SEC Company Response from Livento Group, (LIVG) — Mar 4, 2015
Livento Group, Inc.
Date: March 4, 2015 · CIK: 0001593549 · Accession: 0001615774-15-000398
AI Filing Summary & Sentiment
File numbers found in text: 333-192997
Referenced dates: February 2, 2015
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CORRESP
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March 4, 2015
NuGene International, Inc.
720 Paularino Drive
Costa Mesa, CA 92626
Division of Corporation Finance
U.S. Securities & Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Attn: Pamela Long, Assistant Director
Re: Bling Marketing, Inc.
Form 8-K
Filed January 6, 2015
File No. 333-192997
Dear Ms. Long:
By letter dated February
2, 2015, the staff of the Securities and Exchange Commission (the “Staff”) provided this company, NuGene International,
Inc. (formerly known as Bling Marketing, Inc.) (“NuGene” or the “Company”), with comments to our Form 8-K
filed January 6, 2015. This letter contains the responses of NuGene to the Staff’s comments and we have filed simultaneously
Amendment No. 1 to the Form 8-K (“Amendment”) and have attached a marked copy of such Amendment indicating the changes
that the Company has made to the Form 8-K.
The numbered paragraphs
below correspond to the paragraphs in which the comments were made. For your convenience, we have included above our response a
copy of the comment to which we are responding.
General
1. We note disclosure on page 3 that you entered the Agreement and Plan of Merger on December 26, 2014 and closed on the transaction
on December 29, 2014, but you did not file the Form 8-K relating to this transaction until January 6, 2015. In future filings,
please file or furnish a Form 8-K within four business days after the occurrence of the event pursuant to Form 8-K instructions.
Note that untimely filings such as this render you ineligible to use Form S-3 for a period of twelve months plus any portion of
a month immediately preceding the filing of a registration statement.
Response
We acknowledge the filing made on January 6, 2015
in the context of the hectic Christmas and New Year's holidays. NuGene is mindful that it is to file or furnish a Form 8-K within
four business days after the occurrence of the event pursuant to Form 8-K instructions.
2. Under an appropriate subheading, please describe any related party transactions that are required to be disclosed under
Item 404 of Regulation S-K. Note that the threshold for disclosure is the lesser of $120,000 or one percent of the average of NuGene’s
total assets at year end for the last two completed fiscal years.
Response
Please see the
additional “Related Party Transactions” disclosure included in Item 8.01 Other Events, of the Amendment.
Item 1.01 Entry Into a Material Definitive Agreement,
page 3
3. We note disclosure that each recipient of the stock dividend will receive 14.04 additional shares of common stock for every
share of common stock held. However, section 2.1(c) of the Agreement and Plan of Merger filed as Exhibit 2.1 assumes that the company
has given effect to a 15.04 to 1 stock dividend in setting the conversion ratio for the merger. Please revise to reconcile these
inconsistencies.
Response
We do not
believe that the two descriptions are inconsistent. We effected a 15.04 to one split of the shares by implementing a stock dividend
that provided holders with 14.04 shares for each share they held. We have nevertheless given further attention to Item 1.01 in
our Amendment to reconcile the 15.04 to 1 forward stock split disclosure as requested by staff.
4. We note disclosure of the issuance of 1,917,720 shares of your series A Preferred stock. Please disclose here that the preferred
stock is convertible into common stock at a ratio of one to one, has the right to elect a majority of the board of directors and
has three votes for every vote available to the common stock.
Response
We have revised
paragraph 2 of Item 1.01 in our Amendment to disclose that the preferred stock is convertible into common stock at a ratio of one
to one, has the right to elect a majority of the board of directors and has three votes for every vote available to the common
stock.
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5. Please disclose that this is a reverse merger transaction. Also, please describe the terms of
the merger in this section, including the number of common and preferred shares issued as consideration to holders of both common
and preferred shares of NuGene International, Inc.
Response
We have revised
paragraph 2 of Item 1.01 in our Amendment to disclose that this is a reverse merger transaction. We believe that the terms of the
merger are adequately described, including the number of common and preferred shares issued by NuGene International Inc. (formerly
Bling Marketing Inc.) as consideration to holders of both common and preferred shares of NuGene, Inc.
The terms
of the merger are discussed beginning in paragraph 4 of Item 1.01. Further in regards to the Indemnity Agreement entered into with
Dena Kurland, we, as Bling Marketing Inc. paid Ms. Kurland $350,000 and delivered Bling's entire jewelry operations to her in exchange
for her (i) indemnity to us and (ii) surrender of 15,000,000 shares of Bling’s common stock. We have moved the disclosure
of the Indemnity Agreement to paragraph 3 in order to highlight the consideration given and provided additional disclosure further
to relate the terms of the merger agreement in Amendment.
