SEC Company Response from XCel Brands, Inc. (XELB) (CIK 0001083220) (XELB) — Dec 15, 2011
XCel Brands, Inc. (XELB) (CIK 0001083220)
Date: Dec. 15, 2011 · CIK: 0001083220 · Accession: 0001144204-11-069922
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-10593
Letter
VIA EDGAR Securities and Exchange Commission Attention: Re: XCel Brands, Inc. Form 8-K for the Report Date of September 29, 2011 Filed October 5, 2011 File No. 001-10593
Dear Mr. Crispino:
On behalf of XCel Brands, Inc. (the “Company”), set forth below are the responses to the comments contained in your letter of November 3, 2011 addressed to Mr. Robert W. D’Loren, the Company’s Chief Executive Officer, regarding the Company’s Form 8-K for the report date of September 29, 2011 (the “Form 8-K”). For the convenience of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), the text of the comments is reproduced in its entirety in boldface immediately preceding the Company’s responses in ordinary typeface.
General
1.
In light of the significant amounts of common stock that are issuable due to warrant agreements related to the private placement, the term loan, and other transactions, please revise the appropriate places of the current report to discuss the potential dilution that may occur if the warrants are exercised or if various provisions requiring additional consideration to be paid to IM Ready or employees upon the achievement of certain revenue milestones are triggered.
The requested disclosure has been added under the caption “Risk Factors”.
Securities and Exchange Commission
December 15, 2011
Page 2
The Merger, page 3
2.
Please revise to clarify Mr. Stephen J. Cole-Hatchard’s role in the merger transaction and the consideration he provided for his newly issued 47,132 shares of common stock of the Company.
The relevant disclosure has been amended as requested.
Private Placement, page 4
3.
Please revise to identify the executive officers and describe the number, nature and character of the accredited investors that have purchased units under the private placement offering. Also, please revise the disclosure here or on pages 60 and 61 to disclose the facts relied upon for the exemption under Section 4(2) of the Securities Act, as required by Item 701(d) of Regulation S-K. We note, for example, you do not indicate whether the investors were accredited or sophisticated with access to information generally available in a registered offering.
The relevant disclosure has been amended as requested.
Term Loan, page 5
4.
Please revise to clarify the consequences should the Company fail to meet its financial covenants.
The relevant disclosure has been amended as requested.
5.
Please revise to clarify whether the financial covenants and restrictions of the term loan with MidMarket Capital Partners LLC is restricted to the IM Brands business. For example, should the Company raise additional funds or acquire another licensor, please describe whether the term loan’s financial covenants will impact businesses outside of the IM Brands.
The Company advises the Staff that the disclosure under the caption “Term Loan” states that the financial covenants are applicable to IM Brands and its subsidiaries, not to the Company. Additional disclosure has been added to indicate which restrictions apply to the Company.
Acquisition of the Isaac Mizrahi Business, page 8
6.
Please revise this section to remove the references to “certain” as it pertains to items such as the acquisition of assets, rights related to the IM Trademarks, design services subject to the Earthbound Agreement, obligations of IM Ready and Isaac Mizrahi that constitute closing considerations. Please describe these items with sufficient detail to include all material items in each category.
Securities and Exchange Commission
December 15, 2011
Page 3
The relevant disclosure has been amended as requested.
7.
Please revise to clarify whether Earthbound has selected a board observer and what the observer rights entail.
The relevant disclosure has been amended as requested.
8.
Please revise to clarify under what circumstances the Company has the discretion to issue IM Ready shares of common stock in lieu of cash consideration for its Earn Out Value payments and up to $2,765,500 in cash or stock for achieving aggregate net royalty income of at least $2,500,000 from QVC. Also, please revise to define “actual net royalty income” and “aggregate net royalty income” as it pertains to these pay out provisions.
The relevant disclosure has been amended as requested.
9.
Please revise to clarify here and the Description of Business section the services that were previously provided by Earthbound to IM Ready and what transitional services they will provide in the future. To the extent that Earthbound’s role with the Company changes, please revise to clarify how the Company will perform those services or activities in the future.
The relevant disclosure has been amended as requested.
10.
Please revise to clarify whether IM Ready retains any of its business related to the design or licensing of apparel or otherwise operates in the apparel or fashion industry, other than as an investment vehicle for Mr. Isaac Mizrahi and Ms. Marisa Gardini to hold shares in the Company.
