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SEC Comment Letter for SEAWRIGHT HOLDINGS INC (CIK 0001132887) — Dec 13, 2005

SEAWRIGHT HOLDINGS INC (CIK 0001132887)
Date: Dec. 13, 2005 · CIK: 0001132887 · Accession: 0000000000-05-061997

AI Filing Summary & Sentiment

File numbers found in text: 333-56848

Referenced dates: November 16, 2005, October 20, 2005

Date
December 13, 2005
Author
??
Form
UPLOAD
Company
SEAWRIGHT HOLDINGS INC (CIK 0001132887)

Letter

Mail Stop 3561 December 13, 2005 Mr. Joel Sens Chief Executive Officer Seawright Holdings, Inc. 600 Cameron Street Alexandria, Virginia 22314

RE: Seawright Holdings, Inc. Form 10-KSB for Fiscal Year Ended December 31, 2004 Forms 10-QSB for Fiscal Quarters Ended March 31, 2005, June 30, and September 30, 2005 Filed April 15, 2005, May 23, 2005, August 22, 2005 and November 21, File No. 333-56848

Dear Mr. Sens:

We have reviewed your responses in your letter dated November 16, 2005 and have the following additional comments.

We welcome any questions you may have about our comments or on any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-KSB for Fiscal Year Ended December 31, 2004

Notes to Financial Statements

Note E. Private Placement and Convertible Promissory Notes Payable, page F-19

1. We read your response to comment 1 in our letter dated October 20, 2005. You have not appropriately allocated the proceeds to all the detachable instruments from the transaction on a relative fair value basis. Since your warrants are detachable, you should factor them in your calculation of the relative fair value of the proceeds received in the transaction. Please provide us with a copy of your revised calculations once you have adjusted for the above amounts. Refer to paragraph 5 of EITF 00-27.

Note I. Related Party Transactions, page F-25

2. We read your response to comment 3 in our letter dated October 20, 2005. We continue to object to your accounting for the overpayment to your President and subsequent recovery of funds. Since you characterize the transaction with your President, who is both a related party and shareholder, as a transfer of funds with no requirement for repayment we do not understand why an expense is necessary at the balance sheet date. We view the overpayment in this instance to be a nonreciprocal transfer to a shareholder similar to a return of capital. Accordingly, you should reflect the overpayment as a direct reduction of additional paid in capital. Conversely, the subsequent cash payments received from your President/shareholder in the absence of an agreement or obligation to make such contributions should be characterized as a capital contribution, not as other income. In any case, the expense and subsequent income recognized in connection with these transactions with your President do not appear to have a basis in GAAP. Please amend your filings accordingly.

Note K. Per Share, page F-25

3. We read your response to comment 4 in our letter dated October 20, 2005. It appears that you have interpreted our request that you disclose potentially dilutive securities as a request for you to include anti-dilutive securities in the calculation of diluted EPS. In light of the significance of potentially dilutive securities to your ability to increase EPS in future periods, we believe that disclosure of the total potentially dilutive securities excluded from the calculation of EPS should be provided. Please revise your filings to disclose the nature and amount of potentially dilutive securities which were not included in the calculation of diluted EPS because to do so would have been anti-dilutive for the periods presented. Refer to paragraph 40 of SFAS 128.

As appropriate, please respond to this comment within 10 business days or tell us when you will provide us with a response. Please ensure the response letter provides any requested supplemental information. Please file your response letter on EDGAR. Please understand that we may have additional comments after reviewing your response to our comment.

If you have any questions regarding these comments, please direct them to Anthony Watson, Staff Accountant, at (202) 551-3318 or, in his absence, to me at (202) 551-3843.

Sincerely,
George F. Ohsiek, Jr.
Branch Chief
??

Show Raw Text
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<TEXT>

Mail Stop 3561

									December 13, 2005

Mr. Joel Sens
Chief Executive Officer
Seawright Holdings, Inc.
600 Cameron Street
Alexandria, Virginia 22314

		RE:	Seawright Holdings, Inc.
			Form 10-KSB for Fiscal Year Ended December 31, 2004
Forms 10-QSB for Fiscal Quarters Ended March 31, 2005, June 30,
2005
and September 30, 2005
Filed April 15, 2005, May 23, 2005, August 22, 2005 and November
21,
2005
			File No.  333-56848

Dear Mr. Sens:

		We have reviewed your responses in your letter dated
November 16, 2005 and have the following additional comments.

		We welcome any questions you may have about our comments
or
on any other aspect of our review.  Feel free to call us at the
telephone numbers listed at the end of this letter.

Form 10-KSB for Fiscal Year Ended December 31, 2004

Notes to Financial Statements

Note E. Private Placement and Convertible Promissory Notes
Payable,
page F-19

1. We read your response to comment 1 in our letter dated October
20,
2005.  You have not appropriately allocated the proceeds to all
the
detachable instruments from the transaction on a relative fair
value
basis.  Since your warrants are detachable, you should factor them
in
your calculation of the relative fair value of the proceeds
received
in the transaction.  Please provide us with a copy of your revised
calculations once you have adjusted for the above amounts.  Refer
to
paragraph 5 of EITF 00-27.

Note I. Related Party Transactions, page F-25

2. We read your response to comment 3 in our letter dated October
20,
2005.  We continue to object to your accounting for the
overpayment
to your President and subsequent recovery of funds.  Since you
characterize the transaction with your President, who is both a
related party and shareholder, as a transfer of funds with no
requirement for repayment we do not understand why an expense is
necessary at the balance sheet date.  We view the overpayment in
this
instance to be a nonreciprocal transfer to a shareholder similar
to a
return of capital.  Accordingly, you should reflect the
overpayment
as a direct reduction of additional paid in capital.  Conversely,
the
subsequent cash payments received from your President/shareholder
in
the absence of an agreement or obligation to make such
contributions
should be characterized as a capital contribution, not as other
income.  In any case, the expense and subsequent income recognized
in
connection with these transactions with your President do not
appear
to have a basis in GAAP.   Please amend your filings accordingly.

Note K. Per Share, page F-25

3. We read your response to comment 4 in our letter dated October
20,
2005.  It appears that you have interpreted our request that you
disclose potentially dilutive securities as a request for you to
include anti-dilutive securities in the calculation of diluted
EPS.
In light of the significance of potentially dilutive securities to
your ability to increase EPS in future periods, we believe that
disclosure of the total potentially dilutive securities excluded
from
the calculation of EPS should be provided.  Please revise your
filings to disclose the nature and amount of potentially dilutive
securities which were not included in the calculation of diluted
EPS
because to do so would have been anti-dilutive for the periods
presented.  Refer to paragraph 40 of SFAS 128.

		As appropriate, please respond to this comment within 10
business days or tell us when you will provide us with a response.
Please ensure the response letter provides any requested
supplemental
information.  Please file your response letter on EDGAR.  Please
understand that we may have additional comments after reviewing
your
response to our comment.

		If you have any questions regarding these comments,
please
direct them to Anthony Watson, Staff Accountant, at (202) 551-3318
or, in his absence, to me at (202) 551-3843.

									Sincerely,

									George F. Ohsiek, Jr.
									Branch Chief
??

??

??

??

Mr. Joel Sens
Seawright Holdings, Inc.
December 13, 2005
Page 1

</TEXT>
</DOCUMENT>