LETTER
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Mail Stop 6010 May 18, 2006
Mr. Lars Brannvall
President
Coloured (US) Inc.
Suite 5.15, 130 Shaftesbury Avenue
London, England W1D 5EU
Re: Coloured (US) Inc.
Form SB-2 filed April 24, 2006
File No. 333-133505
Dear Mr. Brannvall:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. Please note that where we provide examples to illustrate what
we
mean by our comments, they are examples and not exhaustive lists.
If
our comments are applicable to portions of the filing that we have
not cited as examples, make the appropriate changes in accordance
with our comments.
2. In your response letter, please state our comment and then
explain
each change that has been made in response to a comment. In
addition, you should also reference each page number in which
disclosure has been revised in response to a comment so that we
can
easily place your revised disclosure in its proper context.
3. Please provide us proofs of all graphic, visual or photographic
information you will provide in the printed prospectus prior to
its
use, for example in a preliminary prospectus. Please note we may
have comments regarding this material.
4. Please include the signature of your Chief Accounting
Officer/Controller on the signature page of the filing.
5. Please update your financial information to comply with Item
310(g) of Regulation S-B.
Prospectus Summary, p. 1
6. Please disclose the name of the other party to the agency
agreement dated August 6, 2003 as well as the letter agreement
dated
September 20, 2004.
7. We note your reference to risk factors on page 3. Please
revise
the summary to include a more expansive discussion of risk factors
which briefly summarizes the key risks facing the company.
Risk Factors, p. 5
General
8. Please consider adding a risk factor relating to the potential
conflicts and/or corporate governance issues that may arise from
the
fact that Mr. Brannvall is both the sole executive officer and
sole
director of the company.
As we have limited operating history..., p. 5
9. Please disclose your accumulated deficit as of March 31, 2006.
If we are unable to obtain additional financing..., p. 5
10. You have indicated that you need to obtain additional funds to
continue operations within the month. As a month has passed since
the filing date, you should update this disclosure to include the
latest developments with regard to fundraising. In addition, if
you
have not yet raised funds but are still seeking them, you should
describe these efforts and disclose the likelihood and timeframe
for
raising additional funds as well as the amount of time these
additional funds, if any, will allow the company to continue
operations.
As we have yet to establish commercial sales..., p. 5
If we are unable to enter into arrangements with gateway
owners...,
p. 5
If we are unable to achieve commercial acceptance..., p. 6
Our business will suffer significant harm..., p. 6
11. These risk factors appear to overlap significantly with one
another. Please consider consolidating the risk factors or
revising
them to reduce redundancy. If you retain more than one risk
factor,
each risk factor should describe separate and distinct risks.
If we are unable to enter into arrangements..., p. 5
12. You describe the risks associated with the inability to enter
into licenses with gateway owners. However, you should include a
discussion of your attempts to enter into these arrangements in
the
past and any difficulties you have encountered in attempting to
secure such licenses. Furthermore, if you believe that there are
any
specific facts that would suggest that entering into these
arrangements may be difficult for the company, you should disclose
those facts in the risk factor.
13. Please consider expanding the risk factor to include the
possibility that you may be able to enter into arrangements with
gateway owners but that those arrangements still may not result in
fees for the company.
We have a history of losses..., p. 6
14. As noted in our prior comment, you should disclose accumulated
losses as of March 31, 2006. Also, include your losses for the
six
months ended March 31 rather than the three months ended December
31,
2005.
If our operating expenses..., p. 6
15. Please disclose your current average monthly expenses and any
specific facts or circumstances that would lead these expenses to
increase.
As there is a substantial doubt as to our ability..., p. 6
16. Please explain what a going concern opinion is so that
investors
can understand this risk factor in its proper context.
We operate in a highly competitive industry..., p. 6
17. Please expand your discussion of this risk factor to include a
discussion of your principal competitors in your industry. In
addition, for each competitor you list, you should describe the
specific competitive advantages possessed by that competitor,
rather
than referring to advantages generically.
As we contract out our software development..., p. 7
18. In your risk factor heading, you indicate that you are
currently
outsourcing your software development activity to SIA. However,
in
the body of the risk factor, you indicate that you "anticipate"
outsourcing these functions. Please clarify whether the
outsourcing
is currently occurring or will be occurring in the future.
19. In addition, if you currently have an agreement with SIA, you
should file it as an exhibit to the registration statement and
include a description of its material terms in the Business
section.
We have not paid dividends, p. 8
20. Please describe the risks associated with the failure to pay
dividends.
Selling stockholders, p. 11
21. Please disclose the names of the natural person(s) who have
voting and/or dispositive control over the shares held by The
Outlander Trust and CISA Holdings APS.
Security ownership of certain beneficial owners and management, p.
17
22. We note your disclosure in Footnote 2 of the table. Please
name
the natural persons who beneficially own the shares held by Colour
Industry, Inc., The Coloured Industry and The Mobile Warrior.
Business, p. 22
Overview, p. 22
23. We note your statement that your games are "easy to learn" and
"fun." Descriptions of this type are subjective and are not
appropriate for the registration statement. Please eliminate all
such descriptions and limit your disclosure to the observable
facts
regarding your company and its products.
Certain relationships and related transactions, p. 41
24. With regard to Debondo Capital and Azuracle Ltd., in each case
you should disclose the director that is common between the entity
and Outlander Management.
Note 2. Significant Accounting Policies
Revenue Recognition, page F-28
25. Clarify when revenue derived from the sale of services is
initially recorded as deferred revenue (e.g is an upfront total
contract payment required).
26. Tell us your accounting basis for recognizing revenue from
fixed
price, long-term service or development contracts over the
contract
term based on the percentage of services that are provided during
the
period compared with the total estimated services to be provided
over
the entire contract. Refer to the accounting literature you are
relying upon for your accounting treatment.
Note 3. Rights and Technology, page F-33
27. Please clarify what you mean by "option agreement" related to
your software license and your basis for the accounting for an
option
agreement. Disclose the terms of the agreement.
28. We noted that you acquired the software license on May 25,
2004
but did not incur amortization expense in the fiscal year ended
September 30, 2004. Please clarify your accounting treatment.
Pro Forma Consolidated Statements of Operations, page F-52
29. Please remove the Pro Forma information since it is not
relevant
in a recapitalization.
As appropriate, please amend your filing in response to
these
comments. You may wish to provide us with marked copies of the
amendment to expedite our review. Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested supplemental information. Detailed cover letters
greatly facilitate our review. Please file your cover letter on
EDGAR under the form type label CORRESP. Please understand that we
may have additional comments after reviewing your amendment and
responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any
proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Sasha Parikh at (202) 551-3627 if you have
questions regarding comments on the financial statements and
related
matters. Please contact Zafar Hasan at (202) 551-3653 or me at
(202)
551-3715 with any other questions.
Sincerely,
Jeffrey Riedler
Assistant Director
cc: Michael Taylor
Lang Michener
1500 Royal Centre
1055 West Georgia Street
Vancouver, British Columbia V6E 4N7
Fax: (604) 685-7084