DALRADA FINANCIAL CORPORATION
9449 Balboa Avenue, Suite 211
San Diego, California 92123
Office: (858) 277-5300 Fax: (858) 277-5379
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September 27, 2005
Daniel Lee
Attorney-Advisor
Division of Corporate Finance
Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W. Mail Stop 4-6
Washington, D.C. 20549-0405
Re: Dalrada Financial Corporation
Amendment No. 2 to Registration Statement on Form SB-2
File No.3330-120019
Form 10-KSB for the fiscal year ended June 30, 2004, as amended
Form 10-QSB for the fiscal quarter ended December 31, 2004, as amended
Form 10-QSB for the fiscal year March 31, 2005
File No. 0-12641
Via Fax: 202-772-9211
Ph: 202-551-3477
Dear Mr. Lee:
Included are the responses to the comments listed on the SEC letter dated June
7, 2005.
AMENDMENT NO. 2 TO REGISTRATION STATEMENT ON FROM SB-2
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1. YOUR AMENDED REGISTRATION STATEMENT DOES NOT INCLUDE YOUR FINANCIAL
STATEMENTS ALTHOUGH YOU MAKE REFERENCE TO THEM IN YOUR TABLE OF CONTENTS.
PURSUANT TO ITEM 310 OF REGULATION S-B, YOUR REGISTRATION STATEMENT MUST INCLUDE
AUDITED FINANCIAL STATEMENTS FOR THE MOST RECENT FISCAL YEAR AS WELL AS
UNAUDITED FINANCIAL STATEMENTS FOR YOUR MOST RECENT INTERIM PERIOD. PLEASE FILE
AN AMENDMENT TO YOUR REGISTRATION STATEMENT WITH APPROPRIATE FINANCIAL
STATEMENTS AND UPDATE YOUR OTHER DISCLOSURES (E.G. MANAGEMENT'S DISCUSSION AND
ANALYSIS) AS NECESSARY.
Financials have been included in the amended filing.
2. PLEASE ADVISE US WHETHER RANDALL JONES HAS RECENTLY BEEN APPOINTED AS YOUR
CHIEF FINANCIAL OFFICER. IF SO, PLEASE REVISE YOUR DISCLOSURE TO REFLECT SUCH
APPOINTMENT. WE NOTE THAT HE EXECUTED YOUR PRIOR AMENDMENT AS THE ACTING CHIEF
FINANCIAL OFFICER. IN ADDITION, PLEASE PROVIDE US WITH YOUR ANALYSIS EXPLAINING
WHY YOU DID NOT BELIEVE IT WAS NECESSARY TO FILE A FORM 8-K TO DISCLOSE THE
APPOINTMENT OF YOUR NEW CHIEF FINANCIAL OFFICER. PLEASE SEE ITEM 5.02 OF FORM
8-K.
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The Form 8-K has now been filed.
FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30, 2004
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3. WITH REFERENCE TO COMMENT NO. 2 ABOVE, IT APPEARS RANDALL JONES SERVED AS
YOUR CHIEF FINANCIAL OFFICER AT THE TIME YOU FILED YOUR AMENDED 10-KSB. PURSUANT
TO THE REQUIREMENTS OF RULES 13A-14(A) AND (B) UNDER THE EXCHANGE ACT, EACH
PRINCIPAL EXECUTIVE AND PRINCIPAL FINANCIAL OFFICER AT THE TIME OF FILING MUST
FURNISH THEIR CERTIFICATES SET FORTH IN ITEMS 601(B)(31) AND (32) OF REGULATION
S-B. PLEASE SEE RELEASE NO. 33-8238 AND QUESTION 13 TO OUR FREQUENTLY ASKED
QUESTIONS FOR THE SARBANES-OXLEY ACT OF 2002 FOR ADDITIONAL GUIDANCE.
An Amendment with new certificates was filed.
ITEM 8A. Controls and Procedures.
4. WE NOTE YOUR RESPONSE TO OUR PRIOR COMMENT 4. YOUR STATEMENT APPEARS TO
SUGGEST THAT YOUR DISCLOSURE CONTROLS AND PROCEDURES ARE EFFECTIVE, BUT ONLY TO
THE EXTENT OF "ALERTING [YOUR CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER] ON A
TIMELY BASIS TO MATERIAL INFORMATION...REQUIRED TO BE INCLUDED IN [Y]OUR
REPORTS." IN OTHER WORDS, YOUR DISCLOSURE DOES NOT APPEAR TO ADDRESS THE
EFFECTIVENESS OF YOUR CONTROLS AND PROCEDURES WITH RESPECT TO WHETHER
INFORMATION REQUIRED TO BE DISCLOSED IS RECORDED, PROCESSED, SUMMARIZED AND
REPORTED ON A TIMELY BASIS OR WHETHER SUCH INFORMATION IS MADE KNOWN TO YOUR
OFFICERS TO ALLOW TIMELY DECISIONS REGARDING REQUIRED DISCLOSURE. PLEASE ADVISE
US WHETHER YOUR DISCLOSURE CONTROLS AND PROCEDURES WERE EFFECTIVE WITH RESPECT
TO THE FOREGOING AS OF JUNE 30, 2004. PLEASE SEE RULE 13A-15(E) UNDER THE
EXCHANGE ACT OF GUIDANCE.
