SEC Company Response from PaperFree Medical Solutions, Inc. (CIK 0001171546) — Dec 16, 2004
PaperFree Medical Solutions, Inc. (CIK 0001171546)
Date: Dec. 16, 2004 · CIK: 0001171546 · Accession: 0001059016-04-000249
AI Filing Summary & Sentiment
Letter
Robert L. Sonfield, Jr. Managing Director December 16, 2004 Ms. Rachel Zablow - Mail Stop 0409 Staff Accountant U.S. Securities and Exchange Commission 450 Fifth Street NW Washington D.C. 20549-0404
Re: PaperFree Medical Solutions, Inc. (the "Company") (formerly Crown Medical Systems, Inc.) Form 8-K filed November 30, 2004 File Number 3-86706
Dear Ms. Zablow:
Our responses to your comments are numbered in the same manner as your letter in response to the captioned Form 8-K. We took longer than 10 days to respond to your letter as our new accountants needed time to review and advise on the issues as we had not previously to their appointment discussed said issues with them.
3) The disagreement with the former Accountant involved both (a) PREFERRED SHARE TREATMENT and (b) DISCLOSURE. The company filed an amended 10-Q that included the following note:
NOTE 6 - RESTATEMENTS
In Paperfree's originally filed Form 10-QSB, PaperFree made the following erroneous entries:
- recorded a purchase transaction that didn't close until September 2, 2004 - failed to record 600,000 shares of preferred stock issued in August 2004 for services valued at $305,250.
A summary of the effect on the income statement for the 3-month period ended August 31, 2004 is as follows: <TABLE> As originally As recorded Amended Difference <S> <C> <C> <C> Total General and administrative expenses $97,175 $402,424 $305,249 Rounding 1 -------- Total difference $305,250 ======== </TABLE> 3) (a) (1) The former accountant concluded that the 600,000 preferred share issue consideration should have been recorded as $1,3339,470 and the corresponding expense deferred until the next quarter; whereas the company believed the consideration was $305,249 and the corresponding expense was a period expense
3) (a) (2) The disagreement was not resolved. The amended 10-Q reflects the change.
3) (a) (3) The former accountant felt that subsequent share transactions should be taken into account in determining the market value of the preferred shares issued; whereas the company was of the opinion that normal valuation methods were applicable, namely the Company used the average of the previous 5 days closing bid to determine value.
3) (a) (4) As quoted above the Company amended its 10-QSB.
3) (b) DISCLOSURE
The former accountants were of the opinion that detailed disclosure akin to an annual 10-KSB filing and detailed pro forma disclosure of the subsequent event was appropriate. The Company felt that such disclosure while desirable, was not mandatory and not practical in the circumstances.
STATEMENTS REQUESTED BY SEC
PaperFree Medical Solutions, Inc. acknowledges that it is responsible for the adequacy and accuracy of the disclosure in the filings;
PaperFree Medical Solutions, Inc. acknowledges that the staff comments or changes to disclusre in response to staff comments in the filing reviewed by the staff do not foreclose the Commission from taking any actions with respect to the filing; and
PaperFree Medical Solutions, Inc. acknowledges that it many 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.
Very truly yours,
/s/Robert L. Sonfield, Jr.
----------------------------------
Robert L. Sonfield, Jr.
Managing Director
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Sonfield and Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056
Tel: 713-877-8333
Fax: 713-877-1547
robert@sonfield.com
www.sonfield.com
Robert L. Sonfield, Jr.
Managing Director
December 16, 2004
Ms. Rachel Zablow - Mail Stop 0409
Staff Accountant U.S. Securities and Exchange Commission
450 Fifth Street NW
Washington D.C. 20549-0404
Re: PaperFree Medical Solutions, Inc. (the "Company")
(formerly Crown Medical Systems, Inc.)
Form 8-K filed November 30, 2004
File Number 3-86706
Dear Ms. Zablow:
Our responses to your comments are numbered in the same manner as your
letter in response to the captioned Form 8-K. We took longer than 10 days to
respond to your letter as our new accountants needed time to review and advise
on the issues as we had not previously to their appointment discussed said
issues with them.
3) The disagreement with the former Accountant involved both (a) PREFERRED
SHARE TREATMENT and (b) DISCLOSURE. The company filed an amended 10-Q
that included the following note:
NOTE 6 - RESTATEMENTS
In Paperfree's originally filed Form 10-QSB, PaperFree made the following
erroneous entries:
- recorded a purchase transaction that didn't close until September 2, 2004
- failed to record 600,000 shares of preferred stock issued in August
2004 for services valued at $305,250.
A summary of the effect on the income statement for the 3-month period ended
August 31, 2004 is as follows:
<TABLE>
As originally As
recorded Amended Difference
<S> <C> <C> <C>
Total General and administrative expenses $97,175 $402,424 $305,249
Rounding 1
--------
Total difference $305,250
========
</TABLE>
3) (a) (1) The former accountant concluded that the 600,000 preferred share
issue consideration should have been recorded as $1,3339,470 and the
corresponding expense deferred until the next quarter; whereas the company
believed the consideration was $305,249 and the corresponding expense was a
period expense
3) (a) (2) The disagreement was not resolved. The amended 10-Q reflects the
change.
3) (a) (3) The former accountant felt that subsequent share transactions should
be taken into account in determining the market value of the preferred shares
issued; whereas the company was of the opinion that normal valuation methods
were applicable, namely the Company used the average of the previous 5 days
closing bid to determine value.
3) (a) (4) As quoted above the Company amended its 10-QSB.
3) (b) DISCLOSURE
The former accountants were of the opinion that detailed disclosure akin to an
annual 10-KSB filing and detailed pro forma disclosure of the subsequent event
was appropriate. The Company felt that such disclosure while desirable, was not
mandatory and not practical in the circumstances.
STATEMENTS REQUESTED BY SEC
PaperFree Medical Solutions, Inc. acknowledges that it is responsible for the
adequacy and accuracy of the disclosure in the filings;
PaperFree Medical Solutions, Inc. acknowledges that the staff comments or
changes to disclusre in response to staff comments in the
filing reviewed by the staff do not foreclose the Commission from taking any
actions with respect to the filing; and
PaperFree Medical Solutions, Inc. acknowledges that it many 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.
Very truly yours,
/s/Robert L. Sonfield, Jr.
----------------------------------
Robert L. Sonfield, Jr.
Managing Director
RLSjr/ldo
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