Mail Stop 3561
July 20, 2005
Via U.S. Mail and Fax
Ms. Sylvia Quintero
Chief Financial Officer
Cell Wireless Corporation
4625 East Broadway
Tucson, AZ 85711
RE: Cell Wireless Corporation
Form 10-KSB for Fiscal Year Ended December 31, 2004
Filed June 6, 2005
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
File No. 0-49849
Dear Ms. Quintero:
We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents. Please address the following comments
in
future filings. If you disagree, we will consider your
explanation
as to why our comment is inapplicable or a future revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or 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 the fiscal year ending December 31, 2004
Item 8.A. Controls and Procedures, page 20
Evaluation of Disclosure Controls and Procedures, page 20
1. We note that your CEO and CFO concluded that your disclosure
controls and procedures were not "adequately effective" as of
December 31, 2004. In your amended Form 10-KSB, please provide
the
following disclosure:
* Describe in greater detail the nature of the deficiencies in the
company`s disclosure controls and procedures;
* State when the deficiencies first arose, when the company
identified such deficiencies, and how the deficiencies were
identified;
* Describe in greater detail the nature of the "corrective
measures"
taken by the company (e.g., the "new internal policies") and the
expected timetable for full implementation of such measures; and
* State whether management believes that the "corrective measures"
will remediate the deficiencies sufficiently to ensure the
effectiveness of the company`s disclosure controls and procedures
in
the future.
Changes in Internal Control Over Financial Reporting, page 20
2. We note the qualifying language included in the second half of
this section. In your amended Form 10-KSB, please revise to state
whether management believes that, with the implementation of the
changes described here, the company`s disclosure controls and
procedures will be designed to provide reasonable assurance of
achieving their objectives. In this regard, we note the statement
on
page 20 that the company feels the engagement of the CPA "will
improve the quality of future period financial reporting."
3. Please clarify the meaning of the following statement: "In
addition, the design of any control system is based in part upon
certain assumptions about the likelihood of future events." Your
revised disclosure should describe in detail the "assumptions" and
"future events." Alternatively, delete this qualification.
Notes to Consolidated Financial Statements, page F-8
Note B - Spin-off and discontinued operations
4. We note that you de-consolidated Arizona Aircraft as of
December
30, 2004. Tell us the date of the distribution. Based on
disclosures in your Form 10-QSB for the quarter ended March 31,
2005,
it appears that the distribution occurred after December 31, 2004.
If so, tell us your basis in the accounting literature to
deconsolidate Arizona Aircraft at December 31, 2004. Please
disclose the total number of shares distributed in the spin off
and
who received those shares on which dates.
5. Using the guidance in EITF 03-13 tell us why you believe it is
appropriate to reflect the operations of Arizona Aircraft as
discontinued operations.
Note I - Acquisition and Capital Restructure
6. In connection with the acquisition of 1Cellnet, please provide
audited historical financial statements and pro-forma information
as
required by Rule 3-05 of Reg. S-X within 75 days of the closing of
the acquisition. We may have further comments after the review
of
this financial information.
Exhibits 31.1 and 31.2
7. Please be advised that the Rule 13a-14 certifications must be
in
the exact form and include the exact disclosure as specified by
Item
601(b)(31) of Regulation S-B. We note that your certifications
omit
certain required language (e.g., in sub-paragraph (a) of paragraph
5,
the term "material weaknesses" is omitted), contains mistakes
(e.g.,
paragraph 2 refers to "quarterly report;" paragraph 4 refers to
the
wrong rules for the definition of "disclosure controls and
procedures"), and include unnecessary language (e.g., the language
contained in paragraph 6 is no longer needed). Please amend your
Form 10-KSB to include the revised certifications. Please note
that
when you correct your certifications, you will have to re-file
your
Form 10-KSB in its entirety.
Form 10-QSB for the quarter ending March 31, 2005
8. You state the transaction with 1Cellnet as a recapitalization
effected by a reverse acquisition effective March 9, 2005. We
note
that you determined the accounting acquirer to be 1Cellnet. Tell
us
how you accounted for the transaction in the statement of
shareholders` equity for the quarter ending March 31, 2005.
Specifically, have all transactions occurring prior to the date of
the acquisition and in prior periods been restated to reflect the
ratio of shares exchanged in the merger.
* * * *
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
letter that keys your responses to our comments and provides any
requested information. Detailed letters greatly facilitate our
review. Please understand that we may have additional comments
after
reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the 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 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 of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
You may contact Nasreen Mohammed, Staff Accountant, at (202)
551-3773 or Ivette Leon, Assistant Chief Accountant, at (202) 551-
3351 if you have questions regarding comments on the financial
statements and related matters. Please contact Ted Yu, Staff
Attorney, at (202) 551-3372 or me at (202) 551-3810 with any other
questions.
Sincerely,
/s/ Carlos Pacho
For Larry Spirgel
Assistant Director
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Ms. Sylvia Quintero
Cell Wireless Corporation
July 20, 2005
Page 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE