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Mail Stop 0408
March 8, 2006
Mr. Michael A. Gales
Executive Chairman
Ashlin Development Corporation
1479 North Clinton Avenue
Bay Shore, New York 11706
Re: Ashlin Development Corporation
Form SB-2
File No. 333-131709
Filed February 9, 2006
Dear Mr. Gales:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form SB-2 Filed February 9, 2006
General
1. Please update your disclosure to account for the change in name
and the state of incorporation that you represented would occur on
or
about February 15.
Front Cover of Prospectus
2. Please disclose the proceeds to you assuming the maximum number
of
warrants is exercised.
Where You Can find More Information, page 4
3. Please revise this section as follows:
* correct the address of the SEC; and
* provide the disclosure required by Item 101(c) of Regulation S-
B.
The Acquisition and Related Transactions, page 5
4. Please revise this section as follows:
* disclose the aggregate purchase price that you paid for Gale
Industries and the valuation of each share of your stock and that
of
Gale Industries; and
* revise your statement that you issued "a significant number of
shares" to Gale by disclosing the number of shares that you issued
and the percentage of your outstanding shares that this
represented.
Risk Factors, page 7
5. Please revise this section as follows:
* address in your first risk factor the risks associated with the
fact that your auditor has expressed an opinion, in note 3 to your
most recent financial statements, that "there remains substantial
doubt about the company`s ability to continue as a going concern;"
* add a risk factor addressing the risk of dilution resulting from
your issuance of additional shares of your common stock in any
potential acquisition pursuant to your current business strategy;
and
* revise your last risk factor to quantify the anticipated annual
costs of being a public company.
The Acquisition and Related Transactions, page 13
6. Please revise this section as follows:
* revise your discussion of the "Transactions of November 30,
2005"
to provide an overview of the transactions and an explanation of
the
purposes for having these as separate transactions including Gales
Industries acquire AIM and then you acquiring Gales Industries and
for Gales Industries rather than you conducting the private
placement;
* revise your discussion of your acquisition of Gales Industries
to
disclose the terms including, but not limited to, the following:
o the aggregate purchase price;
o the number and type of shares that you issued;
o any other consideration;
o the basis for the determination of the purchase price including
the value of Gales Industries and the value of each share of your
stock;
* revise your discussion of your acquisition of AIM by Gales
Industries as follows:
o disclose the aggregate purchase price including cash, notes,
stock
payments of loans and taxes, reimbursement of legal and accounting
expenses;
o disclose the basis for the determination of the purchase price
including the value of AIM and the value of each share of stock of
Gales Industries
* revise your discussion of the acquisition by AIM of real estate
from affiliates to disclose whether AIM obtained an independent
appraisal and, if not, the basis for the purchase price; and
* revise your discussion of the private placement of Gales
Industries
convertible preferred stock to
o disclose the closing date; and
o the number of shares of your common stock of Ashlin that holders
now own and the effective price per share given the price paid in
the
private placement.
Business, page 15
7. Please revise this section to comply with Item 101(a) of
Regulation S-B to include a description of your development during
the past three years including, but not limited to, the form and
year
of organization and a description of your business before the
acquisition of Gales Industries. Please explain the business
without
the use of technical terms such as "ISO 9001 and AS 9100
Certifications" and "OEMs" or explain those terms in plain
English.
8. Please comply with the requirements of Item 101(b) of
Regulation
S-B including, but not limited to, the following:
* describe the extent to which your products are protected by any
patents, trademarks or licenses;
* describe labor contracts with your unionized workers; and
* estimate the amount spent by you and AIM during the last two
fiscal
years on research and developments activities.
9. Please provide more detail on page 16, regarding the "long term
exclusive multi-year agreements" to which you refer including
whether
or not these agreements include binding obligations on the
purchaser
to buy from you. In addition, please explain, on page 17, how
you
will finance your acquisitions given your limited resources and
how
you will compete with larger competitors with greater resources
also
seeking companies to acquire.
Management`s Discussion and Analysis, page 19
10. Please revise this section to comply with Item 303 (b) to
address
your future financial condition and results of operations.
