing and distribution.
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In order to reflect its redirected business operations, the Company also
commenced the process of changing its name from "CME REALTY, INC." to "SOUTH
BEACH SPIRITS, INC.," by filing (and subsequently distributing to shareholders)
a Schedule 14C Information Statement as required under the Exchange Act and
making the required filings with FINRA. On August 6, 2015, the Company announced
that as it had been unable to reach definitive agreement on the terms of the
acquisition of RNR, it had terminated the letter of intent with respect thereto
and had entered into a letter of intent to acquire the intellectual property
assets of the V Georgio brand. It consummated that acquisition on August 25,
2015, as disclosed in the Current Report on form 8-K referred to above. All of
the foregoing events were disclosed in required filings under the Exchange Act.
By reason of all the foregoing, the Company believes that it is not nor has ever
been a "shell" company.
(b) We hereby advise the Staff that V Georgio Enterprises, LLC and certain
affiliated entities (collectively, "VGE") commenced development of the V Georgio
brand of premium Vodka in 2007. The brand was launched in 2008 and was
manufactured, marketed, distributed and sold from 2008 through approximately May
2012, at which time all operations ceased due to a lack of capital. The only
assets which remained at such time were the registered trademark for the brand,
common law intellectual property rights and goodwill related thereto, together
with various administrative documents related to the discontinued operations,
such as customer and vendor lists. It is solely these dormant assets (i.e., the
trademark, common law intellectual property rights and related documents) which
the Company acquired from VGE and Victor G. Harvey, Sr., in the transaction
reported in the Current Report on Form 8-K referred to above.
The Company is aware that the Commission considers the term "BUSINESS" to mean
an operating entity or business unit, but not to include machinery and other
assets that do not generate a distinct profit or loss stream. See S-X Rule
11-01(d) (which presumes that a separate entity, a subsidiary or a division is a
business). The Company is also aware that a lesser component of an entity may
also constitute a "BUSINESS," although it depends on the facts and
circumstances.
In the instant case, no operating entity or business unit was acquired by the
Company. The assets acquired by the Company were primarily dormant intellectual
property, which had not been used to generate revenues since approximately May
2012. While the Company intends to relaunch the V Georgio brand, the
intellectual property acquired in and of itself would not comprise assets
sufficient to generate revenues. In order to generate revenues from assets
acquired from VGE and Mr. Harvey, such assets would have had to include, among
other items, inventory of bottles, labels and finished product, contracts with
suppliers, vendors, distillers and distributors, licenses and permits and other
third party agreements, none of which were included in the assets acquired.
Moreover, other than Mr. Harvey, who has joined the Company to provide his
expertise in connection with the relaunch of the brand, there are no employees.
Finally, there were no physical facilities or rights thereto acquired.
Based on the foregoing, the Company believes that it did not acquire a
"BUSINESS" as understood by the Commission and accordingly, is not required to
file the financial statements and pro forma financial information pursuant to
Instruction 5 of Item 2.01 and Item 9.01 of Form 8-K with respect to the
transaction reported.
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The Company hereby acknowledges to the Staff that:
* the Company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* Staff comments or changes to disclosure in response to Staff comments
do not foreclose the Commission from taking any action with respect to
the filing; and
* the Company may not assert Staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
If you have any further questions or comments with respect to the foregoing,
please contact the undersigned at 954.462.2465 or our counsel, Dale S. Bergman
of Gutierrez Bergman Boulris, P.L.L.C. at 786.888.1744.
Very truly yours,
SOUTH BEACH SPIRITS, INC.
By: /s/ Vincent Prince
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Vincent Prince, Chief Financial Officer
cc: Dale S. Bergman, Esq.
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