GERSTEN
SAVAGE LLP
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WWW.GERSTENSAVAGE.COM
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Re: |
Forms
10-Q for the periods ended March 31, 2009, June 30, 2009 and September 30,
2009
File
No. 1-34124
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1、Where a
comment below requests additional disclosures or other revisions to be
made, please show us in your supplemental response what the revisions will
look like. With the exception of the comment below that specifically
requests an amendment, all other revisions may be included in your future
filings.
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Response: We have
outlined in our responses to each of your comments, the revised
disclosures that will be included, as appropriate in our future
filings.
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2、In your
previous letter, we requested that management provide, in writing,
acknowledgement of the three bullet pointed items described at the end of
this comment letter as well as our comment letter dated November18, 2009.
It appears that these acknowledgements were not provided with the response
letter dated December 24, 2009. Please provide the requested
acknowledgements in writing from management with your next response
letter.
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Response: The requested
acknowledgements from management are attached
hereto.
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3、We have
reviewed your response to prior comment 2. As we previously requested,
please disclose the types of expenses that you include in the general and
administrative expenses line item. In addition, since you exclude certain
costs of your distribution network from cost of sales, please disclose in
MD&A that your gross profit amounts may not be comparable to those of
other entities, since some entities include all of the costs related to
their distribution network in cost of sales and others like you exclude a
portion of them from gross profit, including them instead in a line item,
such as general and administrative
expenses.
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Response: General and
administrative expenses include administrative salaries, office expense,
certain depreciation and amortization charges, repairs and maintenance,
legal and professional fees and other expenses that are not directly
attributable to our revenues. Costs of our distribution network that are
excluded from costs of sales consist of local transportation and unloading
charges, and product inspection charges, which are as previously
disclosed. The Company will expand its disclosure in the
MD&A in future filings to make it clear that our gross profit amounts
may not be comparable to those of certain other entities since these
amounts are excluded from costs of
sales.
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Note 15 –Segments,
page F-25
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4、We have
reviewed your response to prior comment 6. Please ensure that you include
this disclosure within your segment
footnote.
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Response: We will include the
following disclosure within the segment footnote in future
filings:
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5、We have
reviewed your response to prior comment 7. Please revise your disclosure
to provide the amount of assets that are attributed to the United States
of America, as well as attributed to all foreign countries in total. Refer
to paragraph 38 of SFAS 131.
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Response: The Company
will expand its disclosures in future filings relating to geographic
information to include the
following:
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6、We have
reviewed your response to prior comment 11. Please revise your
financial statements in an amendment to your Form 10-Q for the quarter
ended September 30, 2009 to properly account for the 840454 warrants as
derivatives. Please correspondingly revise any related disclosures
throughout the filing. In dong so, please also address the
following:
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.
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Please
include financial statement disclosures required by FASB ASC
250-10-45-23 and 250-10-50-7;
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Response: The
Company is filing an Amendment No. 1 to Form 10-Q for the period ended
September 30, 2009 concurrently with this Response Letter which includes
the restated financial statements for the period then ended that reflect a
decrease in net income and a decrease in basic and diluted earnings per
share of $143,000 and $0.01 per share for the three months ended September
30, 2009, and $725,000 and $0.05 for the nine months ended September 30,
2009.
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.Please
disclose in the appropriate sections of your Form 10-Q/A the impact this
restatement had on your original conclusions regarding the effectiveness
of your disclosure controls and procedures as of September 30,
2009;
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Response:
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In
Part I Item 4 of the Form 10-Q/A filed concurrently with this response
letter, the Company disclosed its conclusion that the Company’s disclosure
controls and procedures were not operating effectively as of September 30,
2009.
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.Ensure that
you include certifications that are currently dated and refer to the Form
10-Q/A; and
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Response:
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The
certifications are currently dated and referred to the Form
10-Q/A.
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.An item 4.02
Form 8-K should be filed within four business days after you conclude that
any previously issued financial statements should no longer be relied upon
because of an error in those financial statements. See also Question 1 of
our FAQ Current Report on Form 8-K dated November 23,
2004.
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Very
truly yours,
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/s/ Arthur Marcus, Esq. | ||
Arthur Marcus, Esq. |