February 22, 2006
U.S. Securities and Exchange Commission
BY EDGAR AND OVERNIGHT DELIVERY
100 F Street, N.E.
Washington, DC 20549
Attention:Mr. Steven Jacobs
Accounting Branch Chief
Re: Oakridge Holdings, Inc.
Form 10-KSB for the Fiscal Year Ended June 30,
2005
File No. 0-01937
Ladies and Gentlemen:
On behalf of Oakridge Holdings, Inc. ("Oakridge"), I am
pleased to submit this response to the comment of the Staff on
the above-referenced Form 10-K, as set forth in Mr. Jacob's
letter to me dated February 7, 2006.
We will consider these comments, and incorporate appropriate
disclosure, in our future reports on Forms 10-Q and 10-K. For
convenience, the Staff's numbered comments are set forth below,
followed by Oakridge's responses.
Oakridge hereby represents that (i) it is responsible for
the adequacy and accuracy of the disclosure in the filing,
(ii) Staff comments or changes to disclosure in response to Staff
comments in the filings reviewed by the Staff do not foreclose
the Securities and Exchange Commission from taking any action
with respect to the filing and (iii) Oakridge may not assert
Staff comments as a defense in any proceeding initiated by the
Securities and Exchange Commission or any person under the
federal securities laws of the United States.
To assist the staff in reviewing this letter, we will
separately deliver to Mr. Jacobs and Mr. Maulbeck, by overnight
mail, a copy of this letter.
Form 10-KSB for the year ended June 30, 2005
Report of Independent Registered Public Accounting Firm
1. Comment: Please revise to refer to the auditing standards
of the Public Company Accounting Oversight Board (United
States) as opposed to auditing standards generally accepted
in the United States of America.
Response: The failure to refer to the auditing standards of
the Public Company Accounting Oversight Board (United
States) was an inadvertent error. Oakridge will ensure that
any reports of independent registered public accounting
firms included in future filings contain the appropriate
reference.
Consolidated Balance Sheets
2. Comment: We note from your disclosure under "Real Estate
Development" within Item 1 that you currently hold land with
a book value of $50,000 and you have listed this land for
sale with a real estate agent. In light of this, please
tell us what consideration you gave to classifying this land
as "held for sale" under SFAS 144 and performing an
impairment analysis on this asset.
Response: Oakridge evaluated whether to classify the land
as "held for sale" and determined that only two of the six
criteria specified in paragraph 30 of SFAS 144 had been met
in this circumstance. SFAS 144 requires that all four
criteria be met in order for the land to be classified as
"held for sale." Set forth below is a summary of Oakridge's
analysis as to each of the six criteria.
Criteria 1: Management, having the authority to approve the
action, commits to a plan to sell the asset.
Analysis: Criteria 1 has been met because Robert Harvey,
Oakridge's Chief Executive Officer, is authorized to sell
the land and has committed to a plan to sell it.
Criteria 2: The asset is available for immediate sale in
its present condition subject only to terms that are usual
and customary for sales of such assets.
Analysis: Criteria 2 has been met because the property is
raw land and would be sold on usual and customary terms.
Criteria 3: An active program to locate a buyer and other
actions required to complete the plan to sell the asset have
been initiated.
Analysis: Criteria 3 has not been met because management
has not listed the asset with a real estate broker. At the
time of the filing, Oakridge was simply evaluating whether
to engage a real estate broker in order to ascertain the
value of the property. Oakridge desired to know the fair
market value of the property as a result of receiving
multiple unsolicited inquiries from individuals and
companies during the prior six months that wanted to
purchase the property or list the property for sale.
Criteria 4: The sale of the asset is probable and transfer
of the asset is expected to qualify for recognition as a
completed sale within one year, except as permitted by
paragraph 31.
Analysis: Criteria 4 has not be met because the land will
not be sold unless the sales price is above $300,000. At
the time of the filing, Oakridge did not know the fair
market value of the land, except that it would be above the
carrying value of the land of $50,000, and did not believe
the sale of the land would occur within one year.
Criteria 5: The asset is being actively marketed for sale
at a price that is reasonable in relation to its fair value.
Analysis: Criteria 5 has not been met because the land was
not being actively marketed as described above in the
analysis of criteria 3.
Criteria 6: Actions required to complete the plan indicate
that it is unlikely that significant changes to the plan
will be made or that the plan will be withdrawn.
Analysis: Criteria 6 has not be met because the plan to
sell would have been withdrawn if the fair market value was
not at least $300,000.
Note 19. Segment Information
3. Comment: Please tell us what consideration you gave to
performing an impairment analysis on the long lived assets
held by the aviation ground support segment in light of the
fact that your contract with the US military will not be
renewed. We note from your disclosure under "General"
within Item 1 that 46% of this segment's revenues were
generated from this contract for the year ended June 30,
2005.
Response: Oakridge did consider an impairment analysis on
the long lived assets held by its aviation ground support
segment. However, because Oakridge had a negative gross
margin on the sales to the U.S. military under the contract
that was not renewed, Oakridge determined that there was no
impairment to long lived assets as a result of the failure
to renew.
If we can facilitate the Staff's review of this letter, or
if the Staff has any questions on any of the information set
forth herein, please telephone me at (651) 454-5112. My fax
number is (651) 454-5143.
Sincerely,
Robert C. Harvey
President and Chief Executive
Officer
cc: Matthew Maulbeck