SEC Company Response from AVIATION UPGRADE TECHNOLOGIES INC (CIK 0001094847) — Nov 9, 2005
AVIATION UPGRADE TECHNOLOGIES INC (CIK 0001094847)
Date: Nov. 9, 2005 · CIK: 0001094847 · Accession: 0001019687-05-003026
AI Filing Summary & Sentiment
File numbers found in text: 000-28347
Referenced dates: September 26, 2005
Letter
November 7, 2005 VIA REGULAR U.S. MAIL --------------------- Division of Corporation Finance Securities and Exchange Commission 450 5th Street N.W. Washington, D.C. 20549
Re: Aviation Upgrade Technologies, Inc., a Nevada corporation Form 10-KSB for the Year Ended December 31, 2004 Form 10-QSB for the Quarterly Period Ended June 30, 2005 File 000-28347
Dear Mr. Migone:
Please be advised that this law firm represents Aviation Upgrade Technologies, Inc., a Nevada corporation ("Company"). Please be informed that the undersigned has received and read your letter September 26, 2005, regarding the Company's Form 10-KSB for the Year Ended December 31, 2004 and Form 10-QSB for the Quarterly Period Ended June 30, 2005 as filed with the Securities and Exchange Commission ("Commission").
The purpose of this letter is to respond, in writing, to the questions, comments and requests for information specified in that letter and to key those responses to the revisions and additions specified in Amendment No. 1 to the Form 10-KSB ("Form 10-KSB Amendment No. 1") and Amendment No. 1 to the Form 10-QSB (Form 10-QSB Amendment No. 1") which were filed on or about the date of this letter. The headings and provisions of this letter, which are numbered, are intended to correspond and respond to the headings and order of the paragraphs in your letter. Three (3) marked copies of each of these filings are included herewith for your reference.
FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2004 ------------------------------------------------ ITEM 6 - MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATION -----------------------------------------------------------------
1. Please note that the Company has revised its disclosure to discuss the consequences should it not be able to raise the capital necessary to continue operations and satisfy its obligations.
<PAGE>
ITEM 7 - FINANCIAL STATEMENTS ----------------------------- NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --------------------------------------------------------------------
REVENUE RECOGNITION, PAGE 15 ----------------------------
2. The Company recognizes revenue at the time of shipment for product sales that are shipped direct to the customer from the factory. Revenue on product sales shipped from the Company's warehouse is recognized at the time of customer acceptance.
WARRANTIES, PAGE 15 -------------------
3. The Company herewith undertakes to revise future filings so as to include the disclosures required under paragraphs 13 and 14 of FIN 45.
NOTE 4 - COMMITMENTS -------------------- PROFIT PARTICIPATION ADVANCES, PAGE 17 --------------------------------------
4. The significant contractual terms for the profit participation advances are as follows: the Company was advanced $103,000 in exchange for the right to receive a portion of the Company's future revenue stream. The maximum amount due under these agreements is $636,000.
a. The Company incurs a liability under these agreements as it sells product on a per unit basis, it is not related to the profitability of the company. b. There are no penalty clauses in these agreements. c. Amounts due under these agreements are payable monthly.
5. The financial statement accounts reflecting the above are as follows:
Profit Profit Profit Participation Participation Participation Advance Payable Expense --------------------------------------------------------------------------- Cash received $ 103,000 $ $ Unit Sales 2,420 2,420 Amortization (1,176) (1,176)
Balance at 12/31/04 $ 101,824 $ 2,420 $ 1,244
6. The company recognized the $103,000 not as a revenue transaction, but as an advance to be matched against a future revenue generated obligation. The advance is being amortized on the same basis as the related revenue generated obligation. The illustration for the accounting for these agreements through December 31, 2004 is as follows:
<PAGE>
Cash $ 103,000 Profit Participation Advances $ 103,000
Profit Participation Expense $ 2,420 Profit Participation Payable $ 2,420
Profit Participation Advances $ 1,176 Profit Participation Expense $ 1,176
7. The counterparties in these transactions are Rick LaPierre, Joe Salamone, William Goldsmith, Doug Couter, Don Hyde and Phil Albright. The Company has these other relationships or affiliations with these investors, are as follows: Joe Salamone and Phil Albright are personal friends with Torbjorn Lundqvist, the Company's officer and director; Rick LaPierre, William Goldsmith, Doug Couter and Don Hyde are personal friends with Joe Salamone and were introduced to Mr. Lundqvist by Mr. Salamone. These individuals are also shareholders of the Company.
