THE LEBRECHT GROUP
A PROFESSIONAL LAW CORPORATION
Brian A. Lebrecht, Esq. Craig V. Butler, Esq. *
Ryan M. Lambert, Esq.** Edward H. Weaver, Esq.**
Admitted only in California*
Admitted only in Utah**
October 30, 2006
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 5th Street, NW
Washington, D.C. 20549
Attn: Lisa Haynes
Re: Anza Capital, Inc.
Form 10-K for the Fiscal Year Ended April 30, 2005
Form 10-Q for the Fiscal Quarters Ended July 31, 2005
and October 31, 2005
File No. 000-19065
Dear Ms. Haynes:
We herein provide the following responses to your comment letter dated
September 7, 2006, regarding the above-listed forms for Anza Capital, Inc. (the
"Company"). I have summarized your comments in bold followed by the Company's
response.
Form 10-K for the Fiscal Year ended April 30, 2005
Financial Statements and Supplementary Data
Note 11 - Stockholders' Equity, page F-32
1. We note your response to our prior comment 7 from our letter dated March 21,
2006. It appears from your Consolidated Statements of Stockholders' Equity on
page F-8 that you issued common shares of Anza Capital, Inc., and AMRES valued
at $703,780 and $900,000, respectively in exchange for consulting services.
Please compare and contrast for us how you determined the fair value of the Anza
Capital, Inc. common shares and the AMRES common shares.
- --------------------------------------------------------------------------------
IRVINE OFFICE: SALT LAKE CITY OFFICE:
9900 RESEARCH DRIVE 406 W. SOUTH JORDAN PARKWAY
IRVINE SUITE 160
CALIFORNIA o 92618 SOUTH JORDAN
UTAH o 84095
(949) 635-1240 www.thelebrechtgroup.com (801) 983-4948
o FAX (949) 635-1244 o FAX (801) 983-4958
Lisa Haynes
U.S. Securities and Exchange Commission
October 30, 2006
Page 2
Both the issuances in question were shares of American Residential
Funding, Inc. (ARFG.PK) "AMRES," not Anza Capital, Inc. No shares of Anza
Capital, Inc. were issued. The fair value of the AMRES shares was determined by
the price of AMRES's stock as traded on the Pink Sheets. For the period Nov. 19,
2004 through Feb. 28, 2005, this price was $0.05 to $0.06, per share. From March
9, 2005 through April 13, 2005, the price was between $0.023 to $0.014, per
share. Attached hereto as Exhibit A is a spreadsheet listing these transactions.
2. As a related matter, please tell us the following (to the extent more than
one consulting firm received shares in exchange for services rendered, please
provide a response specific to each firm):
o Explain which specific characteristics of the consultants' service
agreements resulted in the inability to objectively measure the
values associated with services provided by the consultants (refer
to paragraphs 8 and 9 of SFAS 123);
o Tell us whether the consultants provided invoices for services they
performed and if so, the aggregate dollar amount represented by
their invoices; and
o Tell us whether the consultants were related parties to Anza
Capital, Inc., its officers, directors or subsidiaries and if so,
please explain the nature of the relationship.
a. The consultants provided consulting services related to assisting AMRES
in becoming publicly listed on the Pink Sheets. Since a significant number of
the shares issued to each consultant were restricted in accordance with Rule 144
(15,000,000 shares), to the best of the Company's knowledge the shares were
never sold and are now worthless.
o Gunn Allen Financial, Inc. a broker-dealer in Florida, with Norm
Farra as their securities advisor, provided a significant amount of
advice to AMRES, including introductions to advisors of
International Capital Corp. ("ICC") and CJB Consulting, Inc.
("CJB"). Norm Farra spent hours/days seeking the best fit for AMRES,
and assisted in AMRES's effort to become a publicly traded company.
ICC and CJB introduced AMRES to David Stocker, Esq., an attorney who
advised AMRES on issues relative to going public. Mr. Stocker also
prepared all initial corporate paperwork, resolutions and filings
with the Pink Sheets, as well as stock issuances and a legal
opinion. Rather than charge AMRES upwards of $300,000 to do all the
paperwork, line up the various needed attorneys (there were several
attorneys involved) and securities firms, and introduce AMRES to
certain potential investors, ICC and CJB advisors/consultants agreed
to accept restricted stock, as well as the ability to purchase some
shares at prices below the trading price. In addition, CJB
introduced the Company to three to four individuals who became
investors in AMRES, including Alma Financial Services of Texas,
which purchased 1,000,000 shares (at a discount to market), three
other investors who purchased approximately $150,000 in convertible
preferred stock, web-site designers and marketers (exclusive
investor lists), including Macreport. AMRES also issued 2,000 shares
(value at time $100) each to all employees, including officers
(except Vincent Rinehart). Because of the type of services provided
by the consultants it was deemed to be impossible to value each act,
so a "work performed based on certain benchmarks being achieved"
approach was taken. The work to be performed was to successfully
qualify AMRES for trading on the Pink Sheets for the first time,
find qualified investors to purchase AMRES securities, advise of
possible acquisition candidates, and assist in introducing AMRES to
selected investors who requested to receive information on small-cap
companies. The value of these services was discussed over many
months in 2004 and early 2005. Ultimately, all parties agreed on a
value associated with the completed tasks as noted above, and shares
were issued accordingly, through the give and take of negotiations
over several months.
