November 7, 2005
Mr. Franco DeBlasio
Chief Financial Officer
General Kinetics Incorporated
110 Sunray Dr.
Johnstown, PA 15905
RE: Form 8-K Item 4.01 filed November 4, 2005
File # 1-10914
Dear Mr. DeBlasio:
We have reviewed your filings and have the following comments.
Where indicated, we think you should revise your documents in
response to these comments. 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 on any other
aspect of our review. Feel free to call us at the telephone
number
listed at the end of this letter.
1. Please amend the Form 8-K to revise your disclosure to state
the
reports, instead of report, of your former accountant on your
financial statements for the fiscal years ended May 31, 2005 and
2004 included an explanatory paragraph that noted substantial
doubt
about your ability to continue as a going concern.
2. Regarding your disclosures over disagreements with your
former
accountants, as well as reportable events, please amend your
filing
to cover the interim period from the date of the last audited
financial statements to October 31, 2005, the date of
declination.
See Item 304(a)(1)(IV) and (V) of Regulation S-K.
3. Please amend the Form 8-K to provide the information required
by
Item 304(a)(1)(v) of Regulation S-K, regarding any reportable
event
(i.e. internal control weakness, etc.) that the former
accountant
advised the company of during the two most recent fiscal years
and
subsequent interim period through October 31, 2005.
4. Please provide us with a schedule of your fiscal year end
fourth
quarter adjustments to close the books, or adjustments recorded
in
connection with or as a result of the audit. Clearly explain
the
reason for each adjustment. For each adjustment, show us the
impact on pre-tax net loss. Quantify the net effect of all
adjustments on pre-tax net income (loss). Also, tell us why
none
of the adjustments relate to prior period. Explain in detail
why
you believe the timing of each adjustment is appropriate.
5. Provide us with any letter or written communication to and
from
the former accountants regarding any disagreements or reportable
events to management or the Audit Committee.
6. To the extent that you make changes to the Form 8-K to comply
with our comments, please obtain and file an updated Exhibit 16
letter from the former accountants stating whether the
accountant
agrees with the statements made in your revised Form 8-K.
7. When you engage a new accountant, please report the
engagement
in a new Form 8-K and comply with the requirements of Regulation
S-
K Item 304(a)(2). In making any disclosures about consultations
with your new accountants, please ensure you disclose any
consultations up through the date of engagement.
*****
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. 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 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 file your supplemental response via EDGAR in response to
these comments within 5 business days of the date of this
letter.
Please note that if you require longer than 5 business days to
respond, you should contact the staff immediately to request
additional time. You may wish to provide us with marked copies
of
each amended filing to expedite our review. Direct any
questions
regarding the above to the undersigned at (202) 551-3866.
Sincerely,
Jeffrey Gordon
Staff Accountant
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Franco DeBlasio
Chief Financial Officer
November 7, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0510
DIVISION OF
CORPORATION FINANCE