Item 2.01 Completion of Acquisition of Disposition of
Assets, page 4
6. We note your summary of the Agreement and Plan of Merger on page 3. Please revise to provide information pursuant to Item
2.01(c) and (d) of Form 8-K including:
· The identity of the persons from whom the common shares of Bling Marketing, Inc. were acquired and the nature of any material
relationship between such persons and the registrant or any of its affiliates, or any director or officer of the registrant, or
any associate of any such director or officer;
· The nature and amount of consideration given or received for all of the issued and outstanding shares of Bling Marketing,
Inc. including the number of shares of Bling Marketing, Inc. you received, as well as, all of the consideration given for such
shares. In this regard, we note that Section 4.6 of the Agreement and Plan of Merger filed as Exhibit 2.1 contemplates a warrant
for the purchase of up to 500,000 shares of common stock at a price of $2.50 per share. Please clearly describe the identity of
the person or persons in possession of the warrant and the consideration given or received for such warrant; and
· The formula used to determine the amount of consideration.
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Response
Under the
Agreement and Plan of Merger, Bling Marketing Inc. (“Bling”) acquired NuGene Inc., a California corporation, in a reverse
triangular merger transaction which resulted in NuGene being the surviving entity. Following this merger Bling entered into a Business
Transfer and Indemnity Agreement by which Bling transferred Bling's jewelry business and operations to Dena Kurland, Bling's former
chief executive officer and director. This transaction with Dena Kurland is described above in response to staff's comment 5 of
this letter. Aside from the described prior relationships with Bling, no other relationships exist between Ms. Kurland and Bling,
nor with any of Bling's affiliates, or any director or officer of the registrant, or any associate of any such director or officer.
In consideration of staff's comment we have within the summary of the Agreement and Plan of Merger given attention to highlighting
the consideration given for the shares of the Company and have made further revisions regarding the terms of the merger agreement.
After giving effect to the stock split Bling delivered 26,052,760 shares of common stock to the shareholders of NuGene Inc. of
which 10,276,380 shares were issued to each of M. Ali Kharazmi and M. Saeed Kharazmi, who are brothers and the founders of NuGene
Inc. In addition, they were each the recipients of 958,860 shares of Series A Preferred Stock, totaling 1,917,720 shares or 100%
of the issued and outstanding shares of preferred stock. Generally the holders of the Series A Preferred Stock and the holders
of the common stock will vote together and not as a separate classes, with each share of Series A Preferred Stock having three
times the of votes equal to the number of shares of common stock into which the shares of Series A preferred Stock could have been
then converted. The balance of the shares of common stock were issued to other NuGene Inc. shareholders who were not affiliates
of NuGene, Inc. At the time of the merger, an outstanding warrant to acquire shares of NuGene Inc. was exchanged for the referenced
warrant of Bling Marketing Inc. The warrant on its issuance after giving effect to the stock split had a strike price of $2.50
per share, was not exercisable for 12 months (the "Initial Exercise Date"), and any shares acquired thereunder upon exercise
thereafter would be locked up and could not be sold for six months following the Initial Exercise Date. The warrant was issued
to an entity that is not directly nor indirectly an affiliate of either NuGene Inc. or of Bling.
7. Please revise to discuss whether the board and shareholders of Bling Marketing, Inc. approved the Share Exchange Agreement
and how approval was obtained.
Response
As noted,
the merger transaction was structured as a reverse triangular merger whereby a wholly owned subsidiary of Bling Marketing Inc.
("Merger Sub") merged with NuGene Inc. The Board of Bling voted to enter into and approve the merger transaction and,
as the sole shareholder of Merger Sub, Bling approved the Agreement and Plan of Merger. There was no Share Exchange Agreement.
Item 3.02 Unregistered Sales of Equity Securities, page
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8. Please revise your disclosure to provide the dates of sale of your securities sold, the consideration, and the terms of
conversion or exercise of your warrants and automatic conversion promissory notes pursuant to Item 3.02(a) of the Form 8-K Instructions
and Items 701(a), (c) and (e) of Regulation S-K.
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Response
As requested, we have included in our Amendment the
dates of sale of our securities sold, the consideration, and the terms of automatic conversion of convertible promissory notes
pursuant to Item 3.02(a) of the Form 8-K Instructions and Items 701(a), (c) and (e) of Regulation S-K.
