January 9, 2006
By facsimile to (212) 608-9169 and U.S. Mail
Mr. Wilson Cheng
Chairman, Chief Executive Officer, President, and Treasurer
Bestway Coach Express Inc.
2 Mott Street, 7th Floor
New York, NY 10013
Re: Bestway Coach Express Inc.
Amendments 1 and 2 to Registration Statement on Form 10-SB
Filed December 13 and 14, 2005
Quarterly Report on Form 10-QSB for the quarter ending August
31, 2005
Filed December 14, 2005
File Nos. 0-51437
Dear Mr. Wilson:
We reviewed the filings and have the comments below.
10-SB/A2
Description of Business, Our Services, page 3
1. Revised disclosure here and elsewhere in response to prior
comment
28 indicates that Bestway Coach Express provides services both on
a
contracted and per seat basis. Allocate the amount of services
that
Bestway Coach Express provided during the periods presented in the
financial statements on:
* A contracted basis.
* Per seat basis.
Equipment, page 5
2. We note that the amounts in your response to comment 4 are
different than the amounts that you have disclosed on page 5.
Please
correct these differences. In addition, please reconcile the
$581,098 of loss on trade-in of capitalized leases in your
statement
of cash flow on page F-5 to the amounts in your disclosure on page
5.
Management`s Discussion and Analysis, Overview, page 12
3. Revised disclosure here and elsewhere in response to prior
comment
10 indicates that Bestway Coach Express has 22 roundtrip schedules
to
and from casinos on Monday through Thursday of each week and 26
roundtrip schedules to and from casinos on Friday through Sunday
of
each week and charters to third parties one motorcoach per day
during
the week and two to three motorcoaches during the weekend. Since
Bestway Coach Express` fleet consists of 23 buses, confirm that
some
buses make more than one roundtrip a day to and from casinos on
Friday through Sunday of each week.
4. We note that you have expanded your disclosure about your bus
services in response to our comment 10; however, you have not
provided any discussion about your tours services. In
consideration
that based on the table on page 13, you have generated over 10% of
your revenue for each of the past two years from tours, provide
disclosure about ability to generate revenue from tours.
5. We note your disclosure on page 16 that one of the reasons for
your increase in revenue was a result in your chartered bus
services.
However, this statement seems to contradict your table on page 13
that shows charter revenue decreased year over year. Please
address
this discrepancy.
6. In addition, in your discussion of operating results on page
16,
quantify your increase in revenue as a result of increases in
rates
charged to casinos and the increase due to your special
destination
services. Disclose why your tour revenue decreased significantly
year over year. In addition, disclose the reasons that your
payroll
expenses, bus insurance, and toll expenses increased year over
year.
7. Disclose the reasons for the increase in fuel expenses and
payroll
expenses for your fiscal quarter ended August 31, 2005. In
addition,
disclose the reasons for each of your material changes in
operating
expenses for the nine months ended August 31, 2005. Please
explain
to us why you have omitted a discussion of your loss on trade-in
of
the 11 motorcoaches as this had a material impact on your
financial
results for the fiscal quarter ended August 31, 2005 and nine
months
ended August 31, 2005.
Liquidity and Capital Resources, page 19
8. We note your disclosure on page 19 that you anticipate your
annual
interest expense to be reduced by about $100,000 a year as a
result
of the new motorcoaches that were acquired in May 2005. However,
in
your statement of operations on page F-3 (Interim) interest
expense
increased for the three months ended August 31, 2005 compared to
the
three months ended August 31, 2004. Please explain to us and
address
this apparent discrepancy in your liquidity and capital resources
disclosure.
Recent Sales of Unregistered Securities, page 30
9. We note your response to comment 16 that you have corrected
your
disclosures to reflect the shares issued to Mr. Wilson Cheng in
June
rather than in May. Correct the disclosure on page 30 that still
states the shares were issued in May 2005. We also note your
reference to the May 2005 issuance of 2 million shares in your
stock
valuation note on page F-8 and on page 27 in the 10-QSB. Please
revise.
10. We note your disclosure on page 30 in response to our comment
17.
It remains unclear to us how you determined the fair market value
of
your common stock to be $0.05. Please provide us the objective
information and analysis or valuation report used to determine
fair
value at the date the shares were issued to your CEO. If not
included in the report, please address how the Company determined
its
market capitalization to be $685,000 in consideration of its
stockholder`s deficit of $651,039 as of November 30, 2004. In
addition, we repeat the second half of comment 17 to tell us how
this
transaction was recorded.
