SEC Company Response from REED'S, INC. (REED) (CIK 0001140215) (REED) — Mar 2, 2005
REED'S, INC. (REED) (CIK 0001140215)
Date: March 2, 2005 · CIK: 0001140215 · Accession: 0001144204-05-006429
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-120451
Letter
United States Securities and Exchange Commission Office of Small Business RE: REED’S, INC., a Delaware corporation Registration Statement on Form SB-2 SEC File No.: 333-120451 ~ Filed November 12,
Dear Mr. Reynolds:
This correspondence is in response to the comment letter of the United States Securities and Exchange Commission (the “Commission”) dated December 10, 2004 directed to the Issuer, REED’S, INC., a Delaware corporation (the “Company”). We have underlined each of the Comments of the Commission for ease of reference and now respond as follows:
1. Please tell us what consideration you have given to naming Mr.. Sharma as an ''underwriter'' within the meaning the federal securities laws. As such, he appears to be engaged in the distribution of shares in this offering. We note in this regard that he is both one of your directors and a registered broker-dealer affiliated with your selling agent, Brookstreet. In fact, we note that Mr. Sharma will receive a substantial amount of the commissions and fees you will pay to Brookstreet as part of this offering. If Mr. Sharma is an underwriter, then he must be named as such on the prospectus cover page, in the Plan of Distribution, and elsewhere as appropriate.
Mr. Sharma is not an underwriter within the meaning of federal securities laws. While Mr. Sharma will be extensively involved in the offering, Section 2(11) expressly excludes from the definition of an underwriter: “a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributor’s or selling commission.” Mr. Sharma is only receiving a portion of the commission to be paid to Brookstreet and as a result he would not be considered an underwriter. Mr. Sharma will be operating pursuant to the terms of the Underwriting Agreement between Brookstreet and the Company. Characterizing Mr. Sharma as an underwriter would not only be inaccurate, but it would not provide any additional information necessary to make a fully informed investment decision. The Registration Statement contains an extensive discussion regarding Brookstreet’s obligations and intentions regarding its role as the underwriter in the subject offering.
Horwitz & Cron
United States Securities and Exchange Commission
Attn: H. Christopher Owings, Assistant Director ~ Office of Small Business
Responsive Letter of February 18, 2005 to SEC Comments
RE: REED’S, INC., a Delaware corporation Registration Statement on Form SB-2 SEC File No.: 333-120451 ~ Filed November 12, 2004
Page
Mr. Sharma’s actions will be no more than what would be expected from a broker extensively involved in any public offering.
2. We note a number of blank spaces throughout your registration statement for information that you are not entitled to omit under Rule 430A, such as the anticipated price range. Please note that we may have additional comments once you have provided this disclosure. Therefore, please allow us sufficient time to review your complete disclosure prior to any distribution of preliminary prospectuses. [appropriate changes are found on the Cover Pages and throughout the document]
In this regard, we note you have assumed an offering price of $4.00 per share in certain sections such as the Use of Proceeds and Dilution sections. Other sections such as the Capitalization as of June 30, 2004 were -not fully updated to consider an offering price of $4.00.
In response to this Comment, we have revised the Registration Statement to fill in all spaces left blank and anticipate that the initial offering price will be $4.00 per share. We have revised the Registration Statement accordingly.
We note that you have not filed a number of key exhibits, including the selling agent agreement, various loan agreements, and the legality opinion. Please file these exhibits with your next amendment, as we will need time to adequately review them. We also may have further comment with respect to prospectus disclosure after reviewing the exhibits. [All missing exhibits are being gathered; please refer to the EXHIBIT INDEX on Page II-7 for a complete reckoning of current exhibit status.]
3.
In response to this Comment, the following is a complete listing of the Exhibits we have filed, or will be filing herewith:
Ready to
Send / Sent
Code
Description of Exhibit
Status
Yes/Yes
10.9
Robert T. Reed Sr. 1991 loan 94,000 agreement
New Exhibit
Yes/Yes
10.10
Robert T. Reed Sr. 1999 loan 250,000 agreement
New Exhibit
Yes/Yes
10.11
Robert T. Reed Sr. 2003 loan 50,000 agreement
New Exhibit
Yes/Yes
10.12
Robert T. Reed Jr. co-sign Merrill agreement
New Exhibit
Yes/Yes
4.4
Convertible Promissory Note issued to investors
Existing Exhibit
Yes/Yes
10.1
Virgil’s Purchase Agreement
Existing Exhibit
Yes/Yes
10.3
Loan Agreement - purchase of brewery
Existing Exhibit
Yes/Yes
10.4
Loan Agreement - building improvement
Existing Exhibit
Yes/Yes
10.5
Loan Agreement - bay business
Existing Exhibit
Yes/Yes
10.7
Revised promotional shares lock-up
Existing Exhibit
Horwitz & Cron
United States Securities and Exchange Commission
Attn: H. Christopher Owings, Assistant Director ~ Office of Small Business
Responsive Letter of February 18, 2005 to SEC Comments
RE: REED’S, INC., a Delaware corporation Registration Statement on Form SB-2 SEC File No.: 333-120451 ~ Filed November 12, 2004
Page
Yes/Yes
10.8
Loan Agreement - bay business, September 28, 2004
Existing Exhibit
Yes/Yes
4.5
Revision to Exhibit 4.4 to extend notes
New Exhibit
No
10.13
Sharma and Brookstreet Agreement
New Exhibit
Ready to
Send / Sent
Code
Description of Exhibit
Status
No
1.2
Selling Agent Agreement
New Exhibit
No
23.2
Lawyer consent letter
New Exhibit
Yes/Yes
10.14
Sharma’s Loan Agreement
New Exhibit
Registration Statement Cover Page
4. Add a sentence and a checked box indicating that the securities are being offered on a delayed or continuous basis pursuant to Rule 415. See, for example, interpretation D.36 of the Manual of Publicly Available Telephone Interpretations (July 1997) and Form S- I to review the disclosure that you should include. [Responsive changes are found on the Cover Page.]
In response to this Comment, we have provided this sentence.
Prospectus Cover Page
We may have contingent liabilities resulting from our recent issuance of common stock
5. Please revise the second full paragraph to divide it into two paragraphs: one addressing the offering itself and the other addressing the lack of a market for your shares. The latter paragraph also should highlight that, due to the lack of trading market, purchasers in this offering are receiving an illiquid security. [Responsive changes are found on the Cover Pages i and ii.]
In response to this Comment, we have inserted the following as a new third paragraph on the Prospectus Cover page:
“There is no current public market for our shares and there is no assurance that a public market for our shares will ever develop. In the event a public market for our shares does not develop, then purchasers in this offering may be unable to sell the shares for an extended period of time.”
6. Your use of fully justified margins impedes readability. Please revise throughout to use only a left-justified margin [Global formatting changes are marked on the cover page and page one of each section of the document]
In response to this Comment, we have revised the Registration Statement accordingly.
Horwitz & Cron
United States Securities and Exchange Commission
Attn: H. Christopher Owings, Assistant Director ~ Office of Small Business
Responsive Letter of February 18, 2005 to SEC Comments
RE: REED’S, INC., a Delaware corporation Registration Statement on Form SB-2 SEC File No.: 333-120451 ~ Filed November 12, 2004
Page
Table of Contents
7. the outside back cover page of the prospectus, advise dealers of their prospectus delivery obligation, pursuant to Item 502(b) of Regulation S-B.
In response to this Comment, we have inserted language in compliance with Item 502(b).
Prospectus Summary, page 1
8. Since your summary must provide a brief, but not incomplete, overview of the key aspects of the offering, delete the statement that the ''summary is not complete.'' If necessary, provide additional material information in a concise manner to make the summary complete [Responsive change is on Page 1.]
In response to this Comment, we have deleted the reference to the summary not being complete. We believe that our response to Comment number 9 below provides expanded disclosure for this summary section.
9. We remind you that a summary should provide a brief overview of you in a balanced manner. In this regard, please add disclosure about the following in your core summary: [Responsive change is on Page 1.]
Disclose that you have significant net losses, and state the amount for the most recent audited and interim periods. Also, disclose if accurate that you have an expectation of continued significant losses and inadequate cash from operations to cover operating and net losses. [Responsive change is on Page 1 & 2.]
State the percentage of your common stock being offered in this prospectus. Also indicate that the Reed family will hold % of your shares, and as a -result will exercise control over your direction. [Responsive change is on Page 1.]
Explain that your shares currently are not traded on any market or exchange, and briefly explain how this impacts share liquidity. Briefly explain what is required to list your shares on an exchange or become quoted on a market. State the percentage of Your total sales revenues you derive from your products being sold at supermarkets and also at specialty stores. These are only examples. Revise accordingly. [Responsive change is on Page 1 & 2.]
