SEC Company Response from Elite Cosmetics, Inc (CIK 0001309055) — Aug 31, 2005
Elite Cosmetics, Inc (CIK 0001309055)
Date: Aug. 31, 2005 · CIK: 0001309055 · Accession: 0001013762-05-001111
AI Filing Summary & Sentiment
File numbers found in text: 333-126667
Referenced dates: August 19, 2005
Letter
August 30, 2005 VIA FEDERAL EXPRESS Ms. Janice McGuirk, Esq. Division of Corporate Finance U.S. Securities & Exchange Commission Mail Stop 0511 Washington, D.C. 20549
Re: Elite Cosmetics, Inc. Amend. No. 1 to Registration Statement on Form SB-2 Filed July 18, 2005 File No. 333-126667
Dear Ms. McGuirk:
We represent Elite Cosmetics, Inc. ("Elite Cosmetics" or the "Company") We are in receipt of your letter dated August 19, 2005 regarding the above referenced filing and the following are our responses:
Prospectus Cover Page ---------------------
1. In the fourth line, please replace the word "can" with "will" or otherwise revise to indicate that the selling shareholders are required to sell at the $.03 price, if they resell before the quotation on the OTC BB.
Answer: The prospectus cover page of the SB-2 has been revised to replace the word "can" with "will."
2. Regarding the cross-reference to the risk factors section, please highlight the paragraph through the use of bold-face type or italics.
Answer: The prospectus cover page of the SB-2 has been revised to highlight the reference to the risk factors section.
Risk Factors, page 2 --------------------
3. For each of your risk factors, please revise your subheadings to briefly state the actual risk or harm to the company as a result of the material fact you address. For example, see the last four risk factors under "Risks Relating to the Company."
Answer: The SB-2 has been revised to state the actual risk or harm to the company for each of the risk factors.
4. We note the statement in your sixth risk factor, "[W]e are presently dependent to a great extent upon the experience, abilities and continued services of Glen Landry..."; however, we further note your ninth risk factor, "[O]ur Chief Executive Officer, Glen Landry, Has No Previous Experience in the Cosmetics Industry, or Any Prior Experience as the Chief Executive Officer of a Public Company." Please revise as appropriate to make the disclosure consistent.
Answer: The risk factor has been revised to delete the reference to Glen Landry's experience. <PAGE> Forward Looking Statements, page 5 ----------------------------------
5. Please expand the last sentence under this heading to clarify that the forward looking safe harbor does not apply to the offering. Further, please expand the last paragraph to disclose the obligation to update the registration statement as required by Item 512 of Regulation S-B.
Answer: The SB-2 has been revised to delete the Forward Looking Statements section, as the section is not applicable to this offering.
Market for Common Equity....page 6 ----------------------------------
6. Please update the information to the latest date practicable and in addition, please provide the information required by Item 201(a)(ii) of Regulation S-B.
Answer: The SB-2 has been revised to update the information to the latest date practicable and to provide the information required by Item 201(a)(ii) of Regulation S-B.
Selling Shareholders, page 8 ----------------------------
7. Please add another footnote to the table to indicate the relationship, if any, of Clailee A. Landry to Glen Landry. Also, revise the last statement in this section, "[T]o our knowledge..." to add Clailee Landry, if applicable.
Answer: The SB-2 has been revised to disclose that Clailee A. Landry is the mother of Glen Landry. The last statement of this section has been revised accordingly.
Plan of Distribution, page 8 ----------------------------
8. At the end of the initial paragraph, please add "if ever" referring to the possibility that a market will develop.
Answer: This section of the SB-2 has been revised to add "if ever" at the end of the initial paragraph.
9. Revise the last sentence of this section to correctly state that the expenses are estimated to be $20,000, not $10,000. We note the schedule of expenses in Item 25. on page II-2 in this regard. Answer: The SB-2 has been revised to correctly state that the expenses are estimated to be $20,000, not $10,000. <PAGE> Directors, Executive Officers....page 9 ---------------------------------------
10. Please disclose the business activities of Elmwood Marine and describe Mr. Landry's responsibilities as a manager and supervisor. Please disclose the number of hours each week that Mr. Landry works for Elmwood.
Answer: The SB-2 has been revised to disclose the business activities of Elmwood Marine, to describe Mr. Landry's responsibilities as a manager and supervisor, and to disclose the number of hours each week that Mr. Landry works for Elmwood.
