August 11, 2005
Mail Stop 3561
Via US Mail and Facsimile
Mr. Brad Brimhall
Chief Executive Officer
Nevada Classic Thoroughbreds, Inc.
705 North 110th Place
Mesa, AZ 85207
Re: Nevada Classic Thoroughbreds, Inc.
Form 10-KSB for the year ended June 30, 2005
Commission file #: 000-31154
Dear Mr. Brimhall:
We have reviewed the above referenced filing and have the
following
comments. Please file an amended Form 10-KSB in response to our
request for expanded or revised disclosure. If you disagree, we
will
consider your explanation as to why our comment is inapplicable or
a
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 supplemental 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 year ended June 30, 2005
Management`s Discussion and Analysis or Plan of Operation, page 5
1. We note your disclosure of the common and horse preferred stock
before and after June 30, 2005. Please revise your disclosure to
explain each transaction and the date that it occurred as part of
the
restructuring. Any stock splits or stock dividends that were done
subsequent to the balance sheet date but prior to filing your Form
10-
KSB should be given retroactive effect in your financial
statements.
See SAB Topic 4C.
Financial Statements
2. We note that you have presented unaudited financial statements
in
your Form 10-KSB and disclose in Note 3 that you are an inactive
registrant and do not need to provide an audited or reviewed
quarterly
report. It appears from Note 6 that you have issued stock options
and
therefore would not meet the condition in Rule 3-11(b). It also
appears from your MD&A that subsequent to June 30, 2005 you will
be
issuing warrants to your public shareholders. Please amend your
Form
10-KSB to include audited financial statements and the opinion of
the
independent auditor or alternatively, advise us why you believe
you
continue to meet the requirements to be deemed an inactive
registrant.
If an amendment is filed, the disclosure in Note 11 appears to
indicate that the independent auditor`s report will contain an
explanatory paragraph describing the uncertainty about the
Company`s
ability to continue as a going concern in accordance with
paragraph 13
of Section 341 of the Statement of Auditing Standards (i.e. SAS 59
and
64). See Rule 310(a) of Regulation S-B.
Statement of Stockholders Equity, page 9
3. Please revise your statement of stockholders` equity to present
clearly and chronologically from the enterprise`s inception:
1) Changes in each account of stockholders equity
2) For each issuance, the date and number of shares of stock,
warrants, rights, or other equity securities issued for cash and
for
other consideration.
3) For each issuance, the dollar amounts (per share or other
equity
unit and in total) assigned to the consideration received for
shares
of stock, warrants, rights, or other equity securities. Dollar
amounts
shall be assigned to any noncash consideration received.
4) For each issuance involving noncash consideration, the nature
of
the noncash consideration and the basis for assigning amounts.
5) The total amounts of common stock, preferred stock, paid in
capital
and accumulated deficit at the end of each year.
Notes to the Financial Statements
4. We note your disclosure in the MD&A section that the 5,000
shares
that were previously forward split into 2,000,000 shares shall be
forward split again 1 to 2, to 4,000,000 shares. Please revise
your
disclosure in MD&A to state the date at which these stock splits
took
place. Additionally, please revise your statement of
stockholders`
equity to reflect each split separately and add a note to the
financial statements which discusses the splits and the date at
which
they occurred.
Note 1. Summary of Significant Accounting Policies
- - Long-lived Assets, page 12
5. We note your disclosure that you follow SFAS No. 121 in
accounting
for your long-lived assets. Please revise the disclosure and
confirm
that you are following SFAS No. 144, which superseded SFAS No.
121.
Note 9. Fair Market Value of Services Donated by Stockholder,
page 15
6. We note your disclosure that a stockholder provided services
for
which the fair value is estimated at $10,936. It also appears
from
the Form 10-KSB for the year ended June 30, 2004 that the same
estimate of fair value was used in 2003, 2004 and 2005. Please
tell
us how you determined the fair value of the services and why the
amount is the same in each year.
Note 15. Cash Receivable, page 16
7. We note a beneficial shareholder donated a lump sum to the
company
that was not received by the date of the report. Similar to the
guidance in Topic 4E of the Staff Accounting Bulletins, we believe
the
receivable from the shareholder should be presented as a deduction
from stockholders` equity and not as an asset on the balance
sheet.
Please revise accordingly.
Item 8A. Controls and Procedures, page 17
8. We note that you have not included Item 8a in your filing which
should include disclosure of the conclusions of management
regarding
the effectiveness of your disclosure controls and procedures.
This
item should also disclose any changes to your internal controls
over
financial reporting. Please revise your filing to include these
disclosures. See Item 307 and 308 of Regulation S-B.
Section 302 Sarbanes Oxley CEO/CFO Certifications
9. We note that your CEO/CFO certifications do not include each
item
required by Rule 13a-14(a) and 15d-14(a). Please revise your
certifications to include the following items:
o 4(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to
us by others within those entities, particularly during the period
in
which this report is being prepared.
o 4(c) Evaluated the effectiveness of the registrant`s disclosure
controls and procedures and presented in this report our
conclusions
about the effectiveness of the disclosure controls and procedures,
as
of the end of the period covered by this report based on such
evaluation; and
o 4(d) Disclosed in this report any change in the registrant`s
internal control over financial reporting that occurred during the
registrant`s most recent fiscal quarter that has materially
affectd,
or is reasonably likely to materially affect, the registrant`s
internal control over financial reporting; and
5. The registrant`s other certifying officer and I have
disclosed,
based on our most recent evaluation of internal control over
financial
reporting, to the registrant`s auditors and the audit committee of
the
registrant`s board of directors:
o 5(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which
are reasonably likely to adversely affect the registrant`s ability
to
record, process, summarize and report financial information; and
o 5(b) Any fraud, whether or not material, that involves
management or
other employees who have a significant role in the registrant`s
internal control over financial reporting.
* * * * * * * * * * * * * * * * * * * * * * *
As appropriate, please respond to these comments within 10
business
days or tell us when you will provide us with a response. Please
furnish a cover letter that keys your responses to our comments
and
provides any requested supplemental information. 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 filings reviewed by the staff to be
certain
that they have provided all information investors require for an
informed 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 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.
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 filing or in response to
our
comments on your filing.
You may contact Claire Erlanger at 202-551-3301 or Joe Foti at
202-
551-3816 if you have questions.
Sincerely,
Linda Cvrkel
Branch Chief
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Mr. Brad Brimhall
Nevada Classic Thoroughbreds, Inc.
August 11, 2005
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