Horwitz & Cron
United States Securities and Exchange Commission
Attn: H. Christopher Owings, Assistant Director ~ Office of Small Business
Responsive Letter of February 18, 2005 to SEC Comments
RE: REED’S, INC., a Delaware corporation Registration Statement on Form SB-2 SEC File No.: 333-120451 ~ Filed November 12, 2004
Page
In response to this Comment, we have inserted the following disclosure in the Summary section:
“We believe that the proceeds of this offering may greatly accelerate the success of this business strategy by providing working capital to finance an expanded sales and distribution network….
We currently rely upon one customer for between 10-15% of our aggregate gross revenues. If we were to lose this customer, our operations would be materially effected. …
“This offering is a best efforts offering through our underwriter, Brookstreet Securities Corporation. While there is no assurance, our underwriter currently intends to apply for quotation of our common stock upon the Over the Counter Bulletin Board (“OTCBB”) quotation system. This will require that we complete certain filings and disclosures of information to the National Association of Securities Dealers and to the OTCBB itself. Our shares are currently not traded on the public securities markets and even if our shares of common stock become quoted on the OTCBB, there is no assurance that an active public market for our shares of stock will be established.”
10. Further, in the core summary, please briefly describe the type of offering you are conducting, and describe how the amount of proceeds raised will impact your ability to operate going forward. [Responsive change is on Page 1.]
Please see our response to Comment number 9 above.
Risk Factors
[Changes in response to Risk Factor Comments are found on Pages 3, 4, and 7.]
11. Avoid risk factors that could apply to any company. Generic risk factors do not represent meaningful disclosure. Examples include:
• ''We face risks associated with product liability claims...,'' page 4. If you have a history of product recall, state the reason for the recall and the amount of resultant financial loss to you. Moreover, represent whether you carry commercial reasonable amount of insurance coverage to insulate yourself from product liability claims. However, you do not need to disclose the dollar amount of the insurance coverage you carry. Finally, state here that you do not maintain product recall insurance, as you disclose on page 22.
• ''We need to manage our growth page 5. Specify the nature of ''significant strain'' put upon your company by the growth you have experienced.
• ''Our ability to obtain needed additional financing..., page 6. Quantify your known short-term and long-term capital requirements and disclose the time when you anticipate you will need the additional capital.
Horwitz & Cron
United States Securities and Exchange Commission
Attn: H. Christopher Owings, Assistant Director ~ Office of Small Business
Responsive Letter of February 18, 2005 to SEC Comments
RE: REED’S, INC., a Delaware corporation Registration Statement on Form SB-2 SEC File No.: 333-120451 ~ Filed November 12, 2004
Page
If you elect to retain these and other generic risk factors in your prospectus, you must clearly explain how they apply to your company, industry, offering, etc. Please revise accordingly throughout..
Rather then set forth all of our changes in this correspondence, we request that the examiner review the revisions to the Risk Factors section of the Registration Statement, which revisions have been made keeping in mind this Comment.
12. Some of your risk factors are unduly vague. Please revise to include sufficient, specific information to assess the risk. Examples include:
[Changes in response to Risk Factor Comments are found on Pages 3, 4, and 7.]
• ''The loss of our third-party suppliers or service providers...,'' page 4; and ''The loss of our third-party distributors...,'' page 4. Tell us supplementally whether you have lost or foresee losing third-party suppliers, service Providers, or distributors, or have experienced problems in business relationship with them. If so, disclose the fact in the discussion under the following two risk factor captions.
There are multiple sources for our raw materials and for our packaging and bottling supplies. We believe that if any one of these sources were unable or refused to conduct business with us, that we would be successful in expeditiously identifying an alternative supplier.
• '''Increases in the cost of packaging for our products...,'' page 4. State the percentage of the total expenses on manufacturing that is spent on packaging your products. If your cost of packaging has increased substantially in the recent years, provide quantitative information on this trend.
We have deleted this Risk Factor as it does not apply to our operations
Show Raw Text
CORRESP
1
filename1.htm
Horwitz
& Cron
Four
Venture Plaza
Suite
390
Irvine,
California 92618
Telephone:
949 . 450 . 4942
Facsimile:
949 . 453 . 8774
~
Via Federal Express ~
February
18, 2005
United
States Securities and Exchange Commission
Attn: H.