11. Please state the number of hours per week Mr. Landry will spend on the business part of the company.
Answer: The SB-2 has been revised to disclose that Mr. Landry currently spends 35 hours per week on the Company's business.
12. Please identify the company's promoters. See the definition of promoter in Rule 405.
Answer: The SB-2 has been revised to disclose the identity of the Company's promoters.
Interest of Named Experts and Counsel, page 11 ----------------------------------------------
13. Please specify the contingent basis or substantial interest referred to in the first sentence. Please explain the reference to "any such person" in the second sentence.
Answer: The SB-2 has been revised to disclose that no experts or counsel have any interest in the Company's registration statement.
Organization Within Last Five Years, page 11 --------------------------------------------
14. Please clarify the reference to "commenced operation" in the second lines, as it appears the company was a "blank check" company at the time. Please revise as appropriate.
Answer: The SB-2 has been revised to clarify that the Company did not have any business activities at the time the Company was a blank check company. <PAGE> Description of Business, page 11 --------------------------------
15. Please provide a discussion of the business activities of Mr. Landry prior to his acquisition (or gain of control) of Edmonds 4, Inc., specifically relating to the development and manufacturing of the three products as discussed in this section. We may have further comments.
Answer: The SB-2 has been revised to provide a discussion of the business activities of Mr. Landry prior to his acquisition of Edmonds 4, Inc.
16. Considering the comment above and other disclosures throughout your registration statement (e.g. products are available for sale on eBay), it would appear that you have incurred costs in the development and manufacturing of your products; however, we don not see where such costs have been recorded in your financial statements (e.g. research and development costs, inventory, etc.) Please explain.
Answer: Through April 30, 2005, the Company did not incur any costs to develop the product. During May and June, the company began developing its products and formulations. The company makes it products in small batches and does not currently have any material inventory.
17. State the number of customers you presently have and the number of product units you have sold, as of recent date.
Answer: The SB-2 has been revised to clarify that the Company does not currently have any customers and has not sold any products to date.
18. Explain your "Internet marketing strategy". State the cost to produce your present web-site. Also, state the costs to the company associated with the link to e-bay. Are there any other fees to be paid on e-bay? Does the company have to pay a percentage of each sale to e-bay? Please fully explain how this works.
Answer: The SB-2 has been revised to more fully explain the company's internet strategy and interaction with e-bay.
19. Please clarify the individuals who participated in your survey, including how they were identified for participation and any relationships with Elite or its management or shareholders. Please describe the nature and extent of the testing that was done and summarize the results which demonstrated the effectiveness of your products in reducing the signs of aging and conditioning and beautifying the skin. Summarize the "favorable responses' to use of the body cream. Please explain the reference to "in-house surveys".
Answer: The SB-2 has been revised to clarify the details of the survey conducted on the Company's products. <PAGE> 20. Your website says that your eye cream "dramatically reduces" the signs of aging and that you are always "working hard to develop new cosmetic products." Please disclose these matters in your filing and explain.
Answer: Please note that the Company is currently revising the website to remove this language.
21. Please explain how you design and develop your products given the lack of experience or training in the cosmetology field. For example, identify the person who perform this task and explain the steps or methodology used in creating products.
Answer: The SB-2 has been revised to disclose how the Company designed and developed its products.
22. Please explain how the company "anticipates strong profit margins..." Also, identify your manufacturing costs and explain why they are "low".
Answer: The SB-2 has been revised to explain how the Company anticipates strong profit margins and why the manufacturing costs are low.
23. Please add a subsection which discusses government regulation of your current and proposed business activities. See Item 101(b)(9) of Regulation S-B.
Answer: The SB-2 has been revised to add a subsection which discusses government regulation of the Company's current and proposed business activities.
Marketing / Distribution, page 12 ---------------------------------
24. Since the company will be depending heavily upon a marketing strategy, please indicate Mr. Landry's experience or training in this area. We also note under "Plan of Operations" that [W]ithin thirty to sixty days, we intend to develop a comprehensive marketing plan. We expect to spend approximately $10,000 on marketing in the fourth quarter of 2005..." IF Mr. Landry has no direct experience, please consider adding another risk factor to address this fact.
Answer: The SB-2 has been revised to disclose that Mr. Landry does not have any experience or training in marketing. A risk factor has been added accordingly.
Employees, page 12 ------------------
25. In the last sentence pertaining to Mr. Landry, please clarify "he has become adept at planning and forecasting" as an opinion and explain the basis for this statement in the disclosure.
