SEC Company Response from Fit For Business International Inc (CIK 0001312623) — Sep 26, 2005
Fit For Business International Inc (CIK 0001312623)
Date: Sept. 26, 2005 · CIK: 0001312623 · Accession: 0001312623-05-000011
AI Filing Summary & Sentiment
File numbers found in text: 333-122176
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September 26, 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 September 21, 2005 letter and have the following
responses:
Prospectus Cover Page
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1. We reissue our prior comment 1 because the dealer prospectus delivery
obligation continues to appear on the cover page. Please relocate this
disclosure to either the inside front or outside back cover page of the
prospectus as required by Item 502 of Regulation S-B.
ANSWER: In Amendment No. 5 to Form SB-2, the dealer prospectus delivery
obligation has been moved to the outside back cover page (immediately prior to
Part II).
Risk Factors, page 8
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2. Please revise risk factor 13 to disclose the percent ownership by Mr.
Poulsen including preferred shares.
ANSWER: In Amendment No. 5 to Form SB-2, we have updated the disclosure as
requested.
Management's Discussion and Analysis, page 19
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3. We note the disclosure on page 24 that as of August 19, 2005 you had
cash resources of $1,250. In light of this limited cash, please explain
the statement on page 25, that amounts borrowed from Fort Street Equity
will be used to pay the balance of your estimated offering expenses.
Please disclose the balance of your estimated offering expenses that
have been paid to date and discuss how you plan to pay these expenses.
ANSWER: In Amendment No. 5 to Form SB-2, we have disclosed the estimated balance
of FFB's offering expenses and further disclosed how FFB would fund the same.
4. We note the financial statements for the year ended June 30, 2005
indicate checks in excess of bank balances of $1,608. Please disclose
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in this section and discuss the impact this will have on your
liquidity. Indicate whether in the interim there have been additional
checks in excess of the bank balance.
ANSWER: In Amendment No. 5 to Form SB-2, additional language has been added to
indicate that there was no impact on FFB's liquidity, and that no further
instances have occurred subsequent to June 30, 2005 where checks were in excess
of the bank balance.
Plan of Operation
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5. Your revisions in response to your prior comments are too general. We
therefore reissue our prior comment and ask for more detailed
disclosure regarding your ability to continue as a viable business
should you not be able to raise more than a nominal amount of funds
from this offering. For example, we note that if you raise $350,000
most of the funding will be allocated to salaries and rent expenses.
Please disclose how you intend to pursue your plan of operations and
how your business plan will change if you raise this amount of
proceeds. We may have further comment. Provide detailed disclosure
regarding the activities to be undertaken based upon the amount raised
in this offering.
ANSWER: In Amendment No. 5 to Form SB-2, we have updated the disclosure as
requested.
Selling Stockholders, page 60
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6. We note the shares sold by Fort Street Equity to Ralston Superannuation
fund, Mr. Gilling and Ms. Mulherin. Please disclose the exemption
relied upon in the resale and the analysis under Rule 144 regarding
these transactions. We may have further comment.
ANSWER: Fort Street Equity sold its options, not shares. Fort Street Equity's
sale of its options was undertaken based on an exemption from registration
contained in Section 4(1). We have also added an analysis under Rule 144.
Certain Relationships and Related Transactions, page 65
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7. We partially reissue our prior comment 16. Please disclose Mr.
Poulsen's reliance on the exemption of registration contained in what
is deemed as Section 4(1). Also provide an analysis under Rule 144.
ANSWER: In Amendment No. 5 to Form SB-2, we have disclosed Mr. Poulsen's
reliance on the exemption from registration contained in section 4(1). This was
previously included in Amendment No. 4. We have also provided a Rule 144
analysis.
Note 1- Basis of Presentation and Organization
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Revenue Recognition, page F-8
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8. With respect to our previous comment 18, we note your response stating
you believe there is a high degree of collectibility of the remaining
license fee due to the L.R. Global principals'` "personal asset holding
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and revenues from residual activities". You also state "L.R. Global
entered into the License Agreement with the understanding that the
Company would implement its plan of operations (including the
completion of its capital formation activities) in early February
2005." Based on these citations and your response to us on the whole,
it seems that you do not expect payment from LR Global and you are
relying instead upon payment from the grantors. Revise Management's
Discussion and Analysis and the notes to the financial statements to
disclose the reasons thy you expect LR Global to pay the fee. Explain
why the inability to collect the remaining amount of the license fee
was due to the extended period of time required to complete your
capital formation activities. Disclose whether and the extent to which
LR Global is a revenue-generating entity.
ANSWER: Based on our examination and documentation of L.R. Global, FFB believes
that L.R. Global, as an entity, has sufficient operations (revenue generating
capability) and financial resources to meet the remaining payment obligation of
$375,250. As such, FFB is not looking to the guarantors as the primary source of
payment, but only from the point of additional security to it for collection
purposes. Management's Discussion and Analysis and Note 8 to the financial
statements have been revised to more fully emphasize these points.
The inability of the Company to collect the remaining amount of the license fee
was due to the extended period of time required to complete the capital
formation activities because the levels of "expected and anticipated" market
penetration and sustained effort have not been reached. While this is an
on-going activity of the Company L.R. Global anticipated that there would be
more resources expended to date as a result of the completion of the capital
formation activity. Further, while the Company has fulfilled each and every
written obligation of its License Agreement, this verbal understanding between
the parties has not been achieved. As a result, the Company has presented its
financial statements as of June 30, 2005, with the license revenue removed (see
comment 9).
9. With respect to recognizing the license fee as revenue, it appears that
you do not yet have a sufficiently complete product or service
available for use under license. We note that you are currently
developing wellness programs for the marketplace and supporting
infrastructure (web based management information systems, processes,
systems, intellectual property, and FFBI training event), and that you
are relying upon the offering to provide the necessary funding to
complete the development of these specific items as well as your
overall business plan. Accordingly, the license conveyed to LR Global
may not have and utility separate and independent of your continued
performance in developing the underlying programs and supporting
systems. It appears that they have not paid the balance of the license
fee for that reason. We believe that revenues are considered to have
been earned when the seller has substantially accomplished what it must
do to be entitled represented by the revenue. Your as yet undeveloped
plans indicate that you should not recognized any license revenue until
you have a product or service that can be utilized fully by the
licensee. Please revise the financial statements to defer all license
revenue until you have a fully developed product or service that can be
utilized by LR Global or other licensee.
ANSWER: The Company has fulfilled each written obligation and covenant of its
License Agreement with L.R. Global. We certainly represent that we have provided
all products, software, training, support and other elements to L.R. Global in
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connection with the License Agreement. The completion of the capital formation
activity will allow us to provide additional resources to further penetrate our
markets, and sustain the overall marketing effort. It is this level of sustained
effort that L.R. Global seeks in order to satisfy the verbal obligation
pertaining to the payment to us of the remaining license fees. We also believe
we have "substantially" accomplished all required of us under the License
Agreement, except for the capital formation activity. For this reason, the
Company has presented its financial statements as of June 30, 2005, with the
license revenue removed from the statement of operations, and presented as
deferred revenue in the balance sheet.
Very truly yours,
ANSLOW & JACLIN, LLP
BY: /s/ ANSLOW & JACLIN, LLP
ANSLOW & JACLIN, LLP
RIA/
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