SecProbe.io

CORRESP
1
filename1.htm

   Filed by Automated Filing Services Inc. (604) 609-0244 - Balsam Ventures, Inc. - Response Letter

     O’Neill Law Group
      PLLC
     435 Martin Street, Suite 1010

     Blaine, WA  98230

     Stephen F.X. O’Neill*

     Telephone:
     360-332-3300

    Christian I. Cu**

     Facsimile:
     360-332-2291

    Conrad Y. Nest *

     E-mail:
     cic@stockslaw.com

     File # 4205

    August 2, 2005

     VIA EDGAR &

    FAX-202-772-9209

 THE UNITED STATES SECURITIES

  AND EXCHANGE COMMISSION

  Division of Corporation Finance

  100 F Street, N.E.

  Mail Stop 4561

  Washington, D.C. 20549

Attention: Robert F. Telewicz, Jr., Staff Accountant

Dear Sirs:

    RE:
    BALSAM VENTURES, INC. (the “Company”)

    -
    SEC File Number 000-32011

    -
    Item 4.02 Form 8-K filed on May 17, 2005

We write on behalf of the Company in response to your comment
  letter dated July 25, 2005 regarding the Company’s above-referenced Form
  8-K filing (the “Comment Letter”).

 Our responses herein are based on the factual information
  provided to us by the Company. Paragraph numbering used for each response corresponds
  to the numbering used in the Comment Letter. Capitalized terms used herein and
  not defined, have the same meanings given such terms in the Form 8-K.

 FORM 8-K

    1.
    PLEASE TELL US IF YOUR CERTIFYING OFFICERS
        HAVE RECONSIDERED THE EFFECT ON THE ADEQUACY OF YOUR DISCLOSURE CONTROLS
        AND PROCEDURES AS OF THE END OF THE PERIOD COVERED BY YOUR FORMS
        10-Q FOR THE PERIODS ENDED MARCH 31,
        2004, JUNE 30, 2004
        AND SEPTEMBER 30, 2004 IN LIGHT
        OF THE MATERIAL ERROR YOU HAVE DISCLOSED. ADDITIONALLY,
        TELL US WHAT EFFECT THE ERROR HAD ON YOUR CURRENT EVALUATION OF DISCLOSURE
        CONTROLS AND PROCEDURES AS OF YOUR FISCAL YEAR END DECEMBER
        31, 2004.

    In response to this comment, the Company has informed
        us that its certifying officers have considered whether the material error
        disclosed in the Company’s restated financial statements for the
        periods ended March 31, 2004, June 30, 2004 and September 30, 2004 (the
        “Interim Financial Statements”) affected their evaluation
        and conclusions regarding the adequacy of its disclosure controls and
        procedures for those periods. The Company has informed us that the material
        error disclosed was not indicative of a material weakness of the Company’s
        disclosure controls and procedures.

    VANCOUVER
      OFFICE:
    O’Neill Law
      Corporation

      Suite 1880, 1055 West Georgia Street, Box 11122, Vancouver, British Columbia,
      Canada V6E 3P3

      Tel: (604) 687-5792 / Fax: (604) 687-6650

*Washington and British Columbia Bars; ** Nevada, Washington
  and British Columbia Bars

     O’Neill Law Group PLLC
     2

     United States Securities and Exchange Commission

     Attention: Mr. Robert F. Telewicz, Jr.

    As stated in PCAOB AS No. 2, restatements made to
        reflect a change in accounting principle to comply with a new accounting
        principle or a voluntary change from one generally accepted accounting
        principle to another generally accepted accounting principle are not indicators
        of material weaknesses in a company’s internal control over financial
        reporting.

    The Interim Financial Statements were restated in
        order to apply the accounting principles set out in EITF Release Nos.
        98-5 and 00-27 to the beneficial conversion features in certain convertible
        notes issued by the Company in October, 2003 (the “Convertible Notes”).
        Although the principles and pronouncements contained in these EITF releases
        had been in existence prior to the issue of the Convertible Notes and
        the reporting of the Interim Financial Statements, in the opinion of the
        Company’s management and its auditors at that time, Morgan &
        Company, there remained considerable uncertainty and divergence in practice
        regarding the application of these principles and pronouncements to deep
        discounts arising from very beneficial situations. As a result, the Company
        determined that it was inappropriate to apply these pronouncements to
        the Convertible Notes.

    Early in 2005, the Company, its former auditors,
        and its current auditors, Telford Sadovnick PLLC, determined that the
        uncertainties relating to the application of EITF Release Nos. 98-5 and
        00-27 had been clarified. As a result, the Company determined that the
        Interim Financial Statements should be restated to apply those pronouncements
        to the beneficial conversion features contained in the Convertible Notes.
        However, the Company feels that the accounting treatment of the Convertible
        Notes was correct at the time the Interim Financial Statements were originally
        reported.

    As the restatement of the Interim Financial Statements
        was made in order to comply with a newly accepted accounting principle,
        the Company’s certifying officers have concluded that the restatement
        is not reflective of any deficiencies in the Company’s internal
        controls or procedures and that those controls and procedures remain effective
        in ensuring that the Company maintains effective internal control over
        financial reporting. Furthermore, as the restatement of the Interim Financial
        Statements was not reflective of any material weakness, the restatement
        did not effect how the Company’s certifying officers evaluated the
        Company’s internal controls and procedures as of December 31, 2004.

A statement from the Company as requested in the Comment Letter
  is attached.

 If you have any questions or require any additional information
  or documents, please telephone the undersigned at (604) 687-5792.

 Yours truly,

 “Christian I. Cu”

 CHRISTIAN I. CU

CIC/clk

Enclosures

    cc:
    Balsam Ventures, Inc.

     Attn: Mr. John Boschert