Answer: The SB-2 has been revised to delete the above mentioned sentence. <PAGE> 26. We noted previously the disclosure that Dawn Landry has "mixed cosmetics" since 2003. If she is going to perform this function for the company, it would appear that this should be disclosed here as well as explaining briefly exactly what she does in that regard. Please explain the nature and extent of her experience in mixing cosmetics.
Answer: The SB-2 has been revised to disclose the nature and extent of Dawn Landry's experience in mixing cosmetics.
Intellectual Property, page 12 ------------------------------
27. Please update to indicate the current status of the application for the trademark.
Answer: The SB-2 has been revised to disclose that the application for the trademark is currently pending.
Plan of Operations ------------------
28. For each of the steps you have listed, disclose the anticipated costs and the source(s) of funds to be used to accomplish each of the steps.
Answer: The SB-2 has been revised to disclose the anticipated costs and the source of funds to be used to accomplish each of the steps in the plan of operations.
29. Disclose who will be developing the "comprehensive marketing plan", the "one to three additional websites", and the "additional cosmetics" referred to. If these will all be done by Mr. Landry and/or his wife, this should be made clear. Otherwise, if it is anticipated that the company will hire or enter into an agreement for a consultant or other expert in the area, this should be made clear as well.
Answer: The SB-2 has been revised to clarify that these tasks will be done by Glen Landry until the Company begins generating a profit.
30. In your present third step, please state whether or not there have been any discussions or negotiations with the companies you mentioned, such as Wal-Mart, K-Mark, Walgreens. If so, please disclose the status of any agreements.
Answer: The SB-2 has been revised to disclose that the Company has not entered into any discussions or negotiations with any of the above-mentioned companies.
31. We noted in your fourth risk factor that the company "will need a minimum of $100,000 to commence our planned operations over the next twelve months..." Please add that statement to this section.
Answer: The SB-2 has been revised to add the above-mentioned statement to this section. <PAGE> 32. We note in the penultimate paragraph, the statement, "[W]e currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months to maintain our operations. We will require additional funds to increase marketing, to expand operations...". Please revise to tell us what the amount of funds would be to maintain operations and then further, disclose the additional amount of funds would be needed to implement your business plan. We may have further comments u
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
August 30, 2005
VIA FEDERAL EXPRESS
Ms. Janice McGuirk, Esq.
Division of Corporate Finance
U.S. Securities & Exchange Commission
Mail Stop 0511
Washington, D.C. 20549
Re: Elite Cosmetics, Inc.
Amend. No. 1 to Registration Statement on Form SB-2
Filed July 18, 2005
File No. 333-126667
Dear Ms. McGuirk:
We represent Elite Cosmetics, Inc. ("Elite Cosmetics" or the "Company") We are
in receipt of your letter dated August 19, 2005 regarding the above referenced
filing and the following are our responses:
Prospectus Cover Page
---------------------
1. In the fourth line, please replace the word "can" with "will" or
otherwise revise to indicate that the selling shareholders are
required to sell at the $.03 price, if they resell before the
quotation on the OTC BB.
Answer: The prospectus cover page of the SB-2 has been revised to
replace the word "can" with "will."
2. Regarding the cross-reference to the risk factors section, please
highlight the paragraph through the use of bold-face type or italics.
Answer: The prospectus cover page of the SB-2 has been revised to
highlight the reference to the risk factors section.
Risk Factors, page 2
--------------------
3. For each of your risk factors, please revise your subheadings to
briefly state the actual risk or harm to the company as a result of
the material fact you address. For example, see the last four risk
factors under "Risks Relating to the Company."
Answer: The SB-2 has been revised to state the actual risk or harm
to the company for each of the risk factors.
4. We note the statement in your sixth risk factor, "[W]e are presently
dependent to a great extent upon the experience, abilities and
continued services of Glen Landry..."; however, we further note your
ninth risk factor, "[O]ur Chief Executive Officer, Glen Landry, Has No
Previous Experience in the Cosmetics Industry, or Any Prior Experience
as the Chief Executive Officer of a Public Company." Please revise as
appropriate to make the disclosure consistent.
Answer: The risk factor has been revised to delete the reference to
Glen Landry's experience.
<PAGE>
Forward Looking Statements, page 5
----------------------------------
5. Please expand the last sentence under this heading to clarify that the
forward looking safe harbor does not apply to the offering. Further,
please expand the last paragraph to disclose the obligation to update
the registration statement as required by Item 512 of Regulation S-B.