The relevant disclosure has been amended as requested.
Business, page 11
Overview, page 11
11.
Please revise to clarify whether you have acquired any other licensing businesses other than the Isaac Mizrahi Business.
The relevant disclosure has been amended as requested.
12.
Please revise to clarify whether HSN is your client or licensee of your products or trademarks. Also, please revise to clarify any restrictions your agreement with QVC will have on your ability to license your products with competing Direct-Response Television retailers.
Securities and Exchange Commission
December 15, 2011
Page 4
The relevant disclosure has been amended as requested.
13.
Please revise to provide more details of your acquisition strategy, as briefly described on page 17. Clarify whether additional funding is necessary to implement your acquisition strategy and if you have any current plans to raise such funding.
The relevant disclosure has been amended as requested.
14.
Please discuss how you will acquire additional trademarks in a “multi-channel” distribution strategy, as briefly described on page 20. For example, it is unclear whether the acquisition of additional trademarks would require the acquisition or hiring of additional separate design teams or whether your existing design team would handle new designs for new trademarks.
The relevant disclosure has been amended as requested.
Licensing Business, page 12
15.
Please revise to disclose the material terms of your amended QVC licensing agreement and your Liz Claiborne New York design agreement. Also, please file your Liz Claiborne New York design agreement as an exhibit, pursuant to Item 601(b)(10) of Regulation S-K.
The relevant disclosure has been amended as requested.
In respect of the Staff’s request that the Company file the Liz Claiborne New York design agreement (the “LCNY Agreement”) as an exhibit, the Company submits that the LCNY Agreement ordinarily accompanies the kind of business conducted by the Company and its subsidiaries, is deemed under Item 601(b)(10) of Regulation S-K to be a contract made in the ordinary course of business and, since the Company’s business is not substantially dependent upon it, the LCNY Agreement is not required to be filed in accordance with Item 601(b)(10) of Regulation S-K. The LCNY Agreement accounted for only 4% and 7% of IM Brands’ revenue for fiscal years 2010 and 2011, respectively; by contrast, the QVC Agreement accounted for 61% and 63% of revenue for such periods, respectively.
16.
Please revise to describe the general nature and character of your licenses and licensees. For example, it is unclear the extent that the QVC and the LCNY agreements constitute a substantial amount of your overall business. Please disclose the percentage of your revenue that relates to QVC, LCNY, any other material licenses in aggregate by relevant category.
The relevant disclosure has been amended as requested.
Securities and Exchange Commission
December 15, 2011
Page 5
17.
Please revise to clarify whether the LCNY agreement also involves licensing the Isaac Mizrahi brand, as it appears this line is marketed as an Isaac Mizrahi collection.
The relevant disclosure has been amended as requested.
Competition, page 15
18.
Please provide a more detailed discussion of the competitive conditions of your industry, generally the number of competitors, and your competitive position in your industry, as required by Item 101(h)(4)(iv) of Regulation S-K.
The relevant disclosure has been amended as requested.
Trademarks, page 15
19.
Please revise to clarify how the Company monitors and protects its trademarks, including whether the primary responsibility is with the Company or its major licensees like QVC.
The relevant disclosure has been amended as requested.
20.
Please clarify whether the Company or its licensees have significant international revenue that may require the registration of foreign trademarks or other intellectual property.
The relevant disclosure has been amended as requested.
Management’s Discussion and Analysis, page 33
Overview, page 33
21.
Please revise your Overview to discuss any trends, events and uncertainties as they relate to your business. This discussion should include your increased executive compensation to be paid pursuant to your new employment agreements, your need to upgrade your technology, your ability to acquire and integrate new trademarks and potentially new design teams into your Company, your ability to fund acquisitions, and any other trends, events and uncertainties that may materially affect your financial condition or operating performance.
The relevant disclosure has been amended as requested.
Securities and Exchange Commission
December 15, 2011
Page 6
Critical Accounting Policies and Estimates, page 34
Revenue Recognition, page 34
22.
You indicate that “revenue is essentially earned when the Isaac Mizrahi Business has substantially met i[t]s obligations to be entitled to the benefits represented by the revenue.” Explain how this policy complies with the revenue recognition criteria of SAB Topic 13.
