SEC Company Response from V GPO INC (CIK 0000831297) — Apr 27, 2005
V GPO INC (CIK 0000831297)
Date: April 27, 2005 · CIK: 0000831297 · Accession: 0000831297-05-000004
AI Filing Summary & Sentiment
Letter
April 27, 2005 VIA FACSIMILE (202) 942-9635 AND US MAIL Mr. Daniel Gordon, Branch Chief Division of Corporation Finance U.S. Securities and Exchange Commission Mail Stop 0409 Washington, DC 20549
Re: V-GPO, Inc., Form 10-KSB For the Fiscal Year Ended December 31, 2004 Filed March 30, 2005 File No. 0-30101
Dear Mr. Gordon:
Please accept the following as responses by V-GPO, Inc. ("Company") to your April 18, 2005 comment letter concerning the above filing by the Company:
1. As requested, the following summarizes the evaluation of each pending legal proceeding described in Part 1, Item 3, Legal Proceedings:
As of the date of the financial statements, and prior to filing of the Annual Report on Form 10-KSB, the Company's outside legal counsel provided the Company with an evaluation of the litigation described in footnote M concerning the $406,000 real property dispute. The Company advised its auditors that the likelihood of an adverse outcome was possible. In addition, as of the date of the financial statements and prior to the filing of its SEC Form 10K-SB, the Company determined, based upon the facts and circumstances, the proceeding's ultimate outcome would not have a material effect on the Company's financial position or results of operations. Accordingly, the Company disclosed the loss contingency in accordance with FAS No. 5. At the time of filing of the Form 10-KSB for the fiscal year ended December 31, 2004 (March 30, 2005), the $406,000 judgment in Texas was under review by a Texas Appellate Court and the risk of loss was determined by the Company not to be probable. Subsequent to the filing (April 11, 2005), the Company was advised by its counsel that the Appellate Court had affirmed the Judgment on April 6, 2005 but recommended that the Company file a Motion for Rehearing which has been filed. After a ruling on the Motion for Rehearing, the Company will reevaluate the risk of loss associated with this litigation, and will disclose the status of this matter in accordance with Item 103 of Regulation S-B, as well in the accompanying financial statements, in its SEC Form 10QSB for the period ended March 31, 2005.
The Company believes disclosure of the outstanding litigation as of the date of the financial statements and the filing of its Form 10KSB has been adequately disclosed in its MD & A and its policy for accounting for contingent liabilities is reasonable and complies with current accounting principles generally accepted in the US.
2. The software developed with the Company's funds included in the software development costs, assisted hospitals and medical facilities (owned and/or managed by the Company) in managing certain aspects of their supply chain. Accordingly, the software development costs represented an asset that was integral to the Company's core business of providing healthcare management services with its aim of owning and/or managing those Facilities.
3. The Company's business model is the ownership, operation and management of healthcare facilities. The reference to the production and sale of trusses is a misprint which will be corrected in future filings.
4. The Company's accounting policy is to account for the right of set off between related entities in accordance with FIN 39, paragraph 10.
The Company believes its policy accounting for transactions between related parties is reasonable and complies with current accounting principles generally accepted in the US.
5. The debt financing for the Company's subsidiary, International Healthcare Investments Ltd., Inc. ("IHI") described in the Financing Commitment and Acquisitions section of footnote M involved the issuance of IHI Bonds under an Indenture of Trust in January 2004 (HSBC Bank as Trustee). At the time, representations were made to IHI by the initial holder of the Bonds that full payment net of placement costs would be delivered to IHI immediately after issuance. The initial holder had no transactions with IHI or the Company except for transactions related to the Bonds issued by IHI.
After numerous representations and promises by the initial holder that IHI would be paid the agreed to consideration for the Bonds, IHI demanded return of the Bonds. IHI contacted HSBC as Trustee for assistance and was advised that it was necessary for IHI to commence litigation to compel the initial holder to return the Bonds. Accordingly, IHI demanded return of the Bonds and advised the initial holder that litigation would be commenced if the Bonds were not returned. The initial holder demanded in excess of $3,000,000 from IHI as a condition to return the Bonds with no justification for the demand which IHI viewed as improper and totally unacceptable. The demand for payment was rejected and IHI commenced litigation in New York State Supreme Court against the initial holder and its affiliates seeking the return of the Bonds and damages for breach of contract and fraud. On March 24, 2005, a Temporary Restraining Order requested by IHI was granted (and continued on April 8, 2005 after the defendants appeared to object to the temporary restraining order) pending a hearing scheduled for May 16, 2005.
Item 6 described the January 2004 delivery of the Bonds to HSBC, as Trustee under the Indenture of Trust. The initial holder represented to IHI and the Trustee that the consideration for the Bonds would be immediately paid to IHI after the Bonds were eligible for electronic trading through the Depository Trust Company ("DTC") which occurred after the Trustee delivered the Bonds to DTC. Nevertheless, payment was never received. The Item 6 and footnote M disclosures describe the circumstances and the non-payment.
As required by your letter, the Company hereby acknowledges that:
1. The Company is responsible for the adequacy and accuracy of the disclosure in the filings;
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 a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
This response letter has been reviewed by our auditors. You may contact the undersigned if you have any questions at (800) 486-3141.
Very truly yours,
V-GPO, INC.
Show Raw Text
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[LOGO V-GPO,Inc.
