SEC Company Response from Citius Pharmaceuticals, Inc. (CTXR) (CIK 0001506251) (CTXR) — Jan 21, 2011
Citius Pharmaceuticals, Inc. (CTXR) (CIK 0001506251)
Date: Jan. 21, 2011 · CIK: 0001506251 · Accession: 0001019687-11-000231
AI Filing Summary & Sentiment
Reasoning
Referenced dates: December 20, 2010
Letter
trailone_corresp.htm
TRAILONE, INC.
318 N. Carson Street
Carson City, Nevada 89701
January 20, 2011
Via EDGAR
United States Securities and Exchange Commission
Washington D.C. 20549
Re:
Trailone, Inc.
Registration Statement on Form S-1A
Filed on December 28, 2010
File No. 170781
Attention: Justin Dobbie and Tonya Bryan.
To Whom It May Concern:
In response to your letter dated December 20, 2010 Trailone, Inc., wishes to address the following comments.
General
1. Please revise to provide disclosure required by Items 102 and 407(a) of Regulation S-K.
We have noted this comment and have revised the disclosure on pages 2 and through the entire disclosure.
Page 2 (Regulation S-K, Item 103)
Description of Property
Our corporate office are located at1844 South West Salt Lake City, Utah 84104. Ralph Montrone currently owns this location. This facility is 1,000 square feet of office space and is being provided to the Company free of charge by the sole officer and director, Ralph Montrone. There are currently no proposed programs for renovation, improvement or development of the facility currently in use.
Page 28 (Regulation S-K, Item 407(a)
INDEPENDENT DIRECTOR/CORPORATE GOVERNANCE COMMITTEE
Our Board of Directors currently consists of only Ralph Montrone. We are not a ”listed company” under SEC rules and therefore are not required to have separate committees comprise of independent directors. We do not have independent director(s) at this time.
The Company does not presently have a Corporate Governance Committee and the Board acts in such capacity for the immediate future due to the limited size of the Board. The Company intends to increase the size of its Board in the future, at which time it may appoint a Corporate Governance Committee.
The Corporate Governance Committee will be responsible for reviewing developments in corporate governance practices, evaluating the adequacy of our corporate governance practices and reporting and making recommendations to our Board of Directors concerning corporate governance matters.
2. The financial statements should be updated, as necessary, to comply with Rule 8-08 of Regulation S-X.
We have noted this comment and have not revised the disclosure.
The company believes that the effective date will occur prior to February 15, 2011.
3. Please provide a currently dated consent from the independent registered public accountant in the amendment.
We have noted this comment and have revised the disclosure.
We are providing a currently dated consent from the independent registered public accountant.
Prospectus Summary, page 1
Overview, page 1
4. Please revise your disclosure to explain what you mean by "car jewelry."
We have noted this comment and have revised the disclosure on page .
TrailOne, Inc. is presently developing a license plate tag for automobiles. The license plate tag is car jewelry, which is like a piece of art which is unique to meet the needs of those who want to add a custom look to their vehicles, and is not made to replace a car’s license plate issued by government agencies. Since its inception, on September 9, 2010 TrailOne has incurred losses to September 30, 2010.
General Introduction, page 1
5. It appears unclear from your disclosure whether you have one type of license plate tag or one tag that has been manufactured to date. Please revise or advise.
We have noted this comment and have revised the disclosure on page 1.
The company is presently attempting to market its sole intended product (which has not yet been produced), a license plate tag for automobiles in the Salt Lake City, Utah area.
6. Please revise to indicate your monthly burn rate as well as the amount of time that your present capital will last at this rate.
We have noted this comment and have revised the disclosure on page 1.
Taking into account that our company is a new startup and is without an established income stream and/or profit & loss statement and has not yet produced any product for sale, the estimated monthly burn rate projected during the first fiscal year, without due consideration for adjustment is $43,958.33. This includes a 3 month burn, in cash, considering the company encounters a bad quarter during its first year in business beginning with the first current due date and ending with the cash zero date.
