BiOTECH HOLDINGS LTD.
#160- 3751 Shell Road
Richmond, British Columbia
V6X 2W2
Phone: (604) 295-1119
Toll Free: (888) 216-1111
Fax: (604) 295-1110
25 April, 2006
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.
20549
Attention: Amy C Bruckner, Staff Accountant, Division of Corporation Finance
Dear Ms. Bruckner:
Re: Your review comments - Form 20-F for the fiscal
year ended March 31, 2005
File Number 0-29108
Further to our conversation of today, I have attached a response to the queries which resulted from our reply to your initial review comments.
We trust that these responses will satisfy your queries but understand that these responses may raise additional comments to which we will promptly respond.
Yours truly,
/s/ LORNE BROWN
LORNE BROWN,
Chief FINANCIAL Officer
Biotech Holdings Ltd.
Form 20-F - March 31, 2005
As discussed, on March 31, 2005, after eliminating inter-company transactions, Smith Rothe had total assets of $26,300 and total liabilities of $29,900. Smith Rothe was fully consolidated in the March 31, 2005 financial statements of Biotech Holdings Ltd. There is no minority interest reflected in the financial statements because Smith Rothe had a $3,600 shareholder deficit on March 31, 2005. It is our understanding that under both Canadian and US GAAP, a negative minority interest should not be recognized in the consolidated financial statements. Minority Interest will be recognized once Smith Rothe is in a surplus position.
During the year ended March 31, 2004, the Company settled debt through Common and Preference share warrants and by a Common Share private placement. The shares issued are summarized as follows:
Number of | |||
Shares | Value | ||
Common Shares issued | |||
For debt settlement | |||
by private placement | 973,199 | $ 206,387 | |
by warrants exercised | 9,000,000 | 1,350,000 | |
Total Common Shares | 9,973,199 | $ 1,556,387 | |
Preference Shares issued | |||
For debt settlement | |||
by warrants exercised | 13,806,907 | $ 1,380,691 | |
The journal entry for these transactions was as follows:
Dr. Notes Payable | $ 2,937,078 | ||
Cr. Common Shares | $ 1,556,387 | ||
Cr. Preference Shares | $ 1,380,691 |
Under US GAAP, the Company would have recorded in 2004 a loss totaling $2,640,760 on the early extinguishment of debt. Canadian GAAP did not recognize this loss. The amount was determined using the Black Scholes pricing model.
The $2,640,760 loss under US GAAP would have been offset with a credit to Share Capital. Therefore the Shareholders^ deficiency would not be affected by this expense.