Disclosure revised in the amended filing.
ITEM 8A. Controls and Procedures.
(a) Our Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of our disclosure controls and procedures (as such term is defined
in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) as of the period ended June 30, 2004, covered by this
annual report (the "Evaluation Date"), and based on such evaluation, such
officers have concluded, as of the Evaluation Date, that our disclosure controls
and procedures were effective in ensuring that all information required to be
disclosed in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms.
5. WE NOTE YOUR RESPONSE TO OUR PRIOR COMMENT NO.5. YOUR DISCLOSURE STATES THAT
"THERE HAVE NOT BEEN ANY SIGNIFICANT CHANGES IN [Y]OUR INTERNAL CONTROLS" ITEM
308 OF REGULATION S-B, HOWEVER REQUIRES DISCLOSURE OF "ANY" CHANGE IN YOUR
INTERNAL CONTROLS THAT OCCURRED DURING YOUR LAST FISCAL QUARTER THAT HAS
"MATERIALLY AFFECTED, OR IS REASONABLY LIKELY TO MATERIALLY AFFECT," YOUR
INTERNAL CONTROLS. PLEASE ADVISE US WHETHER THERE WERE ANY CHANGES IN YOUR
INTERNAL CONTROLS DURING THE QUARTER ENDED DECEMBER 31, 2004 REQUIRED TO BE
DISCLOSED UNDER ITEM 308.
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Disclosure revised in the amdended filing.
(b) Changes in Internal Control over Financial Reporting: During our fourth
quarter of fiscal 2004 there were no changes made in our internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
FORM 10-QSB FOR THE FISCAL QUARTERS ENDED DECEMBER 31, 2004, AS AMENDED, AND
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MARCH 31, 2005
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Item 3. Controls and Procedures
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6. WE NOTE YOUR RESPONSES TO OUR PRIOR COMMENT NO. 6 AND YOUR REVISED DISCLOSURE
STATING THAT "WE FEEL OUR DISCLOSURE AND PROCEDURES WERE EFFECTIVE AS OF THE
QUARTER PERIOD." PLEASE NOTE THAT ITEM 307 OF REGULATION S-B REQUIRES THAT
DISCLOSURE OF THE CONCLUSIONS OF YOUR PRINCIPAL EXECUTIVE AND PRINCIPAL
FINANCIAL OFFICERS REGARDING THE EFFECTIVENESS OF YOUR DISCLOSURE CONTROLS AND
PROCEDURES. PLEASE ALSO NOTE THAT TERM "DISCLOSURE CONTROLS AND PROCEDURES" HAS
A SPECIFIC MEANING AS NOTED IN YOUR FOLLOWING PARAGRAPH. PLEASE REVISE TO STATE
WHETHER YOUR PRINCIPAL EXECUTIVE AND PRINCIPAL FINANCIAL OFFICERS CONCLUDED THAT
YOUR DISCLOSURE CONTROLS AND PROCEDURES WERE EFFECTIVE AS OF DECEMBER 31, 2004
AND MARCH 2005.
Disclosure revised for both quarters in the amended filings.
Our Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of our disclosure controls and procedures (as such term is defined
in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) as of the end of the period covered by this quarterly
report (the "Evaluation Date"). This evaluation was carried out under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer. Based on this
evaluation, as of the Evaluation Date, we are adding a new corporate general
ledger system, have hired a new chief accounting officer and are working to
improve the efficiency of the design and operations of our disclosure controls.
There were no changes in our internal control over financial reporting or in
other factors that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting and our
principal executive and principal financial officers have concluded that our
disclosure and procedures were effective as of the quarter period ending
December 31, 2004.
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7. You disclosed in your Form 10-QSB for the quarter ended December 31, 2004
that you are "adding a new corporate general ledger system, have hired a new
chief accounting officer and are working to improve the design and operations of
[y]our disclosure controls." We further note that you make similar disclosure in
your form 10-QSB for the quarter ended March 31, 2005 as well as stating that
there were no changes in your internal controls during the quarter. Please
revise to state whether the steps to improve your controls that you have
disclosed have been completed. It appears that you may have at least completed
hiring a new chief accounting officer. We also note your disclosure in the last
paragraph of this section in which you state that steps have already been taken
to ensure timely reporting. In light of these apparently completed steps, please
advise us why you disclose that there has been no change in your internal
controls during the quarter ended March 31, 2005 as well as why the steps to
ensure timeliness did not appear effective with respect to the timeliness of the
Form 10-QSB for the quarter ended March 31, 2005.
We hired a new chief financial officer effective January 2, 2005. Our new CFO
embarked on a project to upgrade the general ledger system in each of our
subsidiaries and create a new system for recording and closing our corporate
ledgers and consolidation all of our subsidiaries. That process should be
completed by December 2005, and will result in a decrease in the amount of time
necessary to complete our quarterly and annual financial statements commencing
with the quarter ended December 31, 2005. We will update our discussion of
internal control changes in our 10-K for the year ended June 30, 2005 and our
next 10-Q for the quarter ended September 30, 2005.
Disclosure revised in the amended filing.
Sincerely,
/s/ Brian Bonar
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Brian Bonar
Chief Executive Officer