7. Please revise this section to describe in reasonable detail the license plate tag you are developing. Include a discussion of what it will look like, how it will be made and from what materials. Please also clarify whether you are currently developing the product or marketing the product, or both. Your disclosure on this point is inconsistent. if you are marketing the product, describe how you are doing so and to whom.
We have noted this comment and have revised the disclosure on page 1 and throughout.
License plate tags are more commonly known as license plate frames/holders. Ours will be made to order to each specific customer’s wants and desires with an individualized custom look. We are attempting to position ourselves to market our product to both the wholesale and retail markets. Our product is a computer generated license plate tag, produced by using a highly sophisticated laser guided CNC metal cutting flat surface screened lathe/cutter. The materials used for each license plate tag will be from either steel, platinum, titanium or gold. Then each individualized license plate tag will be embellished with chrome, silver or gold plate, personalized script/saying and jeweled to that own person’s taste, set with fine minerals, gems, or the like. We intend to sub-contract the actual manufacturing of each license plate tag to a manufacturer to our approved specifications, but will be taking the product to market by our own marketing efforts.
Business Development, page 1
8. You state that you are marketing a tag for sale to the general public. Please revise here and elsewhere in the prospectus to clarify your target market. For example, on page 27 you state that you are marketing a tag to automobile specialty shops, Please be specific in your discussion of to whom you intend to sell your products and how.
We have noted this comment and have revise the disclosure on pages 7, 20 and 29.
Initial Sales Strategy:
We have established a one-prong sales approach; our approach utilizes direct sales through Ralph Montrone. Our direct sales is being conducted by Mr. Montrone, he is currently attempting to market the product locally in the Salt Lake City, Utah area to automobile specialty shops. His current marketing strategy consists of various Point of Sale material including posters and flyers developed by Mr. Montrone in the past several months.
We intend to derive income from these sales and our goal is establish brand recognition.
Subsequent Sales Strategy
The company is also presently developing its marketing program to sell license plate tags to the general public, through a combination of direct sales, referral and networking within the industry. The Company plans to educate automobile advertisers about our product and work to obtain sales by the ways discussed herein. Because our product offers a very high rate of exclusivity, our target market will be to individuals such as athletes in the NFL, NBA, MLB, and NHL; Hollywood and Music entertainers/stars; NASCAR, NHRA, FIA (Formula One) drivers; and high end automobile enthusiasts, including middle to high income earning individuals in the public sector. Currently we are planning to market out product through the sources noted above, through direct contacts at wholesale/retail trade shows, such as SEMA (Specialty Equipment Market Association), International Auto Show (Circuit), World of Wheels – Indianapolis, and DUB Auto Show Tour. We also intend to use direct target marketing through monthly publications such as Automobile, Road & Track, Car & Driver, as well as on their respective websites. We also intend to market our product through our website: www.trailonecnc.com which is currently under development/construction. It is our intention to also retail through high end retailers and automobile specialty shops such as DUB Auto and high end catalog companies that cater specifically to the elite/rich & famous clientele, as well as by word of mouth advertising. We intend for our product to be distinguished, exclusive and refined to meet the needs of those who intend on setting themselves apart from the crowd while driving their vehicles, such as Porsche, Bentley, Mercedes-Benz, Ferrari, Lamborghini, Jaguar, Maserati, Rand Rove, Hummer, Cadillac, etc… Our product is intended to add the ultimate in personalized “Bling” to any automobile. The company is not offering the product to anyone at this time. TrailOne, Inc. is considered a development stage company because it has not commenced its major operations. In addition the company has not achieved any revenue in connection with its business to date. As a result we are a startup company, that is, we have no operating history or revenue, and are at a competitive disadvantage.
Risk Factors, page 5
9. We note your statement on page 28 that you have not taken any steps to test the product on automobiles. Please add a risk factor so that investors can evaluate this risk.
We have noted this comment and have not revised the disclosure as to Risk Factor however we have revised page 28.
In September of 2010, Advanced Precision Manufacturing Inc. (APMI) and TrailOne finalized the specifications for the TrailOne tag; APMI will manufacture the Aluminum tag for the company. TrailOne does not have any formal agreements with APMI to manufacture its tags. All key metal (solid aluminum) included in our product are readily available from APMI. APMI has advised TrailOne that they can manufacture each tag for $90.00. APMI has not produced any tags for TrailOne at this time.
