March
13,
2007
Via
Federal Express and EDGAR
Kathleen
Collins, Accounting Branch Chief
Division
of Corporate Finance
United
States Securities and Exchange Commission
100
F
Street, N.E.
Washington,
D.C.20549
|
Re:
|
Response
to SEC Comment Letter dated February 15,
2007
|
Tribeworks,
Inc. (the “Company”
or “Tribeworks”)
Form
10-KSB/A for Fiscal Year Ended December 31, 2005
Filed
December 21, 2006
Forms
10-QSB/A for Quarters Ended March 31, 2006 and June 30,
2006
Filed
November 17, 2006
Form
8-K and Form 8K/A Filed December 22, 2006
Dear
Madam:
We
are in
receipt of your letter dated February 15, 2007 in relation to the above
referenced items and apologize for the delay in replying.
We
believe all the points that you have raised relate around the same general
issue
and we have discussed the points that you have raised with our auditors and
we
agree that the changes made in the above referenced documents need to be refiled
to amend what we previously described as a “change in accounting policies” to a
“correction of an error”. We are currently finalizing our financial statements
and audit for the year ended December 31, 2006 on this basis and at the same
time making the appropriate changes to the Form 10-KSB/A for the year ended
December 31, 2005 and the Forms 10-QSB for the quarters ended March 31, 2006,
June 30, 2006 and September 30, 2006. These will all be filed or refiled as
soon
as all of the audit work is completed. With respect to the particular points
raised:
Form
10-KSB/A for the year ended December 31, 2005 Filed on December 21,
2006
1. A
revised
Form 10-KSB/A will be filed for the year ended December 31, 2005 stating that
the restated treatment of software development expenditure is a correction
of an
error.
2. Our
auditors agree the treatment of software development costs should have been
a
correction of error and they will be amending their audit report accordingly
in
the refiled Form 10-KSB/A for the year ended December 31, 2005.
Forms
8-K and 8-K/A Filed on December 22, 2006
3. We
will
be refiling all of our Forms 10-QSB for the quarters ended March 31, 2006,
June
30, 2006 and September 30, 2006 clarifying that the restated financials
statements for the year ended December 31, 2005 include a correction of error.
Additionally, a Form 8/K-A, amending Section 4.02 of Forms 8/K and 8/K-A filed
on December 22, 2006, will be filed stating that in addition to the annual
report for the fiscal year ended December 31, 2005, the unamended quarterly
reports for the periods ended March 31, 2006, June 30, 2006 and September 30,
2006 should no longer be relied upon.
Atlas
Technology Group, 2001 - 152nd
Ave NE,
Redmond, WA 98052
Phone:
425-458 2360, Fax: 425-818 8832
Page
2
4. As
stated
above after further discussion with our auditors, it is clear that the changes
made with regard to the capitalization of software development costs need to
be
disclosed as a correction of an error and full disclosure of this will be made
in the Notes accompanying the refiled Forms 10-KSB/A for the year ended December
31, 2005 and 10-QSB/A’s for the periods ended March 31, 2006, June 30, 2006 and
September 30, 2006. Atlas Technology Group (“AtlasTG”), which was acquired by
Tribeworks on January 20, 2006, had in place internal procedures and controls
for the capitalization of software development costs. Tribeworks had an
accounting policy requiring the write off all development costs as its software
developed into a mature product. Therefore the write-off made in the Tribeworks
financial statements was in accordance with existing Tribeworks accounting
policies. Following the acquisition and subsequent sale of the former business
operations of Tribeworks and during the preparation of restatement of the
AtlasTG financial statements for the Form 8-K/A filed on November 17, 2006,
it
was deemed more appropriate that the AtlasTG accounting policies, should be
adopted as the policy of the Company because the business generated from Atlas
TG products had become the primary source of business of the Company. This
adjustment was agreed to by our auditors. We now realize the subsequent
adjustments should have been filed as corrections of an error rather than as
a
change in accounting policy as previously filed. For the reasons stated above,
we believe that the correction of error has now been addressed and there will
not be any issues with disclosure controls and procedures in the future.
5. In
addition to the amendment to Section 4.02 of Form 8/K-A, filed on December
22,
2006, discussed in Item 3 above, an amended Form 8-K/A, will be filed to state
that there has been a correction of error rather than a change in accounting
policy.
The
Company hereby acknowledges that:
· |
The
Company is responsible for the adequacy and accuracy of the disclosure
in
its filings;
|
· |
Staff
comments or changes to disclosure in response to staff comments do
not
foreclose the Commission from taking any action with respect to the
Company’s filings; and
|
· |
The
Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws or the United States.
|
We
appreciate the opportunity to respond to the Commission’s comments related to
our various filings referenced above.
Thank
you
for your consideration.
Sincerely,
/s/
Peter B. Jacobson
Peter
B.
Jacobson
Chief
Executive Officer
Atlas
Technology Group, 2001 - 152nd
Ave NE,
Redmond, WA 98052
Phone:
425-458 2360, Fax: 425-818 8832