SEC Company Response from Fit For Business International Inc (CIK 0001312623) — Jul 1, 2005
Fit For Business International Inc (CIK 0001312623)
Date: July 1, 2005 · CIK: 0001312623 · Accession: 0001312623-05-000004
AI Filing Summary & Sentiment
File numbers found in text: 333-122176
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
June 30, 2005
Jay Ingram, Esq.
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Fit For Business International, Inc. ("FFB")
Registration Statement on Form SB-2
File No. 333-122176
Dear Mr. Ingram:
We have reviewed your May 25, 2005 letter and have the following responses:
General
-------
1. We note your revisions in response to our prior comment 1 further
noting that you have set varying offering prices for the same security.
Describe for us the basis for setting varying offering prices and how
you plan to conduct this offering given the varying offering prices.
Otherwise, revise your disclosure in accordance with our prior comment
1. We also note that the price being offered by the company differs
from the offering by the selling shareholders. Please explain the basis
for the varying offering prices and how the company plans to conduct
this offering when its shares are offered at a substantially higher
price then the selling shareholders. We may have further comment.
ANSWER: In Amendment No. 2 to Form SB-2, we have revised the offering prices to
be $1.50 for all shares being offered.
2. We reissue our prior comment 10. Please provide the disclosure required
by Item 510 of Regulation S-B; Disclosure of Commission Position on
Indemnification for Securities Act Liabilities on the prospectus.
ANSWER: As previously indicated in our response to prior comment 4 (not comment
10), the original filed SB-2 registration statement contained the information
required by this question in Item 24 (Commission's position on indemnification)
and Item 28(B) (undertaking in the first sentence of Item 512(e)). If there is
another place in the document that this disclosure is required, we would
respectfully request guidance from the Commission.
3. It appears that Herbalife Ltd., rather than Herbalife International
Inc. is traded on the NYSE under the symbol HLF. Please revise
throughout the prospectus. Also, please disclose the relationship
between Herbalife Ltd. and Herbalife International Inc. and clarify
your relationship with each.
<PAGE>
ANSWER: Herbalife Ltd. is the company traded on the NYSE. Herbalife Ltd. is the
supplier of the nutritional products that Fit For Business uses in its wellness
programs. Fit for Business does not know the relationship between Herbalife Ltd.
and Herbalife International Inc. However, pursuant to Herbalife Ltd's latest
Form 10-K filing, Herbalife International Inc. is a subsidiary of Herbalife Ltd.
We have revised Amendment No. 2 to Form SB-2, to change all references to
Herbalife Ltd.
Registration Statement Facing Page
----------------------------------
4. We note that the information required by Item 501(a)(9) of Regulation
S-B appears on page 3. Since you disclose this information on the
prospectus cover page, please remove the disclosure from page 3.
ANSWER: Page 3 of the document is the balance of the registration fee table. It
does not discuss the information required by Item 501(a)(9). Please clarify this
question so that we can address this issue.
Prospectus Cover Page
---------------------
5. We reissue our prior comment 5. Review the disclosure requirements set
forth in Item 501 of Regulation S-B and limit your disclosure on the
cover page to only that information required by the Item. Please note
that the disclosure of extraneous information that is not required by
Item 501 of Regulation S-B greatly impairs the readability of the
disclosure on the cover page. For example, we refer you, without
limitation, to disclosure referencing the use of proceeds and the
identity of the option holders.
ANSWER: We have revised the cover page to comply with Item 501 of Regulation
S-B.
6. We reissue our prior comment 6. Please limit the outside front cover of
the prospectus to one page. Refer to Item 501(a)(9)(iii) of Regulation
S-B .
ANSWER: In Amendment No. 2 to Form SB 2, we limited the outside front cover of
the prospectus to one page.
7. We partially reissue comment 7. Please disclose whether there are any
minimum purchase requirements, as required by Item 501(a)(9)(iii) of
Regulation S-B. This is the minimum number of securities an investor
may purchase.
ANSWER: In Amendment No.2 to Form SB-2, we have stated that there are no minimum
purchase requirements. This was also contained in our original SB-2 filing.
