SEC Company Response from Citius Pharmaceuticals, Inc. (CTXR) (CIK 0001506251) (CTXR) — Mar 16, 2011
Citius Pharmaceuticals, Inc. (CTXR) (CIK 0001506251)
Date: March 16, 2011 · CIK: 0001506251 · Accession: 0001019687-11-000890
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-170781
Referenced dates: February 03, 2011
Letter
trailone_corresp.htm
TRAIL ONE, INC.
1844 South West
Salt Lake City, UT 84104
March 16, 2011
Via EDGAR
United States Securities and Exchange Commission
Washington D.C. 20549
Re:
TRAIL ONE, INC.
Amendment No. 2 to Registration Statement on Form S-1
Filed on March 16, 2011
File No. 333-170781
Attention: Tonya Bryan of Julie F. Rizzo
To Whom It May Concern:
In response to your letter dated February 03, 2011, TRAIL ONE, INC., wishes to address the following comments.
General Overview
In the company’s form S-1filed on March 16, 2011 as amended, the company has corrected the spelling of its name throughout the documents. The company’s legal name is Trail One, Inc. as stated in the articles of incorporation filed with the Secretary of State in Nevada on September 9, 2011. The company mistakenly spelled the name without a space between Trail and One in its filings on November 23, 2010 and January 21, 2011.
Prospectus Summary, page 1
General Introduction, page 1
1.
Please revise your disclosure to explain how you intend to market to the wholesale market when your product appears to be “made to order to each specific customer’s wants and desires with an individualized custom look.” Please also advise how you intend to market to the wholesale market when you will not produce any license plate tags until you have sold the product to an end user.
We have noted this comment and have revised the disclosure on page 5 and through out.
Each tag will be a special order by the end user. The end user will be able to order the tag directly from Trail One or by placing a specialty order with a wholesaler. At this time Trail One does not have any wholesalers marketing the product.
2.
We note your response to our prior comment six and reissue our comment in part. Please revise to indicate the amount of time that your present capital will last at this rate here and on pages 15, 20 and 21. In addition, please clarify whether you are providing a monthly burn rate. In this regard we note your disclosure that “[t]his includes a three month burn.” Also revise for consistency your disclosure on page 15 and pages 20 and 21 where you state that your monthly burn rate is $1,000.00 and $4,000.00, respectively.
We have noted this comment and have revised the disclosure on page 12 and throughout.
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. This amount will last the company six months. 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. This amount will last the company twelve months. 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. This amount will last the company twelve months.
3.
We note your response to our prior comment seven and reissue our comment in part. Please clarify whether you are currently developing the product or marketing the product. If you have not developed the product yet, please explain how you are marketing it. Please also advise as to your plans to obtain the materials such as the minerals and gems that you will use on the license plate tags.
We have noted this comment and revised the disclosure on page 5 and throughout.
Trail One, Inc. is presently marketing 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 Trail One has incurred losses to September 30, 2010.
Business Development, page 1
4.
Please provide consistent disclosure regarding your marketing efforts. In this regard, we note your disclosure on page 2 that you have “commenced the marketing of one license plate tag[s] for sale to the general public” and that you are not “offering the product to anyone at this time.”
We have noted this comment and revised the disclosure throughout.
Subsequent Sales Strategy, page 8
5.
We note your response to our prior comment eight. Please revise the first paragraph of this section to remove all marketing language. We note, for example, “our product offers a very high rate of exclusivity,” “high end automobile enthusiast,” “high end retailers,” “high end catalog companies that cater specifically to the elite/rich & famous clientele,” “our product to be distinguished, exclusive and refined” and “[o]ur product is intended to add the ultimate in personalized “Bling” to any automobile.”
We have noted this disclosure and have revised the disclosure on page 8.
The company is also presently marketing the aluminum 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 professional athletes Movie and Music entertainers, 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 do not have any agreements with these advertisers at this time. We also intend to market our product through our website: www.Trail Onecnc.com which is currently under development/construction. It is our intention to also retail through high end retailers and automobile specialty shops 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. Trail One, 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.
Please revise to delete references to NFL, NBA, MLB, NHL, NASCAR, NHRA, FIA (Formula One) and various car manufacturers, such as Porsche, Bentley and others, on pages 1, 15, and 24.
We have noted this comment and have revised the disclosure see comment number 5 above.
7.
Please advise whether you have any agreements in place to advertise with companies discussed in this section. If so, please file these agreements as exhibits to your registration statement. If not, please remove references to specific companies.
We have noted this comment and have revised the disclosure see comment number 5 above.
Risk Factors, page 5
If We Do not Obtain Additional Financing, page 5
8.
