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December 4, 2008 Philip T. Colton
(612) 604-6729
pcolton@winthrop.com
VIA EDGAR and FEDERAL EXPRESS
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Securities and Exchange Commission
100 F Street, N.E.
Mail Stop 4561
Washington, DC 20549
Attention: Mr. Tom Kluck, Branch Chief
Ms. Erin Martin
RE: American Church Mortgage Company
Registration Statement on Form S-11
Filed October 29, 2008
File No. 333-154831
Ladies and Gentlemen:
On behalf of American Church Mortgage Company (the "Company"), a Minnesota
corporation, we are responding to the comments presented in the letter from Mr.
Tom Kluck dated December 1, 2008. For the Staff's convenience, our Response is
preceded by the related Staff Comment.
Form 10-KSB for Fiscal Year Ended December 31, 2007
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Item 8A(T). Controls and Procedures, page 21
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Comment 1. We note your disclosure about management's assessment of the
effectiveness of your disclosure control and procedures. You did
not, however, include management's assessment of the
effectiveness of your internal control over financial reporting
as required in Item 308T of Regulation S-B. Please revise.
Response 1. The Company will amend its Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2007 to include management's
assessment of the effectiveness of its internal control over
financial reporting as required in Item 308T of Regulation S-B.
In particular, Item 8A(T) of Part II of Form 10-KSB will be
restated in its entirety, and the following language will be
added (underscoring indicates
additions):
(a) Evaluation of Disclosure Controls and Procedures. Under the
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supervision and with the participation of our senior management,
consisting of Philip J. Myers, our chief executive officer and
chief financial officer, we conducted an evaluation of the
effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended,
as of the end of the period covered by this report (the
"Evaluation Date"). Based on this evaluation, our chief executive
officer and chief financial officer concluded, as of the
Evaluation Date, that our disclosure controls and procedures are
not effective as a result of limited resources and limited
segregation of duties such that financial information required to
be disclosed in our Securities and Exchange Commission ("SEC")
reports (i) is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms, and
(ii) is accumulated and communicated to our management, including
our chief executive officer and chief financial officer, as
appropriate to allow timely decisions regarding required
disclosure. More specifically, the Company has a limited number
of personnel in the finance and accounting functions. Were there
a larger staff, it would be possible to provide for greater
segregation of duties which would permit checks and balances and
reviews that would improve internal control. Management
recognizes that this is a material weakness. A material weakness
is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the Company's annual
or interim financial statements will not be prevented or detected
in a timely basis.
(b) Management's Annual Report on Internal Control Over Financial
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Reporting. The management of American Church Mortgage Company is
responsible for establishing and maintaining an adequate system
of internal control over financial reporting (as defined in
Exchange Act Rule 13a-15(f)). Under the supervision and with the
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participation of our senior management, we also conducted an
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evaluation of our internal control over financial reporting as of
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the Evaluation Date. Our internal control over financial
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reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes of
accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can
provide only reasonable assurance of achieving their control
objectives. In evaluating the effectiveness of our internal
control over financial reporting, our management used the
criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) in Internal Control -
Integrated Framework. Based on
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that evaluation, our chief executive officer and chief financial
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officer concluded that, as of the Evaluation Date, we did not
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maintain effective internal control over financial reporting as a
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result of the material weakness described above. We continue to
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evaluate internal controls, particularly segregation of duties,
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to provide greater segregation and improve overall internal
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control.
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(c) Attestation by Registered Public Accounting Firm. This annual
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report does not include an attestation report of our registered
public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by
our registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit us to
provide only management's report in this annual report.
Our independent registered public accountants have reported to
our Board of Directors certain matters of involving internal
controls that they considered to be a material weakness on the
Evaluation Date, under standards established by the American
Institute of Certified Public Accountants. The material weakness
relates to the limited segregation of duties.
(d) Changes in Internal Control over Financial Reporting. There
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were no changes in our internal control over financial reporting,
except for the material weakness identified above related to
limited resources and limited segregation of duties, that
occurred during the last fiscal quarter of the period covered by
this report that have materially affected or are reasonably
likely to materially affect our internal control over financial
reporting.
Item 13. Exhibits, page 23
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Comment 2. In future filings, please file your Section 302 certifications
and Section 906 certifications as exhibits and not within the
document itself. Please refer to Item 601 of Regulation S-K.
Response 2. The Company will file its Section 302 certifications and Section
906 certifications as exhibits to its future filings. Form 10-Q
for Fiscal Quarters Ended March 31, June 30 and September 30,
2008
Form 10-Q for Fiscal Quarters Ended March 31, June 30 and September 30, 2008
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Comment 3. In your 302 certifications for these quarters, you did not
include the phrase in paragraph 4: "and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(t)
and l5d-15(f)) . . . ." Please refer to Item 601(b)(31)(i) of
Regulation S-K. Please file an amendment to each Form 10-Q, which
includes the required language.
Response 3. The Company will file an amendment to each of its Quarterly
Reports on Form 10-Q for the above-specified periods to include
such language.
The Company presently expects to file the above-referenced amendments this week.
It is also working diligently to obtain FINRA and state law clearance as soon as
practicable, and will be filing an amendment to the Registration Statement to
address certain of FINRA and the states' comments. We presently believe that the
Company will be in a position to file the amendment to the Registration
Statement before December 19, 2008, and we plan to request acceleration of
effectiveness at or about that time. We will keep you advised in this regard.
If you have any questions in connection with the filing, please contact the
undersigned at (612) 604-6729.
Very truly yours,
WINTHROP & WEINSTINE, P.A.
/s/Philip T. Colton
Philip T. Colton
PTC/aks
4177720v2
cc: Philip J. Myers (American Church Mortgage Company)