10. It appears that the development of your business is highly reliant upon the manufacturing capabilities of APMI with whom you have no agreement. Please include a risk factor discussing the risk related to your reliance upon APMI.
We have noted this comment and have revised the disclosure on page 6.
WE ARE HIGHLY RELIANT UPON THE MANUFACTURING CAPABILITIES OF APMI OUR INTENDED SUB-CONTRCATOR/MANUFACTURER WITH WHOM WE HAVE NO AGREEMENT AT THIS TIME
Our company is currently solely reliant on APMI to manufacture our product. Should APMI not manufacture our product as intended, we may or may not be able to secure another manufacturer to manufacture our product which would result in a failure of our business.
We Have a History of Losses, page 8
11. Please revise to estimate the amount of your additional costs and expenses here, additionally, please include an estimate of costs associated with public company reporting requirements and costs associated with newly applicable corporate governance requirements on page 8.
We have noted this comment and have revised the disclosure on page 8.
Management anticipates that losses will continue to increase from current levels because the Company expects to incur additional costs and expenses related to: marketing and promotional activities; the possible addition of new personnel; and the development of relationships with strategic business partners for an estimated amount of approximately $10,000.00. It is anticipated that said amount will be obtained by a loan from Ralph Montrone. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
However, it is estimated that the amount of additional costs and expenses associated with public company reporting requirements will be approximately $10,000.00. It is also estimated that the amount of additional costs and expenses associated with newly applicable corporate governance requirements will be approximately $5,000.00.
It is anticipated that we may need to obtain a loan from Ralph Montrone to cover these additional costs and expenses. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
If we Do not Obtain Additional Financing, page 8
12. Please revise this risk factor to include an estimate of additional financing you will need to obtain here and on page 8.
We have noted this comment and have revised the disclosure.
We have noted this comment and have revised the disclosure on page 8.
Management anticipates that losses will continue to increase from current levels because the Company expects to incur additional costs and expenses related to: marketing and promotional activities; the possible addition of new personnel; and the development of relationships with strategic business partners for an estimated amount of approximately $10,000.00. It is anticipated that said amount will be obtained by a loan from Ralph Montrone. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
We have noted this comment and have revised the disclosure on page 8.
However, it is estimated that the amount of additional costs and expenses associated with public company reporting requirements will be approximately $10,000.00. It is also estimated that the amount of additional costs and expenses associated with newly applicable corporate governance requirements will be approximately $5,000.00.
It is anticipated that we may need to obtain a loan from Ralph Montrone to cover these additional costs and expenses. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
We Have a Short Development Stage Operating history, page 7
13. Please reconcile your disclosure that you are "continuing to build (your] customer base" with the statement that you "do not have any customers at this time."
We have noted this comment and have revised the disclosure on page 7.
We have a short development stage operating history from September 9, 2010 to September 30, 2010 for investors to evaluate the potential of our business development. We are continuing our attempts to try market our product and to try to build a customer base for our product, which has not been manufactured yet. We do not have any customers at this time.
Special Note Regarding Forward-Looking Statement, page 10
14. You refer in this section to the expected impact of a Share Exchange that is not otherwise discussed in the prospectus. Please revise or advise.
We have noted this comment and have revised the disclosure on page 10.
There is no Stock Exchange anticipated by us and we have therefore deleted any reference to same from the disclosure.
Use of Proceeds, page 11
15. Please revise to clarify how you intend to pay the remaining $2,500 to cover your fees, costs, and expenses of this offering.
We have noted this comment and have revised the disclosure on page 11.
We intend to pay the remaining estimated $2,500.00 to cover the fees, costs and expenses of this offering when due from a loan to be obtained from Ralph Montrone.
16. You refer to an "investment agreement" with the selling security holder. Please file this agreement as an exhibit to the registration statement and include a description of the material terms of the agreement in the prospectus.
We have noted this comment and have revised the disclosure on page 11.
We do not have an “investment agreement” with the selling security holder and have deleted any reference to same in the disclosure.
