SEC Company Response from COMPREHENSIVE HEALTHCARE SOLUTIONS INC (CIK 0000069623) — Oct 14, 2005
COMPREHENSIVE HEALTHCARE SOLUTIONS INC (CIK 0000069623)
Date: Oct. 14, 2005 · CIK: 0000069623 · Accession: 0001213900-05-001060
AI Filing Summary & Sentiment
Letter
Securities and Exchange Commission Form 10-QSB/A for the period ended August 31, 2004 Filed April 4, 2005 Form 10-QSB/A for the period ended November 30, 2004 Filed April 4, 2005
Re:
Dear Mr. Phippen:
We represent Comprehensive Healthcare Solutions, Inc. (“CMHS”). CMHS has reviewed your May 5, 2005 letter and has the following responses:
Form 10-K Amendment No. 3 for the fiscal year ended February 28, 2004
1.
Please take into consideration all of the following comments on your Form 10-K, as applicable, when you revise your Form 10QSB/A=s.
ANSWER: We will take into consideration all of the comments contained in CMHS’ Form 10-K when it revises all applicable Form 10-QSB/A’s.
2.
You filed your amendment on a Form 10-K however it appears in certain cases you have followed the disclosure requirements of Regulation S-B. For example, you only present the fiscal 2004 year end balance sheet in your audited financial statements. A reporting company may enter the S-B system only at the beginning of a fiscal year, and must determine at the time of its filing in a fiscal year (first quarterly report, Form 8-K, or registration statement) whether it will enter the S-B reporting system. A reporting issuer cannot enter the S-B system during a fiscal year if it has already filed Exchange Act reports for periods included in that fiscal year under Regulation S-X. Please amend your filing to comply with the disclosure requirements on Form 10-K. After review of the amended Form 10-K we may have further comments.
ANSWER: Amendment No. 4 to Form 10-K has been filed and has been amended to comply with the disclosure requirements of Form 10-K.
Item 1. Business
Comprehensive Network Solutions, Inc. page 16
3.
Your references to “Nantucket” here, and in other sections of your filing, are confusing. Please revise your filing to replace references to Nantucket with more appropriate references to the current name of the company.
ANSWER: In Amendment No. 4 to Form 10-K, we have removed the reference to Nantucket on Page 16 and other parts of the body of the document. Certain references remain in the footnotes to the financial statements which CMHS deems appropriate.
Item 5. Market for the Registrant’s Common Stock and Related Security Holder Matters, page 20
4.
Please revise to disclose the approximate number of holders of record of common stock. Refer to Item 201(b) of Regulation S-K.
ANSWER: In Amendment No. 4 to Form 10-K, we have added the number of shareholders of record as of February 28, 2004.
Item 6. Selected Financial Data, page 21
5.
Certain fiscal 2004 amounts in your summary statements of operation and summary balance sheet data do not agree with the financial statements. Please revise.
ANSWER: In Amendment No. 4 to Form 10-K, we have revised the fiscal 2004 amounts in the summary statement of operations and summary balance sheet data to agree with the financial statements.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations, page 24
6.
Please revise to include discussion of net sales and gross margin attributed to each product or service category, for example net sales and gross margin attributed to audiological testing and hearing aids, if considered material. Your disclosures should indicate whether you expect trends, if applicable, to continue and why or why not. Refer to SEC Release No. 33-8350 and Item 303 of Regulation S-K.
ANSWER: In Amendment No. 4 to Form 10-K we have revised this section. Accordingly net sales and gross margin attributable to hearing aid sales is not material to the financial statements.
7.
You state that selling, general and administrative expenses (“SG&A”) were $337,881 for fiscal 2004. Per the financial statements SG&A totaled $360,381. Please revise and consider whether additional discussion is necessary to explain the change in SG&A.
ANSWER: In Amendment No. 4 to Form 10-K, we have revised this section. The increase in SG&A is a result of an increase in the allowance for doubtful accounts and consulting fees has been revised and explained accordingly.
Liquidity and Capital Resources, page 24
8.
Please revise to discuss material changes between periods in your cash flows from operating, investing, and financing activities. Refer to SEC Release No. 33-8350 and Item 303 of Regulation S-K.
ANSWER: The changes between periods have been revised in the Amended 10-K.
Item 8. Financial Statements and Supplementary Data
General
9.