Answer: The SB-2 has been revised to delete the Forward Looking
Statements section, as the section is not applicable to this offering.
Market for Common Equity....page 6
----------------------------------
6. Please update the information to the latest date practicable and in
addition, please provide the information required by Item 201(a)(ii)
of Regulation S-B.
Answer: The SB-2 has been revised to update the information to the
latest date practicable and to provide the information required by
Item 201(a)(ii) of Regulation S-B.
Selling Shareholders, page 8
----------------------------
7. Please add another footnote to the table to indicate the relationship,
if any, of Clailee A. Landry to Glen Landry. Also, revise the last
statement in this section, "[T]o our knowledge..." to add Clailee
Landry, if applicable.
Answer: The SB-2 has been revised to disclose that Clailee A. Landry
is the mother of Glen Landry. The last statement of this section has
been revised accordingly.
Plan of Distribution, page 8
----------------------------
8. At the end of the initial paragraph, please add "if ever" referring to
the possibility that a market will develop.
Answer: This section of the SB-2 has been revised to add "if ever"
at the end of the initial paragraph.
9. Revise the last sentence of this section to correctly state that the
expenses are estimated to be $20,000, not $10,000. We note the
schedule of expenses in Item 25. on page II-2 in this regard. Answer:
The SB-2 has been revised to correctly state that the expenses are
estimated to be $20,000, not $10,000.
<PAGE>
Directors, Executive Officers....page 9
---------------------------------------
10. Please disclose the business activities of Elmwood Marine and describe
Mr. Landry's responsibilities as a manager and supervisor. Please
disclose the number of hours each week that Mr. Landry works for
Elmwood.
Answer: The SB-2 has been revised to disclose the business
activities of Elmwood Marine, to describe Mr. Landry's
responsibilities as a manager and supervisor, and to disclose the
number of hours each week that Mr. Landry works for Elmwood.
11. Please state the number of hours per week Mr. Landry will spend on the
business part of the company.
Answer: The SB-2 has been revised to disclose that Mr. Landry
currently spends 35 hours per week on the Company's business.
12. Please identify the company's promoters. See the definition of
promoter in Rule 405.
Answer: The SB-2 has been revised to disclose the identity of the
Company's promoters.
Interest of Named Experts and Counsel, page 11
----------------------------------------------
13. Please specify the contingent basis or substantial interest referred
to in the first sentence. Please explain the reference to "any such
person" in the second sentence.
Answer: The SB-2 has been revised to disclose that no experts or
counsel have any interest in the Company's registration statement.
Organization Within Last Five Years, page 11
--------------------------------------------
14. Please clarify the reference to "commenced operation" in the second
lines, as it appears the company was a "blank check" company at the
time. Please revise as appropriate.
Answer: The SB-2 has been revised to clarify that the Company did
not have any business activities at the time the Company was a blank
check company.
<PAGE>
Description of Business, page 11
--------------------------------
15. Please provide a discussion of the business activities of Mr. Landry
prior to his acquisition (or gain of control) of Edmonds 4, Inc.,
specifically relating to the development and manufacturing of the
three products as discussed in this section. We may have further
comments.
Answer: The SB-2 has been revised to provide a discussion of the
business activities of Mr. Landry prior to his acquisition of Edmonds
4, Inc.
16. Considering the comment above and other disclosures throughout your
registration statement (e.g. products are available for sale on eBay),
it would appear that you have incurred costs in the development and
manufacturing of your products; however, we don not see where such
costs have been recorded in your financial statements (e.g. research
and development costs, inventory, etc.) Please explain.
Answer: Through April 30, 2005, the Company did not incur any costs
to develop the product. During May and June, the company began
developing its products and formulations. The company makes it
products in small batches and does not currently have any material
inventory.
17. State the number of customers you presently have and the number of
product units you have sold, as of recent date.
Answer: The SB-2 has been revised to clarify that the Company does
not currently have any customers and has not sold any products to
date.
18. Explain your "Internet marketing strategy". State the cost to produce
your present web-site. Also, state the costs to the company associated
with the link to e-bay. Are there any other fees to be paid on e-bay?
Does the company have to pay a percentage of each sale to e-bay?
Please fully explain how this works.
Answer: The SB-2 has been revised to more fully explain the
company's internet strategy and interaction with e-bay.