Specifically, address the extent to which recent financial
statements
of AIM are not indicative of future performance of Ashlin
Development. Please discuss your auditor`s opinion in note 3 to
your September 30, 2005 unaudited financial statements that "there
remains substantial doubt about the company`s ability to continue
as
a going concern." We note that this opinion was based upon your
September 30, 2005 financials and that since then you have
undertaken
additional obligations. It appears that you may not have any net
income as a result of the additional commitments that you have
undertaken since the September 30, 2005 financials including but
not
limited to various loans, promissory notes, the costs of being a
public company and increased compensation. Please provide
discussion
and analysis. In addition, please provide discussion and analysis
of
your net income, not just gross profit, in the past and in the
future.
Results of Operations
Year Ended December 31, 2004 Compared to Year Ended December 31,
2003, page 19
11. Your discussion and explanation of changes in revenues,
expenses,
and gross profits is overly general in nature. Please revise your
disclosure to identify the specific facts and circumstances
surrounding these material changes in your income statement. For
example, you should discuss the factors leading to increased
purchase
orders and shipments that caused the $2.5 million increase in
sales.
Critical Accounting Policies, page 22
12. We note the cross-reference to Note 1 to the audited financial
statements of AIM intended to satisfy the requirement for the
discussion of critical accounting policies. These discussions are
meant to supplement, not duplicate the disclosures presented in
the
financial statements and to provide greater insight into the
quality
and variability of information regarding financial condition and
operating performance. As such, please revise your disclosure to
comply with Part V of FR 76.
Security Ownership, page 22
13. Please disclose the natural person who is the control person
of
ACS Holdings LLC.
Directors, Executive Officers, Promoters and Control Persons, page
23
14. Please comply with Item 401(a)(3) of Regulation S-B by giving
the
term of each director.
Executive Compensation, page 26
15. Please revise this section as follows:
* comply with Item 402(b) of Regulation S-B by providing a table
with
all of the requisite columns and distinguishing in the table
between
restricted stock and options;
* disclose in a footnote that although you only paid your Chairman
$16,837 in 2005 you have agreed to pay him at least $250,000 in
salary and at least $125,000 in bonus in 2006; and
* disclose the terms of the "comprehensive compensation policy"
that
you intend to adopt and the estimated aggregate cost.
Air Industries Machining Corporation
Independent Accountants` Report, page F-2
16. You state that AIM constitutes all of your operations
following
the merger. In view of this fact, your assumption that a reverse
acquisition has occurred and the issuance of the accountants`
report
subsequent to the acquisition date, we would expect the audit to
be
conducted in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Please revise or
advise.
17. As a related matter, refer to the Independent Accountants`
Report
on page F-14. The report states that consolidated statements of
income, retained earnings and cash flows for the twelve months
ended
September 30, 2005 and 2004 have been reviewed. However, the
financial statements which follow appear to consist of the nine
month
periods ended September 30, 2005 and 2004. Please revise or
advise,
as appropriate.
Audited Financial Statements for the Year Ended December 31, 2004
Consolidated Balance Sheets, page F-4
18. We note from your disclosure in Note 5 - Advances from
Shareholders on page F-11 that AIM has historically used these
advances for working capital needs, and that these advances do not
bear interest. As these long term advances are from significant
shareholders the interest that would have been paid on these
amounts
had they been obtained from a third party represents an expense
paid
on behalf of the company by a principal stockholder, and should be
recorded as an expense and a capital contribution. Refer to SAB
Topic 5T. As such, please revise your financial statements to
included imputed interest expense on these advances at rates
similar
to rates you would have been able to obtain in the marketplace.
Disclose the maturity dates and any other significant contractual
terms of these advances in your footnote as well.
19. Please add a footnote to the annual and interim financial
statements to discuss the asset captioned "Cash Surrender Value -
Officer`s Life" and your method of accounting for same. The
reasons
for the significant decline in this asset as of September 30, 2005
should be addressed in your interim financial statements as well.