You have made changes to the financial statements that were previously issued. Please revise to provide all disclosures required by APB20. In particular, you should ensure that you disclose the previously filed amounts, changes made and restated amounts for each financial statement line item affected. Each adjustment should be explained.
ANSWER: In Amendment No. 4 to Form 10-K, the financial statements have been revised to include disclosure of previously filed amounts, changes made, and restated amounts for each financial statement line item affected. Additionally, each adjustment has been explained as follows:
•
Prepaid expenses on the balance sheet previously recorded as current and non-current assets related to stock-based deferred consulting fees. These fees were subsequently adjusted and recorded to deferred stock based consulting fees in the statement of changes in shareholders equity and will be accrued over the consulting service period.
•
Stock subscription receivable recorded as a current asset on the balance sheet was reclassified to common stock subscribed in the statement of changes in shareholders equity.
•
Bad debt expense of $22,500 was recorded to increase the allowance for doubtful accounts on the balance sheet.
Report of Independent Public Accounting Firm
10.
Please revise your filing to include an audit opinion related to the balance sheet as of February 28, 2003 and the related statements of operations, changes in shareholders deficiency, and cash flows for the years ended February 28, 2003 and 2002. If you plan to refer to the predecessor auditor please ensure you follow the guidance in AU508.
ANSWER: Amendment No. 4 to Form 10-K has been revised to include an audit opinion related to the balance sheet as of February 28, 2003 and the related statements of operations, changes in shareholders’ deficiency, and cash flows for the years ended February 28, 2003 and 2002.
11.
We note your independent accountants, Jewett, Schwartz & Associates, are located in Florida while you are headquartered in New York. Please have your accountants supplementally confirm to us that they are registered to practice in New York, or confirm that no such registration is necessary. If your accountants are registered in New York, please have them provide us with their license number.
ANSWER: Jewett, Schwartz & Associates has advised us that there is no requirement stipulating that the public accounting firm of an issuer must be located in the same state as the entity it is auditing.
Consolidated Statements of Operations, page F-4
12.
It is our understanding that net sales substantially refers to fees earned from audiological testing as well as the sales of hearing aids. Net revenues from the sale of tangible products and services along with the related cost of sales should be stated separately in the statements of operations. Refer to Rule 5-03 of Regulation S-X. Please revise.
ANSWER: Revenues and related costs of sales from the sale of tangible assets are not material to the financial statements and are included in net revenue in the statement of operations.
13.
Depreciation and amortization should be included as an operating expense rather than other expenses. Refer to Rule 5-03 of Regulation S-X and SAB Topic 11.B. Please revise.
ANSWER: In Amendment No. 4 to Form 10-K, the consolidated statements of operations have been revised to reflect depreciation and amortization as an operating expense in accordance with Rule 5-03 of Regulation S-X and SAB Topic 11B.
14.
Per Note 9 in June 2002 you terminated a consulting agreement and rescinded 1,200,000 shares of common stock. Please supplementally explain how the 1,200,000 shares of common stock were accounted for at the date of the consulting agreement and upon rescission. Tell us where in your financial statements the transactions were reflected. Please cite authoritative guidance supporting your accounting.
ANSWER: The 1,200,000 shares of common stock were never issued because the consulting agreement was not consummated. Therefore, this was not reflected in the financial statements and did not need to be accounted for.
15.
Please supplementally explain the common stock subscribed and subscription receivable activity. Please revise your balance sheet to present the subscription receivable as a separate line item in stockholders’ equity if the amount is receivable from officers or directors. Please revise to disclose the nature of the transaction in the notes to the financial statements. Refer to EITF 85-1 and SAB Topic 4E.
ANSWER: In Amendment No. 4 to Form 10-K, the balance sheet and footnotes have been revised. In accordance with EITF 85-1 stock subscription receivable recorded as a current asset on the balance sheet was reclassified to common stock subscribed in the statement of changes in shareholders equity.
16.
In fiscal 2003 and fiscal 2004 you issued shares in private placement sales at $0.21 and $0.25 per share, respectively. Your valuation of shares issued for executive compensation in fiscal 2003 and 2004 was valued significantly lower at $0.06 and $0.07, per share, respectively. Please supplementally explain how you determined the value of shares issued to executives and why such values differed significantly from the values ascribed to your shares in transactions with unrelated third parties.