FORM 10-QSB FOR JUNE 30, 2005 ----------------------------- FINANCIAL STATEMENTS --------------------
NOTE B - WARRANTS, PAGE 6 -------------------------
8. Please notice that the Company has revised the weighted average exercise prices for the periods presented. The discrepancy was due to a scrivener's error, in that figures from the previous June 30 period (ended 2004) were inadvertently transcribed into the June 30 period (ended 2005) statements.
Hopefully, this response letter and the amendments to the above referenced filings adequately address the issues raised in your comment letter dated September 26, 2005. Attached hereto is the Company's acknowledgment, as requested. Of course, if you should require any additional information or clarification, please do not hesitate to contact the undersigned at 949.250.8655.
Your assistance in this matter is greatly appreciated. Thank you.
Sincerely,
ABRAMS GARFINKEL MARGOLIS BERGSON, LLP
Show Raw Text
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Abrams Garfinkel Margolis Bergson, LLP
Attorneys at Law
4100 Newport Place Drive
Suite 830
Newport Beach, California 92660
Telephone: (949) 250-8655
Facsimile: (949) 250-8656
www.agmblaw.com
November 7, 2005
VIA REGULAR U.S. MAIL
---------------------
Division of Corporation Finance
Securities and Exchange Commission
450 5th Street N.W.
Washington, D.C. 20549
Re: Aviation Upgrade Technologies, Inc., a Nevada corporation
Form 10-KSB for the Year Ended December 31, 2004
Form 10-QSB for the Quarterly Period Ended June 30, 2005
File 000-28347
Dear Mr. Migone:
Please be advised that this law firm represents Aviation Upgrade Technologies,
Inc., a Nevada corporation ("Company"). Please be informed that the undersigned
has received and read your letter September 26, 2005, regarding the Company's
Form 10-KSB for the Year Ended December 31, 2004 and Form 10-QSB for the
Quarterly Period Ended June 30, 2005 as filed with the Securities and Exchange
Commission ("Commission").
The purpose of this letter is to respond, in writing, to the questions, comments
and requests for information specified in that letter and to key those responses
to the revisions and additions specified in Amendment No. 1 to the Form 10-KSB
("Form 10-KSB Amendment No. 1") and Amendment No. 1 to the Form 10-QSB (Form
10-QSB Amendment No. 1") which were filed on or about the date of this letter.
The headings and provisions of this letter, which are numbered, are intended to
correspond and respond to the headings and order of the paragraphs in your
letter. Three (3) marked copies of each of these filings are included herewith
for your reference.
FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2004
------------------------------------------------
ITEM 6 - MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
-----------------------------------------------------------------
1. Please note that the Company has revised its disclosure to discuss the
consequences should it not be able to raise the capital necessary to
continue operations and satisfy its obligations.
<PAGE>
ITEM 7 - FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------
REVENUE RECOGNITION, PAGE 15
----------------------------
2. The Company recognizes revenue at the time of shipment for product
sales that are shipped direct to the customer from the factory.
Revenue on product sales shipped from the Company's warehouse is
recognized at the time of customer acceptance.
WARRANTIES, PAGE 15
-------------------
3. The Company herewith undertakes to revise future filings so as to
include the disclosures required under paragraphs 13 and 14 of FIN 45.
NOTE 4 - COMMITMENTS
--------------------
PROFIT PARTICIPATION ADVANCES, PAGE 17
--------------------------------------
4. The significant contractual terms for the profit participation
advances are as follows: the Company was advanced $103,000 in exchange
for the right to receive a portion of the Company's future revenue
stream. The maximum amount due under these agreements is $636,000.
a. The Company incurs a liability under these agreements as it sells
product on a per unit basis, it is not related to the
profitability of the company.
b. There are no penalty clauses in these agreements.
c. Amounts due under these agreements are payable monthly.
5. The financial statement accounts reflecting the above are as follows:
Profit Profit Profit
Participation Participation Participation
Advance Payable Expense
---------------------------------------------------------------------------
Cash received $ 103,000 $ $
Unit Sales 2,420 2,420
Amortization (1,176) (1,176)
Balance at 12/31/04 $ 101,824 $ 2,420 $ 1,244
6. The company recognized the $103,000 not as a revenue transaction, but
as an advance to be matched against a future revenue generated
obligation. The advance is being amortized on the same basis as the
related revenue generated obligation. The illustration for the
accounting for these agreements through December 31, 2004 is as
follows:
<PAGE>
Cash $ 103,000
Profit Participation Advances $ 103,000
Profit Participation Expense $ 2,420
Profit Participation Payable $ 2,420
Profit Participation Advances $ 1,176
Profit Participation Expense $ 1,176
7. The counterparties in these transactions are Rick LaPierre, Joe
Salamone, William Goldsmith, Doug Couter, Don Hyde and Phil Albright.