8. Review your disclosure on the cover page and revise to delete all
repetitious information. For example, we refer you to disclose
referencing the terms of the offering.
ANSWER: In Amendment No. 2 to Form SB-2, we have eliminated repetitive
disclosure.
<PAGE>
9. We partially reissue our prior comment 8 continuing to note reference
to the term "recognized exchange." Clarify what you mean by your use of
the term.
ANSWER: In Amendment No. 2 to Form SB-2, this has been deleted since the only
exchange that the Company intends to be quoted on is the OTC Bulletin Board.
10. Please remove the statement that after effectiveness you plan to apply
for quotation on the OTC Bulletin Board from the prospectus cover page.
ANSWER: In Amendment No. 2 to Form SB-2, we have removed the above-referenced
statement.
11. The cross-reference to the "Risk Factors" section is not correct
because the "Risk Factors" section commences on page 10. Revise as
appropriate.
ANSWER: In Amendment No. 2 to Form SB-2, we have inserted the correct page
number reference to the Risk Factors section.
12. The Company's supplemental response to our prior comment 11 appears to
be incorrect since you have not removed the disclosure referenced in
prior comment. We thus reissue our previous comment 11. We do not
understand what you mean when you disclose that "[t]this registration
statement will be amended and completed from time to time, as
necessary." Revise or advise.
ANSWER: In Amendment No. 2 to Form SB-2, we have deleted this section.
Inside Front and Outside Back Cover Page
----------------------------------------
13. The Company's supplemental response to our prior comment 12 appears to
be incorrect since it does not appear as though you have provided the
dealer prospectus delivery obligation. We, therefore, reissue the
comment. Refer to Item 501(b) of Regulation S-B.
ANSWER: In Amendment No. 2 to Form SB-2, we have provided the dealer prospectus
delivery obligation.
Application of Proceeds
-----------------------
14. Please remove this section since you prospectus includes a detailed
"Use of Proceeds" section in accordance with Item 504 of Regulation
S-B.
ANSWER: In Amendment No. 2 to Form SB-2, we have removed this section.
Risk Factors
------------
15. We reissue our prior comment 21. Please avoid the generic conclusion
you reach in many of your risk factors that you risk could negatively
impact or have an adverse effect on your business or your business
could suffer negative consequences. Instead, replace this language with
specific disclosure of how your business and operations would be
affected. Refer to the second, seventh, and fifteenth risk factors.
ANSWER: In Amendment No. 2 to Form SB-2, we have revised the generic conclusions
and replaced such language with specific risk disclosure.
16. Please revise the first risk factor subheading to revise the risk to
the company and investors relating to the going concern. The risk would
appear to be that the company may cease to exist and investors could
loose their money, rather than simply hurting the company's ability to
raise additional financing. Also, update the deficit accumulated as of
most recent financial statements in the risk factor.
<PAGE>
ANSWER: In Amendment No. 2 to Form SB-2, we have revised the first risk factor
subheading.
17. Please remove risk factor thirteen.
ANSWER: In Amendment No. 2 to Form SB-2, we have removed risk factor 13.
Since Our Business Operations Are Presently Located. . . ."
-----------------------------------------------------------
18. Please expand the disclosure in this risk factor to provide more
specific information about the "rules and regulations" of Australia and
how they may impact your operations. Currently, the disclosure is too
general.
ANSWER: In Amendment No. 2 to Form SB-2, we have added disclosure about
Australian rules and regulations.
Use of Proceeds
---------------
19. We partially reissue prior comment 25. Please provide more specificity
regarding the amount allocated to working capital. Please revise to
indicate the amount allocated to each use of working capital.
ANSWER: In Amendment No. 2 to Form SB-2, we have specifically allocated the
working capital to 5 specific areas.
20. We note that the proceeds will be used to pay salaries of management.
Please include a separate line in the use of proceeds table indicating
the total amount allocated to these salaries.
ANSWER: In Amendment No. 2 to Form SB-2, we have included a separate salary
line.
21. Please discuss the allocation of proceeds if you raise less than
$700,000.
ANSWER; In Amendment No. 2 to Form SB-2, per our discussion, we have added an
allocation for $350,000.