20. Please revise your interim balance sheet presentation to
include
a pro forma balance sheet along side your historical balance sheet
giving effect to the conversion of preferred stock to common stock
that will mandatorily convert on effectiveness of the registration
statement.
Consolidated Statements of Income and Retained Earnings, page F-5
21. It is unclear from your disclosure why you classify interest
income and interest expense within operations on your income
statement. Supplementally justify the inclusion of interest
income
in revenues from operations and interest expense in operating
expenses or reclassify both items to Other Income.
22. We note your presentation here and on the face of the other
financial statement schedules of "Distributions to Shareholders"
during 2004 and 2003. We also note your disclosure throughout
your
Form SB-2 that AIM previously reported as a subchapter S
corporation
and made distributions to its shareholders to cover their tax
burden
resulting from AIM`s operations. It does not appear however, that
the nature of distributions have been discussed in AIM`s financial
statements for the year ended December 31, 2004. As such, please
revise your financial statement disclosure and your MD&A, as
appropriate, to include the facts and circumstances surrounding
such
distribution. This discussion should include how the distribution
amount was calculated or determined and the timing and amount of
the
payment. Also, please supplementally tell us the total amount of
any
undistributed earnings or losses as of the acquisition date. Your
attention is invited to SAB Topic 4-B with regard to the treatment
of
any such undistributed earnings. We may have further comment on
your
response.
23. As a related matter, the historical financial statements of
AIM
should include pro forma tax information on the face of the income
statement for all periods presented. Subsequent to the
acquisition,
pro forma presentations reflecting tax expense for earlier
comparable
periods should continue to be presented for periods prior to
becoming
taxable and for the period of change. Pro forma after tax EPS
data
should be presented for each of these periods as well.
Note 1 - Significant Accounting Policies
Principles of Consolidation, page F-7
24. Please revise your footnote to clarify how you determine which
entities to consolidate and how such consolidation is effected.
For
example, specify the conditions under which you consolidate
variable
interest entities and indicate the conditions under which you
consolidate entities that do not qualify as VIEs.
Inventories, page F-10
25. We note that inventory represents over half of your total
assets,
but you have not discussed your policy for determining what
constitutes excess and obsolete inventory. As such, please revise
your accounting policy here to indicate how you determine excess
and
obsolete inventory. As a related matter, also please include
either
here or in Note 2 a rollforward of the provision for excess and
obsolete inventory for each year an income statement is presented,
as
applicable and if significant.
26. As a related matter, we note the methodology you use to value
finished goods inventory and work-in-process as described on page
F-
19. Please supplementally explain the rationale for your
methodology
in circumstances where the inventory is not supported by an
invoiced
selling price based on a purchase order from a company.
Specifically, explain how you determined that a sixty percent
reduction of the historic selling price is appropriate in every
instance and tell us why you believe that a discount for a general
and administrative charge is appropriate. Such costs are
generally
considered to be period costs and are often so unrelated to the
immediate production process that any allocation would be purely
arbitrary. Please advise.
Note 10 - Commitments and Contingencies, page F-12
27. It is unclear how your disclosure and accounting treatment of
the
claim for personal injury in the amount of $5,000,000 as described
in
Note 10 and elsewhere in your filing are in compliance with FAS 5.
Specifically, it is unclear why you believe right of setoff exists
between the loss contingency associated with the claim for
personal
injury and the insurance recovery as the general principles of FIN
39
prohibit the offset of any liability with an asset (such as a
"probable" insurance recovery) unless a legal right of setoff
exists
between the two parties (i.e. debtor and creditor). Therefore,
the
amounts expected to be received from the insurer cannot offset the
liability to be booked, and it is necessary to evaluate the loss
and
gain separately under paragraphs 8 and 17 of SFAS 5, respectively.
In addition, your current disclosure does not meet the
requirements
of paragraphs 9-13 of SFAS 5 in that it is unclear what you
estimate
the range of possible loss to be, if estimable, and what the
probability of such a payout is. As such, please revise your
financial statements and related disclosure to fully and
completely
discuss this claim in accordance with the disclosure requirements
of
SFAS 5 independent of any insurance recovery, per paragraphs 8-13
and
17 of SFAS 5. Disclosure throughout your filing should be
similarly
revised.
Ashlin Development Corporation
Unaudited Financial Statements for the Nine-Month Period Ended
September 30, 2005 and 2004
Condensed Statements of Operations, page F-28
28. As you sold your core operations, it appears that you disposed
of
a "component of an entity" as described in paragraphs 41 and 42 of
SFAS 144. If our understanding is correct, we would expect your
income statement presentation to comply with the guidance and the
example set forth in paragraph 43 of that statement.
Specifically,
it appears that the order of the line items in your income
statement
should be revised so that "Total operating expense" is followed by
"Loss from operations," "Other income," "Interest income," "Loss
from
continuing operations before income taxes," "Income taxes," "Loss
from continuing operations," "Discontinued operations (Note X),"
"Income (loss) from discontinued operations (including gain on
disposal of $XXX)," "Income tax," "Loss on discontinued
operations,"
"Net income." Please revise or advise. Your current presentation
is
confusing and it does not appear to comply with GAAP. We may have
further comments upon review of your revised format.
Note 4 - Equity
29. Please confirm that you issued 100,000 shares valued at $0.10
per
share resulting in $10,000 consulting expense pursuant to a new
consulting contract. Your current disclosure indicates the shares
were valued at $0.010 per share. If our understanding is correct,
please revise your financial statements accordingly.
30. We note that the 300,000 shares issued to the CEO per his
compensation contract during the nine-month period ended September
30, 2005 were valued at $0.04 per share, a value significantly
less
than the other issuances discussed in this footnote.
Supplementally
explain to us how you determined market value for this and the
other
issuances described in this note. We may have further comment on
your response.
Gales Industries Incorporated
Unaudited Financial Statements for the Nine-Month Period Ended
September 30, 2005 and 2004
General
31. We note that Gales Industries was incorporated on October 30,
2004, and that they have had no operations since that date.
Supplementally explain the history of Ashlin`s relationship with
Gales and Gales relationship with AIM. Include in your
explanation a
discussion of how the merger and acquisition transaction was
formulated; specifically address how the three entities came
initially came into contact with each other. We may have further
comment on your response.
Note 1 - Organization and General
Private Placement of Preferred Stock, page F-38
32. Supplementally explain to us and revise your disclosure
throughout your filing, as appropriate, to indicate the material
terms of the preferred stock issued in the private placement.
This
explanation and disclosure should include under what circumstances
and when the preferred stock may be converted, how you determined
the
offering price of the preferred stock, and any other material
terms.
Please also supplementally tell us how the purchasers of the
preferred stock are related to the acquisition and merger
transaction. We may have further comment on your response.
Bridge Financings, page F-38
33. We note that as of September 30, 2005 you had approximately
$172,500 in bridge financing notes outstanding, that approximately
$150,000 of this balance was repaid using the a portion of the
proceeds from the private placement of preferred stock, that
$22,500
was converted per the terms, and that warrants were issued in
connection with each of the three tranches of bridge financing
(February, August, and September 2005). Supplementally explain to
us
how you have valued and recorded the value of the warrants and
their
effect on the conversion rate of each round of bridge financing.
It
would appear that, at a minimum, the initial bridge note may
contain
a beneficial conversion feature. Your response should include an
analysis using the guidance in EITF 00-19 and EITF 00-27, as
applicable. We may have further comment on your response.
Unaudited Pro Forma Financial Statements
General
34. Based upon the descriptions on page F-40 and elsewhere
throughout
the filing, it sometimes appears that you regard the concurrent
merger and acquisition transactions as two separate and distinct
acquisitions, each of which constituted a reverse acquisition.