Christopher Owings, Assistant Director
Office of Small Business
Mail Stop
0308
Washington,
D.C. 20549
RE:
REED’S,
INC., a Delaware corporation
Registration
Statement on Form SB-2
SEC
File No.: 333-120451 ~ Filed November 12,
2004
Dear Mr.
Reynolds:
This
correspondence is in response to the comment letter of the United States
Securities and Exchange Commission (the “Commission”) dated December 10, 2004
directed to the Issuer, REED’S,
INC., a Delaware corporation (the
“Company”). We have underlined each of the Comments of the Commission for ease
of reference and now respond as follows:
1. Please
tell us what consideration you have given to naming Mr.. Sharma as an
''underwriter'' within the meaning the federal securities laws. As such, he
appears to be engaged in the distribution of shares in this offering. We note in
this regard that he is both one of your directors and a registered broker-dealer
affiliated with your selling agent, Brookstreet. In fact, we note that Mr.
Sharma will receive a substantial amount of the commissions and fees you will
pay to Brookstreet as part of this offering. If Mr. Sharma is an underwriter,
then he must be named as such on the prospectus cover page, in the Plan of
Distribution, and elsewhere as appropriate.
Mr.
Sharma is not an underwriter within the meaning of federal securities laws.
While Mr. Sharma will be extensively involved in the offering, Section 2(11)
expressly excludes from the definition of an underwriter: “a person whose
interest is limited to a commission from an underwriter or dealer not in excess
of the usual and customary distributor’s or selling commission.” Mr. Sharma is
only receiving a portion of the commission to be paid to Brookstreet and as a
result he would not be considered an underwriter. Mr. Sharma will be operating
pursuant to the terms of the Underwriting Agreement between Brookstreet and the
Company. Characterizing Mr. Sharma as an underwriter would not only be
inaccurate, but it would not provide any additional information necessary to
make a fully informed investment decision. The Registration Statement contains
an extensive discussion regarding Brookstreet’s obligations and intentions
regarding its role as the underwriter in the subject offering.
Horwitz
& Cron
United
States Securities and Exchange Commission
Attn: H.
Christopher Owings, Assistant Director ~ Office of Small Business
Responsive
Letter of February 18, 2005 to SEC Comments
RE: REED’S,
INC., a Delaware corporation
Registration
Statement on Form SB-2
SEC
File No.: 333-120451 ~ Filed November 12, 2004
Page
2
Mr.
Sharma’s actions will be no more than what would be expected from a broker
extensively involved in any public offering.
2. We
note a number of blank spaces throughout your registration statement for
information that you are not entitled to omit under Rule 430A, such as the
anticipated price range. Please note that we may have additional comments once
you have provided this disclosure. Therefore, please allow us sufficient time to
review your complete disclosure prior to any distribution of preliminary
prospectuses.
[appropriate changes are found on the Cover Pages and throughout the
document]
In
this regard, we note you have assumed an offering price of $4.00 per share in
certain sections such as the Use of Proceeds and Dilution sections. Other
sections such as the Capitalization as of June 30, 2004 were -not fully updated
to consider an offering price of $4.00.
In
response to this Comment, we have revised the Registration Statement to fill in
all spaces left blank and anticipate that the initial offering price will be
$4.00 per share. We have revised the Registration Statement
accordingly.
We
note that you have not filed a number of key exhibits, including the selling
agent agreement, various loan agreements, and the legality opinion. Please file
these exhibits with your next amendment, as we will need time to adequately
review them. We also may have further comment with respect to prospectus
disclosure after reviewing the exhibits. [All
missing exhibits are being gathered; please refer to the EXHIBIT INDEX on Page
II-7 for a complete reckoning of current exhibit status.]
3.
In
response to this Comment, the following is a complete listing of the Exhibits we
have filed, or will be filing herewith:
Ready
to
Send
/ Sent
Code
Description
of Exhibit
Status
Yes/Yes
10.9
Robert
T. Reed Sr. 1991 loan 94,000 agreement
New
Exhibit
Yes/Yes
10.10
Robert
T. Reed Sr. 1999 loan 250,000 agreement
New
Exhibit
Yes/Yes
10.11
Robert
T. Reed Sr. 2003 loan 50,000 agreement
New
Exhibit
Yes/Yes
10.12
Robert
T. Reed Jr. co-sign Merrill agreement
New
Exhibit
Yes/Yes
4.4
Convertible
Promissory Note issued to investors
Existing
Exhibit
Yes/Yes
10.1
Virgil’s
Purchase Agreement
Existing
Exhibit
Yes/Yes
10.3
Loan
Agreement - purchase of brewery
Existing
Exhibit
Yes/Yes
10.4
Loan
Agreement - building improvement
Existing
Exhibit
Yes/Yes
10.5
Loan
Agreement - bay business
Existing
Exhibit
Yes/Yes
10.7
Revised
promotional shares lock-up
Existing
Exhibit
Horwitz
& Cron
United
States Securities and Exchange Commission
Attn: H.
