SEC Comment Letter for XMax Inc. (XMAX) (CIK 0001473334) (XMAX) — Aug 24, 2011
XMax Inc. (XMAX) (CIK 0001473334)
Date: Aug. 24, 2011 · CIK: 0001473334 · Accession: 0000000000-11-051004
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-163019
Referenced dates: July 27, 2011
Letter
August 24, 2011 Via E-mail Ms. Tawny Lam President Nova Lifestyle, Inc. 6541 East Washington Blvd. Commerce, CA 90040 Re: Nova Lifestyle, Inc. Amendment No. 1 to Current Report on Form 8-K Filed August 10, 2011 Form 10-Q for the Quarter Ended June 30, 2011 Filed August 15, 2011 File No. 333-163019
Dear Ms. Lam: We have reviewed your response letter da ted August 9, 2011 and the above-referenced filings, and have the following comments. If yo u disagree, we will consider your explanation as to why our comments are inapplicable. We may ask you to provide us with supplemental information so we may better understand your disc losure. After reviewing this information, we may or may not raise additional comments. Amendment No. 1 to Current Report on Form 8-K filed on August 10, 2011
Business, page 3 Suppliers and Raw Materials, page 11
1. We note your response to comment 26 of our letter dated July 27, 2011, including your response that you may not be able to pass al l increases in raw material costs to your customers in the international markets, but are less susceptible to s hort-term raw material price swings in China because of rights re served under your franchise agreements. In future filings, please include similar disclosu re in your Business Section under “Suppliers and Raw Materials” and in your Management’s Discussion and Analysis, as appropriate. Security Ownership of Certain Benefi cial Owners and Management, page 46
2. We note your response to comment 32 of our letter dated July 27, 2011. In future filings, please include disclosure that Mr. Wong and Mr. Ho are co-owners of Nova Holdings, similar to the disclosure that you have includ ed for Mr. Jiang and Mr. Liu regarding their ownership of St. Joyal.
Ms. Tawny Lam Nova Lifestyle, Inc. August 24, 2011 Page 2
Description of Securities, page 53
3. We note your revisions in res ponse to comment 37 of our letter dated July 27, 2011. We note further that your current di sclosure states that the desc ription is a summary of your Articles of Incorporation and Amended and Rest ated Bylaws. In future filings, please revise your disclosure to state that the summary includes all material provisions of your common stock. Form 10-Q for the Quarter Ended June 30, 2011
Net Sales, page 28
4. In future filings please identify and quantify the product categories that materially impact your results of operations. Refer to Sectio ns 501.04 and .05 of the Financial Reporting Codification for guidance.
Cost of Sales, page 29
5. You disclose that costs of sale s consist primarily of material costs, labor costs and related overhead directly attributable to the producti on of your products. In future filings please quantify each contributing factor so that an investor can assess the materiality of each contributing factor. Refer to Section 501.04 of the Financial Reporting Codification for guidance.
Controls and Procedures, page 34
6. With respect to the material weaknesses re lating to (1) the failure to timely accrue or amortize expenses and (2) inadequate polic ies and procedures for inventory, please supplementally tell us the specific steps the co mpany has taken, if any, to remediate these material weaknesses, and please include such di sclosure in future filings, as relevant. Please also clarify what is meant by “subse quent periods” in your statement that the material weaknesses and significant deficienci es were identified in connection with the audit for the year ended December 31, 2010 and “subsequent periods.” Further, please tell us how you were able to conclude th e inventory balances at December 31, 2010, and subsequent periods were fairly stated.
As appropriate, please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furn ish a letter that keys your responses to our comments and provides any requested supplementa l information. Detailed response letters greatly facilitate our review. Please file your response letter on EDGAR. Please understand that we may have additional comments after re viewing your responses to our comments.
Ms. Tawny Lam Nova Lifestyle, Inc. August 24, 2011 Page 3
You may contact Tracey McKoy, Staff A ccountant, at 202-551-3772, or Terence O’Brien, Accounting Branch Chief, at 202-551- 3355 if you have questions regarding comments on the financial statements and related matters. Please contact Erin Jaskot, Staff Attorney, at 202-551-3442, or myself, at 202-551- 3765 with any other questions.