ANSWER: The stock issued for executive compensation was issued in accordance with the employment agreement in effect. The sock was issued to a related party and value was significantly lower than the market value at $0.06 and $0.07 per share due to the restrictive nature of the stock.
17.
Please supplementally explain the fiscal 2004 convertible debt transaction. Please supplementally explain the consolidated balance sheet and consolidated statements of cash flow presentation of the transaction. Please revise the notes to the consolidated financial statements to disclose the transaction.
ANSWER: In Amendment No. 4 to Form 10-K, the notes to the consolidated financial statements have been revised to include an explanation of the 2004 convertible debt transaction..
Consolidated Statements of Cash Flows, page F-5
18.
Please supplementally explain the line “(Increase) decrease in other assets.” Please revise if necessary.
ANSWER: The line item increase (decrease) in other assets represents the change in hearing aids and inventory supplies on hand.
19.
Cash inflows from financing activities include proceeds received, for example, from issuing equity instruments, bonds, mortgages, notes and from other short or long term borrowing. Based on review of your notes to the consolidated financial statements it does not appear that you received proceeds that should be classified as financing activities totaling $762,400 in fiscal year 2004. Please supplementally explain and revise if necessary. Note that the value of equity instruments issued as non-cash compensation to employees and non-employees which are expensed should be included as non-cash adjustments in the operating activities section of the statements of cash flows. Refer to SFAS 95.
ANSWER: In Amendment No. 4 to Form 10-K, The statements of cash flows have been revised to include the non-cash compensation to employees and non-employees in the operating activities section with the required supplemental disclosure of non-cash investing and financing activities, as applicable.
20.
Please provide a supporting schedule to your revised consolidated statements of cash flows. The schedule should include a reconciliation to applicable consolidated balance sheets.
ANSWER: The supporting reconciliation schedule has been supplementally attached to this letter.
Notes to Consolidated Financial Statements
Note 1. Reorganization
General
21.
In a reverse acquisition shareholders’ equity should be determined and presented on the consolidated balance sheet as if the consolidated financial statements are a continuation of the accounting acquiror/legal acquiree (Accutone, Inc.). The retained deficit and other surplus accounts in the consolidated financial statements immediately after the reverse acquisition would be the same as the accounts of the accounting acquiror / legal acquiree at that date. The retained deficit and other surplus accounts of the legal acquiror (Nantucket Industries, Inc.) at the date of the legal combination would be eliminated in consolidation. We assume your accumulated deficit of $13,153,009 as of February 28, 2002 principally relates to operations of Nantucket Industries Inc. prior to the January 25, 2002 reverse acquisition. If so, please revise your filing to eliminate the retained deficit and additional paid in capital of Nantucket included in your February 28, 2002 equity accounts.
ANSWER: In Amendment No. 4 to Form 10-K, revisions have been made to eliminate the accumulated deficit and additional paid in capital relating to the operations of Nantucket Industries Inc. at February 28, 2002.
Basis of Presentation and Going Concern, page F-7
22.
You refer to SFAS 7. SFAS 7 refers to the accounting and disclosure requirements of developmental stage enterprises. Do you consider yourself a developmental stage enterprise in accordance with SFAS 7? If so, it does not appear you have followed the accounting and disclosure requirements of SFAS 7. Please supplementally explain and revise.
ANSWER: CMHS is not a development stage company at February 29, 2004. In Amendment No. 4 to Form 10-Q, Note 1 to the financial statements has been revised accordingly.
23.
You disclose that you have not commenced planned principle operations and you have not generated revenues from prospective customers. Based on review of this filing, neither of these statements appear accurate. Please revise or advise.
ANSWER: CMHS’ planned principal operations have commenced. In Amendment No. 4 to Form 10-Q, Note 1 to the financial statements has been revised accordingly.
Note 2. Summary of Significant Accounting Policies
Intangible Assets, page F-12
24.
Please supplementally provide your fiscal 2004 impairment test performed on your intangible assets. Please supplementally provide support for your assumptions. In light of your unfavorable operating history, negative cash flows and weak liquidity position, it is unclear how you support recoverability of the assets.
