Mail Stop 3561-CF/AD 11
August 25, 2005
Via U.S. Mail and Fax (972 3 972 6001)
Mr. Jacob Batchon, Financial Officer
Crow Technologies 1977 Ltd.
12 Kineret Street
Airport City, Israel
RE: Crow Technologies 1977 Ltd.
Form 20-F for the fiscal year ended December 31, 2004
Filed July 14, 2005
File No. 0-13844
Dear Mr. Batchon:
We have reviewed the above referenced filing and have the
following comments. We have limited our review to only your
financial statements and related disclosures and will make no
further
review of your documents. As such, all persons who are
responsible
for the adequacy and accuracy of the disclosure are urged to be
certain that they have included all information required pursuant
to
the Securities Exchange Act of 1934. Please address the following
comments in the 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 supplemental information so that 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 on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 20-F for the year ended December 31, 2004
Recent Developments, page 21
1. Please refer to the information provided in first paragraph
under
the above caption. Your attention is directed to the staff`s
comment
letter issued on September 13, 2002 on the examination of your
Amendment # 1 to Form F-3 filed on July 9, 2002 and Form 20-F for
the
year ended December 31, 2001. Our records indicate that you did
not
respond to our comments issued in the above indicated letter.
Please
advice. Please provide us with your responses to comment nos. 7,
17, 18 and 19 issued on the Form 20-F for the year ended December
31,
2001.
Crow Technologies 1977 Ltd.
August 25, 2005
Page 2
Item 5. Operating and Financial Review and Prospects
Significant Accounting Principles and Policies
Reclassification, page 39
2. We note that regarding the year 2003, NIS 638 thousands was
classified from "deferred taxes on income" in "long term
liabilities"
to "other accounts receivable" in current assets. Please tell us
if
this reclassification was restatements to correct prior year
errors.
Also, tell us if the reclassification had any effect on the
consolidated statements of operations for the year ended December
31,
2003.
Revenue Recognition, page 40
3. Disclose in detail why you consider that your revenue
recognition
and allowance for doubtful accounts policies have substantial
impact
on the financial statements. Also, tell us why you believe that
your
accounting policies for the inventories, impairment of property
and
equipments and intangible assets are not critical accounting
policies. For additional guidance, please refer to Item 5 of Form
20-F and the Implementation Guidance to FR- 60 issued by the SEC
in
January 2002. Also, disclose in future filings how accurate the
estimates of the net realizable revenue have been in the past, and
provide sensitivity analysis depicting reasonably likely scenarios
had other variables been chosen in the determination of your
estimates. Refer to SEC Interpretive Release no. 33-8350
Commission
Guidance Regarding Management`s Discussion and Analysis of
Financial
Condition and Results of Operations.
4. Clarify for us the nature of any continuing involvement or
significant post-sales commitments that you may have with regard
to
certain sales of security alarm systems.
Also, tell us if your sales involve multiple elements, such as the
sales of products, installation services and customer service and
support. Discuss how you determined that these multiple
deliverables
are not considered separate units of accounting as discussed by
EITF
00-21. If applicable, please discuss your liability for the
product
warranty.
Analysis of our Operation Results for the Year ended December 31,
2004 as Compared to the Year ended December 31, 2003, page 40
5. Please disclose and discuss in future filings, the changes in
each
material component of the "Cost of sales" line item disclosed on
page
F-40. In circumstances where there is more than one business
reason
for the change, you should attempt to quantify the incremental
impact
of each individual business reason discussed on the overall change
in
the line item. Your present discussion on page 41 is not very
informative.
Crow Technologies 1977 Ltd.
August 25, 2005
Page 3
Financial Statements:
Notes to Consolidated Financial Statements
Note 20. Effect of material differences between Israeli GAAP and
US
GAAP on the consolidated financial statement, page F-42
e. Preferred shares of an affiliate, page F-43
6. Tell us about the nature of your investment in the affiliate
including the characteristics of the preferred shares. Tell us
how
you consider the consensus reached in EITF 02-14 in determining
the
difference in accounting between Israel GAAP and US GAAP. Also,
tell
us how you concluded that you don`t have to recognize equity
losses
under US GAAP.
In connection with responding to our comment, 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 in the filings reviewed by the staff 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.
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 supplemental information. Please file your response
letter
on EDGAR. You may contact Gopal Dharia, Staff Accountant, at
(202)
551-3353 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 me at (202) 551-
3810
with any other questions.
Sincerely,
Larry Spirgel
Assistant Director
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