GRAPHIC] 2150 Whitfield Industrial Way
Sarasota, FL 34243
(941) 727-1552 (941) 739-2078 fax
April 27, 2005
VIA FACSIMILE (202) 942-9635
AND US MAIL
Mr. Daniel Gordon, Branch Chief
Division of Corporation Finance
U.S. Securities and Exchange Commission
Mail Stop 0409
Washington, DC 20549
Re: V-GPO, Inc., Form 10-KSB
For the Fiscal Year Ended December 31, 2004
Filed March 30, 2005
File No. 0-30101
Dear Mr. Gordon:
Please accept the following as responses by V-GPO, Inc. ("Company") to your
April 18, 2005 comment letter concerning the above filing by the Company:
1. As requested, the following summarizes the evaluation of each pending
legal proceeding described in Part 1, Item 3, Legal Proceedings:
As of the date of the financial statements, and prior to filing of the
Annual Report on Form 10-KSB, the Company's outside legal counsel provided the
Company with an evaluation of the litigation described in footnote M concerning
the $406,000 real property dispute. The Company advised its auditors that the
likelihood of an adverse outcome was possible. In addition, as of the date of
the financial statements and prior to the filing of its SEC Form 10K-SB, the
Company determined, based upon the facts and circumstances, the proceeding's
ultimate outcome would not have a material effect on the Company's financial
position or results of operations. Accordingly, the Company disclosed the loss
contingency in accordance with FAS No. 5. At the time of filing of the Form
10-KSB for the fiscal year ended December 31, 2004 (March 30, 2005), the
$406,000 judgment in Texas was under review by a Texas Appellate Court and the
risk of loss was determined by the Company not to be probable. Subsequent to the
filing (April 11, 2005), the Company was advised by its counsel that the
Appellate Court had affirmed the Judgment on April 6, 2005 but recommended that
the Company file a Motion for Rehearing which has been filed. After a ruling on
the Motion for Rehearing, the Company will reevaluate the risk of loss
associated with this litigation, and will disclose the status of this matter in
accordance with Item 103 of Regulation S-B, as well in the accompanying
financial statements, in its SEC Form 10QSB for the period ended March 31, 2005.
The Company believes disclosure of the outstanding litigation as of the
date of the financial statements and the filing of its Form 10KSB has been
adequately disclosed in its MD & A and its policy for accounting for contingent
liabilities is reasonable and complies with current accounting principles
generally accepted in the US.
2. The software developed with the Company's funds included in the software
development costs, assisted hospitals and medical facilities (owned and/or
managed by the Company) in managing certain aspects of their supply chain.
Accordingly, the software development costs represented an asset that was
integral to the Company's core business of providing healthcare management
services with its aim of owning and/or managing those Facilities.
3. The Company's business model is the ownership, operation and management
of healthcare facilities. The reference to the production and sale of trusses is
a misprint which will be corrected in future filings.
4. The Company's accounting policy is to account for the right of set off
between related entities in accordance with FIN 39, paragraph 10.
The Company believes its policy accounting for transactions between related
parties is reasonable and complies with current accounting principles generally
accepted in the US.
5. The debt financing for the Company's subsidiary, International
Healthcare Investments Ltd., Inc. ("IHI") described in the Financing Commitment
and Acquisitions section of footnote M involved the issuance of IHI Bonds under
an Indenture of Trust in January 2004 (HSBC Bank as Trustee). At the time,
representations were made to IHI by the initial holder of the Bonds that full
payment net of placement costs would be delivered to IHI immediately after
issuance. The initial holder had no transactions with IHI or the Company except
for transactions related to the Bonds issued by IHI.
After numerous representations and promises by the initial holder that IHI
would be paid the agreed to consideration for the Bonds, IHI demanded return of
the Bonds. IHI contacted HSBC as Trustee for assistance and was advised that it
was necessary for IHI to commence litigation to compel the initial holder to
return the Bonds. Accordingly, IHI demanded return of the Bonds and advised the
initial holder that litigation would be commenced if the Bonds were not
returned. The initial holder demanded in excess of $3,000,000 from IHI as a
condition to return the Bonds with no justification for the demand which IHI
viewed as improper and totally unacceptable. The demand for payment was rejected
and IHI commenced litigation in New York State Supreme Court against the initial
holder and its affiliates seeking the return of the Bonds and damages for breach
of contract and fraud. On March 24, 2005, a Temporary Restraining Order
requested by IHI was granted (and continued on April 8, 2005 after the
defendants appeared to object to the temporary restraining order) pending a
hearing scheduled for May 16, 2005.
Item 6 described the January 2004 delivery of the Bonds to HSBC, as Trustee
under the Indenture of Trust. The initial holder represented to IHI and the
Trustee that the consideration for the Bonds would be immediately paid to IHI
after the Bonds were eligible for electronic trading through the Depository
Trust Company ("DTC") which occurred after the Trustee delivered the Bonds to
DTC. Nevertheless, payment was never received. The Item 6 and footnote M
disclosures describe the circumstances and the non-payment.
As required by your letter, the Company hereby acknowledges that:
1. The Company is responsible for the adequacy and accuracy of the
disclosure in the filings;
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 a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of
the United States.
This response letter has been reviewed by our auditors. You may contact the
undersigned if you have any questions at (800) 486-3141.
Very truly yours,
V-GPO, INC.
By: /s/ NORMAN R. DOBIESZ
Norman R. Dobiesz, Chairman and CEO
NRD/dak
cc: William Demarest, Staff Accountant
Facsimile (202) 942-9635
Peter Stefanou, CPA
Russell Bedford Stefanou Mirchandani LLP
Facsimile (703) 448-3515
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