ANSWER: CMHS’ intangible assets are comprised of a covenant not to compete and a customer list. The covenant
Show Raw Text
CORRESP
1
filename1.htm
October 14, 2005
Mr. Adam Phippen
Securities and Exchange Commission
101 F Street
Washington, D.C. 20549
Re:
Comprehensive Healthcare Solutions, Inc.
Form 10-K/A for the fiscal year ended February 29, 2004
Filed March 30, 2005
File No. 033-08955
Form 10-QSB/A for the period ended May 31, 2004
Filed April 1, 2005
Form 10-QSB/A for the period ended August 31, 2004
Filed April 4, 2005
Form 10-QSB/A for the period ended November 30, 2004
Filed April 4, 2005
Dear Mr. Phippen:
We represent Comprehensive Healthcare Solutions, Inc. (“CMHS”). CMHS has reviewed your May 5, 2005 letter and has the following responses:
Form 10-K Amendment No. 3 for the fiscal year ended February 28, 2004
1.
Please take into consideration all of the following comments on your Form 10-K, as applicable, when you revise your Form 10QSB/A=s.
ANSWER: We will take into consideration all of the comments contained in CMHS’ Form 10-K when it revises all applicable Form 10-QSB/A’s.
2.
You filed your amendment on a Form 10-K however it appears in certain cases you have followed the disclosure requirements of Regulation S-B. For example, you only present the fiscal 2004 year end balance sheet in your audited financial statements. A reporting company may enter the S-B system only at the beginning of a fiscal year, and must determine at the time of its filing in a fiscal year (first quarterly report, Form 8-K, or registration statement) whether it will enter the S-B reporting system. A reporting issuer cannot enter the S-B system during a fiscal year if it has already filed Exchange Act reports for periods included in that fiscal year under Regulation S-X. Please amend your filing to comply with the disclosure requirements on Form 10-K. After review of the amended Form 10-K we may have further comments.
ANSWER: Amendment No. 4 to Form 10-K has been filed and has been amended to comply with the disclosure requirements of Form 10-K.
Item 1. Business
Comprehensive Network Solutions, Inc. page 16
3.
Your references to “Nantucket” here, and in other sections of your filing, are confusing. Please revise your filing to replace references to Nantucket with more appropriate references to the current name of the company.
ANSWER: In Amendment No. 4 to Form 10-K, we have removed the reference to Nantucket on Page 16 and other parts of the body of the document. Certain references remain in the footnotes to the financial statements which CMHS deems appropriate.
Item 5. Market for the Registrant’s Common Stock and Related Security Holder Matters, page 20
4.
Please revise to disclose the approximate number of holders of record of common stock. Refer to Item 201(b) of Regulation S-K.
ANSWER: In Amendment No. 4 to Form 10-K, we have added the number of shareholders of record as of February 28, 2004.
Item 6. Selected Financial Data, page 21
5.
Certain fiscal 2004 amounts in your summary statements of operation and summary balance sheet data do not agree with the financial statements. Please revise.
ANSWER: In Amendment No. 4 to Form 10-K, we have revised the fiscal 2004 amounts in the summary statement of operations and summary balance sheet data to agree with the financial statements.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations, page 24
6.
Please revise to include discussion of net sales and gross margin attributed to each product or service category, for example net sales and gross margin attributed to audiological testing and hearing aids, if considered material. Your disclosures should indicate whether you expect trends, if applicable, to continue and why or why not. Refer to SEC Release No. 33-8350 and Item 303 of Regulation S-K.
ANSWER: In Amendment No. 4 to Form 10-K we have revised this section. Accordingly net sales and gross margin attributable to hearing aid sales is not material to the financial statements.
7.
You state that selling, general and administrative expenses (“SG&A”) were $337,881 for fiscal 2004. Per the financial statements SG&A totaled $360,381. Please revise and consider whether additional discussion is necessary to explain the change in SG&A.
ANSWER: In Amendment No. 4 to Form 10-K, we have revised this section. The increase in SG&A is a result of an increase in the allowance for doubtful accounts and consulting fees has been revised and explained accordingly.
Liquidity and Capital Resources, page 24
8.
Please revise to discuss material changes between periods in your cash flows from operating, investing, and financing activities. Refer to SEC Release No. 33-8350 and Item 303 of Regulation S-K.
ANSWER: The changes between periods have been revised in the Amended 10-K.
