CTI Industries Corporation
22160 N. Pepper Road
Barrington, Illinois 60610
(847) 382-1000
February 18, 2005
Mr. Ryan Rohn
Staff Accountant
Division of Corporate Finance
Securities and Exchange Commission
Washington, D.C. 20549-0404
Re: Form 8-K Item 4.01 Filed February 15, 2005
File Number 000-23115
Dear Mr. Rohn:
This letter is provided to you in response to your letter to CTI Industries
Corporation (the "Company") dated February 15 ("Comment Letter"). The responses
are keyed to, and organized by, the comments as set forth in your letter.
Out of State Auditors
1. We note your independent accountant, Weiser, LLP, is duly registered and in
good standing to practice in New York. However, Weiser, LLP is not currently
licensed in Illinois where your company is located. Tell us why you selected a
New York based accounting firm to audit the financial statements of an Illinois
based company. Tell us if the audit will be physically performed in New York or
Illinois. Also, confirm to us that the operations and assets of your company are
physically located in Illinois. Please note that it is your responsibility to
provide financial statements audited by an auditor who meets the requirements of
Rule 2-01(a) of Regulation S-X. Tell us how you have met the requirements of
Rule 2-01(a) of Regulation S-X. Also tell us what consideration you gave to
Illinois state laws governing audits of Illinois companies performed by
accountants who are licensed by other states.
Response:
The Company's Audit Committee selected Weiser, LLP to be the
Company's independent auditors based upon the following factors:
o The professional reputation of Weiser, LLP;
o Weiser's experience and expertise in auditing
manufacturing and distribution entities such as the
Company;
o Weiser's international audit expertise and capabilities;
and
o Weiser experience with SEC registrants.
We confirm that the Company's audit will be physically performed in
the State of Illinois. We also confirm that the majority of our operations
and assets are physically located in Illinois. Please note that the
Company has assets and operations located in Guadalajara, Mexico and in
the United Kingdom.
We confirm our understanding of our requirements to provide
financial statements audited by an auditor who meets the requirements of
Rule 2-01(a) of Regulation S-X. Prior to our consideration of Weiser, LLP
as our independent auditors, we met with them and reviewed their
credentials, which, as you noted, included the fact that they are duly
licensed and in good standing to practice in New York. We also confirm
that Weiser, LLP was made aware of an SEC comment included in a previous
SEC comment letter to the Company in 2004 regarding licensing requirements
of out-of-state auditors. Weiser informed the Company that, as part of
their client acceptance procedures, they have reviewed the requirements to
be licensed in the State of Illinois, and as such have further informed us
that they are currently in the process of becoming licensed in the State
of Illinois. We represent that we will file a supplemental response to
this correspondence attaching a copy of documentation verifying Weiser,
LLP's Illinois registration once such documentation has been finally
issued.
Pursuant to the requirements of the Comment Letter, the Company
further acknowledges that:
o the Company is responsible for the adequacy and accuracy
of the disclosure in this filing;
o staff comments or changes to disclosure in response to
staff comments in the filing reviewed by the staff 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.
Sincerely,
Stephen M. Merrick
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Executive Vice President and
Chief Financial Officer