We note your response to our prior comment 12. However, please provide the total amount of financing you will require and clarify whether you have provided annual cost estimates here and on page 8. In this regard, we note your disclosure on page 15 that the development of relationships with strategic business partners alone will cost $10,000. Additionally, please revise to clarify whether you have any agreement in place with Mr. Montrone to provide this financing.
We have noted this comment and have revised the disclosure on pages 5
WE REQUIRE ADDITIONAL CAPITAL WHICH WE MAY BE UNABLE TO RAISE WHICH MAY CAUSE US TO STOP OR CUT BACK OUR OPERATIONS.
Through December 31, 2011 we have spent approximately $18,000 dollars. Our currently estimated annual expenses are approximately $95,000. We anticipate that we will need approximately $95,000 to complete all necessary stages in order to market our one license plate tag in the United States.
Obtaining additional financing will be subject to a number of factors, including Trail One’s lack of revenue. These factors may have an effect on the timing, amount, terms or conditions of additional financing and make such additional financing unavailable to us. See “Description of Business.”
No assurance can be given that Trail One will obtain access to capital markets in the future or that adequate financing to satisfy the cash requirements of implementing our business strategies will be available on acceptable terms. The inability of Trail One to gain access to capital markets or obtain acceptable financing will have a material adverse effect upon the results of its operations and its financial conditions. The proceeds from the sale of the securities offered in this registration statement will go directly to the selling security holder and not to Trail One. As such, this offering might negatively affect Trail One’s ability to raise needed funds through a primary offering of Trail One’s securities in the future
Due to the fact we are small and do not have much capital, we must limit our marketing activities to a relatively small number of potential customers having the likelihood of purchasing our product. We intend to generate revenue through the sale of our one product. Because we will be limiting the scope of our marketing activities, we may not be able to generate timely or sufficient sales to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations. The company’s financing requirements for next twelve month are the following.
·
$35,000 toward marketing materials which include filers, broachers, direct marketing DVD’s and mailing costs.
·
$10,000. towards direct sales and direct mail (automobile industry)
·
regulatory processes,
·
$10,000 Software and hardware to develop an internet site
·
$25,000 Program administration and working capital
·
$10,000 Costs and expenses associated with public company reporting requirements
·
$5,000 expenses associated with newly applicable corporate governance requirements
Our future capital requirements depend on many factors, including the following:
·
the progress of our direct sales,
·
the progress of marketing to the end users,
·
The progress in getting our web site completed and operational.
Although we have from time to time reviewed opportunities provided to us by investment bankers or potential investors in regard to additional equity financings, there can be no assurance that additional financing will be available when needed, or if available, will be available on acceptable terms. Insufficient funds may prevent us from implementing our business strategy and will require us to further delay, scale back or eliminate our marketing program, or to scale back or eliminate our other operations.
In order to obtain working capital we will continue to:
·
seek capital through debt or equity financing which may include the issuance of convertible debentures or convertible preferred stock whose rights and preferences are superior to those of the common stockholders, and
·
attempt to negotiate the best transactions possible taking into account the impact on our shareholders, dilution, loss of voting power and the possibility of a change-in-control.
Nonetheless, in order to satisfy our working capital needs, it may become necessary to issue convertible securities without a floor on the conversion price.
In the event that we issue convertible preferred stock or convertible debentures without a limit on the number of shares that can be issued upon conversion and if the price of our common stock decreases:
·
the percentage of shares outstanding that will be held by these holders upon conversion will increase accordingly,
·
the lower the market price the greater the number of shares to be issued to these holders upon conversion, thus increasing the potential profits to the holder when the price per share later increases and the holder sells the common shares,
·
the preferred stockholders' potential for increased share issuance and profit, including profits derived from short sales of our common stock, in addition to a stock overhang of an indeterminable amount, may depress the price of our common stock,
·
in the event of our voluntary or involuntary liquidation while the preferred stock are outstanding, the holders of those securities will be entitled to a preference in distribution of our property.
It is anticipated that the $95,000 financing amount will be obtained by a loan from Ralph Montrone. At this time we do not have a any agreement in place with Mr. Montrone for an additional loan. 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. It is also estimated that the amount of additional costs and expenses associated with newly applicable corporate governance requirements will be approximately $5,000.
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.
Special Note Regarding Forward-Looking Statements, page 10
9.
We note your response to our prior comment 14 and reissue our comment. 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 disclosure and have revised the disclosure on page 10
The information contained in this report, including in the documents incorporated by reference into this report, includes some statement that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our and their management's expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition and results of operations. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Use of Proceeds, page 11
10.
