SEC Comment Letter for GLOBAL DIVERSIFIED INDUSTRIES INC (CIK 0001090461) — Mar 22, 2005
GLOBAL DIVERSIFIED INDUSTRIES INC (CIK 0001090461)
Date: March 22, 2005 · CIK: 0001090461 · Accession: 0000000000-05-013417
AI Filing Summary & Sentiment
File numbers found in text: 333-83231
Letter
Mail Stop 0409 VIA U.S. MAIL AND FAX (559) 665-7066 Mr. Phil Hamilton President and Chief Executive Officer Global Diversified Industries, Inc. 1200 Airport Drive Chowchilla, CA 93610
Re: Global Diversified Industries, Inc. Form 10-KSB for the year ended April 30, 2004 Forms 10-QSB for the quarters ended January 31, 2005 File No. 333-83231
Dear Mr. Hamilton:
We have reviewed your March 9, 2005 response letter and have the following 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 any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
1. We note from your response to comment 1 that you believe the consensus reached in Issue 2 of EITF 99-5 supports your accounting policy. Based on your description, these costs appear to be more closely aligned to costs incurred to design and develop your product (Issue 1) rather than costs incurred to design and develop equipment used to produce your product, as contemplated in Issue 2. In a supplemental response, please support your analogy to Issue 2 rather than Issue 1 of EITF 99-5. In addition, please cite any other authoritative accounting literature you rely on to support your policy.
2. We read your response to comment 2. In accordance with EITF 98-5 and 00-27, you should look through the intermediary security, in this instance your Series A Preferred Stock, to the ultimate conversion to your common stock to determine if a beneficial conversion feature exists. We note that the closing price of your common stock on July 14, 2003, the commitment date, was $0.02 per share resulting in a positive intrinsic value when compared to the conversion price of $0.015 per share. Accordingly, please revise your financial statements to reflect the value of the beneficial conversion feature and additional interest expense over the term of the note through November 2003 or tell us how your accounting is in accordance with EITF 98-5 and 00-27.
3. We read your response to comment 3. Please confirm to us whether your stock subscription agreements contain any provision whereby the investor or other party, as applicable, has the ability to have the consideration refunded or liability settled in cash. In addition, please explain to us why there is such a significant delay in share issuance.
* * * *
You may contact Josh Forgione, at (202) 824-5464, or me, at (202) 824-5222, if you have questions. Please respond to the comments included in this letter within ten business days or tell us when you will provide us with a response. Please file your response on EDGAR.
Sincerely,
Steven Jacobs
Accounting Branch Chief
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March 22, 2005
Mail Stop 0409
VIA U.S. MAIL AND FAX (559) 665-7066
Mr. Phil Hamilton
President and Chief Executive Officer
Global Diversified Industries, Inc.
1200 Airport Drive
Chowchilla, CA 93610
Re: Global Diversified Industries, Inc.
Form 10-KSB for the year ended April 30, 2004
Forms 10-QSB for the quarters ended January 31, 2005
File No. 333-83231
Dear Mr. Hamilton:
We have reviewed your March 9, 2005 response letter and have
the following 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 any other aspect of our review. Feel free to call
us
at the telephone numbers listed at the end of this letter.
1. We note from your response to comment 1 that you believe the
consensus reached in Issue 2 of EITF 99-5 supports your accounting
policy. Based on your description, these costs appear to be more
closely aligned to costs incurred to design and develop your
product
(Issue 1) rather than costs incurred to design and develop
equipment
used to produce your product, as contemplated in Issue 2. In a
supplemental response, please support your analogy to Issue 2
rather
than Issue 1 of EITF 99-5. In addition, please cite any other
authoritative accounting literature you rely on to support your
policy.
2. We read your response to comment 2. In accordance with EITF
98-5
and 00-27, you should look through the intermediary security, in
this
instance your Series A Preferred Stock, to the ultimate conversion
to
your common stock to determine if a beneficial conversion feature
exists. We note that the closing price of your common stock on
July
14, 2003, the commitment date, was $0.02 per share resulting in a
positive intrinsic value when compared to the conversion price of
$0.015 per share. Accordingly, please revise your financial
statements to reflect the value of the beneficial conversion
feature
and additional interest expense over the term of the note through
November 2003 or tell us how your accounting is in accordance with
EITF 98-5 and 00-27.
3. We read your response to comment 3. Please confirm to us
whether
your stock subscription agreements contain any provision whereby
the
investor or other party, as applicable, has the ability to have
the
consideration refunded or liability settled in cash. In addition,
please explain to us why there is such a significant delay in
share
issuance.
* * * *
You may contact Josh Forgione, at (202) 824-5464, or me, at
(202) 824-5222, if you have questions. Please respond to the
comments
included in this letter within ten business days or tell us when
you
will provide us with a response. Please file your response on
EDGAR.
Sincerely,
Steven Jacobs
Accounting Branch Chief
??
??
??
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Global Diversified Industries, Inc.
March 22, 2005
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