SEC Company Response from Nutex Health, Inc. (NUTX) (CIK 0001479681) (NUTX) — Sep 13, 2010
Nutex Health, Inc. (NUTX) (CIK 0001479681)
Date: Sept. 13, 2010 · CIK: 0001479681 · Accession: 0001131754-10-000063
AI Filing Summary & Sentiment
File numbers found in text: 000-53862
Referenced dates: January 28, 2010
Letter
United States Securities and Exchange Commission Division of Corporate Finance Attention: H. Christopher Owings iGambit, Inc. (File No. 000-53862) (the “Company”) Amendment No. 1 to Registration Statement on Form 10 - filed 6/11/10 (“Form 10”) Annual Report on Form 10-K for the FYE 12/31/09 - filed 6/15/10 (“Form 10-K”) Quarterly Report on Form 10-Q for the Quarter Ended 3/31/10 - filed 6/17/10 (Form 10-Q”)
Dear Mr. Owings:
The purpose of this letter is to provide the Company’s responses to the July 1, 2010 Comment Letter (the “2nd Comment Letter”) to Mr. John Salerno, Chief Executive Officer of iGambit, Inc. (the “Company”). This letter indicates how the Company proposes to respond to your comments and provide certain information requested by you in the 2nd Comment Letter. For your convenience, we have restated the comments from the 2nd Comment Letter below followed by the Company’s responses.
General
COMMENT 1.
We note the acknowledgements made by your counsel on your behalf at the conclusion of counsel's letter to us dated June 11, 2010. Notwithstanding these acknowledgements, we still require a letter from you, on company letterhead and executed by a duly authorized officer, acknowledging that:
·
the company is responsible for the adequacy and accuracy of the disclosure in the filings;
·
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
·
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.
Response:
Attached hereto is a letter from the Company, on Company letterhead, executed by the Chief Executive Officer of the Company, acknowledging the three bullet points set forth above.
Amendment No. 1 to Registration Statement On Form 10
COMMENT 2.
Please apply all comments relating to the Form 10 to your Form 10-K for the fiscal year ended December 31, 2009, filed on June 15, 2010, and your Form 10-Q for the fiscal period ended March 31, 2010, filed on June 17, 2010, as applicable.
Response:
The Company will file an amendment to the Form 10-K and an amendment to the Form 10-Q applying all comments relating to the Form 10, as applicable.
COMMENT 3.
We note your response to comment two in our letter dated January 28, 2010. Please revise your disclosure to describe the following:
·
The steps taken by management to increase revenue share payments and "leverage its business experience and knowledge through other opportunities in the technology market" since the sale of your online business in February 2006.
·
The manner in which management is "working to expand the operations of [your] subsidiary and is seeking other synergistic opportunities."
·
The components of your business plan in greater detail.
Response:
The Company has re-written the “HISTORY” section and the “OUR COMPANY” section of the Form 10 to more clearly and expansively describe the main components of the Company’s business plan. Specifically, the Company has: (i) moved the Quarterly Revenue Share Payment - Annual Increase Payment Table to a new subsection under “OUR COMPANY” titled “DDC Revenue Share Payments and Annual Increase Payments”, and has disclosed in that section the steps taken by management to increase said payments by leveraging managements’ business experience, knowledge, and contacts in the technology market.; (ii) provided additional disclosure of how management is working to expand the operations of the Company’s subsidiary under the subsection titled “Our Partner Company – Gotham Photo Company”; and (iii) expanded the general description of the Company’s business plan under the section titled “Our Strategy to Grow the Company” to more specifically describe the processes we work through in evaluating target companies.
Item 1. Business, page 3
Our Company, page 5
Our Partner Company – Gotham Photo Company, page 7
Products and Services, page 7
COMMENT 4.
We note your response to comment seven in our letter dated January 28, 2010. Please revise your disclosure to indicate generally the portion of your clients that take advantage of EXPO on a per unit basis, as an add-on to photography services or on a subscription basis.