We note your response to our prior comment and reissue your comment. Please revise to clarify how you intend to pay the remaining $2,500 to cover your fees, costs, and expenses of this offering.
We ha
Show Raw Text
CORRESP
1
filename1.htm
trailone_corresp.htm
TRAIL ONE, INC.
1844 South West
Salt Lake City, UT 84104
March 16, 2011
Via EDGAR
United States Securities and Exchange Commission
Washington D.C. 20549
Re:
TRAIL ONE, INC.
Amendment No. 2 to Registration Statement on Form S-1
Filed on March 16, 2011
File No. 333-170781
Attention: Tonya Bryan of Julie F. Rizzo
To Whom It May Concern:
In response to your letter dated February 03, 2011, TRAIL ONE, INC., wishes to address the following comments.
General Overview
In the company’s form S-1filed on March 16, 2011 as amended, the company has corrected the spelling of its name throughout the documents. The company’s legal name is Trail One, Inc. as stated in the articles of incorporation filed with the Secretary of State in Nevada on September 9, 2011. The company mistakenly spelled the name without a space between Trail and One in its filings on November 23, 2010 and January 21, 2011.
Prospectus Summary, page 1
General Introduction, page 1
1.
Please revise your disclosure to explain how you intend to market to the wholesale market when your product appears to be “made to order to each specific customer’s wants and desires with an individualized custom look.” Please also advise how you intend to market to the wholesale market when you will not produce any license plate tags until you have sold the product to an end user.
We have noted this comment and have revised the disclosure on page 5 and through out.
Each tag will be a special order by the end user. The end user will be able to order the tag directly from Trail One or by placing a specialty order with a wholesaler. At this time Trail One does not have any wholesalers marketing the product.
1
2.
We note your response to our prior comment six and reissue our comment in part. Please revise to indicate the amount of time that your present capital will last at this rate here and on pages 15, 20 and 21. In addition, please clarify whether you are providing a monthly burn rate. In this regard we note your disclosure that “[t]his includes a three month burn.” Also revise for consistency your disclosure on page 15 and pages 20 and 21 where you state that your monthly burn rate is $1,000.00 and $4,000.00, respectively.
We have noted this comment and have revised the disclosure on page 12 and throughout.
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. This amount will last the company six months. 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. This amount will last the company twelve months. 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. This amount will last the company twelve months.
3.
We note your response to our prior comment seven and reissue our comment in part. Please clarify whether you are currently developing the product or marketing the product. If you have not developed the product yet, please explain how you are marketing it. Please also advise as to your plans to obtain the materials such as the minerals and gems that you will use on the license plate tags.
We have noted this comment and revised the disclosure on page 5 and throughout.
Trail One, Inc. is presently marketing 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 Trail One has incurred losses to September 30, 2010.
Business Development, page 1
4.
Please provide consistent disclosure regarding your marketing efforts. In this regard, we note your disclosure on page 2 that you have “commenced the marketing of one license plate tag[s] for sale to the general public” and that you are not “offering the product to anyone at this time.”
We have noted this comment and revised the disclosure throughout.
2
Subsequent Sales Strategy, page 8
5.
We note your response to our prior comment eight. Please revise the first paragraph of this section to remove all marketing language. We note, for example, “our product offers a very high rate of exclusivity,” “high end automobile enthusiast,” “high end retailers,” “high end catalog companies that cater specifically to the elite/rich & famous clientele,” “our product to be distinguished, exclusive and refined” and “[o]ur product is intended to add the ultimate in personalized “Bling” to any automobile.”
We have noted this disclosure and have revised the disclosure on page 8.
The company is also presently marketing the aluminum 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 professional athletes Movie and Music entertainers, 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 do not have any agreements with these advertisers at this time. We also intend to market our product through our website: www.Trail Onecnc.com which is currently under development/construction. It is our intention to also retail through high end retailers and automobile specialty shops 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. Trail One, 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.
6
Please revise to delete references to NFL, NBA, MLB, NHL, NASCAR, NHRA, FIA (Formula One) and various car manufacturers, such as Porsche, Bentley and others, on pages 1, 15, and 24.
We have noted this comment and have revised the disclosure see comment number 5 above.
7.
Please advise whether you have any agreements in place to advertise with companies discussed in this section. If so, please file these agreements as exhibits to your registration statement. If not, please remove references to specific companies.
We have noted this comment and have revised the disclosure see comment number 5 above.
Risk Factors, page 5
If We Do not Obtain Additional Financing, page 5
8.