Sincerely,
/s/ Pamela A. Long
Pamela A. Long Assistant Director
cc: Robert Newman, Esq. ( via E-mail )
Newman & Morrison LLP
Show Raw Text
August 24, 2011 Via E-mail Ms. Tawny Lam President Nova Lifestyle, Inc. 6541 East Washington Blvd. Commerce, CA 90040 Re: Nova Lifestyle, Inc. Amendment No. 1 to Current Report on Form 8-K Filed August 10, 2011 Form 10-Q for the Quarter Ended June 30, 2011 Filed August 15, 2011 File No. 333-163019 Dear Ms. Lam: We have reviewed your response letter da ted August 9, 2011 and the above-referenced filings, and have the following comments. If yo u disagree, we will consider your explanation as to why our comments are inapplicable. We may ask you to provide us with supplemental information so we may better understand your disc losure. After reviewing this information, we may or may not raise additional comments. Amendment No. 1 to Current Report on Form 8-K filed on August 10, 2011 Business, page 3 Suppliers and Raw Materials, page 11 1. We note your response to comment 26 of our letter dated July 27, 2011, including your response that you may not be able to pass al l increases in raw material costs to your customers in the international markets, but are less susceptible to s hort-term raw material price swings in China because of rights re served under your franchise agreements. In future filings, please include similar disclosu re in your Business Section under “Suppliers and Raw Materials” and in your Management’s Discussion and Analysis, as appropriate. Security Ownership of Certain Benefi cial Owners and Management, page 46 2. We note your response to comment 32 of our letter dated July 27, 2011. In future filings, please include disclosure that Mr. Wong and Mr. Ho are co-owners of Nova Holdings, similar to the disclosure that you have includ ed for Mr. Jiang and Mr. Liu regarding their ownership of St. Joyal. Ms. Tawny Lam Nova Lifestyle, Inc. August 24, 2011 Page 2 Description of Securities, page 53 3. We note your revisions in res ponse to comment 37 of our letter dated July 27, 2011. We note further that your current di sclosure states that the desc ription is a summary of your Articles of Incorporation and Amended and Rest ated Bylaws. In future filings, please revise your disclosure to state that the summary includes all material provisions of your common stock. Form 10-Q for the Quarter Ended June 30, 2011 Net Sales, page 28 4. In future filings please identify and quantify the product categories that materially impact your results of operations. Refer to Sectio ns 501.04 and .05 of the Financial Reporting Codification for guidance. Cost of Sales, page 29 5. You disclose that costs of sale s consist primarily of material costs, labor costs and related overhead directly attributable to the producti on of your products. In future filings please quantify each contributing factor so that an investor can assess the materiality of each contributing factor. Refer to Section 501.04 of the Financial Reporting Codification for guidance. Controls and Procedures, page 34 6. With respect to the material weaknesses re lating to (1) the failure to timely accrue or amortize expenses and (2) inadequate polic ies and procedures for inventory, please supplementally tell us the specific steps the co mpany has taken, if any, to remediate these material weaknesses, and please include such di sclosure in future filings, as relevant. Please also clarify what is meant by “subse quent periods” in your statement that the material weaknesses and significant deficienci es were identified in connection with the audit for the year ended December 31, 2010 and “subsequent periods.” Further, please tell us how you were able to conclude th e inventory balances at December 31, 2010, and subsequent periods were fairly stated. As appropriate, please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furn ish a letter that keys your responses to our comments and provides any requested supplementa l information. Detailed response letters greatly facilitate our review. Please file your response letter on EDGAR. Please understand that we may have additional comments after re viewing your responses to our comments. Ms. Tawny Lam Nova Lifestyle, Inc. August 24, 2011 Page 3 You may contact Tracey McKoy, Staff A ccountant, at 202-551-3772, or Terence O’Brien, Accounting Branch Chief, at 202-551- 3355 if you have questions regarding comments on the financial statements and related matters. Please contact Erin Jaskot, Staff Attorney, at 202-551-3442, or myself, at 202-551- 3765 with any other questions. Sincerely, /s/ Pamela A. Long Pamela A. Long Assistant Director cc: Robert Newman, Esq. ( via E-mail ) Newman & Morrison LLP