Response:
We have revised our disclosure in the “Products and Services” section of the Form 10 to provide that currently, approximately 19% of our clients utilize EXPO, of which 24% do so on a per unit basis, 48% do so as an add-on to photography services, and 28% do so on a subscription basis.
COMMENT 5.
We note your statement that you have "large `master accounts' with large firms such as Prudential Douglas Elliman and Halstead." If applicable, please discuss your dependence on a single customer or a few customers, the loss of any one or more of which would have a material adverse effect on your business. Refer to Item 101(c)(vii) of Regulation S-K. Also if applicable, please consider whether risk factor disclosure or disclosure under Item 601(b)(10)(ii)(B) of Regulation S-K is appropriate with respect to this issue.
Response:
We have added a “Customers” section to the Form 10, in which we provide that 5 of our customers constitute approximately 61% of our consolidated revenues, and have included an additional risk factor with respect to same. We do not believe that additional disclosure under Item 601(b)(10)(ii)(B) is warranted, based on the approximate percentages of revenues generated from each of the 6 customers set forth above.
Competitive Comparison, page 7
COMMENT 6.
We note your response to comment eight in our letter dated January 28, 2010. Please furnish us with support for the statement made in the last sentence of this section that a majority of your competitors "either don't seem to employ similar measures in their full screen product offerings or do so on a more limited basis," or label such statement as the opinion of management.
Response:
We have revised the last sentence of the “Competitive Comparison” section of the Form 10 to label such statement as the opinion of management.
COMMENT 7.
In addition, we note that you deleted your discussion of Team5. However, Team5 continues to be featured on your website as one of the two companies in your portfolio. Please tell us why it is appropriate for you to exclude disclosure regarding Team5 when, it appears to be one of your two primary technologies or holdings.
Response:
Team 5 is a tradename that was acquired by the Company when it acquired the assets of Jekyll Island Ventures, Inc. The tradename was used by Jekyll with respect to certain product/service offerings in NYC for approximately 10 years prior to closing. As such, the tradename has some value. The Company currently uses the tradename in connection with certain non-core product/service offerings in NYC, which products/services are not material to the overall operations of the Company.
Item 1A. Risk Factors, page 8
COMMENT 8.
We note your response to comment 11 in our letter dated January 28, 2010. However, it appears as though you have not made the requested change to your disclosure, Accordingly, we re-issue that comment.
Response:
We have deleted second sentence of the introductory paragraph of the “Risk Factors” section of the Form 10.
Item 2. Financial Information, page 12
Year Ended December 31, 2009 as Compared to Year Ended December 31, 2008
COMMENT 9.
The fiscal 2009 general and administrative expenses disclosed in your discussion total $617,898 while total fiscal 2009 general and administrative expenses were $861,512. Please discuss the remaining fiscal 2009 general and administrative expenses.
Response:
We have revised the fiscal 2009 “General and Administrative Expenses” subsection in the Form 10 to correct the amount of each subcategory of expenses under the general and administrative expenses line item.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 13
COMMENT 10.
Please expand your disclosure to discuss the causes for any material changes in your results of operations from period to period.
Response:
We have expanded our disclosure under the “Management’s Discussion and Analysis” section of the Form 10 to discuss the causes for any material changes in our results of operations from period to period.
Liquidity and Capital Resources, page 15
COMMENT 11.
We note your response to comment 16 in our letter dated January 28, 2010 and reissue a portion of our comment. Please provide a discussion and analysis of your cash flows from operating, investing and financing activities for the periods covered by the financial statements. This discussion and analysis of liquidity should focus on material changes in operating, investing and financing cash flows, as depicted in the statement of cash flows, and the reasons underlying those changes Please refer to the Instructions to Item 303(A) of Regulation S-K and SEC Release 33-8350 for guidance on this matter.
Response:
We have updated the “Liquidity and Capital Resources” section of the Form 10 and revised it to include subsections titled “Cash Flow Activity” and “Supplemental Cash Flow Activity”, in which we focus on material changes in our cash flows and the reasons underlying those changes.
Item 5. Directors and Executive Officers, page 16
COMMENT 12.
We note your response to comment 17 in our letter dated January 28, 2010, as well as your revised disclosure that Mr. Dempster currently is the Chairman of Tran-Leisure Corp. Please revise your disclosure to state the date from which Mr. Dempster has served in this capacity. Please also revise your disclosure to state briefly the type of business in which each of Interpharm Holdings, Inc. and Authentidate Holding Corp. is engaged. In addition, please revise your disclosure to identify the SPAC of which Mr. Waters was the CFO. Finally, please disclose Mr. Waters' employment since 2008 or confirm to us that there is no such employment information to disclose.
Response:
We have revised the “Directors and Executive Officers” section of the Form 10 to state the date from which Mr. Dempster has served as the Chairman of Tran-Leisure Corp., to state briefly the type of business in which Interpharm Holdings, Inc., and Authentidate Holding Corp. is engaged, to identify the SPAC of which Mr. Waters was the CFO, and to disclose Mr. Waters’ employment since 2008.
COMMENT 13.
Please discuss the specific experience, qualifications, attributes or skills that led to the conclusion that each director should serve in such capacity. Refer to Item 401(e)(1) of Regulation S-K.
Response:
We have expanded the disclosure in the “Directors and Executive Officers” section of the Form 10 to include the specific experience, qualifications, attributes or skills that led to the conclusion that each director should serve in such capacity.
COMMENT 14.
Please describe the board leadership structure, and disclose the board's role in risk oversight. Refer to Item 407(h) of Regulation S-K.
Response:
We have added a “Board Structure; Board’s Role in Risk Management” subsection to the “Board Independence and Committees” section of the Form 10, in which we describe the board leadership structure and disclose the board’s role in risk oversight.
Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters, page 21
COMMENT 15.
We note your response to comment 21 in our letter dated January 28, 2010, which indicates that you issued warrants to purchase 2,310,000 shares of common stock to two consultants. However, your disclosure in this section indicates that you issued these warrants to five consultants. Please revise or advise. In addition, please also disclose the issuance of these warrants in Item 10 of your filing.
Response:
We have revised the disclosure in the “Equity Compensation Plan Information” section of the Form 10 to provide that the warrants in question were issued to 3 consultants. The current disclosure in the Item 10 section of the Form 10 accurately reflects the foregoing.
Item 10. Recent Sales of Unregistered Securities, page 22
COMMENT 16.
We note your response to comment 22 in our letter dated January 28, 2010. For each issuance of securities, please ensure that you disclose all of the information required by Item 701 of Regulation S-K, including the names or class of persons to whom the securities were sold, the offering price of the securities or, if issued otherwise than for cash, the nature of the transaction and the nature and aggregate amount of consideration received by the registrant, and the terms, fair values and reason for issuance of any options and warrants. In addition, please either confirm that the issuances of options and common stock to Mr. Salerno and Ms. Luqman in 2007 were made more than three years ago or disclose them here.
Response:
We have revised the disclosure in the “Recent Sales of Unregistered Securities” section of the Form 10, to provide additional detail regarding the securities issuances set forth therein, as requested. The designated issuances to Mr. Salerno and Ms. Luqman were effected more than 3 years ago.
Item 15. Financial Statements and Exhibits, page 24
COMMENT 17.
We reviewed your response to comment 23 in our letter dated January 28, 2010. The test set forth in Rule 8-04(b)(3) of Regulation S-X is applicable to your fact pattern. Please note that it is the Staff's position that if the registrant and/or the acquired business reported a pretax loss, the absolute value should be used when calculating significance. Please provide us with the significance test performed pursuant to this Rule. To the extent applicable, please amend to include the Jekyll Island Ventures, Inc. financial statements and pro forma financial information required by Rule 8-04 and 8-05 of Regulation S-X.
Response:
We are in the process of having the Jekyll Island Ventures, Inc. financial statements and pro forma financial information required by Rule 8-04 and 8-05 of Regulation S-X prepared, and will incorporate said financial statements into the requisite filings via amendment upon completion.
Report of Independent Registered Public Accountant, page F-1
COMMENT 18.
In future audit reports, please have your auditor revise the first sentence in the second paragraph of the audit report to state that the audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board. Refer to PCAOB Auditing Standard No. 1.
Response:
In future audit reports, we will have our auditor revise the first sentence in the second paragraph of the audit report to state that the audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board.
Annual Financial Statements, page F-2
Consolidated Statements of Cash flows, page F-5
COMMENT 19.
Please explain why "Assets of acquired business" are presented as an adjustment to reconcile net income to net cash provided by operating activities since such adjustment would appear to represent a non-cash investing activity and such adjustment had no impact on net income.
Response:
We have revised our statement of cash flows for the year ended December 31, 2009, to reflect the following changes:
*
Assets of acquired business of $73,974 was removed as an adjustment to reconcile net income to net cash provided by operating activities and included in the supplemental disclosures of cash flow information as a non-cash investing activity.
*
Write off of fixed assets (from acquired business) of $2,993 was included as an adjustment to reconcile net income to net cash provided by operating activities.
*
Changes in
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CORRESP
1
filename1.htm
correspondence.htm
September 13, 2010
United States Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, DC 20549-3628
Attention: H. Christopher Owings
Assistant Director
Re:
iGambit, Inc. (File No. 000-53862) (the “Company”)
Amendment No. 1 to Registration Statement on Form 10 - filed 6/11/10 (“Form 10”)
Annual Report on Form 10-K for the FYE 12/31/09 - filed 6/15/10 (“Form 10-K”)
Quarterly Report on Form 10-Q for the Quarter Ended 3/31/10 - filed 6/17/10 (Form 10-Q”)
Dear Mr. Owings:
The purpose of this letter is to provide the Company’s responses to the July 1, 2010 Comment Letter (the “2nd Comment Letter”) to Mr. John Salerno, Chief Executive Officer of iGambit, Inc. (the “Company”). This letter indicates how the Company proposes to respond to your comments and provide certain information requested by you in the 2nd Comment Letter. For your convenience, we have restated the comments from the 2nd Comment Letter below followed by the Company’s responses.
General
COMMENT 1.
We note the acknowledgements made by your counsel on your behalf at the conclusion of counsel's letter to us dated June 11, 2010. Notwithstanding these acknowledgements, we still require a letter from you, on company letterhead and executed by a duly authorized officer, acknowledging that:
·
the company is responsible for the adequacy and accuracy of the disclosure in the filings;
·
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
·
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.
Response:
Attached hereto is a letter from the Company, on Company letterhead, executed by the Chief Executive Officer of the Company, acknowledging the three bullet points set forth above.
Amendment No. 1 to Registration Statement On Form 10
COMMENT 2.
Please apply all comments relating to the Form 10 to your Form 10-K for the fiscal year ended December 31, 2009, filed on June 15, 2010, and your Form 10-Q for the fiscal period ended March 31, 2010, filed on June 17, 2010, as applicable.
Response:
The Company will file an amendment to the Form 10-K and an amendment to the Form 10-Q applying all comments relating to the Form 10, as applicable.
COMMENT 3.
We note your response to comment two in our letter dated January 28, 2010. Please revise your disclosure to describe the following:
·
The steps taken by management to increase revenue share payments and "leverage its business experience and knowledge through other opportunities in the technology market" since the sale of your online business in February 2006.
·
The manner in which management is "working to expand the operations of [your] subsidiary and is seeking other synergistic opportunities."
·
The components of your business plan in greater detail.