We note your response to our prior comment 12. However, please provide the total amount of financing you will require and clarify whether you have provided annual cost estimates here and on page 8. In this regard, we note your disclosure on page 15 that the development of relationships with strategic business partners alone will cost $10,000. Additionally, please revise to clarify whether you have any agreement in place with Mr. Montrone to provide this financing.
We have noted this comment and have revised the disclosure on pages 5
WE REQUIRE ADDITIONAL CAPITAL WHICH WE MAY BE UNABLE TO RAISE WHICH MAY CAUSE US TO STOP OR CUT BACK OUR OPERATIONS.
Through December 31, 2011 we have spent approximately $18,000 dollars. Our currently estimated annual expenses are approximately $95,000. We anticipate that we will need approximately $95,000 to complete all necessary stages in order to market our one license plate tag in the United States.
Obtaining additional financing will be subject to a number of factors, including Trail One’s lack of revenue. These factors may have an effect on the timing, amount, terms or conditions of additional financing and make such additional financing unavailable to us. See “Description of Business.”
3
No assurance can be given that Trail One will obtain access to capital markets in the future or that adequate financing to satisfy the cash requirements of implementing our business strategies will be available on acceptable terms. The inability of Trail One to gain access to capital markets or obtain acceptable financing will have a material adverse effect upon the results of its operations and its financial conditions. The proceeds from the sale of the securities offered in this registration statement will go directly to the selling security holder and not to Trail One. As such, this offering might negatively affect Trail One’s ability to raise needed funds through a primary offering of Trail One’s securities in the future
Due to the fact we are small and do not have much capital, we must limit our marketing activities to a relatively small number of potential customers having the likelihood of purchasing our product. We intend to generate revenue through the sale of our one product. Because we will be limiting the scope of our marketing activities, we may not be able to generate timely or sufficient sales to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations. The company’s financing requirements for next twelve month are the following.
·
$35,000 toward marketing materials which include filers, broachers, direct marketing DVD’s and mailing costs.
·
$10,000. towards direct sales and direct mail (automobile industry)
·
regulatory processes,
·
$10,000 Software and hardware to develop an internet site
·
$25,000 Program administration and working capital
·
$10,000 Costs and expenses associated with public company reporting requirements
·
$5,000 expenses associated with newly applicable corporate governance requirements
Our future capital requirements depend on many factors, including the following:
·
the progress of our direct sales,
·
the progress of marketing to the end users,
·
The progress in getting our web site completed and operational.
Although we have from time to time reviewed opportunities provided to us by investment bankers or potential investors in regard to additional equity financings, there can be no assurance that additional financing will be available when needed, or if available, will be available on acceptable terms. Insufficient funds may prevent us from implementing our business strategy and will require us to further delay, scale back or eliminate our marketing program, or to scale back or eliminate our other operations.
In order to obtain working capital we will continue to:
·
seek capital through debt or equity financing which may include the issuance of convertible debentures or convertible preferred stock whose rights and preferences are superior to those of the common stockholders, and
·
attempt to negotiate the best transactions possible taking into account the impact on our shareholders, dilution, loss of voting power and the possibility of a change-in-control.
Nonetheless, in order to satisfy our working capital needs, it may become necessary to issue convertible securities without a floor on the conversion price.
In the event that we issue convertible preferred stock or convertible debentures without a limit on the number of shares that can be issued upon conversion and if the price of our common stock decreases:
·
the percentage of shares outstanding that will be held by these holders upon conversion will increase accordingly,
·
the lower the market price the greater the number of shares to be issued to these holders upon conversion, thus increasing the potential profits to the holder when the price per share later increases and the holder sells the common shares,
·
the preferred stockholders' potential for increased share issuance and profit, including profits derived from short sales of our common stock, in addition to a stock overhang of an indeterminable amount, may depress the price of our common stock,
·
in the event of our voluntary or involuntary liquidation while the preferred stock are outstanding, the holders of those securities will be entitled to a preference in distribution of our property.
It is anticipated that the $95,000 financing amount will be obtained by a loan from Ralph Montrone. At this time we do not have a any agreement in place with Mr. Montrone for an additional loan. 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. It is also estimated that the amount of additional costs and expenses associated with newly applicable corporate governance requirements will be approximately $5,000.
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
Special Note Regarding Forward-Looking Statements, page 10
9.
We note your response to our prior comment 14 and reissue our comment. 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 disclosure and have revised the disclosure on page 10
The information contained in this report, including in the documents incorporated by reference into this report, includes some statement that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our and their management's expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition and results of operations. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Use of Proceeds, page 11
10.
We note your response to our prior comment and reissue your comment. Please revise to clarify how you intend to pay the remaining $2,500 to cover your fees, costs, and expenses of this offering.
We ha