SEC Company Response from AMERICAN SOUTHWEST HOLDINGS INC (CIK 0001001516) — Nov 4, 2005
AMERICAN SOUTHWEST HOLDINGS INC (CIK 0001001516)
Date: Nov. 4, 2005 · CIK: 0001001516 · Accession: 0001076542-05-000259
AI Filing Summary & Sentiment
File numbers found in text: 000-27947
Referenced dates: October 27, 2005
Letter
VIA EDGAR AND FEDERAL EXPRESS Securities and Exchange Commission Division of Corporation Finance Re: American Southwest Holdings, Inc. Form 10-KSB for the Year Ended December 31, 2004 File 000-27947
Dear Mr. Foti:
On behalf of American Southwest Holdings, Inc. (the “Company”), set forth below are the Company’s responses to the Staff’s comment letter dated October 27, 2005 with respect to the above referenced periodic reports of the Company. We have reproduced the Staff’s comment and have followed the comment with the Company’s response. References in this letter to “we,”“our” or “us” mean the Company or its advisors, as the context may require.
Form 10-KSB for the Fiscal Year Ended December 31, 2004
Item 7 - Financial Statements
Note 8 - Acquisition of Metal Sands Limited, page F-21
Comment
1.
We note your response to our prior comment #3. However, it appears the net liabilities received of $194,999 relate to amounts due for your prior cash advances to Metal Sands. Since the balance of the mineral rights was nominal and you received cash back from the acquisition, these net liabilities appear to represent the portion of cash advances from you that were used and expensed by Metal Sands. As a result, we believe these costs should receive similar treatment on your financial statements and should not be capitalized as part of the cost of your acquisition of mineral rights. In other words, we believe you should write off amounts lent to Metal Sands prior to the acquisition to the extent such amounts were expended by Metal Sands. Therefore, we reissue our prior comment #3. Based on the guidance in SAB 48, we believe you should record the mineral rights acquired at the transferor’s historical cost, which appears to be a nominal amount. However, we would not object if you record the approximately 33,000,000 shares issued at their par value of $.001 per share (i.e. approximately $33,000.)
Securities and Exchange Commission
Division of Corporation Finance
Re: American Southwest Holdings, Inc.
November 4, 2005
Page
Response
The financial statements have been revised to report a value of $33,100 for the 33,100,000 shares of common stock issued. See Appendix 1.
General
Correction of an Error
Comment
2.
Changes to your previously-issued financial statements for the year ended December 31, 2004 with respect to the acquisition of mining rights should be reported as the correction of an error pursuant to paragraphs 36-37 of APB Opinion 20 or, if early adopted, paragraphs 26-26 of SFAS 154.
Response
The company has applied SFAS 154 and the financial statements have been revised. See Appendix 1.
Accountants’ Reports
Comment
3.
Please include the report of Semple & Cooper in your amended filing, and ensure that such report includes an appropriate reference to the correction of an error as required by AU section 420.12.
Response
The company has applied SFAS 154 and the accountants’ report has been revised. See Appendix 1.
Securities and Exchange Commission
Division of Corporation Finance
Re: American Southwest Holdings, Inc.
November 4, 2005
Page
Comment
4.
The report of Shelley International included in Appendix I of your response refers to periods prior to 2003 that are not included in your financial statements. Also, the report of Shelley International refers to the cumulative period from October 10, 1989 (inception) to December 31, 2003. However, your financial statements include cumulative amounts up to December 31, 2004, and it is unclear who audited these cumulative amounts. Please revise, as appropriate.
Response
The accountants’ report of Semple & Cooper, LLP has been revised to reflect the cumulative period from October 10, 1989 (inception) to December 31, 2004. See Appendix 1.
We hope that the information contained in this letter satisfactorily addresses the comments by the Staff. If you have no further comments, these changes will be made in the 10-KSB and filed in a few days. Please direct any questions, requests for additional documentation or comments to the undersigned by telephone at (480) 443-9657, or by facsimile at (480) 443-1908.
Very
truly yours,
Michael
K. Hair, P.C.
Show Raw Text
CORRESP
1
filename1.htm
Unassociated Document
Michael
K. Hair, P.C.
Attorney
at Law
7407
E. Ironwood Court
Scottsdale,
Arizona 85258
Telephone:
(480) 443-9657
November
4, 2005
VIA
EDGAR AND FEDERAL EXPRESS
Securities
and Exchange Commission
Division
of Corporation Finance
100
F
Street, N.E.
Washington
DC, 20549
Attn.:
Mr.
Joseph Foti
Re:
American
Southwest Holdings, Inc.
Form
10-KSB for the Year Ended December 31, 2004
File
000-27947
Dear
Mr.
Foti:
On
behalf
of American Southwest Holdings, Inc. (the “Company”), set forth below are the
Company’s responses to the Staff’s comment letter dated October 27, 2005 with
respect to the above referenced periodic reports of the Company. We have
reproduced the Staff’s comment and have followed the comment with the Company’s
response. References in this letter to “we,”“our” or “us” mean the Company or
its advisors, as the context may require.
Form
10-KSB for the Fiscal Year Ended December 31, 2004
Item
7 - Financial Statements
Note
8 - Acquisition of Metal Sands Limited, page F-21
Comment
1.