Plan of Distribution. page 12
17. Please clearly disclose on page 18 that there ca
Show Raw Text
CORRESP
1
filename1.htm
trailone_corresp.htm
TRAILONE, INC.
318 N. Carson Street
Carson City, Nevada 89701
January 20, 2011
Via EDGAR
United States Securities and Exchange Commission
Washington D.C. 20549
Re:
Trailone, Inc.
Registration Statement on Form S-1A
Filed on December 28, 2010
File No. 170781
Attention: Justin Dobbie and Tonya Bryan.
To Whom It May Concern:
In response to your letter dated December 20, 2010 Trailone, Inc., wishes to address the following comments.
General
1. Please revise to provide disclosure required by Items 102 and 407(a) of Regulation S-K.
We have noted this comment and have revised the disclosure on pages 2 and through the entire disclosure.
Page 2 (Regulation S-K, Item 103)
Description of Property
Our corporate office are located at1844 South West Salt Lake City, Utah 84104. Ralph Montrone currently owns this location. This facility is 1,000 square feet of office space and is being provided to the Company free of charge by the sole officer and director, Ralph Montrone. There are currently no proposed programs for renovation, improvement or development of the facility currently in use.
Page 28 (Regulation S-K, Item 407(a)
INDEPENDENT DIRECTOR/CORPORATE GOVERNANCE COMMITTEE
Our Board of Directors currently consists of only Ralph Montrone. We are not a ”listed company” under SEC rules and therefore are not required to have separate committees comprise of independent directors. We do not have independent director(s) at this time.
The Company does not presently have a Corporate Governance Committee and the Board acts in such capacity for the immediate future due to the limited size of the Board. The Company intends to increase the size of its Board in the future, at which time it may appoint a Corporate Governance Committee.
The Corporate Governance Committee will be responsible for reviewing developments in corporate governance practices, evaluating the adequacy of our corporate governance practices and reporting and making recommendations to our Board of Directors concerning corporate governance matters.
1
2. The financial statements should be updated, as necessary, to comply with Rule 8-08 of Regulation S-X.
We have noted this comment and have not revised the disclosure.
The company believes that the effective date will occur prior to February 15, 2011.
3. Please provide a currently dated consent from the independent registered public accountant in the amendment.
We have noted this comment and have revised the disclosure.
We are providing a currently dated consent from the independent registered public accountant.
Prospectus Summary, page 1
Overview, page 1
4. Please revise your disclosure to explain what you mean by "car jewelry."
We have noted this comment and have revised the disclosure on page .
TrailOne, Inc. is presently developing a license plate tag for automobiles. The license plate tag is car jewelry, which is like a piece of art which is unique to meet the needs of those who want to add a custom look to their vehicles, and is not made to replace a car’s license plate issued by government agencies. Since its inception, on September 9, 2010 TrailOne has incurred losses to September 30, 2010.
General Introduction, page 1
5. It appears unclear from your disclosure whether you have one type of license plate tag or one tag that has been manufactured to date. Please revise or advise.
We have noted this comment and have revised the disclosure on page 1.
The company is presently attempting to market its sole intended product (which has not yet been produced), a license plate tag for automobiles in the Salt Lake City, Utah area.
6. Please revise to indicate your monthly burn rate as well as the amount of time that your present capital will last at this rate.
We have noted this comment and have revised the disclosure on page 1.
Taking into account that our company is a new startup and is without an established income stream and/or profit & loss statement and has not yet produced any product for sale, the estimated monthly burn rate projected during the first fiscal year, without due consideration for adjustment is $43,958.33. This includes a 3 month burn, in cash, considering the company encounters a bad quarter during its first year in business beginning with the first current due date and ending with the cash zero date.
2
7. Please revise this section to describe in reasonable detail the license plate tag you are developing. Include a discussion of what it will look like, how it will be made and from what materials. Please also clarify whether you are currently developing the product or marketing the product, or both. Your disclosure on this point is inconsistent. if you are marketing the product, describe how you are doing so and to whom.
We have noted this comment and have revised the disclosure on page 1 and throughout.