Christopher Owings, Assistant Director ~ Office of Small Business
Responsive
Letter of February 18, 2005 to SEC Comments
RE: REED’S,
INC., a Delaware corporation
Registration
Statement on Form SB-2
SEC
File No.: 333-120451 ~ Filed November 12, 2004
Page
3
Yes/Yes
10.8
Loan
Agreement - bay business, September 28, 2004
Existing
Exhibit
Yes/Yes
4.5
Revision
to Exhibit 4.4 to extend notes
New
Exhibit
No
10.13
Sharma
and Brookstreet Agreement
New
Exhibit
Ready
to
Send
/ Sent
Code
Description
of Exhibit
Status
No
1.2
Selling
Agent Agreement
New
Exhibit
No
23.2
Lawyer
consent letter
New
Exhibit
Yes/Yes
10.14
Sharma’s
Loan Agreement
New
Exhibit
Registration
Statement Cover Page
4. Add a
sentence and a checked box indicating that the securities are being offered on a
delayed or continuous basis pursuant to Rule 415. See, for example,
interpretation D.36 of the Manual of Publicly Available Telephone
Interpretations (July 1997) and Form S- I to review the disclosure that you
should include. [Responsive
changes are found on the Cover Page.]
In
response to this Comment, we have provided this sentence.
Prospectus
Cover Page
We
may have contingent liabilities resulting from our recent issuance of common
stock
5. Please
revise the second full paragraph to divide it into two paragraphs: one
addressing the offering itself and the other addressing the lack of a market for
your shares. The latter paragraph also should highlight that, due to the lack of
trading market, purchasers in this offering are receiving an illiquid
security.
[Responsive changes are found on the Cover Pages i and
ii.]
In
response to this Comment, we have inserted the following as a new third
paragraph on the Prospectus Cover page:
“There is
no current public market for our shares and there is no assurance that a public
market for our shares will ever develop. In the event a public market for our
shares does not develop, then purchasers in this offering may be unable to sell
the shares for an extended period of time.”
6. Your
use of fully justified margins impedes readability. Please revise throughout to
use only a left-justified margin [Global
formatting changes are marked on the cover page and page one of each section of
the document]
In
response to this Comment, we have revised the Registration Statement
accordingly.
Horwitz
& Cron
United
States Securities and Exchange Commission
Attn: H.
Christopher Owings, Assistant Director ~ Office of Small Business
Responsive
Letter of February 18, 2005 to SEC Comments
RE: REED’S,
INC., a Delaware corporation
Registration
Statement on Form SB-2
SEC
File No.: 333-120451 ~ Filed November 12, 2004
Page
4
Table
of Contents
7. the
outside back cover page of the prospectus, advise dealers of their prospectus
delivery obligation, pursuant to Item 502(b) of Regulation S-B.
In
response to this Comment, we have inserted language in compliance with Item
502(b).
Prospectus
Summary, page 1
8. Since
your summary must provide a brief, but not incomplete, overview of
the key
aspects of the offering, delete the statement that the ''summary is not
complete.'' If necessary, provide additional material information in a concise
manner to make the summary complete [Responsive
change is on Page 1.]
In
response to this Comment, we have deleted the reference to the summary not being
complete. We believe that our response to Comment number 9 below provides
expanded disclosure for this summary section.
9. We
remind you that a summary should provide a brief overview of you in a balanced
manner. In this regard, please add disclosure about the following in your core
summary:
[Responsive change is on Page 1.]
Disclose
that you have significant net losses, and state the amount for the most recent
audited and interim periods. Also, disclose if accurate that you have an
expectation of continued significant losses and inadequate cash from operations
to cover operating and net losses. [Responsive
change is on Page 1 & 2.]
State
the percentage of your common stock being offered in this prospectus. Also
indicate that the Reed family will hold % of your shares, and as a -result will
exercise control over your direction.
[Responsive change is on Page 1.]
