SEC Company Response from Z TRIM HOLDINGS, INC (CIK 0001052257) — Oct 20, 2005
Z TRIM HOLDINGS, INC (CIK 0001052257)
Date: Oct. 20, 2005 · CIK: 0001052257 · Accession: 0001013762-05-001380
AI Filing Summary & Sentiment
Letter
October 18, 2005 Attention: Ms. Ciclely D. Luckey Accounts Branch Chief Division of Corporate Finance Securities Exchange Commission Washington, D.C. 20549
Re: Circle Group Holdings, Inc. Reply #2 Form 10-K for Fiscal Year Ended December 31, 2004 Form 10-Q for Fiscal Quarter Ended March 31, 2005 File No. 1-32134
Dear Ms. Luckey:
Your correspondence by facsimiles forwarded to the undersigned was received October 11, 2005. The responses required of Circle Group by your letter follows and the text of your letter has been repeated for the convenience of your review.
A. SEC INFORMATION REQUESTED
Form 10-K for the year ended December 31, 2004 ----------------------------------------------
Item 5 - Market Price for Common Equity and Related Stockholder Matters, page 9 -------------------------------------------------------------------------------
1. We note your response to our previous comment one and we are unable to reconcile your response with the amounts disclosed in your December 31, 2004 Consolidated Statement of Stockholders' Equity as filed in your form 10-KSB. Please advise.
REPLY TO #1. See the attached Consolidated Statement of Stockholders' Equity and the detailed schedule of shares and amounts by stockholder of the stock for services line item.
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY -------------------------------------------------------------------------------- <TABLE> <CAPTION> Common Stock and Note Shares of Additional Receivable Common Paid-in Unamortized issued for Accumulated Treasury Stock Capital Expenses Stock Deficit Stock Total - ---------------------------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> <C> Balance at December 31, 2002 23,711,043 $20,405,970 $ -- $ -- $(20,082,234) $(11,269) $ 312,467 Stock issued for services 934,046 1,407,552 (333,750) 0 0 1,073,802 Stock issued for acquisition of license rights 1,208,333 620,000 0 0 0 620,000 Stock issued for cash 1,260,000 250,000 0 0 0 250,000 Stock subscription 2,742,857 978,250 0 0 0 978,250 Exercise of stock warrants and options 1,119,573 331,987 0 0 0 331,987 Retirement of common stock (103,600) (58,750) 0 0 0 (58,750) Equity adjustments related to subsidiary equity transactions 0 1,100,000 0 0 0 1,100,000 Warrants issued for services 0 719,877 (112,117) 0 0 607,760 Net loss 0 0 0 (2,827,821) 0 (2,827,821) -------------------------------------------------------------------------------------------------------------------- Balance at December 31, 2003 30,872,252 $25,754,886 $ (445,867) $ -- $(22,910,055) $(11,269) $ 2,387,695
</TABLE> CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY -------------------------------------------------------------------------------- <TABLE> <CAPTION> Common Stock and Note Shares of Additional Receivable Common Paid-in Unamortized issued for Accumulated Treasury Stock Capital Expenses Stock Deficit Stock Total ------------------------------------------------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> <C> <C> Stock issued for services 2,846,074 2,647,920 (2,033,500) 614,420 Stock issued for cash 3,916,813 7,276,175 (3,215,000) 4,061,175 Stock subscription 1,730,000
Exercise of stock warrants and options 5,031,330 2,458,665 (250,000) 2,208,665 Warrants issued for services 50,000 (50,000) Amortization of services 679,778 679,778 Minority loss 67,540 67,540 Net loss (4,185,315) (4,185,315) ---------------------------------------------------------------------------------------------------
Balance at December 31, 2004 44,396,469 $38,187,646 $(1,849,589) $(3,465,000) $(27,027,830) $(11,269) $ 5,833,958 ===================================================================================================
</TABLE> <PAGE> Circle Group Holdings, Inc. <TABLE> <CAPTION> <S> <C> <C> <C> <C> <C> <C> Schedule: U-1 Date -------------------------------------- Carryforward Stock Book Analysis Prepared By: KG 03/16/05 -------------------------------------- 12/31/04 Reviewed By: CW ------------------ -------------------
------------------------------------------------------------------------------------------------------------------------------------ Certificate Number of Shares As of Date Number Stockholder Process Date Issued Amount Total ---------------------------------------------------------------------------------------------------------------------------------