However, on other occasions it appears that, either you regard
Gales
as the acquirer in the first transaction, or you regard the deals
as
a single transaction. Further, the disclosure regarding these
transactions contained elsewhere in your filing is unclear as to
how
these transactions were treated under GAAP. Please revise your
disclosure throughout your filing to completely and clearly
present
and discuss each of these transactions in accordance with the
disclosure requirements of paragraphs 51 and 52 of SFAS 141. In
this
regard, your attention is also directed to paragraph 57 of that
statement. Your revised disclosure should discuss each
transaction
separately from the viewpoint of the accounting acquirer. If AIM
is
considered to be the accounting acquirer, please specifically
state
this fact, here and throughout your filing. We may have further
comment on review of your revised presentation and your response.
35. Please revise your description of the transactions in the
narrative on page F-40 to include a complete description of each
the
specific terms of each transaction directly related to the
November
30, 2005 merger and acquisition.
36. Supplementally explain to us and revise your disclosure here
and
throughout your filing to indicate whether the real estate
purchase
by AIM was conducted pursuant to terms of the transaction, or was
conducted contemporaneously with but separate from the
transaction.
If the real estate purchase was not executed pursuant to the terms
of
the reverse acquisition, please remove all adjustments relating to
the real estate transaction from the pro forma statements as they
would not be considered directly attributable to the transaction.
37. As a related matter, we note that AIM consolidates the two
entities holding the mortgages as of September 30, 2005 and
December
31, 2004 as you consider them to be VIE`s under FIN 46 (R).
Supplementally explain to us why you believe recording the
purchase
of the property at the purchase price paid is appropriate given
that
these properties appear to have been recorded in your financial
statements at a lower price in earlier periods.
38. Your current tabular presentation of the pro forma financial
statements is confusing. Please revise both your balance sheet
and
income statement presentations to clearly label the unadjusted
column
as the historical financial statements of AIM, and to break out
your
"adjustments" column into several additional distinct columns, the
first representing the historical financial statements for the
appropriate period of Gales, the second presenting any
adjustments
or eliminations necessary to effect the first acquisition, the
third
presenting a subtotal, the fourth representing the historical
financial statements for Ashlin, the fifth presenting any
adjustments
or eliminations associated with that transaction and the sixth
presenting a final total. Our comment assumes that you regard the
transaction as two separate and distinct acquisitions. Even if
this
is not the case, however, the pro forma financial statements
should
still present the three sets of historical financial statements in
separate pro forma columns. Please revise as appropriate.
39. Individual adjustments should be self-balancing and prepared
on a
standalone basis. For example, you have not identified the debit
side of adjustment (a). Further, the purpose of the reference to
"See Contra" in the line item labeled "Cash and Cash Equivalents"
is
neither explained nor readily apparent. Please eliminate this
type
of reference from your presentation as it only adds to the
confusion.
Finally, please clarify how this adjustment is related to the
November 30, 2005 transaction.
40. Please review your presentation of positive and negative
amounts
as the use of parentheses to represent negative amounts appears to
be
inconsistently applied.
41. We note that there are several adjustments to your pro forma
balance sheet that do not have explanations. Please remove these
adjustments or add footnotes explaining how these items are
calculated, and why they are directly attributable to the
transaction
and will have an ongoing impact.
42. If the pro forma balance sheet is not included in your next
amendment as a result of updating the financial statements, please
provide a supplemental pro forma balance sheet to the staff in
order
to facilitate our understanding of the transaction. Supplemental
responses should be provided to all of our related comments.
Consolidated Pro Forma Balance Sheet
Footnotes (b), (d), (l)
43. The methodology you have used to value these transactions does
not appear to be appropriate based upon the narrative disclosures
presented. Specifically, assuming you believe that two reverse
acquisitions have occurred, we would expect the costs to be
determined in accordance with GAAP. Where both the issuer and the
target are nonpublic, the transaction should be recorded at the
fair
value of the issuer`s assets. Further, when a public shell
acquires
a nonpublic target in a reverse acquisition, we would normally
expect
cost to equal the recorded value of the issuer`s net tangible
assets.
Please explain your valuation methodology and assumptions in
detail
and provide support for your proposed accounting. Identify your
basis in GAAP for the accounting methodology applied. Provide us
with your cost computations and purchase price allocations, as
applicable. We may have further comments upon review of your
response.
