Mail Stop 3561
October 5, 2005
Via U.S. Mail and Fax
Mr. David Shorey
Chief Financial Officer
Cell Wireless Corporation
4625 East Broadway, Suite 203
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 Quarters Ended March 31, 2005 and
June 30, 2005
File No. 0-49849
Dear Mr. Shorey:
We have reviewed your supplemental response letter dated
August
5, 2005 and your subsequent filings and have the following
comments.
As noted in our comment letter dated July 20, 2005, we have
limited
our review to your financial statements and related disclosures
and
do not intend to expand our review to other portions of your
documents.
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 your responses to prior comments 1 and 2 of our July
20,
2005 letter. We are unclear as to the conclusions of the
company`s
CEO and CFO regarding the effectiveness of disclosure controls and
procedures as of the end of the fiscal year covered by the Form
10-
KSB. In your response letter, please provide the following
information:
* a clear statement regarding the CEO`s and CFO`s conclusions
about
the effectiveness of the company`s disclosure controls and
procedures
as of the end of the fiscal year covered by the Form 10-KSB (the
statement that "the effectiveness of the company`s disclosure
controls and procedures in the future are adequate at this time
and
in the past" is insufficient);
* an explanation as to why they concluded in the original Form 10-
KSB
that the disclosure controls and procedures were not "adequately
effective;"
* a clear statement as to whether any changes were implemented to
the
company`s disclosure controls and procedures or internal controls
over financial reporting in response to the auditor`s beliefs that
there were deficiencies (e.g., indicate when the "addition of an
accounting professional" occurred and whether this was in response
to
the auditor`s reported deficiencies);
* an explanation to why the company never received a written
description of the deficiencies identified by the auditor; and
* an explanation as to how the CEO and CFO can conclude that the
disclosure controls and procedures were effective when they never
received a written description of the deficiencies from the
auditor.
Include this information in the amended Form 10-KSB that the
company
will file. Provide us with a draft version of the revised
Controls
and Procedures section for our review.
Note B - Spin-off and discontinued operations
2. We are still unclear on why you concluded that de-consolidation
of
Arizona Aircraft Spares, Inc. (AASI) was appropriate for the year
ended December 31, 2004. We note that AASI was a wholly owned
subsidiary of the Company until its spin-off and in the spin-off
you
distributed 80% of AASI and retained 20%. To help us understand
the
transaction please provide us the following information:
a) The total number of shares distributed to
(1) the shareholders,
(2) the former senior management
(3) the consultant.
b) The number of shares retained by the company after the
distribution
c) Total number of shares distributed as a whole.
d) Total number of authorized shares of AASI.
We note that the majority of the shares have yet to be
distributed,
in this regard, please tell us whether the shares placed in escrow
cannot be returned under any circumstances to Cell Wireless. In
addition, tell us whether AASI was in operations after December
30,
2004 and who was responsible for AASI thereafter.
8-K/A filed on August 31, 2005
3. We have reviewed your filing containing the financial
statements
of the business acquired as required by Rule 3-05 of Reg. S-X. As
a
domestic filer using Form 10-KSB, you are required to include
financial statements prepared in accordance with US GAAP and
audited
by an accountant registered with the PCAOB. Further, the
auditor`s
report should state that the audit was performed in accordance
with
the standards of the Public Company Accounting Oversight Board
(US).
Typically registrants incorporated in the US should use auditors
licensed in the US. However, based upon our understanding of your
specific facts and circumstances, namely that (i) all assets are
located in Australia, (ii) all operations are conducted in
Australia,
and (iii) the books and records are maintained in Australia, we
will
not object if you select a non-US domiciled auditor. This auditor
should be located in the same country as the majority of your
assets,
revenues and operations (e.g., Australia).
In determining whether to accept a report from a non-US auditor,
we
expect the auditor to be subject to the same quality controls,
including completion of filing reviewer procedures, as described
in
Section IV.C "Quality of Audits and Reconciliations to US GAAP"
of
The International Reporting and Disclosure Issues in the Division
of
Corporation Finance, found on our web site at
http://www.sec.gov/divisions/corpfin/internatl/cfirdissues1104.htm
..
Accordingly, if you elect to use a non-US auditor, note that they
must be registered with the PCAOB. They must also demonstrate
sufficient knowledge and experience in applying US GAAP, US GAAS
(now
PCAOB Standards), SEC financial reporting rules, and SEC
independence
requirements. In selecting an audit firm, you should be aware that
an
auditor practicing before the Commission for the first time is
expected to demonstrate its knowledge and experience before its
audit
reports are included in filings made with us.
4. We note that the fiscal year-end for Cell Wireless is December
31
while 1Cellnet is June 30. If you elect to adopt December 31 as
the
year-end for the continuing entity, you are required to file a
transition report on Form 10-K containing the audited financial
statements of 1Cellnet from June 30, 2004 through December 31,
2004.
These financial statements must be prepared in US GAAP and be
audited
by an accountant registered with the PCAOB. See the requirements
listed above if you elect to use a non-US domiciled auditor.
* * * *
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. 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,
Larry Spirgel
Assistant Director
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Mr. David Shorey
Cell Wireless Corporation
October 5, 2005
Page 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE