[LETTERHEAD OF AMINCOR, INC.]
June 21, 2011
United States Securities and Exchange Commission
Division of Corporate Finance
100 F Street NE
Washington, DC 20549
Attn: Caroline Kim
Re: Amincor, Inc.
Amendment No. 3 Registration Statement on Form 10
Filed May 18, 2011
Form 10-Q for the Quarter Ended September 30, 2010
Filed November 30, 2010
Current Reports on Amended Form 8-K
Filed October 19, 2010, January 26, 2011, and March 2, 2011
File No. 0-49669
Dear Ms. Kim,
This letter supplements our May 18, 2011 response to the Commission's April 12,
2011 comment letter (the "Comment Letter") with respect to comments 20 to 24
inclusive in the Comment Letter. We have set forth below comments 20 to 24 in
the Comment Letter and our responses to such comments.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2010
GENERAL
20. We note that you have labeled your financial statements including activity
of Tulare Holdings, Inc. prior to your common control merger with that
entity on August 3, 2010 as consolidated, while at page 9 you indicate that
you are reporting combined financial statements. Please revise you
presentation and all labeling and applicable narratives as necessary to
comply with FASB ASC 805-50.45-5. Please confirm that your historical
financial statements include activity of both entities only for periods
when these entities were under common control; and ensure that the changes
you make to the labeling and narratives clarify that your financial
statements are shown on a combined basis prior to the merger and on a
consolidated basis subsequent to the merger.
ANSWER
The Company will file an amended Form 10-Q which will include financial
statement titles, which state "Consolidated or Combined...," such as
"Consolidated or Combined Condensed Statements of Operations." In addition,
each column with financial statement data as of a balance sheet date or for
a time period (3 months, 9 months) will be labeled as either consolidated
or combined, as applicable.
As of September 30, 2010, the financial statements of Amincor, Inc. and
Tulare Holdings, Inc. were consolidated and had been since August 3rd,
2010; however, both entities were under common control throughout the
period from January 9, 2008 through December 31, 2009. Therefore, activity
of both entities for all periods presented in this Form 10-Q relate to
periods these entities were under common control.
BALANCE SHEET, PAGE 3
21. Please present a balance sheet as of the end of the preceding fiscal
year-end to comply with Rule 8-03 of Regulation S-X.
ANSWER
The Company will file an amended Form 10-Q which will include a balance
sheet as of the end of the preceding fiscal year-end.
FORM 8-K/AS FILED MARCH 2, 2011
GENERAL
23. It appears that you have accounted for the foreclosures as business
combinations, recording the net assets at fair value in the financial
statements of the holding companies. However, your response to prior
comment 44 indicates that you view the foreclosures as troubled debt
restructurings. Please explain your rationale in accounting for the
foreclosures as business combinations rather than troubled debt
restructurings, specifically addressing how your accounting complies with
FASB ASC Section 310-40-40.
ANSWER
As was stated in the response to prior comment 44, the financial statements
for the period from January 1, 2008 to August 28, 2008 were not presented
because the predecessor did not maintain sufficient and reliable accounting
records for the preparation of financial statements. The Company believes
that the acquisition of the business of Baker's Pride, Inc. was a business
combination as defined by FASB ASC Section 805-10-15-3 because, as stated
in the FASB Glossary, a business combination is "a transaction or other
event in which an acquirer (a) obtains control of one or more businesses."
In furtherance of the conclusion, the Company relies on the FASB Glossary
definition of a business.
a. The Company believes that the two lenders together (since both
are commonly controlled) qualifies as the acquirer based on the
guidance in FASB ASC Section 805-10-55-10 through 15 and on
definition of a business in the FASB ASC Glossary; however, the
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FASB ASC Glossary is circular since it defines an "acquirer" as
"the entity that obtains control of the acquiree" and then
defines an "acquiree" as "the business or businesses that the
acquirer obtains control of in a business combination."
Having concluded that the acquisition of Baker's Pride, Inc. was a business
combination, the Company concluded that Rule 8-02 of Regulation S-X applies
and predecessor financial information for the period from January 1, 2008
to August 28, 2008 would normally be presented. However, the Company was
faced with a dilemma because such predecessor financial information is
simply not available. Our prior response referred to a troubled debt
restructuring as a consideration to justify not including the predecessor
financial information; that consideration [or comparison] was not intended
to infer that the acquisition of the business of Baker's Pride was "a
troubled debt restructuring" as that term is used under GAAP. Instead, the
terminology used was meant as an analogy. The Company does not view the
foreclosures as troubled debt restructurings and does not believe the
conditions in FASB ASC 470-60-15-5 through 13, and as clarified by FASB ASC
470-60-55-4 through 6, are present.
If it were possible, the Company would provide Baker's Pride's predecessor
financial information for the period from January 1, 2008 to August 28,
2008, but that information does not exist. Further, as of the date hereof
audited financial statements for the year ended December 31, 2010 and
unaudited statements for the quarter ended March 31, 2011 have been
provided in the Company's Form 10-K for the year ended December 31, 2010
and Form 10-Q for the quarter ended March 31, 2011, respectively.
24. In your responses to prior comments 43 and 46, your represent that the
losses resulting from the foreclosures on outstanding debts of the Imperia
Bros., Inc. ("Imperia") and The Baking Company of Burlington, LLC ("TBC")
have been recognized by former creditors of Imperia and TBC in accordance
with FASB ASC paragraphs 810-10-55-20 through 21. Please explain why you
refer to the accounting of the former creditors of Imperia and TBC in your
response and tell us how you have applied FASB ASC paragraphs 810-10-55-20
through 21 in determining any gain or loss should be recognized in your
financial statements.
ANSWER
Prior comments 43 and 46 both refer to "preexisting relationship between
the lender and Imperia Bros. (comment 43) or TBC (comment 46)." Therefore,
it appeared that the comments requested a response concerning the
accounting of the former creditors (i.e., lenders) of Imperia (comment 43)
or TBC (comment 46).
The purchase price in each case was the enterprise value of the businesses
acquired as determined by independent valuation experts. FASB ASC
paragraphs 810-10-55-20 and 21, which relate to variable interests and
Variable Interest Entities and are not relevant. The assets and liabilities
of the businesses of Imperia Bros. and TBC were foreclosed on by their
lenders due to their inability to satisfy their debt obligations. Prior to
the foreclosures, the lenders had no equity interests in either company.
Imperia Masonry Supply Corp. and Baker's Pride, Inc. were corporations
established by the lenders (a) to effect the acquisition of the businesses
of Imperia Bros. and TBC, respectively due to the foreclosures.
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a. The Company believes that the two lenders together (since both
are commonly controlled) qualify as the acquirer based on the
guidance in FASB ASC Section 805-10-55-10 through 15.
As noted in the responses to prior comments 43 and 46, the lenders suffered
losses because the fair values of the net assets received upon foreclosure
were less than the loan balances. Such losses are loan losses of the
lenders which are not recoverable.
The Company hereby acknowledges that:
* The Company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* 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
* 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.
Very truly yours,
Amincor, Inc.
By: /s/ John R. Rice, III
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John. R. Rice, III President
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