Item 5.01 Changes in Control of Registrant, page 5
9. We note disclosure that eight prior shareholders will own approximately 66.47% of the outstanding common stock and that
two shareholders voting as a class are empowered to elect a majority of the board of directors. Please revise to disclose the identity
of the persons who acquired control, the basis of the control, including the percentage of “voting” securities of the
registrant now beneficially owned by the persons who acquired control and identify the person(s) from whom control was assumed.
See Items 5.01 (a)(1), (3) and (6) of the Form 8-K Instructions.
Response
Please see our response to Comment 6 above. M. Ali
Kharazmi and M. Saeed Kharazmi are the co-founders of NuGene Inc. and following the merger they are currently the sole directors
and principal shareholders of the registrant. M. Ali Kharazmi and M. Saeed Kharazmi own collectively 20,552,760 shares of common
stock and all 1,917,720 shares of Series A Preferred Stock outstanding, amounting in the aggregate to 52.43% of the common stock
outstanding and 100% of the Series A Preferred Stock outstanding. Of the remaining six shareholders, none beneficially owns as
much as 5% of the common stock of the registrant. Again as noted all securities acquired by the NuGene Inc shareholders as a result
of the merger were acquired directly from the registrant and the disclosures made in the Amendment are consistent with the
Instructions to Items 5.01 (a)(1), (3) and (6) of the Form 8-K.
Item 8.01 Other Events, page 6
Description of Business, page 6
History, page 6
10. Please disclose in this
section that Bling Marketing, Inc. was a shell company until you changed your status as disclosed in your Form 8-K filing on September
11, 2014.
Response
As requested, we have included in our Amendment that
Bling Marketing, Inc. was a shell company until our status was changed, based on sales and other operational activity occurring
in the Quarter ending June 30, 2014, as disclosed in our Form 8-K filing on September 11, 2014.
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The NuGene Industry and the Overall Market, page 7
NuGene History, page 7
11. We note the disclosure on page 28 in the risk factor “Because we have a limited operating history. . .”. Please
revise this section to clearly describe that you are an early stage company and your operations to date have been primarily focused
on your formation, the hiring of your management team, etc.
Response
We have included disclosure in the Amendment that
we are an early-stage company with a limited operating history and limited revenues derived from our operations. Our operations
to date have been primarily focused on our formation, the hiring of our management team, acquiring, licensing and developing our
technology and products, funding preclinical trials for a limited number of products, building our sales force and preparing for
and commencing the commercial launch of our products.
12. Please revise this section to clearly describe your current operations, versus your intended operations. We note disclosure
that during the first nine months of 2014 you “distributed” product nationally through medical offices and medical
spas. We also note disclosure on page 22 in the risk factor “We depend on wholesalers for the majority . . .” that
68% of your cosmeceutical revenues were from an affiliate and 32% from select wholesale distributor(s).
Response
We have revised this section to clarify that our
product distribution to medical offices and medical spas was through wholesale distributors that we are expecting to minimize our
revenues received from an affiliate and to better describe our current operations versus intended operations.
13. Please revise this section to clearly describe your customers. Please also clearly disclose the geographic area in which
you are selling your products.
Response
We have added a paragraph to this section in the
Amendment to include the items noted above.
License with Kathy Ireland Worldwide, Inc.
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14. Please disclose that you are required to submit a business plan for the review and approval by the licensor within 90 days
of the agreement and that if you have not launched products under this agreement by April 15, 2015, the licensor may terminate
the agreement. Please also clearly state whether you have products to market under this agreement, if so, please describe such
products, describe the status of the submission and approval of your business plan by the licensee and whether you intend to launch
products by April 15, 2015.
Response
We have revised our disclosure in the Amendment to
include the items noted above. We have completed packaging, jar and bottle designs, photo shoots and other promotional materials
and expect to launch our newly branded products during March 2015.
Overview
15. Please revise to provide a section on management’s discussion and analysis that is fully responsive to the requirements
of Item 303(A)(1)-(3) of Regulation S-K. For the liquidity discussion, at a minimum, you should: i) discuss the sources and amounts
of cash you will need to sustain operations for the next twelve months; ii) quantify the extent to which you are currently using
funds in your operations on a monthly basis; and iii) discuss your long-term liquidity needs as discussed in Section 501.03.a of
the Codification of Financial Reporting Policies.
Response
We have included in our Amendment a section on management’s
discussion and analysis that responds to the requirements of Item 303(A)(1)-(3). As disclosed, our operations for the years ended
December 31, 2013 and 2012 were minimal as we were still in the process of developing and refining our product offerings. Accordingly
our discussion and analysis of the results of operations and financ