We
are in
receipt of your comment letters dated August 22, 2007 to Quintek Technologies,
Inc. (the “Company”). We have addressed your comment letter by reproducing each
comment below (in bold) and providing the Company’s response immediately
following.
We
are
providing our responses which address all comments raised by this Comment
Letter. When all comments have been properly addressed and cleared, we intend
to
file an amended Form 10-KSB which includes all the changes; we will also file
an
Item 4.02 8-K. Our responses to the comments follow.
Note
5. Employee Receivables, page F-12
1.
We
have reviewed your response to comment 1. We understand that you
have a
contractual right to receive interest on the promissory notes. Please
explain to us why you have not suspended the recognition of interest
income when you do not expect to collect any of the amounts owed.
For
reference see paragraph 84(g) of Statement of Financial Accounting
Concepts No. 5.
Quintek
Technologies Inc. Response to Item #1:
Pursuant
to the language in the promissory note agreement which allows for payment in
full at the conclusion of the loan or by June 30, 2019; we do not believe these
notes are “doubtful” and will assume their collectibility until term in 2019.
Because the interest is inclusive with the note we continue to accrue for our
records. We believe that the valuation allowance correctly states our financial
position in regard to this asset.
We
have reviewed your response to comments 4 and 5. Please confirm to
us that
the value of all warrants outstanding at May 19, 2006 was $2,644,645
and
the value of the same warrants outstanding at June 30, 2006 was
$1,967,637. Also, tell us why you have recorded $2,171,921 as income
related to the change in fair value of warrants when the change was
only
$677,008. Please reconcile this
difference.
Quintek
Technologies Inc. Response to Item #2:
We
will
confirm that the value of all warrants outstanding at May 19, 2006 was
$2,644,645 and the value of the same warrant outstanding at June 30, 2006 was
$1,967,637. The updated financials will correctly reflect the change in fair
value of the warrants as $677,008.
3.
Please
include a footnote that discusses your statement in detail and provide
a
reconciliation of the amounts affected that reflects the prior balances
and the restated balances with an explanation of all the changes.
In
addition, label the financial statements as restated and provide
an
updated auditors report. Finally, please file an Item 4.02
8-K.
Quintek
Technologies Inc. Response to Item #3:
The
disclosures have been updated for the change in fair value of the warrants
and
restatement note. We will have our counsel file a Form 8-K for an Item 4.02
disclosure of non-reliance on previously issued financial
statements.
The
Company acknowledges that: 1) the Company is
responsible for the adequacy and accuracy of disclosure in the
filing;
2)
staff
comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filings;
and 3)
the Company may not assert staff comments as defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.
We
trust
that the foregoing appropriately addresses the issues raised by your recent
Letter of Comment. Thank you in advance for your prompt review and assistance.