1/13/2004 14533 Tressler 1/13/2004 44,723 84,973.70 Legal ------------------------------------------------------------------------------------------------------------------------- 1/23/2004 14583 CEO Cast Inc. 1/29/2004 30,000 183,000.00 Professional Services --------------------------------------------------------------------------------------------------------------------------------- 2/27/2004 14641 Tressler 3/3/2004 7,370 41,638.77 Legal --------------------------------------------------------------------------------------------------------------------------------- 3/25/2004 14691 Tressler 4/2/2004 2,384 15,257.60 Legal --------------------------------------------------------------------------------------------------------------------------------- 9/13/2004 CEO Cast Inc. 9/13/2004 30,000 54,300.00 Professional Services --------------------------------------------------------------------------------------------------------------------------------- 4/19/2004 14904 The Research Works(**) 10/11/2004 20,000 Professional Services --------------------------------------------------------------------------------------------------------------------------------- 11/21/04 14947 Sitrick and Company, Inc. 11/21/2004 100,000 70,000.00 Professional Services --------------------------------------------------------------------------------------------------------------------------------- 11/22/04 14974-14981 David Shemesh 12/27/2004 2,000,000 1,580,000.00 Professional Services --------------------------------------------------------------------------------------------------------------------------------- 11/22/04 4982-14983 Mordechai Tobian 12/27/2004 250,000 197,500.00 Professional Services --------------------------------------------------------------------------------------------------------------------------------- 11/23/04 14967 Tressler Soderstrom Malony & Priess 12/20/2004 29,236 38,591.52 Legal --------------------------------------------------------------------------------------------------------------------------------- 11/23/04 14968 Tressler Soderstrom Malony & Priess 12/21/2004 126,604 167,117.28 Legal --------------------------------------------------------------------------------------------------------------------------------- 11/30/04 15030 Tressler Soderstrom Malony & Priess 1/27/2005 3,599 4,750.68 Legal -------------------------------------------------------------------------------------------------------------------------------- 12/10/04 15025 Ioannis Mihalos 1/24/2005 100,000 128,000.00 Marketing Consulting --------------------------------------------------------------------------------------------------------------------------------- 12/10/04 15026 Ioannis Mihalos 1/24/2005 100,000 128,000.00 Marketing Consulting --------------------------------------------------------------------------------------------------------------------------------- 12/31/04 15031 Tressler Soderstrom Malony & Priess 1/27/2005 2,158 4,790.76 Legal Legal [services]** 216,074 357,120.31 Investor Relations [services]* 2,430,000 2,084,800.00 Marketing Consulting [services]* 200,000 $256,000.00 ---------------------------- 2,846,074 2,697,920.31 ============================ Stock for Services, per 10K $(2,647,920.00) (2,846,074) Stock for Services, per 10K Warrants for Services, 0 (50,000.00) Warrants for Services, per 10K ---------------------------- - $ 0.31 rounding </TABLE>
<PAGE> Note 2 - Summary of Significant Accounting Policies, page F-8 --------------------------------------------------------------
Revenue Recognition -------------------
2. Please further expand on your response to our previously issued comment two and your consideration of EITF 99-19. In this regard, we note your discussion of credit risk which is generally a weaker indicator under this guidance. Please clarify what is included in the direct costs that you incur and tell us what other indicators in paragraph 7-14 of the literature were met to conclude gross reporting was appropriate.
REPLY TO # 2
Responses to SEC comments dated 10/11/2005:
The Company recognizes all amounts billed by Online Bedding as gross revenue in accordance with EITF 99-19. The indicators of gross reporting are that Online Bedding has reasonable latitude in establishing the selling price and selecting a supplier, and it earns a variable amount in the transaction equal to the difference between the selling price and the amount to be paid to the supplier. In addition, Online Bedding is at risk for the payment of its direct costs, including suppliers' billings and freight charges. Whether or not its customers pay on a timely basis or at all, is also an indicator that revenue should be reported gross.
We hereby respectfully submit to you the answers contained herein and please do not hesitate to contact the undersigned if you would like any further clarification on your review of the File No. 1-32134.