This revenue policy is stated within SAB Topic 13, paragraph 1. Revenues for the Isaac Mizrahi Business are essentially earned in accordance with the terms and conditions governed by each licensing agreement. This includes (1) providing the use of the Isaac Mizrahi brand’s trademarks, logos and other brand images, (2) providing design services and (3) appearances by Isaac Mizrahi. The Company provides the use of the Isaac Mizrahi brand’s trademarks, logos and other brand images at the onset of each licensing agreement it enters into, therefore satisfying this component of its obligations to its licensees. Design services and appearances by Isaac Mizrahi are provided are provided on a routine, ongoing basis. Therefore, management’s assertion is that it has met its obligations entitling it to licensing and design revenues from its licensees by virtue of delivering the use of the brands trademarks and by rendering services in accordance with its licensing agreements. Please also see our response to Question 42 below.
Trend Information Discussion, page 37
23.
Please revise here and elsewhere to disclose why the Company believes that its revenues from its QVC agreement will result in significantly increased sales. Also, given your various employment agreements, sales commission agreements, and agreements related to the acquisition of the Isaac Mizrahi Businesses, please provide a discussion how such increased sales would affect your obligation to issue new shares or pay cash if certain financial milestones are met.
The relevant disclosure has been amended as requested.
The Company advises the Staff that it did not state that revenues from its QVC Agreement will result in significantly increased sales, but rather that it believes revenues will increase overall primarily from revenues generated by new license agreements.
Liquidity and Capital Resources, page 37
24.
Your discussion and analysis of liquidity and capital resources should provide a clear picture of your ability to generate cash and to meet existing and known or reasonably likely short-term and long-term cash requirements. You should provide a comprehensive discussion of the significant changes in your sources and uses of cash from period to period and the impact of these changes on your liquidity and capital resources. Your disclosure should include a discussion of prospective information regarding sources of and needs for capital, including the existence and timing of commitments and other known and reasonably likely cash requirements. Please tell us how you considered the guidance in Section IV of SEC Release 33-8350 and revise accordingly.
Securities and Exchange Commission
December 15, 2011
Page 7
The relevant disclosure has been amended as requested.
Our response has taken into consideration all of the material aspects of Section IV of SEC Release 33-8350 including (1) historical information regarding sources of cash and capital expenditures, (2) an evaluation of the amounts and certainty of cash flows, the existence and timing of commitments for capital expenditures and other known and reasonably likely cash requirements, (3) discussion and analysis of known trends and uncertainties, (4) a description of expected changes in the mix and relative cost of capital resources, (5) indications of which balance sheet or income or cash flow items should be considered in assessing liquidity; and a discussion of prospective information regarding companies’ sources of and needs for capital.
25.
Please revise this section to provide the basis for your belief that you will be cash flow positive in the next twelve months, or have adequate working capital for your operating needs, debt service obligations, or capital expenditures.
The relevant disclosure has been amended as requested.
26.
Please revise this section to provide a discussion of how the term loan financial covenants will restrict your business and whether you anticipate you will violate any of the covenants. For example, it appears you are restricted to $400,000 in capital expenditures. Please clarify how this restriction, and others like the Excess Cash Flow Sweep provisions described on page six, will affect your liquidity and capital resources.
The relevant disclosure has been amended as requested.
Directors and Executive Officers, page 39
27.
Please revise to briefly discuss the specific experience, qualifications, attributes or skills that led to the conclusion that each of your directors should serve on your board, in light of your business and structure. See Item 401(e) of Regulation S-K. Please provide this disclosure on an individual basis for each director.
The relevant disclosure has been amended as requested.
28.
Your management biography for Ms. Marisa Gardini indicates that she has served as “President and Chief Executive Officer of Isaac Mizrahi New York …” since 2002. Your disclosure on page eight indicates that Isaac Mizrahi New York is a brand of IM Ready, but there is no mention that it is a separate entity or division of IM Ready. Please revise your disclosure to reconcile.
Securities and Exchange Commission
December 15, 2011
Page 8
The relevant disclosure has been amended as requested.
29.
Please revise to clarify whether Mr. Isaac Mizrahi is a full time employee. If not, please describe his other employment or ventures and what percentage of his time he devotes to the Company. We note that you disclose Mr. Mizrahi is associated with IM Ready and Laugh Club, Inc. o
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Unassociated Document
XCel Brands, Inc.