Footnote (c)
44. Supplementally explain to us how the purchase price of the
corporate campus was determined.
Footnote (f)
45. Please revise your calculation of the adjustment to
amortization
expense so that the reader of the financial statements can
recalculate your adjustment from the explanation provided. You
should consider the use of tabular presentation for clarity. You
should itemize each source of the total adjustment and include how
such adjustment was calculated, including original cost basis and
useful life.
Footnote (g), (j), (n), (o)
46. To the extent the real estate transaction is directly
attributable to the purchase transaction, please revise your
explanation (g) to include a description of the material terms of
the
loan with PNC bank including the entity with which the loan is
associated and include the amounts of each adjustment in each of
these explanations. Otherwise, please remove these pro forma
adjustments
Footnote (i)
47. It is unclear from your explanation how the repayment of
certain
accrued expenses is directly attributable to the transactions and
not
merely a transaction in the ordinary course of business. Please
either revise your pro forma statements to exclude such adjustment
or
revise your footnote explanation to completely and clearly state
how
this pay-down of accrued expenses is directly related to the
transactions.
Footnote (k)
48. Please revise this explanation to specify the amounts of the
legal and accounting expenses associated with each transaction.
Footnote (p), (r), (x)
49. Please revise these explanations to clearly state why they are
directly attributable to the transaction.
Footnote (q)
50. Please revise your explanation to include the material terms
of
the notes issued to shareholders of AIM.
Pro Forma Statement of Income for the Year Ended December 31, 2004
and Nine-Month Period Ended September 30, 2005
Footnotes (a) and (d), page F-47
51. Please revise your explanations so that the reader of the
financial statements is able to recalculate the amount of the
adjustment from the explanation provided. For example, an
adjustment
to depreciation expense should be accompanied by an explanation
including the change in basis of the asset or assets in question
as
well as the useful life of such assets.
52. Supplementally explain to us whether the termination and
hiring
of the employees named in part (ii) of explanations (a) and (d)
was
negotiated as part of the transaction or was separately
negotiated.
We may have further comment on your response.
Footnotes (b) and (e)
53. Please revise part (i) of your explanations (b) and (e) to
include the material terms of the options and warrants to which
the
expense relates. Your explanation should also include why you
believe this adjustment is directly attributable to the
transaction.
54. It appears part (ii) of these explanations is in part a
reclassification of expenses from cost of sales to general and
administrative expense. If our understanding is correct,
supplementally explain to us why the previous accounting was
correct
and how the reclassification is justified as a pro forma
adjustment.
We may have further comment on your response.
Item 26. Recent Sales of Unregistered Securities
Shares Issued by Gales Industries Prior to the Merger, page I-I
55. Supplementally explain to us how you have valued and recorded
the
options to purchase shares issued to Mr. Gales (1,250,000
options),
Mr.Giusto (1,200,000), Mr. Rettaliata (1,200,000), and Mr. D.
Peragallo (1,200,000). We may have further comment on your
response.
Other
56. Please update the financial statement and related disclosures
included in the Company`s Form SB-2 registration statement in
accordance with Item 310 (g) of Regulation S-B.
57. Please include a currently dated consent of the independent
accountants in any amendments to the Form SB-2 registration
statement
that are filed.
* * * * * * * * * * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company and each filing person
acknowledging that:
* the company or filing person 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 or filing person 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.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Amy Marie Geddes at (202) 551-3304 or
Margery
E. Reich at (202) 551-3347 if you have questions regarding
comments
on the financial statements and related matters. Please contact
either Jonathan E. Gottlieb at (202) 551-3416 or me at (202) 551-
3491
with any other questions.
Sincerely,
Todd K. Schiffman
Assistant Director
cc. Vincent J. McGill, Esquire
Eaton & Van Winkle, LLP
3 Park Avenue
16th Floor
New York, New York 10016
Mr. Michael Gales
Gales Industries Inc.
March 8, 2006
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