Kind regards,
Circle Group Holdings, Inc.
Copy: Thomas Flinn Gregory J. Halpern Ken Kwiatt /S/ Dana L. Dabney ------------------ Dana L. Dabney Chief Financial Officer
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
October 18, 2005
Attention: Ms. Ciclely D. Luckey
Accounts Branch Chief
Division of Corporate Finance
Securities Exchange Commission
Washington, D.C. 20549
Re: Circle Group Holdings, Inc. Reply #2
Form 10-K for Fiscal Year Ended December 31, 2004
Form 10-Q for Fiscal Quarter Ended March 31, 2005
File No. 1-32134
Dear Ms. Luckey:
Your correspondence by facsimiles forwarded to the undersigned was received
October 11, 2005. The responses required of Circle Group by your letter follows
and the text of your letter has been repeated for the convenience of your
review.
A. SEC INFORMATION REQUESTED
Form 10-K for the year ended December 31, 2004
----------------------------------------------
Item 5 - Market Price for Common Equity and Related Stockholder Matters, page 9
-------------------------------------------------------------------------------
1. We note your response to our previous comment one and we are unable to
reconcile your response with the amounts disclosed in your December 31, 2004
Consolidated Statement of Stockholders' Equity as filed in your form 10-KSB.
Please advise.
REPLY TO #1. See the attached Consolidated Statement of Stockholders' Equity and
the detailed schedule of shares and amounts by stockholder of the stock for
services line item.
<PAGE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common
Stock and Note
Shares of Additional Receivable
Common Paid-in Unamortized issued for Accumulated Treasury
Stock Capital Expenses Stock Deficit Stock Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 2002 23,711,043 $20,405,970 $ -- $ -- $(20,082,234) $(11,269)
$ 312,467
Stock issued for services 934,046 1,407,552 (333,750) 0 0 1,073,802
Stock issued for acquisition
of license rights 1,208,333 620,000 0 0 0 620,000
Stock issued for cash 1,260,000 250,000 0 0 0 250,000
Stock subscription 2,742,857 978,250 0 0 0 978,250
Exercise of stock warrants
and options 1,119,573 331,987 0 0 0 331,987
Retirement of common stock (103,600) (58,750) 0 0 0 (58,750)
Equity adjustments related
to subsidiary equity
transactions 0 1,100,000 0 0 0 1,100,000
Warrants issued for services 0 719,877 (112,117) 0 0 607,760
Net loss 0 0 0 (2,827,821) 0 (2,827,821)
--------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2003 30,872,252 $25,754,886 $ (445,867) $ -- $(22,910,055) $(11,269) $ 2,387,695
</TABLE>
CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common
Stock and Note
Shares of Additional Receivable
Common Paid-in Unamortized issued for Accumulated Treasury
Stock Capital Expenses Stock Deficit Stock Total
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stock issued for services 2,846,074 2,647,920 (2,033,500) 614,420
Stock issued for cash 3,916,813 7,276,175 (3,215,000) 4,061,175
Stock subscription 1,730,000
Exercise of stock warrants
and options 5,031,330 2,458,665 (250,000) 2,208,665
Warrants issued for services 50,000 (50,000)
Amortization of services 679,778 679,778
Minority loss 67,540 67,540
Net loss (4,185,315) (4,185,315)
---------------------------------------------------------------------------------------------------
Balance at December 31, 2004 44,396,469 $38,187,646 $(1,849,589) $(3,465,000) $(27,027,830) $(11,269) $ 5,833,958
===================================================================================================
</TABLE>
2
<PAGE>
Circle Group Holdings, Inc.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Schedule: U-1 Date
--------------------------------------
Carryforward Stock Book Analysis Prepared By: KG 03/16/05
--------------------------------------
12/31/04 Reviewed By: CW
------------------ -------------------
------------------------------------------------------------------------------------------------------------------------------------
Certificate Number of Shares
As of Date Number Stockholder Process Date Issued Amount Total
---------------------------------------------------------------------------------------------------------------------------------
1/13/2004 14533 Tressler 1/13/2004 44,723 84,973.70 Legal
-------------------------------------------------------------------------------------------------------------------------
1/23/2004 14583 CEO Cast Inc. 1/29/2004 30,000 183,000.00 Professional Services
---------------------------------------------------------------------------------------------------------------------------------
2/27/2004 14641 Tressler 3/3/2004 7,370 41,638.77 Legal