475 10th Avenue, 4th Floor
New York, NY 10018
(347) 727-2474
December 15, 2011
VIA EDGAR
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention:
Mr. Matthew Crispino
Staff Attorney
Re: XCel Brands, Inc.
Form 8-K for the Report Date of September 29, 2011
Filed October 5, 2011
File No. 001-10593
Dear Mr. Crispino:
On behalf of XCel Brands, Inc. (the “Company”), set forth below are the responses to the comments contained in your letter of November 3, 2011 addressed to Mr. Robert W. D’Loren, the Company’s Chief Executive Officer, regarding the Company’s Form 8-K for the report date of September 29, 2011 (the “Form 8-K”). For the convenience of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), the text of the comments is reproduced in its entirety in boldface immediately preceding the Company’s responses in ordinary typeface.
General
1.
In light of the significant amounts of common stock that are issuable due to warrant agreements related to the private placement, the term loan, and other transactions, please revise the appropriate places of the current report to discuss the potential dilution that may occur if the warrants are exercised or if various provisions requiring additional consideration to be paid to IM Ready or employees upon the achievement of certain revenue milestones are triggered.
The requested disclosure has been added under the caption “Risk Factors”.
Securities and Exchange Commission
December 15, 2011
Page 2
The Merger, page 3
2.
Please revise to clarify Mr. Stephen J. Cole-Hatchard’s role in the merger transaction and the consideration he provided for his newly issued 47,132 shares of common stock of the Company.
The relevant disclosure has been amended as requested.
Private Placement, page 4
3.
Please revise to identify the executive officers and describe the number, nature and character of the accredited investors that have purchased units under the private placement offering. Also, please revise the disclosure here or on pages 60 and 61 to disclose the facts relied upon for the exemption under Section 4(2) of the Securities Act, as required by Item 701(d) of Regulation S-K. We note, for example, you do not indicate whether the investors were accredited or sophisticated with access to information generally available in a registered offering.
The relevant disclosure has been amended as requested.
Term Loan, page 5
4.
Please revise to clarify the consequences should the Company fail to meet its financial covenants.
The relevant disclosure has been amended as requested.
5.
Please revise to clarify whether the financial covenants and restrictions of the term loan with MidMarket Capital Partners LLC is restricted to the IM Brands business. For example, should the Company raise additional funds or acquire another licensor, please describe whether the term loan’s financial covenants will impact businesses outside of the IM Brands.
The Company advises the Staff that the disclosure under the caption “Term Loan” states that the financial covenants are applicable to IM Brands and its subsidiaries, not to the Company. Additional disclosure has been added to indicate which restrictions apply to the Company.
Acquisition of the Isaac Mizrahi Business, page 8
6.
Please revise this section to remove the references to “certain” as it pertains to items such as the acquisition of assets, rights related to the IM Trademarks, design services subject to the Earthbound Agreement, obligations of IM Ready and Isaac Mizrahi that constitute closing considerations. Please describe these items with sufficient detail to include all material items in each category.
Securities and Exchange Commission
December 15, 2011
Page 3
The relevant disclosure has been amended as requested.
7.
Please revise to clarify whether Earthbound has selected a board observer and what the observer rights entail.
The relevant disclosure has been amended as requested.
8.
Please revise to clarify under what circumstances the Company has the discretion to issue IM Ready shares of common stock in lieu of cash consideration for its Earn Out Value payments and up to $2,765,500 in cash or stock for achieving aggregate net royalty income of at least $2,500,000 from QVC. Also, please revise to define “actual net royalty income” and “aggregate net royalty income” as it pertains to these pay out provisions.
The relevant disclosure has been amended as requested.
9.
Please revise to clarify here and the Description of Business section the services that were previously provided by Earthbound to IM Ready and what transitional services they will provide in the future. To the extent that Earthbound’s role with the Company changes, please revise to clarify how the Company will perform those services or activities in the future.
The relevant disclosure has been amended as requested.
10.
Please revise to clarify whether IM Ready retains any of its business related to the design or licensing of apparel or otherwise operates in the apparel or fashion industry, other than as an investment vehicle for Mr. Isaac Mizrahi and Ms. Marisa Gardini to hold shares in the Company.