The Company has these other relationships or affiliations with these
investors, are as follows: Joe Salamone and Phil Albright are personal
friends with Torbjorn Lundqvist, the Company's officer and director;
Rick LaPierre, William Goldsmith, Doug Couter and Don Hyde are
personal friends with Joe Salamone and were introduced to Mr.
Lundqvist by Mr. Salamone. These individuals are also shareholders of
the Company.
FORM 10-QSB FOR JUNE 30, 2005
-----------------------------
FINANCIAL STATEMENTS
--------------------
NOTE B - WARRANTS, PAGE 6
-------------------------
8. Please notice that the Company has revised the weighted average
exercise prices for the periods presented. The discrepancy was due to
a scrivener's error, in that figures from the previous June 30 period
(ended 2004) were inadvertently transcribed into the June 30 period
(ended 2005) statements.
Hopefully, this response letter and the amendments to the above referenced
filings adequately address the issues raised in your comment letter dated
September 26, 2005. Attached hereto is the Company's acknowledgment, as
requested. Of course, if you should require any additional information or
clarification, please do not hesitate to contact the undersigned at
949.250.8655.
Your assistance in this matter is greatly appreciated. Thank you.
Sincerely,
ABRAMS GARFINKEL MARGOLIS BERGSON, LLP
By: Deron M. Colby
Enclosures
<PAGE>
[COMPANY LETTERHEAD]
Division of Corporation Finance
Securities and Exchange Commission
450 5th Street N.W.
Washington, D.C. 20549
Re: Aviation Upgrade Technologies, Inc., a Nevada corporation
Form 10-KSB for the Year Ended December 31, 2004
Form 10-QSB for the Quarterly Period Ended June 30, 2005
File 000-28347
Date: November 7, 2005
Dear Mr. Migone:
In reference to your letter dated September, 26, 2005, the Company herewith
acknowledges that it is responsible for the adequacy and accuracy of the
disclosures in the filing.
The Company herewith acknowledges that staff comments or changes to the
discourse in response to staff comments do not foreclose the Commission from
taking any action with respect to the filing; and
The Company herewith acknowledges that it may not assert staff comments as a
defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
AVIATION UPGRADE TECHNOLOGIES, INC.
By: /s/ Torbjorn B. Lundqvist
--------------------------
Torbjorn B. Lundqvist
Its: Chairman, CEO, CFO
6550 SO. PECOS ROAD, # 142, LAS VEGAS, NEVADA, 89120, USA
PH.: +1 702 450 0003 FAX: +1 949 499 4424
EMAIL: MINI@AVIATIONUPGRADE.COM
<PAGE>
[GRAPHIC OMITTED]
May 2, 2003
Aviation Upgrade Technologies, Inc, hereinafter AUT is seeking some funding for
its Air Alert Valve Cap (AAVC) project and ___________________________________,
hereinafter the Investor, is interested in participating in the funding the said
project by investing $___________ (______________________) (investment). AUT has
a capable and ready manufacturing source in China who is willing to manufacture
the AAVC for AUT and AUT has also lined up some customers for the AAVC including
Wal-Mart. The Investor is willing to make this transaction as a profit sharing
participation deal.
Now therefore the following has been mutually agreed upon:
o The Investor will write a check for 50% of the investment on or before
May 8, 2003.
o The Investor will write a check for the balance (50% of the
investment) within 5 days from when AUT has presented the Investor
with a purchase order from Wal-Mart.
AUT will share the profits of sales by giving the Investor 0.0002% of
the invested amount for each retail package delivered to and paid by
customer. This profit sharing will end when the earnings from one
million packages has been completed. This will double the Investor's
original investment. The profit participation shall be paid to the
Investor on the 15th of each month for the previous months income.
This agreement is made in duplicates, one for the Investor and one for AUT
Investor Aviation Upgrade Technologies, Inc
Date: Date:
------------------------------ --------------------------------
Signature: Signature:
------------------------- ----------------------------
Torbjorn B. Lundqvist CEO
6550 SO. PECOS ROAD, # 142, LAS VEGAS, NEVADA, 89120, USA
PH.: +1 702 450 0003 FAX: +1 949 499 4424
EMAIL: MINI@AVIATIONUPGRADE.COM
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