---------------------------------------------------------------------------------------------------------------------------------
3/25/2004 14691 Tressler 4/2/2004 2,384 15,257.60 Legal
---------------------------------------------------------------------------------------------------------------------------------
9/13/2004 CEO Cast Inc. 9/13/2004 30,000 54,300.00 Professional Services
---------------------------------------------------------------------------------------------------------------------------------
4/19/2004 14904 The Research Works(**) 10/11/2004 20,000 Professional Services
---------------------------------------------------------------------------------------------------------------------------------
11/21/04 14947 Sitrick and Company, Inc. 11/21/2004 100,000 70,000.00 Professional Services
---------------------------------------------------------------------------------------------------------------------------------
11/22/04 14974-14981 David Shemesh 12/27/2004 2,000,000 1,580,000.00 Professional Services
---------------------------------------------------------------------------------------------------------------------------------
11/22/04 4982-14983 Mordechai Tobian 12/27/2004 250,000 197,500.00 Professional Services
---------------------------------------------------------------------------------------------------------------------------------
11/23/04 14967 Tressler Soderstrom Malony & Priess 12/20/2004 29,236 38,591.52 Legal
---------------------------------------------------------------------------------------------------------------------------------
11/23/04 14968 Tressler Soderstrom Malony & Priess 12/21/2004 126,604 167,117.28 Legal
---------------------------------------------------------------------------------------------------------------------------------
11/30/04 15030 Tressler Soderstrom Malony & Priess 1/27/2005 3,599 4,750.68 Legal
--------------------------------------------------------------------------------------------------------------------------------
12/10/04 15025 Ioannis Mihalos 1/24/2005 100,000 128,000.00 Marketing Consulting
---------------------------------------------------------------------------------------------------------------------------------
12/10/04 15026 Ioannis Mihalos 1/24/2005 100,000 128,000.00 Marketing Consulting
---------------------------------------------------------------------------------------------------------------------------------
12/31/04 15031 Tressler Soderstrom Malony & Priess 1/27/2005 2,158 4,790.76 Legal
Legal [services]** 216,074 357,120.31
Investor Relations [services]* 2,430,000 2,084,800.00
Marketing Consulting [services]* 200,000 $256,000.00
----------------------------
2,846,074 2,697,920.31
============================
Stock for Services, per 10K $(2,647,920.00) (2,846,074) Stock for Services, per 10K
Warrants for Services, 0 (50,000.00) Warrants for Services, per 10K
----------------------------
- $ 0.31 rounding
</TABLE>
3
<PAGE>
Note 2 - Summary of Significant Accounting Policies, page F-8
--------------------------------------------------------------
Revenue Recognition
-------------------
2. Please further expand on your response to our previously issued comment
two and your consideration of EITF 99-19. In this regard, we note your
discussion of credit risk which is generally a weaker indicator under this
guidance. Please clarify what is included in the direct costs that you incur and
tell us what other indicators in paragraph 7-14 of the literature were met to
conclude gross reporting was appropriate.
REPLY TO # 2
Responses to SEC comments dated 10/11/2005:
The Company recognizes all amounts billed by Online Bedding as gross revenue in
accordance with EITF 99-19. The indicators of gross reporting are that Online
Bedding has reasonable latitude in establishing the selling price and selecting
a supplier, and it earns a variable amount in the transaction equal to the
difference between the selling price and the amount to be paid to the supplier.
In addition, Online Bedding is at risk for the payment of its direct costs,
including suppliers' billings and freight charges. Whether or not its customers
pay on a timely basis or at all, is also an indicator that revenue should be
reported gross.
We hereby respectfully submit to you the answers contained herein and please do
not hesitate to contact the undersigned if you would like any further
clarification on your review of the File No. 1-32134.
Kind regards,
Circle Group Holdings, Inc.
Copy: Thomas Flinn
Gregory J. Halpern
Ken Kwiatt
/S/ Dana L. Dabney
------------------
Dana L. Dabney
Chief Financial Officer
4
</TEXT>
</DOCUMENT>