The relevant disclosure has been amended as requested.
Business, page 11
Overview, page 11
11.
Please revise to clarify whether you have acquired any other licensing businesses other than the Isaac Mizrahi Business.
The relevant disclosure has been amended as requested.
12.
Please revise to clarify whether HSN is your client or licensee of your products or trademarks. Also, please revise to clarify any restrictions your agreement with QVC will have on your ability to license your products with competing Direct-Response Television retailers.
Securities and Exchange Commission
December 15, 2011
Page 4
The relevant disclosure has been amended as requested.
13.
Please revise to provide more details of your acquisition strategy, as briefly described on page 17. Clarify whether additional funding is necessary to implement your acquisition strategy and if you have any current plans to raise such funding.
The relevant disclosure has been amended as requested.
14.
Please discuss how you will acquire additional trademarks in a “multi-channel” distribution strategy, as briefly described on page 20. For example, it is unclear whether the acquisition of additional trademarks would require the acquisition or hiring of additional separate design teams or whether your existing design team would handle new designs for new trademarks.
The relevant disclosure has been amended as requested.
Licensing Business, page 12
15.
Please revise to disclose the material terms of your amended QVC licensing agreement and your Liz Claiborne New York design agreement. Also, please file your Liz Claiborne New York design agreement as an exhibit, pursuant to Item 601(b)(10) of Regulation S-K.
The relevant disclosure has been amended as requested.
In respect of the Staff’s request that the Company file the Liz Claiborne New York design agreement (the “LCNY Agreement”) as an exhibit, the Company submits that the LCNY Agreement ordinarily accompanies the kind of business conducted by the Company and its subsidiaries, is deemed under Item 601(b)(10) of Regulation S-K to be a contract made in the ordinary course of business and, since the Company’s business is not substantially dependent upon it, the LCNY Agreement is not required to be filed in accordance with Item 601(b)(10) of Regulation S-K. The LCNY Agreement accounted for only 4% and 7% of IM Brands’ revenue for fiscal years 2010 and 2011, respectively; by contrast, the QVC Agreement accounted for 61% and 63% of revenue for such periods, respectively.
16.
Please revise to describe the general nature and character of your licenses and licensees. For example, it is unclear the extent that the QVC and the LCNY agreements constitute a substantial amount of your overall business. Please disclose the percentage of your revenue that relates to QVC, LCNY, any other material licenses in aggregate by relevant category.
The relevant disclosure has been amended as requested.
Securities and Exchange Commission
December 15, 2011
Page 5
17.
Please revise to clarify whether the LCNY agreement also involves licensing the Isaac Mizrahi brand, as it appears this line is marketed as an Isaac Mizrahi collection.
The relevant disclosure has been amended as requested.
Competition, page 15
18.
Please provide a more detailed discussion of the competitive conditions of your industry, generally the number of competitors, and your competitive position in your industry, as required by Item 101(h)(4)(iv) of Regulation S-K.
The relevant disclosure has been amended as requested.
Trademarks, page 15
19.
Please revise to clarify how the Company monitors and protects its trademarks, including whether the primary responsibility is with the Company or its major licensees like QVC.
The relevant disclosure has been amended as requested.
20.
Please clarify whether the Company or its licensees have significant international revenue that may require the registration of foreign trademarks or other intellectual property.
The relevant disclosure has been amended as requested.
Management’s Discussion and Analysis, page 33
Overview, page 33
21.
Please revise your Overview to discuss any trends, events and uncertainties as they relate to your business. This discussion should include your increased executive compensation to be paid pursuant to your new employment agreements, your need to upgrade your technology, your ability to acquire and integrate new trademarks and potentially new design teams into your Company, your ability to fund acquisitions, and any other trends, events and uncertainties that may materially affect your financial condition or operating performance.
The relevant disclosure has been amended as requested.
Securities and Exchange Commission
December 15, 2011
Page 6
Critical Accounting Policies and Estimates, page 34
Revenue Recognition, page 34
22.
You indicate that “revenue is essentially earned when the Isaac Mizrahi Business has substantially met i[t]s obligations to be entitled to the benefits represented by the revenue.” Explain how this policy complies with the revenue recognition criteria of SAB Topic 13.