License plate tags are more commonly known as license plate frames/holders. Ours will be made to order to each specific customer’s wants and desires with an individualized custom look. We are attempting to position ourselves to market our product to both the wholesale and retail markets. Our product is a computer generated license plate tag, produced by using a highly sophisticated laser guided CNC metal cutting flat surface screened lathe/cutter. The materials used for each license plate tag will be from either steel, platinum, titanium or gold. Then each individualized license plate tag will be embellished with chrome, silver or gold plate, personalized script/saying and jeweled to that own person’s taste, set with fine minerals, gems, or the like. We intend to sub-contract the actual manufacturing of each license plate tag to a manufacturer to our approved specifications, but will be taking the product to market by our own marketing efforts.
Business Development, page 1
8. You state that you are marketing a tag for sale to the general public. Please revise here and elsewhere in the prospectus to clarify your target market. For example, on page 27 you state that you are marketing a tag to automobile specialty shops, Please be specific in your discussion of to whom you intend to sell your products and how.
We have noted this comment and have revise the disclosure on pages 7, 20 and 29.
Initial Sales Strategy:
We have established a one-prong sales approach; our approach utilizes direct sales through Ralph Montrone. Our direct sales is being conducted by Mr. Montrone, he is currently attempting to market the product locally in the Salt Lake City, Utah area to automobile specialty shops. His current marketing strategy consists of various Point of Sale material including posters and flyers developed by Mr. Montrone in the past several months.
We intend to derive income from these sales and our goal is establish brand recognition.
Subsequent Sales Strategy
The company is also presently developing its marketing program to sell license plate tags to the general public, through a combination of direct sales, referral and networking within the industry. The Company plans to educate automobile advertisers about our product and work to obtain sales by the ways discussed herein. Because our product offers a very high rate of exclusivity, our target market will be to individuals such as athletes in the NFL, NBA, MLB, and NHL; Hollywood and Music entertainers/stars; NASCAR, NHRA, FIA (Formula One) drivers; and high end automobile enthusiasts, including middle to high income earning individuals in the public sector. Currently we are planning to market out product through the sources noted above, through direct contacts at wholesale/retail trade shows, such as SEMA (Specialty Equipment Market Association), International Auto Show (Circuit), World of Wheels – Indianapolis, and DUB Auto Show Tour. We also intend to use direct target marketing through monthly publications such as Automobile, Road & Track, Car & Driver, as well as on their respective websites. We also intend to market our product through our website: www.trailonecnc.com which is currently under development/construction. It is our intention to also retail through high end retailers and automobile specialty shops such as DUB Auto and high end catalog companies that cater specifically to the elite/rich & famous clientele, as well as by word of mouth advertising. We intend for our product to be distinguished, exclusive and refined to meet the needs of those who intend on setting themselves apart from the crowd while driving their vehicles, such as Porsche, Bentley, Mercedes-Benz, Ferrari, Lamborghini, Jaguar, Maserati, Rand Rove, Hummer, Cadillac, etc… Our product is intended to add the ultimate in personalized “Bling” to any automobile. The company is not offering the product to anyone at this time. TrailOne, Inc. is considered a development stage company because it has not commenced its major operations. In addition the company has not achieved any revenue in connection with its business to date. As a result we are a startup company, that is, we have no operating history or revenue, and are at a competitive disadvantage.
3
Risk Factors, page 5
9. We note your statement on page 28 that you have not taken any steps to test the product on automobiles. Please add a risk factor so that investors can evaluate this risk.
We have noted this comment and have not revised the disclosure as to Risk Factor however we have revised page 28.
In September of 2010, Advanced Precision Manufacturing Inc. (APMI) and TrailOne finalized the specifications for the TrailOne tag; APMI will manufacture the Aluminum tag for the company. TrailOne does not have any formal agreements with APMI to manufacture its tags. All key metal (solid aluminum) included in our product are readily available from APMI. APMI has advised TrailOne that they can manufacture each tag for $90.00. APMI has not produced any tags for TrailOne at this time.
10. It appears that the development of your business is highly reliant upon the manufacturing capabilities of APMI with whom you have no agreement. Please include a risk factor discussing the risk related to your reliance upon APMI.
