Part I
Description of Business/Properties
(1) Enclosed please find copies of the Original Private Placement
Offering Memorandum for each of the three (3) partnerships to be
included as additional exhibits to the 10SB filing. Also please find
the memorandum for the "Exchange of Partnership Interests" in the
three (3) partnerships for the common stock of Central American
Equities.
The above publications clearly provide a complete description and
history of the development of the businesses of the three (3)
Partnerships as requested. Please note that the original Private
Placement Offering Memorandum was included as an Exhibit to the
10SB filing but apparently was not clearly received through Edgar
transmission.
The above reports also clearly indicate that the information included
in the scope of such reports is of company opinion and belief.
Also please be advised that the above reports were manually (hard
copy) submitted with the 15C211 application.
(2) The additional reports as provided above clearly indicate that
the hotels are owned 100% by the company and are fully disclosed
as such in the Financial Statements.
(3) There is no long-term financing due to the fact that when
Central American Equities acquired the Limited Partnership
interests, each of the Limited Partnerships were free of debt. In
addition as disclosed, the company raised $1,425,375.45 through
Rule 506, which was used to complete construction and start-up
cost as so disclosed in the 10SB filing.
Item 5
Directors, Executives Officers
(1) The age of each director and Executive Officer is as follows:
Brian Franzee 37
W.F.O. Rosenmiller 65
Richard William Talley 55
Paul King 33
(2) Percentage of each Director and Executive Officer's
business time devoted to the company is as follows:
Brian Frazee 100%
W.F.O. Rosenmiller 3%
Richard Wm. Talley 5%
Paul King 5%
(3) Warren Francis from the inception of Central American
Equities until September of 1997 was General Manager of the
company residing at the time in Costa Rica. In September of 1997
for personal reasons Mr. Francis returned to the United States and
relinquished his position as General Manager. Brian Frazee,
Assistant General Manager, was then promoted to fill the vacant
position of General Manager. Mr. Francis no longer has any
association or ties to Central American Equities.
Renumeration of Directors and Officers
Through December 31, 1997, no compensation was paid or accrued for
directors and Officers. This information is clearly disclosed in the 10SB
under this heading already.
Interest of Management and others in Certain Transactions
(1) Advances to the Company as described in Note 3 to the
Financial Statements will be according to "GAAP" and be updated
as to status in future financial reports.
(2) The management agreement with Talley, King and
Company is herewith enclosed to be filed as an exhibit to the
registration statement.
Part II
Item 4 Recent Sales
(1) The names of the Limited and General Partners who
received shares in the December 1996 exchange are herewith
included and to be added in accordance with Item 701 of
Regulation S.B.
(2) There are no Costa Rican corporations mentioned in the
report. There are the three (3) partnerships mentioned in this
section of which their interests were exchanged for the common
stock of "Central American Equities" as fully disclosed.
(3) Copy of Form 506 as filed including the list of the 37
investors is herewith included to be filed as additional exhibits.
All 37 persons named are considered to be "sophisticated
investors."
Financial Statements - General
The Company as of December 31, 1997 has been properly "labeled" as a
Development Stage Company. As of the balance sheet date, the Company had
limited nominal revenue and its hotels were only operating in a limited
capacity. However, as of this date and in future SEC Filings, the label of
development stage will no longer be valid and will not be disclosed as such.
Balance Sheet
(1) We have agreed today in our phone conversation that a
complete review of "Capitalized Organization Costs" will be
conducted and that any change made will be incorporated in future
SEC Filings with full disclosure as to the reasons for such changes,
if any.
(2) The number of authorized and outstanding shares of
common stock is disclosed in Note 4 to the Financial Statements.
There is no need for revision as it is already properly disclosed.
Perhaps this information was lost through the Edgar Transmission.
Statement of Stockholder's Equity
We have agreed that in future SEC Filings, we will expand the
presentation of the "Statement of Stockholders' Equity" as requested.
Note 2 - Long Term Debt
Agreed, the Beach Land, purchased via Long-Term Debt will be classified
separately in future Financial Statements to all SEC Filings.
Note 3 - Related Party Transactions
The advances made to the Company by two (2) shareholders have no
stated terms for repayment. In addition, these advances are not to earn
interest. The Company is only committed to repay the original advances.
This information is properly disclosed in Note 3.
CENTRAL AMERICAN EQUITIES CORP.
19200 Von Karman, Ste. 850
Irvine, CA 92612
November 09, 1998
United States
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Attention: Richard K. Wulff, Chief
Office of Small Business Review
RE: CENTRAL AMERICAN EQUITIES CORP.
FORM 10-SB
Dear Mr. Wulff:
Enclosed please find responses to your comment letter dated September
18, 1998, regarding the above referenced company. The comments have been
responded to diligently and as thoroughly as possible.
We appreciate your thorough review and are in agreement with your
suggestions concerning classification changes in future SEC Filings.
If any additional information is required, I can be reached at the above
address.
Very truly yours,
BRIAN FRAZEE
President
