SEC Company Response from Idaho Copper Corp (COPR) (CIK 0001263364) (COPR) — Oct 13, 2011
Idaho Copper Corp (COPR) (CIK 0001263364)
Date: Oct. 13, 2011 · CIK: 0001263364 · Accession: 0001193125-11-270671
AI Filing Summary & Sentiment
File numbers found in text: 333-108715
Referenced dates: August 3, 2011, September 30, 2011
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CORRESP
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filename1.htm
Correspondence
Joway Health Industries Group Inc. (f/k/a G2 Ventures, Inc.)
16th Floor, Tianjin Global Zhiye Square, 309 Nanjing Road
Nankai District, Tianjin, PRC
October 11, 2011
John Reynolds
Assistant Director
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street NE
Washington, DC 20549
Re:
Joway Health Industries Group Inc. (f/k/a G2 Ventures, Inc.)
Form 8-K/A
Filed June 13, 2011
Form 10-K for the Fiscal Year Ended December 31, 2010
File: 333-108715
Dear Mr. Reynolds:
This letter responds to certain comments of the Staff
(the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in the letter from the Staff to Joway Health Industries Group Inc. (formerly G2 Ventures, Inc.) (the “Company”) dated
September 30, 2011.
For your convenience, we have included each of the Staff’s comments in italics before each of
the Company’s responses. References in this letter to “we,” “our” or “us” mean the Company or its advisors, as the context may require.
Form 8-K/A Filed June 13, 2011
General
Staff Comment 1. Please note we are unable to clear prior comments three, four, six, and seven until you file an actual amendment
with the changes you provided to us supplementally. Also, please note you did not provide us with draft language for comment five of our letter dated August 3, 2011, thus we are unable to determine whether your prospective revisions would be
responsive to our comment.
Response: In response to Staff comment five in the letter dated August 3, 2011, the Company
will amend the table in the 8-K/A (the “Current Report”) entitled Security Ownership of Certain Beneficial Owners and Management as follows:
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our voting securities following the
completion of the Reverse Merger described in Items 1.01 and 3.02 of this report by (i) any person or group owning more than 5% of any class of voting securities, (ii) each director, (iii) our chief executive officer and (iv) all
executive officers and directors as a group as of October 6, 2010.
John Reynolds
Assistant Director
United States Securities and Exchange Commission
Division of Corporation Finance
October 11,
2011
Page
2
Name and Address
Number of Shares
of Common
Stock
Beneficially
Owned(1)
Percentage
Ownership
of Shares of
Common
Stock
Owner of More than 5% of Class
Crystal Globe Limited(4)
P.O. Box 957, Offshore Incorporations Centre, Road Town,
Tortola, British Virgin Islands
18,515,426
92.58
%
Directors and Executive Officers
Gust C. Kepler(2)
1810 Three Galleria Tower
13155 Noel Road,
Dallas, TX 75240
—
—
Jinghe Zhang(3)(5)
16 Floor, 309 Nanjing Road,
Nankai District, Tianjin,
PRC
18,515,426
92.58
%
Yuan Huang(3)
16 Floor, 309 Nanjing Road,
Nankai District, Tianjin,
PRC
—
—
All directors and executive officers (2 persons)
18,515,426
92.58
%
(1)
In determining beneficial ownership of our common stock as of a given date, the number of shares shown includes shares of common stock which may be
acquired on exercise of warrants or options or conversion of convertible securities within 60 days of that date. In determining the percent of common stock owned by a person or entity on October 6, 2010, (a) the numerator is the number of
shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of warrants or options and conversion of convertible securities, and (b) the denominator is the sum of
(i) the total shares of common stock outstanding on October 6, 2010 (20,000,000), and (ii) the total number of shares that the beneficial owner may acquire upon conversion of the preferred and on exercise of the warrants and options,
subject to limitations on conversion and exercise. Unless otherwise stated, each beneficial owner has sole power to vote and dispose of its shares.
(2)
Gust C. Kepler was our former President, Chief Executive Officer, Chief Financial Officer, Secretary and sole director until his resignation on
September 28, 2010 in connection with the sale of 3,300,000 of his shares of common stock to Crystal Globe Limited.
(3)
Jinghe Zhang was appointed our new President, Chief Executive Officer, and sole director and Yuan Huang was appointed our new Chief Financial Officer,
Secretary and Treasurer with effect from September 28, 2010.
(4)
On October 1, 2010, G2 Ventures, Dynamic Elite and Crystal Globe entered into and consummated a Share Exchange Agreement. As a result, Crystal
Globe holds a total of 18,515,426 shares of Joway Group. As the executive director of Crystal Globe, Mr. Zhang has voting and dispositive control over the shares held by Crystal Globe. Further, in connection with the Reverse Merger and as
consideration for entering into the VIE Agreements, Mr. Lionel Evan Liu, the sole shareholder of Crystal Globe, entered into a Call Option Agreement with Mr. Zhang Jinghe, pursuant to which Mr. Zhang Jinghe has the right to purchase
up to 99% of the shares of Crystal Globe at an aggregate price equal of $20,000 over the next three years (2011-2013). Consequently, Mr. Zhang will become the indirect beneficial owner of 99% of the shares of the Company held by Crystal Globe
over the next three years.
