Mail Stop 4561
March 21, 2006
Mr. Kung-Chieh Huang
Chief Financial Officer
Eupa International Corporation
89 N. San Gabriel Boulevard
Pasadena, CA 91107
Re: Eupa International Corporation
Form 10-KSB for the Year Ended December 31, 2004
Filed March 31, 2005
File No. 0-26539
Dear Mr. Huang:
We have reviewed your response letter dated March 10, 2006
and
have the following additional comments. Where indicated, we think
you should revise your document in response to these comments in
future filings. 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 ask you to provide us with information so we may
better understand your disclosure. After reviewing this
information,
we may 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
filings.
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 10-KSB for the year ended December 31, 2004
Item 3. Legal Proceedings, page 3
1. We note the disclosure on page 3 of your amended annual report
regarding a lawsuit brought against Tsann Kuen Enterprise Co.,
Ltd.
and your subsidiary, Tsann Kuen U.S.A., related to sales of
products
in Iran by Tsann Kuen China (Shanghai) Enterprises Ltd. Iran is
identified as a state sponsor of terrorism by the State
Department,
and is subject to economic sanctions administered by the Treasury
Department`s Office of Foreign Assets Control. Your Form 10-KSB/A
contains no other information regarding contacts with Iran by you,
TK
USA or any other affiliated entity. Please describe for us your
current, historical, and anticipated direct or indirect business
activities in or contacts with Iran, whether through subsidiaries
or
other affiliates, joint ventures, or other direct or indirect
arrangements. Your discussion should include, but not be limited
to:
* the extent and nature of any business activities in Iran,
including
the type and dollar value of goods sold, and whether TKS, TK USA
or
any other affiliate continues to sell goods in Iran; and
* whether the parties with whom you have agreements to sell, or to
whom you otherwise sell, in Iran, are entities controlled by or
affiliated with the government of Iran; the material terms of any
agreements covering sales into Iran; and whether such agreements
are
still in force.
2. Please discuss in reasonable detail the materiality of the
business activities or contacts identified in response to the
foregoing comment, and whether these activities or contacts
constitute a material investment risk for your security holders.
You
should address materiality in quantitative terms, including the
dollar amounts of any associated assets and liabilities, and the
dollar amount of revenues derived from business activities in or
contacts with Iran. Please also address materiality in terms of
qualitative factors that a reasonable investor would deem
important
in making an investment decision, including the potential impact
of
your business activities upon your reputation and share value. In
this regard, we note, for example, that Arizona and Louisiana have
adopted legislation requiring their state retirement systems to
prepare reports regarding state pension fund assets invested in,
and/or permitting divestment of state pension fund assets from,
companies that conduct business with countries identified as state
sponsors of terrorism. Your materiality analysis should address
the
potential impact of the investor sentiment evidenced by these
illustrative actions.
Consolidated Statements of Operations, page F-3
3. We note your response to comment 4. In future filings, please
revise your statements of operations to classify costs related to
research and development services and fiduciary and administration
services as costs of services to arrive at gross profit rather
than
general and administrative expenses. Reference is made to Rule 5-
03
of Regulation S-X.
Note D - Intangible Assets, page F-12
4. We note your response to comment 1. Please revise your
disclosure
in future filings to include a more detailed description of your
impairment policies related to intangible assets and the useful
lives
assigned to those assets.
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please file your response on EDGAR. 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 to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment 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.
You may contact Matthew Maulbeck, Staff Accountant, at (202)
551-3466 or the undersigned at (202) 551-3403 if you have
questions
regarding comments three or four. If you have questions regarding
comments one or two, please contact Pradip Bhaumik in the Office
of
Global Security Risk at (202) 551-3333
Sincerely,
Steven Jacobs
Accounting Branch Chief
??
??
??
??
Mr. Kung-Chieh Huang
Eupa International Corporation
March 21, 2006
Page 1