This revenue policy is stated within SAB Topic 13, paragraph 1. Revenues for the Isaac Mizrahi Business are essentially earned in accordance with the terms and conditions governed by each licensing agreement. This includes (1) providing the use of the Isaac Mizrahi brand’s trademarks, logos and other brand images, (2) providing design services and (3) appearances by Isaac Mizrahi. The Company provides the use of the Isaac Mizrahi brand’s trademarks, logos and other brand images at the onset of each licensing agreement it enters into, therefore satisfying this component of its obligations to its licensees. Design services and appearances by Isaac Mizrahi are provided are provided on a routine, ongoing basis. Therefore, management’s assertion is that it has met its obligations entitling it to licensing and design revenues from its licensees by virtue of delivering the use of the brands trademarks and by rendering services in accordance with its licensing agreements. Please also see our response to Question 42 below.
Trend Information Discussion, page 37
23.
Please revise here and elsewhere to disclose why the Company believes that its revenues from its QVC agreement will result in significantly increased sales. Also, given your various employment agreements, sales commission agreements, and agreements related to the acquisition of the Isaac Mizrahi Businesses, please provide a discussion how such increased sales would affect your obligation to issue new shares or pay cash if certain financial milestones are met.
The relevant disclosure has been amended as requested.
The Company advises the Staff that it did not state that revenues from its QVC Agreement will result in significantly increased sales, but rather that it believes revenues will increase overall primarily from revenues generated by new license agreements.
Liquidity and Capital Resources, page 37
24.
Your discussion and analysis of liquidity and capital resources should provide a clear picture of your ability to generate cash and to meet existing and known or reasonably likely short-term and long-term cash requirements. You should provide a comprehensive discussion of the significant changes in your sources and uses of cash from period to period and the impact of these changes on your liquidity and capital resources. Your disclosure should include a discussion of prospective information regarding sources of and needs for capital, including the existence and timing of commitments and other known and reasonably likely cash requirements. Please tell us how you considered the guidance in Section IV of SEC Release 33-8350 and revise accordingly.
Securities and Exchange Commission
December 15, 2011
Page 7
The relevant disclosure has been amended as requested.
Our response has taken into consideration all of the material aspects of Section IV of SEC Release 33-8350 including (1) historical information regarding sources of cash and capital expenditures, (2) an evaluation of the amounts and certainty of cash flows, the existence and timing of commitments for capital expenditures and other known and reasonably likely cash requirements, (3) discussion and analysis of known trends and uncertainties, (4) a description of expected changes in the mix and relative cost of capital resources, (5) indications of which balance sheet or income or cash flow items should be considered in assessing liquidity; and a discussion of prospective information regarding companies’ sources of and needs for capital.
25.
Please revise this section to provide the basis for your belief that you will be cash flow positive in the next twelve months, or have adequate working capital for your operating needs, debt service obligations, or capital expenditures.
The relevant disclosure has been amended as requested.
26.
Please revise this section to provide a discussion of how the term loan financial covenants will restrict your business and whether you anticipate you will violate any of the covenants. For example, it appears you are restricted to $400,000 in capital expenditures. Please clarify how this restriction, and others like the Excess Cash Flow Sweep provisions described on page six, will affect your liquidity and capital resources.
The relevant disclosure has been amended as requested.
Directors and Executive Officers, page 39
27.
Please revise to briefly discuss the specific experience, qualifications, attributes or skills that led to the conclusion that each of your directors should serve on your board, in light of your business and structure. See Item 401(e) of Regulation S-K. Please provide this disclosure on an individual basis for each director.
The relevant disclosure has been amended as requested.
28.
Your management biography for Ms. Marisa Gardini indicates that she has served as “President and Chief Executive Officer of Isaac Mizrahi New York …” since 2002. Your disclosure on page eight indicates that Isaac Mizrahi New York is a brand of IM Ready, but there is no mention that it is a separate entity or division of IM Ready. Please revise your disclosure to reconcile.
Securities and Exchange Commission
December 15, 2011
Page 8
The relevant disclosure has been amended as requested.
29.
Please revise to clarify whether Mr. Isaac Mizrahi is a full time employee. If not, please describe his other employment or ventures and what percentage of his time he devotes to the Company. We note that you disclose Mr. Mizrahi is associated with IM Ready and Laugh Club, Inc. o