19. Please clarify the individuals who participated in your survey,
including how they were identified for participation and any
relationships with Elite or its management or shareholders. Please
describe the nature and extent of the testing that was done and
summarize the results which demonstrated the effectiveness of your
products in reducing the signs of aging and conditioning and
beautifying the skin. Summarize the "favorable responses' to use of
the body cream. Please explain the reference to "in-house surveys".
Answer: The SB-2 has been revised to clarify the details of the
survey conducted on the Company's products.
<PAGE>
20. Your website says that your eye cream "dramatically reduces" the signs
of aging and that you are always "working hard to develop new cosmetic
products." Please disclose these matters in your filing and explain.
Answer: Please note that the Company is currently revising the
website to remove this language.
21. Please explain how you design and develop your products given the lack
of experience or training in the cosmetology field. For example,
identify the person who perform this task and explain the steps or
methodology used in creating products.
Answer: The SB-2 has been revised to disclose how the Company
designed and developed its products.
22. Please explain how the company "anticipates strong profit margins..."
Also, identify your manufacturing costs and explain why they are
"low".
Answer: The SB-2 has been revised to explain how the Company
anticipates strong profit margins and why the manufacturing costs are
low.
23. Please add a subsection which discusses government regulation of your
current and proposed business activities. See Item 101(b)(9) of
Regulation S-B.
Answer: The SB-2 has been revised to add a subsection which discusses
government regulation of the Company's current and proposed business
activities.
Marketing / Distribution, page 12
---------------------------------
24. Since the company will be depending heavily upon a marketing strategy,
please indicate Mr. Landry's experience or training in this area. We
also note under "Plan of Operations" that [W]ithin thirty to sixty
days, we intend to develop a comprehensive marketing plan. We expect
to spend approximately $10,000 on marketing in the fourth quarter of
2005..." IF Mr. Landry has no direct experience, please consider
adding another risk factor to address this fact.
Answer: The SB-2 has been revised to disclose that Mr. Landry does
not have any experience or training in marketing. A risk factor has
been added accordingly.
Employees, page 12
------------------
25. In the last sentence pertaining to Mr. Landry, please clarify "he has
become adept at planning and forecasting" as an opinion and explain
the basis for this statement in the disclosure.
Answer: The SB-2 has been revised to delete the above mentioned
sentence.
<PAGE>
26. We noted previously the disclosure that Dawn Landry has "mixed
cosmetics" since 2003. If she is going to perform this function for
the company, it would appear that this should be disclosed here as
well as explaining briefly exactly what she does in that regard.
Please explain the nature and extent of her experience in mixing
cosmetics.
Answer: The SB-2 has been revised to disclose the nature and extent
of Dawn Landry's experience in mixing cosmetics.
Intellectual Property, page 12
------------------------------
27. Please update to indicate the current status of the application for
the trademark.
Answer: The SB-2 has been revised to disclose that the application
for the trademark is currently pending.
Plan of Operations
------------------
28. For each of the steps you have listed, disclose the anticipated costs
and the source(s) of funds to be used to accomplish each of the steps.
Answer: The SB-2 has been revised to disclose the anticipated costs
and the source of funds to be used to accomplish each of the steps in
the plan of operations.
29. Disclose who will be developing the "comprehensive marketing plan",
the "one to three additional websites", and the "additional cosmetics"
referred to. If these will all be done by Mr. Landry and/or his wife,
this should be made clear. Otherwise, if it is anticipated that the
company will hire or enter into an agreement for a consultant or other
expert in the area, this should be made clear as well.
Answer: The SB-2 has been revised to clarify that these tasks will
be done by Glen Landry until the Company begins generating a profit.
30. In your present third step, please state whether or not there have
been any discussions or negotiations with the companies you mentioned,
such as Wal-Mart, K-Mark, Walgreens. If so, please disclose the status
of any agreements.
Answer: The SB-2 has been revised to disclose that the Company has
not entered into any discussions or negotiations with any of the
above-mentioned companies.
31. We noted in your fourth risk factor that the company "will need a
minimum of $100,000 to commence our planned operations over the next
twelve months..." Please add that statement to this section.
Answer: The SB-2 has been revised to add the above-mentioned
statement to this section.
<PAGE>
32. We note in the penultimate paragraph, the statement, "[W]e currently
do not have enough cash to satisfy our minimum cash requirements for
the next twelve months to maintain our operations. We will require
additional funds to increase marketing, to expand operations...".
Please revise to tell us what the amount of funds would be to maintain
operations and then further, disclose the additional amount of funds
would be needed to implement your business plan. We may have further
comments u