Item 8. Financial Statements and Supplementary Data
General
9.
You have made changes to the financial statements that were previously issued. Please revise to provide all disclosures required by APB20. In particular, you should ensure that you disclose the previously filed amounts, changes made and restated amounts for each financial statement line item affected. Each adjustment should be explained.
ANSWER: In Amendment No. 4 to Form 10-K, the financial statements have been revised to include disclosure of previously filed amounts, changes made, and restated amounts for each financial statement line item affected. Additionally, each adjustment has been explained as follows:
•
Prepaid expenses on the balance sheet previously recorded as current and non-current assets related to stock-based deferred consulting fees. These fees were subsequently adjusted and recorded to deferred stock based consulting fees in the statement of changes in shareholders equity and will be accrued over the consulting service period.
•
Stock subscription receivable recorded as a current asset on the balance sheet was reclassified to common stock subscribed in the statement of changes in shareholders equity.
•
Bad debt expense of $22,500 was recorded to increase the allowance for doubtful accounts on the balance sheet.
Report of Independent Public Accounting Firm
10.
Please revise your filing to include an audit opinion related to the balance sheet as of February 28, 2003 and the related statements of operations, changes in shareholders deficiency, and cash flows for the years ended February 28, 2003 and 2002. If you plan to refer to the predecessor auditor please ensure you follow the guidance in AU508.
ANSWER: Amendment No. 4 to Form 10-K has been revised to include an audit opinion related to the balance sheet as of February 28, 2003 and the related statements of operations, changes in shareholders’ deficiency, and cash flows for the years ended February 28, 2003 and 2002.
11.
We note your independent accountants, Jewett, Schwartz & Associates, are located in Florida while you are headquartered in New York. Please have your accountants supplementally confirm to us that they are registered to practice in New York, or confirm that no such registration is necessary. If your accountants are registered in New York, please have them provide us with their license number.
ANSWER: Jewett, Schwartz & Associates has advised us that there is no requirement stipulating that the public accounting firm of an issuer must be located in the same state as the entity it is auditing.
Consolidated Statements of Operations, page F-4
12.
It is our understanding that net sales substantially refers to fees earned from audiological testing as well as the sales of hearing aids. Net revenues from the sale of tangible products and services along with the related cost of sales should be stated separately in the statements of operations. Refer to Rule 5-03 of Regulation S-X. Please revise.
ANSWER: Revenues and related costs of sales from the sale of tangible assets are not material to the financial statements and are included in net revenue in the statement of operations.
13.
Depreciation and amortization should be included as an operating expense rather than other expenses. Refer to Rule 5-03 of Regulation S-X and SAB Topic 11.B. Please revise.
ANSWER: In Amendment No. 4 to Form 10-K, the consolidated statements of operations have been revised to reflect depreciation and amortization as an operating expense in accordance with Rule 5-03 of Regulation S-X and SAB Topic 11B.
14.
Per Note 9 in June 2002 you terminated a consulting agreement and rescinded 1,200,000 shares of common stock. Please supplementally explain how the 1,200,000 shares of common stock were accounted for at the date of the consulting agreement and upon rescission. Tell us where in your financial statements the transactions were reflected. Please cite authoritative guidance supporting your accounting.
ANSWER: The 1,200,000 shares of common stock were never issued because the consulting agreement was not consummated. Therefore, this was not reflected in the financial statements and did not need to be accounted for.
15.
Please supplementally explain the common stock subscribed and subscription receivable activity. Please revise your balance sheet to present the subscription receivable as a separate line item in stockholders’ equity if the amount is receivable from officers or directors. Please revise to disclose the nature of the transaction in the notes to the financial statements. Refer to EITF 85-1 and SAB Topic 4E.
ANSWER: In Amendment No. 4 to Form 10-K, the balance sheet and footnotes have been revised. In accordance with EITF 85-1 stock subscription receivable recorded as a current asset on the balance sheet was reclassified to common stock subscribed in the statement of changes in shareholders equity.
16.
In fiscal 2003 and fiscal 2004 you issued shares in private placement sales at $0.21 and $0.25 per share, respectively. Your valuation of shares issued for executive compensation in fiscal 2003 and 2004 was valued significantly lower at $0.06 and $0.07, per share, respectively. Please supplementally explain how you determined the value of shares issued to executives and why such values differed significantly from the values ascribed to your shares in transactions with unrelated third parties.