Explain
that your shares currently are not traded on any market or exchange, and briefly
explain how this impacts share liquidity. Briefly explain what is required to
list your shares on an exchange or become quoted on a market. State the
percentage of Your total sales revenues you derive from your products being sold
at supermarkets and also at specialty stores. These are only examples. Revise
accordingly.
[Responsive change is on Page 1 & 2.]
Horwitz
& Cron
United
States Securities and Exchange Commission
Attn: H.
Christopher Owings, Assistant Director ~ Office of Small Business
Responsive
Letter of February 18, 2005 to SEC Comments
RE: REED’S,
INC., a Delaware corporation
Registration
Statement on Form SB-2
SEC
File No.: 333-120451 ~ Filed November 12, 2004
Page
5
In
response to this Comment, we have inserted the following disclosure in the
Summary section:
“We
believe that the proceeds of this offering may greatly accelerate the success of
this business strategy by providing working capital to finance an expanded sales
and distribution network….
We
currently rely upon one customer for between 10-15% of our aggregate gross
revenues. If we were to lose this customer, our operations would be materially
effected. …
“This
offering is a best efforts offering through our underwriter, Brookstreet
Securities Corporation. While there is no assurance, our underwriter currently
intends to apply for quotation of our common stock upon the Over the Counter
Bulletin Board (“OTCBB”) quotation system. This will require that we complete
certain filings and disclosures of information to the National Association of
Securities Dealers and to the OTCBB itself. Our shares are currently not traded
on the public securities markets and even if our shares of common stock become
quoted on the OTCBB, there is no assurance that an active public market for our
shares of stock will be established.”
10. Further,
in the core summary, please briefly describe the type of offering you are
conducting, and describe how the amount of proceeds raised will impact your
ability to operate going forward.
[Responsive change is on Page 1.]
Please
see our response to Comment number 9 above.
Risk
Factors
[Changes
in response to Risk Factor Comments are found on Pages 3, 4, and
7.]
11. Avoid
risk factors that could apply to any company. Generic risk factors do not
represent meaningful disclosure. Examples include:
• ''We
face risks associated with product liability claims...,'' page 4. If you have a
history of product recall, state the reason for the recall and the amount of
resultant financial loss to you. Moreover, represent whether you carry
commercial reasonable amount of insurance coverage to insulate yourself from
product liability claims. However, you do not need to disclose the dollar amount
of the insurance coverage you carry. Finally, state here that you do not
maintain product recall insurance, as you disclose on page 22.
• ''We
need to manage our growth page 5. Specify the nature of ''significant strain''
put upon your company by the growth you have experienced.
•
''Our ability to obtain needed additional financing..., page 6. Quantify your
known short-term and long-term capital requirements and disclose the time when
you anticipate you will need the additional capital.
Horwitz
& Cron
United
States Securities and Exchange Commission
Attn: H.
Christopher Owings, Assistant Director ~ Office of Small Business
Responsive
Letter of February 18, 2005 to SEC Comments
RE: REED’S,
INC., a Delaware corporation
Registration
Statement on Form SB-2
SEC
File No.: 333-120451 ~ Filed November 12, 2004
Page
6
If you
elect to retain these and other generic risk factors in your prospectus,
you must
clearly explain how they apply to your company, industry, offering, etc. Please
revise accordingly throughout..
Rather
then set forth all of our changes in this correspondence, we request that the
examiner review the revisions to the Risk
Factors section
of the Registration Statement, which revisions have been made keeping in mind
this Comment.
12. Some
of your risk factors are unduly vague. Please revise to include sufficient,
specific information to assess the risk. Examples include:
[Changes
in response to Risk Factor Comments are found on Pages 3, 4, and
7.]
•
''The loss of our third-party suppliers or service providers...,'' page 4; and
''The loss of our third-party distributors...,'' page 4. Tell us supplementally
whether you have lost or foresee losing third-party suppliers, service
Providers, or distributors, or have experienced problems in business
relationship with them. If so, disclose the fact in the discussion under the
following two risk factor captions.
There are
multiple sources for our raw materials and for our packaging and bottling
supplies. We believe that if any one of these sources were unable or refused to
conduct business with us, that we would be successful in expeditiously
identifying an alternative supplier.
•
'''Increases in the cost of packaging for our products...,'' page 4. State the
percentage of the total expenses on manufacturing that is spent on packaging
your products. If your cost of packaging has increased substantially in the
recent years, provide quantitative information on this trend.
We have
deleted this Risk Factor as it does not apply to our operations