AMBASE CORPORATION
100 Putnam Green, 3rd Floor
Greenwich, CT 06830
April 16, 2007
Via Edgar Filing Via Edgar Filing
Mr. Daniel Gordon, Branch Chief Ms. Jessica Barberich, Staff Accountant
Division of Corporate Finance Division of Corporate Finance
U.S. Securities and Exchange Comm. U.S. Securities and Exchange Commission
100 F Street, NE 100 F Street, NE
Washington, DC 20545 Washington, DC 20545
Re: Staff Comment letter dated April 5, 2007
AmBase Corporation
Form 10-K for the year ended December 31, 2006
Filed March 29, 2007
File No. 001-07265
Dear Mr. Gordon/Ms. Barberich:
Set forth below are AmBase Corporation's (the "Company"), responses to the
comments of the staff (the "Staff") of the Securities and Exchange Commission
(the "Commission") dated April 5, 2007 (received Monday, April 9, 2007).
We have carefully reviewed your letter and the Staff's comments internally and
with PricewaterhouseCoopers, LLP, the Company's Independent Public Accountants
and Thelen Reid Brown Raysman & Steiner, the Company's outside corporate legal
counsel, and to the extent appropriate, we will expand our future filings to
enhance disclosure.
For convenience of reference, all of the Staff comments are provided below,
followed by the accompanying responses. References in the responses are to the
Company's Annual Report on Form 10-K for the year ended December 31, 2006, filed
with the Commission via EDGAR on March 29, 2007.
1. Staff Comment - Form 10-K for the year ended December 31, 2006 -
Consolidated Balance Sheet:
"We note that you currently own a commercial office building in Greenwich,
CT and that the carrying amount of the building and the related land is
$2,171,000 on your balance sheet. We also note that the building is
approximately 14,500 square feet with approximately 3,500 square feet
utilized by your company for its executive offices with the remaining space
unoccupied and available for lease. We also note that you have incurred
recurring losses from continuing operations and negative cash flows in at
least the past three years and your main source of operating revenue has
been rental income from this property. Furthermore, you disclose in your
discussion of your results of operations that the vacancies in your
building have increased over the past three years; thus, revenue has
declined as well. In light of these facts, please tell us how you
determined that this property is not impaired. Additionally, please tell us
and in future filings disclose how and when you perform the impairment test
on your property."
Response:
The Company does not believe an impairment condition exists as of December
31, 2006, or as of the current date. The carrying value of the asset does
not exceed its current fair value and; therefore, the carrying value of the
asset is fully recoverable by the Company.
Our analysis is based on many factors, including but not limited to, the
location of the property; property condition; current market conditions;
recent comparable sales; new building zoning restrictions; raw land values;
building costs; and cap rates for comparable buildings in the area. In
addition, although the portion of the building not being utilized by the
Company is currently unoccupied and available for lease; based on current
market rents in the area, leasing values, and the costs of operating the
building, the Company believes the carrying value of the property has not
been impaired. The Company has also considered the property sales value, in
terms of the value of the property to an owner user with an unoccupied
building, versus a fully leased building at current lease rates and market
cap rates.
As noted above, the Company has; therefore, concluded that there has been
no impairment in the carrying value of the property, nor does the carrying
value of the property exceed the property's fair value.
The Company performs impairment tests if events or circumstances would
indicate that the property's carrying value would not be recoverable.
It should be noted that the level of operating losses and negative cash
flows from continuing operations are not solely attributable to the
operations of the property, but they are substantially related to
non-property related activities.
The Staff Comment is noted and future filings to the extent required, will
reflect the requested change.
2. Staff Comment - Consolidated Statements of Cash Flows:
"We note that you begin your reconciliation to operating cash flows with
loss from continuing operations. In future filings please adjust net
income/loss, rather than loss from continuing operations, when reconciling
to operating cash flows. For reference please see paragraph 28 of SFAS 95."
Response:
The Staff Comment is noted and future filings will reflect the requested
change.
3. Staff Comment - Consolidated Statements of Cash Flows:
"Furthermore, it is not appropriate to present operating, investing, and
financing cash flows from discontinued operations all within the operating
cash flow category. In future filings, please either combine cash flows
from discontinued operations with cash flows from continuing operations
within each category or identify cash flows from discontinued operations
within each category."
Response:
The Staff Comment is noted and future filings will reflect the requested
change.
4. Staff Comment - Item 9B - Other Information:
"In future filings please disclose whether there have been any changes in
your internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, your internal
control over financial reporting. For reference, please see Item 308(c) of
Regulation S-K."
Response:
The Staff Comment is noted and future filings will reflect the requested
change.
In connection with this response, we acknowledge that:
o the Company is responsible for the adequacy and accuracy of the disclosure
in the filing;
o staff comments or changes to disclosure in response to staff comments do
not foreclose the Commission from taking any action with respect to the
filings; and
o 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.
It should be noted, as part of our filing process with the Commission,
PricewaterhouseCoopers, LLP and Thelen Reid Brown Raysman & Steiner regularly
review the Company's other Commission filings.
If necessary, we would be pleased to discuss these matters in further detail, at
your convenience. Should you have any further questions, please contact us to
arrange a mutually convenient time. We can be contacted as follows:
Mr. Richard A. Bianco Mr. John P. Ferrara
Chairman, President and Vice President and
Chief Executive Officer Chief Financial Officer
AmBase Corporation OR AmBase Corporation
100 Putnam Green, 3rd Floor 100 Putnam Green, 3rd Floor
Greenwich, CT 06830 Greenwich, CT 06830
Tel: (203) 532-2010 Tel: (203)532-2054
Fax: (203) 532-1115 Fax: (203)532-1115
Thank you.
Sincerely,
/s/ Richard A. Bianco /s/ John P. Ferrara
Richard A. Bianco John P. Ferrara
Chairman, President and Vice President and
Chief Executive Officer Chief Financial Officer