SEC Company Response from STARSTREAM ENTERTAINMENT, INC. (CIK 0001561686) — Jun 24, 2020
STARSTREAM ENTERTAINMENT, INC. (CIK 0001561686)
Date: June 24, 2020 · CIK: 0001561686 · Accession: 0001683168-20-002050
AI Filing Summary & Sentiment
File numbers found in text: 024-11197
Referenced dates: June 18, 2020
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CORRESP
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Suares
& Associates
Attorneys
at Law
833
Flatbush Avenue
Suite
100
Brooklyn,
New York 11226
dsuares@suaresassociates.com
Tel: 718-622-8450
Fax: 718-282-3113
June 24, 2020
Daniel Morris,
Esq.
Staff Attorney
Division of Corporation
Finance
Office of Trade
& Services
United States
Securities and Exchange Commission
Washington, DC
20549
Re:
Starstream Entertainment, Inc.
Offering Statement on Form 1-A Filed April 16, 2020
File No. 024-11197
Dear Mr. Morris,
On behalf of Starstream
Entertainment, Inc. (the “Company”), we respond as follows to the Staff’s comment letter, dated June 18, 2020,
relating to the above-captioned Offering Statement on Form 1-A (“Offering Statement”). Captions and page references
herein correspond to those set forth in the Offering Statement.
Please note that
for the Staff’s convenience, we have recited each of the Staff’s comments in italics and provided the Company’s
response to each comment immediately thereafter.
Amendment No. 2 to Form 1-A
Cover Page
1. It appears that you have revised your risk factor disclosure
at page 3 in response to our prior comment 1. Please also revise the cover page of the offering circular to disclose the voting
preference of the Series B preferred and the percentage of the vote that will be controlled by your management if all or some of
the shares are sold in the offering.
We have added the following to the
Cover Page:
Carla Rissell, the Company’s Chief
Executive Officer and sole member of the Company’s Board of Directors, is the owner of all of the outstanding shares of the
Company’s Series B Preferred Stock. Series B Preferred shareholders have voting rights equal to four times the sum of: i)
the total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of
votes Preferred Series A holders are entitled. Thus, Ms. Rissell possesses significant influence and can elect a majority of our
Board of Directors and authorize or prevent proposed significant corporate transactions. Ms. Rissell’s ownership and control
of Series B Preferred Stock gives her the control of 80% of the Company’s voting shares regardless of the number of shares
sold pursuant to this Offering.
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The Current Coronavirus Pandemic, page 5
2. We note your discussion of the general impact of COVID-19
on the global supply chain, market, and economies. Please also include management’s outlook for the near future and whether
you expect the pandemic to have a material impact on your revenues in your current or future financial periods. If the pandemic
required you to close your operations, please disclose that information and when you reopened, or expect to reopen, your operations.
We have added the following to the Page 5 and Management’s
Analysis of Financial Condition and Results of Operations:
The COVID-19 pandemic did not require the closure of Company
operations. The Company suspended onsite events in late March 2020, and began limited onsite events in May 2020. During the timeframe
in which onsite events were suspended, Company management reallocated resources to the collection of outstanding receivables, client
development and future event staff planning and events.
Management does expect a material downturn in revenues during
Q1 and Q2 2020, due to the suspension of onsite events. Management’s outlook for the near-term business operations will mirror
the overall continued reopening of business operations within the state of Florida, as a whole. For the Company to return to pre-COVID-19
levels of operation, it will be necessary businesses across the state of Florida to be allowed to return to full operations and
capacities.
We are classified as a "smaller reporting company",
page 10
3. Please revise your disclosure to describe your ongoing
filing requirements after qualification under Regulation A. Also, please revise your risk factor to clarify that the company suspended
its reporting obligations on October 6, 2014 and therefore is not currently a reporting company.
We have deleted the risk factor referencing
the Company as a “smaller reporting company”. We have added the following to Risk Factors, page 5:
The reduced disclosure requirements applicable to our
Company may make our shares less attractive to investors.
On October 6, 2014, the Company suspended its reporting obligation
pursuant to Rule 15d-6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As an issuer utilizing
Regulation A of the Securities Act of 1933, as amended (the “Securities Act”), we will be subject to an ongoing reporting
regime that will require us, in addition to annual reports and summary information about a recently completed offering, to file
semiannual reports, current event reports, and, when eligible and electing to do so, notice to the SEC of the suspension of ongoing
reporting obligations. However, we will not be subject to the reporting requirements of the Exchange Act and will not be required
to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with respect to our business
and financial condition, unless we elect to become subject to the Exchange Act. At this time we do not intend to elect to become
subject to the Exchange Act. The reporting obligations for issuers utilizing Regulation A of the Securities Act is new, and potential
investors may not view such reports as sufficient for their investment purposes or such reports may otherwise cause potential investors
to not be interested in investing in our shares, each of which could have a negative effect on the price of our shares and our
investors’ ability to sell their shares.
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Use of Proceeds, page 18
4. We note your response to prior comment
4 and re-issue in part. Please address how your operations may be limited if you are not able to sell all of the shares offered.
In this regard, consider if, and how long, the timeline to achieve your immediate objectives will be altered or extended if you
do not receive full offering proceeds. Additionally, we note that your tables on page 19 do not specify the amount to be devoted
to working capital. Please advise or revise to clarify.
We have added the following to the Use of Proceeds section:
The Company’s current operations will not be limited if
all of the share offered are not sold. The Company has the ability to continue to operate without any shares from the offering
being sold. Proceeds from the offering will enable the company to expand operations and revenues to grow at a rate commensurate
with the amount of shares from the offering being sold. Our immediate goals for growth will be very limited until such time as
at least 25% of the offering is sold. As the Company reaches 25% of the offering sold, the Company will be able to acquire additional
technology, assets and hire additional administrative and professional staff in order to achieve our objectives for growth.
Exhibits
5. We
are unable to locate your response to prior comment 5; therefore we re-issue our prior comment on the exclusive forum and jury
trial waiver provisions contained in your subscription agreement.
We have removed all references to the “jury trial”
and “exclusive forum” provisions in our Subscription Agreement. Those provisions no longer are applicable. I am submitting
a new and revised Subscription Agreement.
Please contact me with any questions or comments on the enclosed.
Thank you.
Sincerely,
/s/ Donnell Suares
Donnell Suares
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