Cambridge Holdings, Ltd
106 S. University Blvd., #14
Denver, CO 80209
March 15, 2011
United States Securities and Exchange Commission Division of Corporation Finance 100 F Street NE Washington, DC 20549 | |
| Attention: | Mr. Daniel L. Gordon |
| Re: | Cambridge Holdings, Ltd. File Number: 000-12962 Form 10-K for the year ended June 30, 2010 Form 10-Q for the quarter ended December 31, 2010 |
We are responding to your comment letter of March 10, 2011 regarding the above referenced filings of Cambridge Holdings, Ltd., (“Cambridge” or the “Company”). For your convenience, the Staff’s comments have been reproduced below, followed by the Company’s response.
Form 10-Q for the Quarter Ended December 31. 2010
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures, page 12
| 1. | We have reviewed your response. In addition, we note that your disclosure control and procedures were ineffective for the June 30, 2010 10-K and it does not appear that anything has changed since that time. You still have significant deficiencies in internal controls and you disclose that there is reasonable possibility that a material misstatement would not have been prevented or detected. Please amend your 10-Q to state that your disclosure controls and procedures were ineffective based upon your disclosed deficiencies. |
Page 2
Securities and Exchange Commission
March 15, 2011
RESPONSE: We have amended our Form 10-Q for the period ended December 31, 2010 to state that our disclosure controls and procedures were ineffective. The revised wording is presented below.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures.
Our management, including our chief executive officer and our chief financial officer, has conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the last day of the period of the accompanying financial statements (the “Evaluation Date”). Based on that review and evaluation, our chief executive officer and our chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were ineffective to ensure that material information relating to us would be made known to them by others within the Company in a timely manner, particularly during the period in which this quarterly report on Form 10-Q was being prepared. The evaluation of our disclosure controls and procedures and the conclusion as to their adequacy and effectiveness, included consideration of the deficiencies noted below.
The Company did not maintain an effective control environment based on criteria established in the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework. Specifically, the Company did not adequately design in an effective manner the procedures necessary to support on a timely basis the requirements of the financial reporting and closing process.
Our evaluation concluded that, although policies and procedures appropriate for operating control activities were designed, and in large part instituted, the Company has not been successful in designing and implementing polices for the control environment. The control environment sets the tone of an organization, influences the control consciousness of its people, and is the foundation of all other components of internal control over financial reporting. A material weakness in the control environment affects all other internal control components.
We have also identified conditions as of December 31, 2010 that we believe are significant deficiencies in internal controls that include: 1) a lack of segregation of duties in accounting and financial reporting activities and 2) the lack of a sufficient number of qualified accounting personnel. We do not believe that these deficiencies constitute material weaknesses because of the use of temporary controllers, the review by our chief executive officer of accounting information and reconciliations, and the use of outside consultants.
Management believes these deficiencies in internal control did not result in material inaccuracies or omissions of material fact and, to the best of its knowledge, believes that the financial statements for the six months ended December 31, 2010 fairly present in all material respects the financial condition and results of operations for the Company in conformity with GAAP. There is, however, a reasonable possibility that a material misstatement of the annual or interim financial statements would not have been prevented or detected as a result of the control environment weaknesses.
Page 3
Securities and Exchange Commission
March 15, 2011
* * * * * *
We acknowledge that:
| | • | the company is responsible for the adequacy and accuracy of the disclosure in the filing, |
| | • | staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; 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 of the United States. |
We shall be pleased to address any additional comments or concerns the staff may have concerning our filing.
Sincerely,
/s/ Jeffrey G. McGonegal
Jeffrey G. McGonegal
Chief Financial Officer and Principal Financial Officer