John Reynolds
Assistant Director
United States Securities and Exchange Commission
Division of Corporation Finance
October 11,
2011
Page
3
(5)
Includes 18,515,426 shares held by Crystal Globe Ltd. Mr. Zhang is the executive director of Crystal Globe and as such has voting and dispositive
control over the shares held by Crystal Globe. In addition, Mr. Zhang has entered into a Call Option Agreement with Mr. Liu, the sole shareholder of Crystal Globe, pursuant to which Mr. Zhang has the right to purchase up to 99% of the
shares of Crystal Globe (“the Option”); thirty-four percent (34%) of the Option vests on April 2, 2011, and 33% of the Option vests on April 2, 2012 and April 2, 2013, respectively.
Corporate Structure and History, page 4
Staff Comment 2. We note your response to comment one of our letter dated August 3, 2011, and we reissue it. You disclose
that Mr. Liu formed Dynamic Elite on June 2, 2010 and Exhibit 10.19 indicates that Mr. Liu formed personally owned all of the shares of Dynamic Elite when it and Mr. Liu entered into the Entrust Agreement with Mr. Zhang. You
later disclose that Crystal Globe was formed to hold all of the outstanding shares of Dynamic Elite and that Mr. Zhang was appointed as the executive director of Crystal Globe. Please revise to clarify who owned Dynamic Elite when formed, when
Crystal Globe was founded and whether Mr. Liu owned 100% of the Crystal Globe from its inception through the report date of the current report filed on October 7, 2010. Also, please clarify how and when Crystal Globe acquired Dynamic Elite
from Mr. Liu and the date that Mr. Zhang was appointed executive director of Crystal Globe. On October 1, 2010, G2 Ventures, Inc. acquired Dynamic Elite by issuing 15,215,426 shares of common stock to Crystal Globe. Thus, Crystal
Globe controlled Dynamic Elite through 92% ownership of the outstanding shares of G2 Ventures. You disclose that the Entrust Agreement gave “irrevocable authority to make all business, operating and organizational decisions regarding Dynamic
Elite” to Mr. Zhang on page three and effective control of Crystal Globe through his appointment as executive director. Please revise to clarify the references to “effective control” and whether it resulted in the same rights as
ownership and what business, operation and organizational powers are still retained by Mr. Liu. For example, please clarify whether Mr. Liu has the power to replace Mr. Zhang as the executive director of Crystal Globe and the effect
of such an act on Mr. Zhang’s ability to control Dynamic Elite via the Entrust Agreement. As previously requested, while you state the founders of the companies, you are not clearly stating whether the individuals who formed the companies
were also the controlling shareholders at that time and before the transactions described in this section. Lastly, as previously requested please clarify whether Mr. Zhang had any ownership, directly or indirectly, of Crystal Globe and Dynamic
Elite before the transactions.
Response: The Company will amend the Current Report to reflect the following:
In 2010, the shareholders of the Joway Group determined to reorganize the Joway Group with the ultimate goal of consummating a reverse merger with a U.S.
publicly traded company. To this end, on June 2, 2010, at the request of Mr. Zhang, Mr. Lionel Even Liu founded Dynamic Elite International Limited, a limited liability company under the laws of the British Virgin Islands and on
June 18, 2010 Mr. Liu was issued 10,000 shares of Dynamic Elite representing 100% of the issued and outstanding shares. On June 18, 2010 Mr. Liu was appointed a Director of Dynamic Elite and on September 17, 2010
Mr. Zhang was appointed the Executive Director of Dynamic Elite.
On June 2, 2010, Mr. Liu and Mr. Zhang entered into an
Entrust Agreement pursuant to which Mr. Liu:
•
Appointed Mr. Zhang as Mr. Liu’s exclusive agent and attorney, with respect to all of his shareholder’s rights and
shareholder’s voting rights in Dynamic Elite;
John Reynolds
Assistant Director
United States Securities and Exchange Commission
Division of Corporation Finance
October 11,
2011
Page
4
•
Granted Mr. Zhang irrevocable authority to operate and manage Dynamic Elite, including the power to appoint directors, legal representatives, and
executive and other senior officers;
•
Agreed not to cause the Company to conduct any transaction that would materially affect the assets, obligations, rights or the operations of the
Company, without the consent of Mr. Zhang;
•
Agreed not to (i) issue or create any new shares, equity, registered capital, ownership interest, or equity-linked securities, or any options or
warrants that are directly convertible into, or exercisable or exchangeable for, shares, equity, registered capital, ownership interest, or equity-linked securities of the Company, or other similar equivalent arrangement; (ii) alter the
shareholding structure of the Company; (iii) cancel or otherwise alter the shares held by Mr. Liu; (iv) amend the register of members or the memorandum and articles of association of the Company; (v) liquidate or wind up the
Company, or; (vi) act or omit to act in such a way that would effect the interest of shares held by Mr. Liu, without the prior consent of Mr. Zhang; and
•
Waived all rights as a shareholder in Dynamic Elite in favor of Mr. Zhang.