We
note your response to our prior comment #3. However, it appears
the net
liabilities received of $194,999 relate to amounts due for
your prior cash
advances to Metal Sands. Since the balance of the mineral rights
was
nominal and you received cash back from the acquisition, these
net
liabilities appear to represent the portion of cash advances
from you that
were used and expensed by Metal Sands. As a result, we believe
these costs
should receive similar treatment on your financial statements
and should
not be capitalized as part of the cost of your acquisition
of mineral
rights. In other words, we believe you should write off amounts
lent to
Metal Sands prior to the acquisition to the extent such amounts
were
expended by Metal Sands. Therefore, we reissue our prior comment
#3. Based
on the guidance in SAB 48, we believe you should record the
mineral rights
acquired at the transferor’s historical cost, which appears to be a
nominal amount. However, we would not object if you record
the
approximately 33,000,000 shares issued at their par value of
$.001 per
share (i.e. approximately $33,000.)
Securities
and Exchange Commission
Division
of Corporation Finance
Re:
American Southwest Holdings, Inc.
November
4, 2005
Page
2
Response
The
financial statements have been revised to report a value of $33,100
for the
33,100,000 shares of common stock issued. See Appendix
1.
General
Correction
of an Error
Comment
2.
Changes
to your previously-issued financial statements for the
year ended December
31, 2004 with respect to the acquisition of mining rights
should be
reported as the correction of an error pursuant to paragraphs
36-37 of APB
Opinion 20 or, if early adopted, paragraphs 26-26 of SFAS
154.
Response
The
company has applied SFAS 154 and the financial statements have been
revised. See Appendix 1.
Accountants’
Reports
Comment
3.
Please
include the report of Semple & Cooper in your amended filing, and
ensure that such report includes an appropriate reference
to the
correction of an error as required by AU section
420.12.
Response
The
company has applied SFAS 154 and the accountants’ report has been
revised. See Appendix 1.
Securities
and Exchange Commission
Division
of Corporation Finance
Re:
American Southwest Holdings, Inc.
November
4, 2005
Page
3
Comment
4.
The
report of Shelley International included in Appendix
I of your response
refers to periods prior to 2003 that are not included
in your financial
statements. Also, the report of Shelley International
refers to the
cumulative period from October 10, 1989 (inception) to
December 31, 2003.
However, your financial statements include cumulative
amounts up to
December 31, 2004, and it is unclear who audited these
cumulative amounts.
Please revise, as appropriate.
Response
The
accountants’ report of Semple & Cooper, LLP has been revised to reflect the
cumulative period from October 10, 1989 (inception) to December
31,
2004. See Appendix 1.
We
hope
that the information contained in this letter satisfactorily addresses
the
comments by the Staff. If you have no further comments, these changes
will be
made in the 10-KSB and filed in a few days. Please direct any questions,
requests for additional documentation or comments to the undersigned
by
telephone at (480) 443-9657, or by facsimile at (480)
443-1908.
Very
truly yours,
Michael
K. Hair, P.C.
By:
/s/
Michael K. Hair
Michael
K. Hair,
President
cc:
Alan
Doyle, American Southwest Holdings, Inc.
Debby
Tutrone, Semple & Cooper, LLP
Appendix
1
Report
of Independent Registered Public Accounting Firm
We
have
audited the accompanying consolidated balance sheet of
American Southwest
Holdings, Inc. as of December 31, 2004, and the related
consolidated statements
of operations and comprehensive loss, stockholders’ equity, and cash flows for
the year then ended and the cumulative period from inception
(October 20, 1989)
through December 31, 2004. These financial statements are
the responsibility of
the Company’s management. Our responsibility is to express an opinion
on these
financial statements based on our audits.
We
conducted our audit in accordance with the standards of
the Public Company
Accounting Oversight Board (United States). Those standards
require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial
statements are free of material misstatement. The Company
is not required to
have, nor were we engaged to perform, an audit of its internal
control over
financial reporting. Our audit included consideration of
internal control over
financial reporting as a basis for designing audit procedures
that are
appropriate in the circumstances, but not for the purpose
of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An
audit includes examining,
on a test basis, evidence supporting the amounts and disclosures
in the
financial statements. An audit also includes assessing
the accounting principles
used and significant estimates made by management, as well
as evaluating the
overall financial statement presentation. We believe that
our audits provide a
reasonable basis for our opinion.
In
our
opinion, the consolidated statements referred to above
present fairly, in all
material respects, the consolidated financial position
of the Company as of
December 31, 2004, and the results of its operations and
its cash flows for the
year then ended and the cumulative period from inception
(October 20, 1989)
through December 31, 2004, in conformity with accounting
principles generally
accepted in the United States.
The
accompanying financial statements have been prepared assuming
that the Company
will continue as a going concern. As discussed in Note
1 to the financial
statements, the Company is in the exploration stage, has
incurred losses from
operations, and requires additional funds for further exploratory
activity prior
to attaining a revenue generating status. In addition,
the Company may not find
sufficient ore reserves to be commercially mined. These
conditions raise
substantial doubt about its ability to continue as a going
concern. The
financial statements do not include any adjustments that
might result from the
outcome of these uncertainties.
As
discussed in Note 11 to the consolidated financial statements,
the financial
statements have been restated in relation to the correction
of the application
of an accounting principle.
/s/
Semple & Cooper, LLP
Phoenix,
Arizona
June
2,
2005, except as to Note 11, as to which the date is November
1,
2005
F-2
AMERICAN
SOUTHWEST HOLDINGS,
INC.
(An
Exploration Stage Company)
Consolidated
Balance Sheets
December
31,
2004
2003
ASSETS
Cash
& cash equivalents
$
205,493
$
4,579
Receivables
3,065
—
Total
current assets
208,558
4,579
Property
and equipment, net
4,202
—
Mining
rights
33,100
—
Total
assets
$
245,860
$
4,579
LIABILITIES
AND SHAREHOLDERS' EQUITY
Accounts
payable and accrued liabilities
$
147,937
$
122,581
Due
to related parties
334,714
—
Loans
payable to related parties
41,495
36,980