ANSWER: The stock issued for executive compensation was issued in accordance
with the employment agreement in effect. The sock was issued to a related party
and value was significantly lower than the market value at $0.06 and $0.07 per
share due to the restrictive nature of the stock.
17.
Please supplementally explain the fiscal 2004 convertible debt transaction. Please supplementally explain the consolidated balance sheet and consolidated statements of cash flow presentation of the transaction. Please revise the notes to the consolidated financial statements to disclose the transaction.
ANSWER: In Amendment No. 4 to Form 10-K, the notes to the consolidated financial statements have been revised to include an explanation of the 2004 convertible debt transaction..
Consolidated Statements of Cash Flows, page F-5
18.
Please supplementally explain the line “(Increase) decrease in other assets.” Please revise if necessary.
ANSWER: The line item increase (decrease) in other assets represents the change in hearing aids and inventory supplies on hand.
19.
Cash inflows from financing activities include proceeds received, for example, from issuing equity instruments, bonds, mortgages, notes and from other short or long term borrowing. Based on review of your notes to the consolidated financial statements it does not appear that you received proceeds that should be classified as financing activities totaling $762,400 in fiscal year 2004. Please supplementally explain and revise if necessary. Note that the value of equity instruments issued as non-cash compensation to employees and non-employees which are expensed should be included as non-cash adjustments in the operating activities section of the statements of cash flows. Refer to SFAS 95.
ANSWER: In Amendment No. 4 to Form 10-K, The statements of cash flows have been revised to include the non-cash compensation to employees and non-employees in the operating activities section with the required supplemental disclosure of non-cash investing and financing activities, as applicable.
20.
Please provide a supporting schedule to your revised consolidated statements of cash flows. The schedule should include a reconciliation to applicable consolidated balance sheets.
ANSWER: The supporting reconciliation schedule has been supplementally attached to this letter.
Notes to Consolidated Financial Statements
Note 1. Reorganization
General
21.
In a reverse acquisition shareholders’ equity should be determined and presented on the consolidated balance sheet as if the consolidated financial statements are a continuation of the accounting acquiror/legal acquiree (Accutone, Inc.). The retained deficit and other surplus accounts in the consolidated financial statements immediately after the reverse acquisition would be the same as the accounts of the accounting acquiror / legal acquiree at that date. The retained deficit and other surplus accounts of the legal acquiror (Nantucket Industries, Inc.) at the date of the legal combination would be eliminated in consolidation. We assume your accumulated deficit of $13,153,009 as of February 28, 2002 principally relates to operations of Nantucket Industries Inc. prior to the January 25, 2002 reverse acquisition. If so, please revise your filing to eliminate the retained deficit and additional
paid in capital of Nantucket included in your February 28, 2002 equity accounts.
ANSWER: In Amendment No. 4 to Form 10-K, revisions have been made to eliminate the accumulated deficit and additional paid in capital relating to the operations of Nantucket Industries Inc. at February 28, 2002.
Basis of Presentation and Going Concern, page F-7
22.
You refer to SFAS 7. SFAS 7 refers to the accounting and disclosure requirements of developmental stage enterprises. Do you consider yourself a developmental stage enterprise in accordance with SFAS 7? If so, it does not appear you have followed the accounting and disclosure requirements of SFAS 7. Please supplementally explain and revise.
ANSWER: CMHS is not a development stage company at February 29, 2004. In Amendment No. 4 to Form 10-Q, Note 1 to the financial statements has been revised accordingly.
23.
You disclose that you have not commenced planned principle operations and you have not generated revenues from prospective customers. Based on review of this filing, neither of these statements appear accurate. Please revise or advise.
ANSWER: CMHS’ planned principal operations have commenced. In Amendment No. 4 to Form 10-Q, Note 1 to the financial statements has been revised accordingly.
Note 2. Summary of Significant Accounting Policies
Intangible Assets, page F-12
24.
Please supplementally provide your fiscal 2004 impairment test performed on your intangible assets. Please supplementally provide support for your assumptions. In light of your unfavorable operating history, negative cash flows and weak liquidity position, it is unclear how you support recoverability of the assets.
ANSWER: CMHS’ intangible assets are comprised of a covenant not to compete and a customer list. The covenant