Management's Discussion and Analysis
------------------------------------
Overview
--------
22. In the second paragraph, explain your use of the term "deemed" as it
relates to the disclosure about the reverse merger. Also, explain the
business purpose of the reverse merger.
<PAGE>
ANSWER: The use of the word "deemed" as it relates to the disclosure of the
reverse merger comes from the information contained in Statement of Accounting
Financial Standards No. 141 - Business Combinations, (SFAS No. 141), paragraph
17 which states: "In a business combination effected through an exchange of
equity interest, the entity that issues the equity interests is general the
acquiring entity. In some business combinations (commonly referred to as reverse
acquisitions), however, the acquired entity issues the equity interests." As
such, the use of the word "deemed" refers to an entity identification
application of the acquiring entity and the acquired entity. In the case of Fit
For Business International, Inc. ("FFB International" and Fit For Business
Australia Pty Limited ("FFB Australia"), FFB International is a Nevada
corporation with no assets, working capital or operations. FFB Australia is a
private operating company. The merger of the private operating company (FFB
Australia) into the non-operating shell corporation (FFB International) resulted
in the owners and management of the private company having actual and effective
operating control of the combined company after the transaction, with
shareholders of the shell company continuing as passive investors. In this
reverse acquisition transaction, FFB Australia is "deemed" to be the acquiring
entity, and FFB International the acquired entity, with the continuation of the
operations of the combined entity after the transaction under the name of FFB
International.
The business purpose of the reverse merger is to allow FFB Australia, under the
name of FFB International, the opportunity to conduct a capital formation
activity through the issuance of common stock registered with the SEC through
the use of a Registration Statement on Form SB-2. Considering the limited
resources of FFB Australia, this method of "going public" is preferred over that
of an initial public offering ("IPO") registration.
The accounting application involved in the reverse merger process is described
in Note 1 to the financial statements for the interim periods ended March 31,
2005, and 2004, under the heading of Basis of Presentation and Organization,
presented in the SB-2/A document.
23. In the second paragraph, explain you use of the phrase "quality
endorsed business model."
ANSWER: In Amendment No. 2 to Form SB-2, we have deleted this phrase as the
quality endorsement applies to the Company's processes rather than to the
business model.
24. Please specifically disclose the factual basis for, and the context of
all your beliefs, understandings, estimates, and opinions. This is
particularly true for all projections, statistics, and assertions.
Unless you can substantiate on a reasonable basis all of the
projections, statistics and assertions that you cite, please remove
them. Some examples include the following. This is not an exhaustive
list.
a. Disclosure referencing the statistics of the Australian
Institute of Health and Welfare and how the "statistics are
reflected in the Australian workforce."
b. Disclosure referencing the Australian National Audit
Office.
c. On page 23, the disclosure in the paragraph commencing
"[i]t would be FFBI analysis that within three to five
years...." d. Disclosure on page 36, stating that "[t]he FFBI
program appeals to a broad cross-section of potential
independent Living Well account executives throughout the
world...."
ANSWER: In Amendment No. 2 to Form SB-2, we have identified source documents
that were the basis for the Company's beliefs, understanding, estimates and
opinions. We have identified and footnoted the specific references to these
documents. Please note, we have moved this section to the description of our
business section, as a consequence of revising the MD&A section as requested.
<PAGE>
25. Please provide the basis for the disclosure regarding the company's
beliefs throughout this section. For example, we note management's
belief "its approach and programs deliver a sustainable improvement to
employees' lives.... [which is] reflected in their increased health,
more positive mental and emotional states, and greater productivity"
and your programs "improve their profitability."
ANSWER: In Amendment No. 2 to Form SB-2, we have provided the basis for the
disclosure regarding the Company's beliefs, understanding, estimates and
opinions or deleted such language.
26. Currently the overview repeats disclosure found in the business section
and does not add meaningful disclosure to the MD&A discussion. As such,
we ask that you revise the executive overview to discuss the events,
trends, and uncertainties that management views as most critical to the
company's revenues, financial position, liquidity, plan of operations
and results of operations. In an effort to assist you in this regard,
please refer to th