SICHENZIA ROSS FRIEDMAN FERENCE LLP
1065 AVENUE OF THE AMERICAS NEW YORK NY 10018
TEL 212 930 9700 FAX 212 930 9725 WEB WWW. SRFF.COM
December 6, 2005
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention: Derek Swanson, Esq.
Mail Stop 3561
Re: Walker Financial Corporation (the "Company")
Amendment No. 5 to Form SB-2
File No. 333-122776
Form 10-KSB for the year ended December 31, 2003
Forms 10-QSB for the quarter ended September 30, 2004
File No. 0-28173
Dear Mr. Swanson:
On behalf of the Company, we are hereby enclosing two copies of Amendment No. 5
(the "Amendment") to the Company's registration statement on Form SB-2 (the
"Registration Statement"). One of the copies has been marked to show changes
from Amendment No. 4 to the Registration Statement ("Amendment No. 4"). The
Registration Statement was filed on February 11, 2005. By telephone conference
on December 5, 2005, the staff of the Securities and Exchange Commission (the
"Staff") issued comments on Amendment No. 4 and the Form 10-QSB for the three
months ended September 30, 2004 the three months ended March 31, 2005 and the
three months ended June 30, 2005 (collectively, the "Quarterly Reports"), and
the Form 10-KSB for the year ended December 31, 2004 (the "Annual Report",
together with the Quarterly Reports, the "34 Act Reports") (Commission File No.
0-13215). Following are the Company's responses to the Staff's comments. For
ease of reference, each response is preceded by the Staff's comment.
The 34 Act Reports
1. The Staff requests that the Company supplementally revise certain matters
pertaining to its controls and procedures disclosure to comply with Item 308(c)
and that it confirm that it will comply with such item in future filings.
The Company advises the Staff that with respect to each of the Quarterly
Reports, there had been no change in its internal control over financial
reporting that occurred during the fiscal quarter to which each respective 34
Act Report relates that materially affected, or is reasonably likely to
materially affect, its internal control over financial reporting.
With respect to the Annual Report, during November 2004, the Company's
independent auditors advised the Company that they identified a deficiency in
internal controls, which was designated a "material weakness." The material
weakness indicated that there is inadequate structure within the Company's
accounting operations. The Company has no central corporate accounting
department. Each subsidiary independently maintains its own books and records
and all disbursements are done at the subsidiary level. This decentralizes the
accounting function and limits the effectiveness of the internal control
procedures to detect potential misstatements and fraudulent accounting and
financial reporting. The subsidiary accounting departments do not have the
sophistication to critically evaluate and implement new accounting
pronouncements, such as stock based transactions for options, warrants and
common stock at times are recorded improperly and require additional procedures
and review and audit adjustments to be proposed by our auditors. The Company
believes this material weakness resulted from continued cost cutting efforts and
a failure to generate cash flows from operations, which resulted in the
termination of employees during our fiscal years ended December 31, 2004 and
2003. The Company believes that sufficient compensating controls have been
implemented to minimize the risks associated with this material weakness,
including using an independent accountant/bookkeeper to review, compile and
consolidate its financial statements on a quarterly and annual basis.
Additionally, it expects to hire a chief financial officer with public company
experience within the next twelve months and relieve its chief executive officer
of his current chief financial officer duties.
The Company hereby confirms to the Staff that it will in the future comply with
Items 307 and 308 of Regulation S-B in the preparation and filing of its
periodic reports.
Registration Statement, Item 27 Exhibits
2. The Staff requests that the Company amend the Registration Statement by
filing as exhibits the documents executed in connection with the Modification
Agreement entered into in September 2005.
The Company has revised the Registration Statement to include the exhibits in
accordance with the Staff's comment.
3. The Staff request that the Company (i) detail the activities performed by The
Vantage Group, Ltd. ("Vantage") on behalf of the Company and (ii) states the
reason for the termination of its relationship with Vantage.
The Company advises the Staff that it retained Vantage due to that firm's
expertise in helping public companies make strategic acquisitions and enter into
partnerships and other strategic relationships. Specifically, Vantage had
introduced the Company to a voluntary benefits company active in the travel
industry. The Company entered into discussions with this entity respecting joint
marketing efforts as well as a potential acquisition. The Company met with
representatives of this entity on several occasions in addition to having
numerous conference calls. These discussions did not result in any agreements.
In addition, Vantage made an introduction to HRH, the 8th largest insurance
agency in the United States. This introduction led to a strategic relationship
with HRH of Southern California, a subsidiary of HRH, concerning the marketing
of one of the insurance products the Company seeks to market. To date, the
relationship has not generated any revenues.
The Company terminated its relationship with Vantage based on its determination
that it involved a costly consulting contract which did not result in any
material benefits to the Company.
Please contact the undersigned at 212-981-6766 with any questions or comments
you may have with respect to the foregoing.
Very truly yours,
Louis A. Brilleman
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