Report of Independent Registered Public Accounting Firm, page F-2
11. We note the disclosure in the audit report on page F-2 and
your
disclosure in Note 20 on page F-20, that you refer to a previous
report dated February 28, 2005 that resulted in a restatement of
your
financial statements. We also note your current audit report is
also
dated February 28, 2005. Please explain to us how the original
audit
report and the audit report containing the restated financial
statements are the same date. Refer to AU Section 530.
Statements of Operations, page F-3 (Interim)
12. The line item, "Loss on trade-in of assets under capitalized
leases" should be presented as a component of income from
operations.
Refer to paragraph 45 of SFAS No. 144.
Statements of Cash Flows, page F-5 (Interim)
13. Please explain to us how you recorded the purchase of the
eleven
motorcoaches in June 2005 for $4,211,000 and the related
financing.
We note that in your cash flow statement, your purchase of
property
and equipment for the nine months ended August 31, 2005 is $38,122
and your proceeds from notes payable is $116,073. Amounts
disclosed
in the cash flow statement should be presented gross, not net.
Refer
to paragraph 11 of SFAS No. 95.
Exhibit Index
14. We note that you omit from the exhibit index exhibits 2.1,
2.2,
2.3, 6.1, 6.2, and 6.3 that you filed in the 10-SB on July 15,
2005.
Include in the exhibit index in any amendment to the 10-SB all
exhibits filed as exhibits to the 10-SB. Indicate by footnote or
otherwise if the exhibits were filed previously.
Exhibits 10.5, 10.8, 10.11, and 10.15
15. Absent an order granting confidential treatment, Item
601(b)(10)
of Regulation S-B requires the filing of material contracts,
including attachments, in their entirety. Attachments include,
for
example, annexes, appendices, exhibits, and schedules. Since you
did
not file the exhibits` attachments, refile the exhibits in their
entirety.
10-QSB
Cover Page
16. Our records reflect that Bestway Coach Express` Commission
file
number is 0-51437 and not 000-51158. Please revise in future
filings.
Item 3. Controls and Procedures, page 26
17. Revise your disclosure in future filings that, if true, an
evaluation of your controls and procedures was performed as of the
end of the period of the report, not within 90 days. Refer to
Item
307 of Regulation S-B.
Closing
File an amendment to the Form 10-SB in response to these
comments. To expedite our review, you may wish to provide us
three
marked courtesy copies of the filing. Include with the filings a
cover letter tagged as correspondence that keys the responses to
the
comments and any supplemental information requested. If you think
that compliance with any of the comments is inappropriate, provide
the basis in the letter. We may have additional comments after
review of the filing, the responses to the comments, and any
supplemental information.
We urge all persons responsible for the accuracy and adequacy
of
the disclosures in the filings reviewed by us to make certain that
they have provided all information that investors require for an
informed decision. Since Bestway Coach Express and its management
are in possession of all facts relating to the disclosures in the
filings, they are responsible for the adequacy and accuracy of the
disclosures that they have made.
When responding to our comments, provide a written statement
from Bestway Coach Express acknowledging that:
* Bestway Coach Express is responsible for the adequacy and
accuracy
of the disclosures in the filings.
* Our comments or changes to disclosures in response to our
comments
do not foreclose the Commission from taking any action on the
filings.
* Bestway Coach Express may not assert our comments as a defense
in
any proceedings initiated by the Commission or any person under
the
United States` federal securities laws.
The Commission`s Division of Enforcement has access to all
information that you provide us in our review of the filings or in
response to our comments on the filings.
You may direct questions on accounting comments to Ryan E.
Rohn, Staff Accountant, at (202) 551-3739 and Alfred P. Pavot,
Jr.,
Staff Accountant, at (202) 551-3738. You may direct
questions on other comments and disclosure issues to Edward M.
Kelly,
Senior Counsel, at (202) 551-3728 or Christopher B. Edwards,
Special
Counsel, at (202) 551-3742.
Very truly yours,
Pamela A. Long
Assistant Director
cc: Louis A. Bevilacqua, Esq.
Thelen Reid & Priest LLP
701 8th Street, N.W.
Washington, DC 20001-3721
Mr. Wilson Cheng
January 9, 2006
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE