SEC Company Response from NGAS Resources Inc (CIK 0000746834) — Jul 6, 2005
NGAS Resources Inc (CIK 0000746834)
Date: July 6, 2005 · CIK: 0000746834 · Accession: 0000950152-05-005784
AI Filing Summary & Sentiment
Letter
NGAS Resources, Inc. Correspondence
Stahl & Zelmanovitz
767 Third Avenue — 14th Floor
New York, New York 10017
Email: StahlNYC@AOL.com
Phone: (212) 826-6435
Fax: (212) 826-6402
July 6, 2005
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549-0405
Attention: H. Roger Schwall,
Assistant Director
Re: NGAS Resources, Inc. – Proposed 10-KSB/A, File No. 0-12185
Ladies and Gentlemen:
This correspondence is provided on behalf of NGAS Resources, Inc. (the “Company”) to correct two typographical errors in our correspondence dated July 5, 2005 (the “Second Response”) in response to the staff’s comment letters dated April 22 and June 21, 2005 on the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2004.
The first sentence in the introductory paragraph to item 1(b) and the operating section of the cash flow statements on page 2 of the Second Response are corrected to read as follows, marked to show the corrections:
As noted in the roll-forward to be added to Note 10 to the consolidated financial statements for common shares to be issued in response to comment 7 of the Initial Comment Letter, the common shares to be issued at December 31, 2003 in connection with a contract settlement were reduced by 3,556 shares to reflect the payment of the settlement in cash in the amount of $17,780 during 2004 in lieu of common shares.
Year Ended December 31,
OPERATING ACTIVITIES Net income
$ 1,611,701
$ 3,660,140
$ 634,950
Adjustments to reconcile net income to net cash provided by operating activities:
Incentive bonus paid in common shares
674,905
364,680
130,020
Options, warrants and deferred compensation
743,096
742,800
—
Contract settlement paid in common shares
(17,780 )
(293,074 )
—
Depreciation, depletion and amortization
1,886,965
911,089
652,069
Write-down of investments
63,627
—
—
Write-off of deferred financing costs
—
29,786
—
Notes issued in kind for interest on long term debt
74,036
104,888
—
Gain on sale of assets
(1,542,607 )
(2,695 )
(4,361 )
Future income taxes
1,795,785
257,647
—
Changes in assets and liabilities:
Accounts receivable
(1,778,538 )
(175,142 )
95,324
Prepaid expenses and other current assets
(1,378,759 )
(329,752 )
(258,648 )
Accounts payable
2,117,643
514,788
374,018
Accrued liabilities
672,531
1,804,651
418,959
Income taxes payable
(144,450 )
144,450
—
Customers’ drilling deposits
2,489,401
3,398,400
3,909,500
Net cash provided by operating activities
7,267,556
11,718,804
5,951,831
* * *
Securities and Exchange Commission
Division of Corporation Finance
July 6, 2005
Page 2
The balance of the Second Response is unmodified. If the revised disclosure proposed on behalf of the Company in my response letters dated May 6 and July 5, 2005 is acceptable, with the foregoing corrections, the Company will promptly file the proposed 10-KSB/A, with conforming disclosure in all of its future periodic reports under the Exchange Act. We appreciate your consideration of our responses and look forward to receiving any further comments as promptly as practicable.
Yours very truly,
/s/ Douglas Stahl
cc: NGAS Resources, Inc.
Kraft, Berger, Grill, Schwartz, Cohen & March LLP
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CORRESP
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filename1.htm
NGAS Resources, Inc. Correspondence
Stahl & Zelmanovitz
767 Third Avenue — 14th Floor
New York, New York 10017
Email: StahlNYC@AOL.com
Phone: (212) 826-6435
Fax: (212) 826-6402
July 6, 2005
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549-0405
Attention: H. Roger
Schwall,
Assistant Director
Re: NGAS Resources, Inc.
– Proposed 10-KSB/A, File No. 0-12185
Ladies and Gentlemen:
This correspondence is provided on behalf of NGAS Resources, Inc. (the “Company”) to
correct two typographical errors in our correspondence dated July 5, 2005 (the “Second Response”)
in response to the staff’s comment letters dated April 22 and June 21, 2005 on the Company’s Annual
Report on Form 10-KSB for the year ended December 31, 2004.
The first sentence in the introductory paragraph to item 1(b) and the operating section of the
cash flow statements on page 2 of the Second Response are corrected to read as follows, marked to
show the corrections:
As noted in the roll-forward to be added to Note 10 to the consolidated
financial statements for common shares to be issued in response to comment 7 of the
Initial Comment Letter, the common shares to be issued at December 31, 2003 in
connection with a contract settlement were reduced by 3,556 shares to reflect the
payment of the settlement in cash in the amount of $17,780 during 2004 in lieu of
common shares.
Year Ended December 31,
2004
2003
2002
OPERATING ACTIVITIES
Net income
$
1,611,701
$
3,660,140
$
634,950
Adjustments to reconcile net income to
net cash provided by operating activities:
Incentive bonus paid in common shares
674,905
364,680
130,020
Options, warrants and deferred compensation
743,096
742,800
—
Contract settlement paid in common shares
(17,780
)
(293,074
)
—
Depreciation, depletion and amortization
1,886,965
911,089
652,069
Write-down of investments
63,627
—
—
Write-off of deferred financing costs
—
29,786
—
Notes issued in kind for interest on long term debt
74,036
104,888
—
Gain on sale of assets
(1,542,607
)
(2,695
)
(4,361
)
Future income taxes
1,795,785
257,647
—
Changes in assets and liabilities:
Accounts receivable
(1,778,538
)
(175,142
)
95,324
Prepaid expenses and other current assets
(1,378,759
)
(329,752
)
(258,648
)
Accounts payable
2,117,643
514,788
374,018
Accrued liabilities
672,531
1,804,651
418,959
Income taxes payable
(144,450
)
144,450
—
Customers’ drilling deposits
2,489,401
3,398,400
3,909,500
Net cash provided by operating activities
7,267,556
11,718,804
5,951,831
* * *
Securities and Exchange
Commission
Division of Corporation Finance
July 6, 2005
Page 2
The balance of the Second Response is unmodified. If the revised disclosure proposed on
behalf of the Company in my response letters dated May 6 and July 5, 2005 is acceptable, with the
foregoing corrections, the Company will promptly file the proposed 10-KSB/A, with conforming
disclosure in all of its future periodic reports under the Exchange Act. We appreciate your
consideration of our responses and look forward to receiving any further comments as promptly as
practicable.
Yours very truly,
/s/ Douglas Stahl
cc: NGAS Resources, Inc.
Kraft, Berger, Grill, Schwartz, Cohen & March LLP