Lisa Haynes
U.S. Securities and Exchange Commission
October 30, 2006
Page 3
b. Please see attached Exhibit A and Exhibit B. While no "invoices for
services" were provided, Securities Subscription Agreements and Consulting
Agreements relating to the tasks noted were executed by the parties. In
addition, AMRES was listed on the Pink Sheets, shares were traded, and the
company did sell shares to various qualified persons, as negotiated in various
agreements.
c. The consultants were not related to Anza Capital, Inc., it's officers,
directors, or subsidiaries.
Company's Statements
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 filing; 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.
Please do not hesitate to contact me if you have any questions. Thank you
for your time and attention to this matter.
Sincerely,
/s/ Craig V. Butler, Esq.
----------------------------------------
Craig V. Butler, Esq.
EXHIBIT A
Stockholders' Equity, page F-32
Initially, 15,000,000 shares were issued to advisors/consultants to facilitate
the transaction; that being the successful trading of a private company (AMRES)
on the Pink Sheets. The reference, in the second from the bottom paragraph to an
additional 3,000,000 sold, are shares included in the last paragraph on F-31 and
in Exhibit B.
---------
On 11-01-04 (Dec., 2004, shares began trading at .05) shares issued:
Value at Time
Shareholder Issued Class (traded ARFG.PK) Eventual Value
- ---------------------------------- ------------------------ ---------------- --------------
CJB Consulting, Inc. 5M common 144 restricted .05 ($250,000) worthless
(coordinated most matters of
listing on Pink Sheets)
Gunn Allen Financial, Inc. 3M common 144 restricted .05 ($150,000) worthless
(initial advisor; introduced
AMRES to CJB; overall advisor)
Norm Farra 7M common 144 restricted .05 ($350,000) worthless
(employee of Gunn Allen Financial)
EXHIBIT B
DEBT CONVERSION SHARES
DATE DESCRIPTION FMV FOR CONSULTING AMOUNT
---------- ------------------------------- ----- ---------------------- -------
CEDE & CO 4016 11/19/2004 250,000 Conversion of debt 250,000 0 0
CJB Consulting for consulting
CEDE & CO 4017 11/22/2004 50,000 services 0.050 50,000 2,500
CEDE & CO 4095 12/22/2004 1,000,000 Alma Financial Services 0.050 1,000,000 50,000
CJB Consulting for consulting
CEDE & CO 4096 12/22/2004 200,000 services 0.050 200,000 10,000
CJB Consulting for consulting
CEDE & CO 4099 12/27/2004 1,000,000 services 0.050 1,000,000 50,000
CJB Consulting for consulting
CEDE & CO 4100 1/3/2005 2,500,000 services 0.060 2,500,000 150,000
CJB Consulting for consulting
CEDE & CO 4101 1/5/2005 2,500,000 services 0.060 2,500,000 150,000
CJB Consulting for consulting
CEDE & CO 4148 1/25/2005 500,000 services 0.060 500,000 30,000
CEDE & CO 4150 2/1/2005 500,000 Conversion of debt 500,000 0 0
CJB Consulting for consulting
CEDE & CO 4151 2/17/2005 3,750,000 services 0.050 3,750,000 187,500
CJB Consulting for consulting
CEDE & CO 4152 2/28/2005 1,000,000 services 0.050 1,000,000 50,000
CEDE & CO 4157 3/9/2005 600,000 Consulting 0.023 324,138 7,390
CJB Consulting for consulting
CEDE & CO 4158 3/11/2005 1,830,000 services 0.023 1,830,000 42,090
CEDE & CO 4159 3/14/2005 2,500,000 Conversion of debt 2,500,000 0 0
CEDE & CO 4160 3/15/2005 2,500,000 Conversion of debt 2,500,000 0 0
CEDE & CO 4161 3/16/2005 2,500,000 Conversion of debt 2,500,000 0 0
CJB Consulting for consulting
CEDE & CO 4162 3/18/2005 3,000,000 services 0.020 3,000,000 60,000
CJB Consulting for consulting
CEDE & CO 4164 3/31/2005 1,500,000 services 0.015 1,500,000 22,500
CJB Consulting for consulting
CEDE & CO 4165 4/1/2005 1,000,000 services 0.014 1,000,000 14,000
Macreport Co. website/marketing
CEDE & CO 4168 4/13/2005 200,000 fee 0.015 200,000 3,000
---------- --------
20,354,138 828,980
(3,000,000) (150,000)
---------- --------
17,354,138 678,908