We have noted this comment and have revised the disclosure on page 6.
WE ARE HIGHLY RELIANT UPON THE MANUFACTURING CAPABILITIES OF APMI OUR INTENDED SUB-CONTRCATOR/MANUFACTURER WITH WHOM WE HAVE NO AGREEMENT AT THIS TIME
Our company is currently solely reliant on APMI to manufacture our product. Should APMI not manufacture our product as intended, we may or may not be able to secure another manufacturer to manufacture our product which would result in a failure of our business.
We Have a History of Losses, page 8
11. Please revise to estimate the amount of your additional costs and expenses here, additionally, please include an estimate of costs associated with public company reporting requirements and costs associated with newly applicable corporate governance requirements on page 8.
We have noted this comment and have revised the disclosure on page 8.
Management anticipates that losses will continue to increase from current levels because the Company expects to incur additional costs and expenses related to: marketing and promotional activities; the possible addition of new personnel; and the development of relationships with strategic business partners for an estimated amount of approximately $10,000.00. It is anticipated that said amount will be obtained by a loan from Ralph Montrone. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
However, it is estimated that the amount of additional costs and expenses associated with public company reporting requirements will be approximately $10,000.00. It is also estimated that the amount of additional costs and expenses associated with newly applicable corporate governance requirements will be approximately $5,000.00.
It is anticipated that we may need to obtain a loan from Ralph Montrone to cover these additional costs and expenses. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
4
If we Do not Obtain Additional Financing, page 8
12. Please revise this risk factor to include an estimate of additional financing you will need to obtain here and on page 8.
We have noted this comment and have revised the disclosure.
We have noted this comment and have revised the disclosure on page 8.
Management anticipates that losses will continue to increase from current levels because the Company expects to incur additional costs and expenses related to: marketing and promotional activities; the possible addition of new personnel; and the development of relationships with strategic business partners for an estimated amount of approximately $10,000.00. It is anticipated that said amount will be obtained by a loan from Ralph Montrone. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
We have noted this comment and have revised the disclosure on page 8.
However, it is estimated that the amount of additional costs and expenses associated with public company reporting requirements will be approximately $10,000.00. It is also estimated that the amount of additional costs and expenses associated with newly applicable corporate governance requirements will be approximately $5,000.00.
It is anticipated that we may need to obtain a loan from Ralph Montrone to cover these additional costs and expenses. In the event that we are unable to secure such a loan from Mr. Montrone, or some other source(s), unknown at this time, we will not be able to continue forward and our business will fail.
We Have a Short Development Stage Operating history, page 7
13. Please reconcile your disclosure that you are "continuing to build (your] customer base" with the statement that you "do not have any customers at this time."
We have noted this comment and have revised the disclosure on page 7.
We have a short development stage operating history from September 9, 2010 to September 30, 2010 for investors to evaluate the potential of our business development. We are continuing our attempts to try market our product and to try to build a customer base for our product, which has not been manufactured yet. We do not have any customers at this time.
Special Note Regarding Forward-Looking Statement, page 10
14. You refer in this section to the expected impact of a Share Exchange that is not otherwise discussed in the prospectus. Please revise or advise.
We have noted this comment and have revised the disclosure on page 10.
There is no Stock Exchange anticipated by us and we have therefore deleted any reference to same from the disclosure.
5
Use of Proceeds, page 11
15. Please revise to clarify how you intend to pay the remaining $2,500 to cover your fees, costs, and expenses of this offering.
We have noted this comment and have revised the disclosure on page 11.
We intend to pay the remaining estimated $2,500.00 to cover the fees, costs and expenses of this offering when due from a loan to be obtained from Ralph Montrone.
16. You refer to an "investment agreement" with the selling security holder. Please file this agreement as an exhibit to the registration statement and include a description of the material terms of the agreement in the prospectus.
We have noted this comment and have revised the disclosure on page 11.
We do not have an “investment agreement” with the selling security holder and have deleted any reference to same in the disclosure.
Plan of Distribution. page 12
17. Please clearly disclose on page 18 that there ca