Pursuant to the Entrust Agreement, Mr. Liu transferred to Mr. Zhang all of Mr. Liu’s rights to manage and operate Dynamic Elite as
well as all of Mr. Liu’s rights as a shareholder, including the right to vote his shares of Dynamic Elite. Pursuant to the Agreement, Mr. Zhang has the sole and exclusive right to appoint the directors of Dynamic Elite and to manage
and operate the company and its business. In addition, Mr. Liu was prohibited from undertaking any transaction affecting the business, assets, operations or securities of the Company without the consent of Mr. Zhang. As a result,
Mr. Liu did not retain any operational or organizational control over Dynamic Elite.
On June 18, 2010, Mr. Liu established
Crystal Globe Limited, a limited liability company under the laws of the British Virgin Islands and on June 18, 2010 Mr. Liu was issued 10,000 shares of Crystal Globe representing 100% of the issued and outstanding shares. On July 20,
2010, Mr. Zhang was appointed the Executive Director of Crystal Globe and Mr. Liu was appointed a Director of Crystal Globe. On September 18, 2010, Mr. Liu, the sole shareholder of Dynamic Elite, transferred all of the shares of
Dynamic Elite to Crystal Globe.
On July 20, 2010, Mr. Liu entered into a Call Option Agreement with Mr. Zhang and
Mr. Song, the two shareholders of the Joway Group, pursuant to which Mr. Liu granted Mr. Zhang and Mr. Song the right to purchase up to 100% of the shares of Crystal Globe at an aggregate price equal of $20,000 over the next
three years. In addition, the Option Agreement also provides that Mr. Liu shall not dispose any of the shares of Crystal Globe without consent of Mr. Zhang and Mr. Song.
On October 1, 2010, G2 Ventures, Inc., Dynamic Elite and Crystal Globe, the sole shareholder of Dynamic Elite entered into and consummated a Share Exchange Agreement pursuant to which Crystal Globe
assigned, transferred, conveyed and delivered 10,000 shares of Dynamic Elite (representing 100% of the issued and outstanding shares) to G2 Ventures in consideration for the issuance to Crystal Globe of 15,215,426 restricted shares of common stock
of G2 Ventures (the “Reverse Merger”). As of the date of the Reverse Merger and as of the date of the Current Report on Form 8-K filed with the SEC on October 7, 2010, Mr. Liu was the sole shareholder of Crystal Globe. Except as
set forth in the Call Option Agreement and the Entrust Agreement or as otherwise set forth above, Mr. Zhang had no ownership, directly or indirectly, in Crystal Globe and Dynamic Elite before the Reverse Merger.
John Reynolds
Assistant Director
United States Securities and Exchange Commission
Division of Corporation Finance
October 11,
2011
Page
5
Staff
Comment 3. We note your response to comment two of our letter dated August 3, 2011 that the amount of consideration was agreed upon orally between the parties. This would appear to be an oral amendment to the agreements. Please
provide a written description of this amendment as an exhibit. For guidance, we direct your attention to Question 146.04 to the Compliance and Disclosure Interpretations, which are found at
http://www.sec.gov/divisions/corpfin/guidance/regs-kinterp.htm.
Response: With respect to the acquisition of the interests
of Chen Jingyun and Wang Aiying in Joway Decoration and Shengtang Trading, respectively, by Tianjin Joway Shengshi Group Co., we will include as exhibits to the Current Report a description of the consideration that was agreed upon orally between
the parties as follows:
On July 28, 2010, Wang Aiying and Tianjin Joway Shengshi Group Co., Ltd entered into a Stockholder’s Rights
Transfer Agreement pursuant to which Wang Aiying agreed to transfer all of his stockholder rights in Tianjin Oriental Shengtang Import & Export Trading Co., Ltd. to Tianjin Joway Shengshi Group. The parties agreed orally at the time the
Agreement was entered into that Tianjin Joway Shengshi would pay Wang Aiying cash in the amount of RMB100,000 as consideration for such transfer.
On July 9, 2010, Chen Jingyun and Tianjin Joway Shengshi Group Co., Ltd entered into a Stockholder’s Rights Transfer Agreement pursuant to which Chen Jingyun agreed to transfer all of his
stockholder rights in Tianjin Joway Decoration Engineering Co., Ltd to Tianjin Joway Shengshi Group. The parties agreed orally at the time the Agreement was entered into that Tianjin Joway Shengshi would pay Chen Jingyun cash in the amount of
RMB200,000 as consideration for such transfer.
Form 10-K for Fiscal Year Ended December 31, 2010
General
Staff Comment 4.
We note your response to comment eight of our letter dated August 3, 2011, and we reissue it. Please revise your annual report any relevant issue noted in our comments above and to comply with the prior comments issued on the Form
8-K. Your draft disclosures for comments three and four of our letter dated August 3, 2011 should be included in your amended Form 10-K. Also, your prospective revisions related to comment five of our letter dated August 3, 2011, along
with