Response:
The Company has re-written the “HISTORY” section and the “OUR COMPANY” section of the Form 10 to more clearly and expansively describe the main components of the Company’s business plan. Specifically, the Company has: (i) moved the Quarterly Revenue Share Payment - Annual Increase Payment Table to a new subsection under “OUR COMPANY” titled “DDC Revenue Share Payments and Annual Increase Payments”, and has disclosed in that section the steps taken by management to increase said payments by leveraging managements’ business experience, knowledge, and contacts in the technology market.; (ii) provided additional disclosure of how management is working to expand the operations of the Company’s subsidiary under the subsection titled “Our Partner Company – Gotham Photo Company”; and (iii) expanded the general description of the Company’s business plan under the section titled “Our Strategy to Grow the Company” to more specifically describe the processes we work through in evaluating target companies.
Item 1. Business, page 3
Our Company, page 5
Our Partner Company – Gotham Photo Company, page 7
Products and Services, page 7
COMMENT 4.
We note your response to comment seven in our letter dated January 28, 2010. Please revise your disclosure to indicate generally the portion of your clients that take advantage of EXPO on a per unit basis, as an add-on to photography services or on a subscription basis.
Response:
We have revised our disclosure in the “Products and Services” section of the Form 10 to provide that currently, approximately 19% of our clients utilize EXPO, of which 24% do so on a per unit basis, 48% do so as an add-on to photography services, and 28% do so on a subscription basis.
COMMENT 5.
We note your statement that you have "large `master accounts' with large firms such as Prudential Douglas Elliman and Halstead." If applicable, please discuss your dependence on a single customer or a few customers, the loss of any one or more of which would have a material adverse effect on your business. Refer to Item 101(c)(vii) of Regulation S-K. Also if applicable, please consider whether risk factor disclosure or disclosure under Item 601(b)(10)(ii)(B) of Regulation S-K is appropriate with respect to this issue.
Response:
We have added a “Customers” section to the Form 10, in which we provide that 5 of our customers constitute approximately 61% of our consolidated revenues, and have included an additional risk factor with respect to same. We do not believe that additional disclosure under Item 601(b)(10)(ii)(B) is warranted, based on the approximate percentages of revenues generated from each of the 6 customers set forth above.
Competitive Comparison, page 7
COMMENT 6.
We note your response to comment eight in our letter dated January 28, 2010. Please furnish us with support for the statement made in the last sentence of this section that a majority of your competitors "either don't seem to employ similar measures in their full screen product offerings or do so on a more limited basis," or label such statement as the opinion of management.
Response:
We have revised the last sentence of the “Competitive Comparison” section of the Form 10 to label such statement as the opinion of management.
COMMENT 7.
In addition, we note that you deleted your discussion of Team5. However, Team5 continues to be featured on your website as one of the two companies in your portfolio. Please tell us why it is appropriate for you to exclude disclosure regarding Team5 when, it appears to be one of your two primary technologies or holdings.
Response:
Team 5 is a tradename that was acquired by the Company when it acquired the assets of Jekyll Island Ventures, Inc. The tradename was used by Jekyll with respect to certain product/service offerings in NYC for approximately 10 years prior to closing. As such, the tradename has some value. The Company currently uses the tradename in connection with certain non-core product/service offerings in NYC, which products/services are not material to the overall operations of the Company.
Item 1A. Risk Factors, page 8
COMMENT 8.
We note your response to comment 11 in our letter dated January 28, 2010. However, it appears as though you have not made the requested change to your disclosure, Accordingly, we re-issue that comment.
Response:
We have deleted second sentence of the introductory paragraph of the “Risk Factors” section of the Form 10.
Item 2. Financial Information, page 12
Year Ended December 31, 2009 as Compared to Year Ended December 31, 2008
COMMENT 9.
The fiscal 2009 general and administrative expenses disclosed in your discussion total $617,898 while total fiscal 2009 general and administrative expenses were $861,512. Please discuss the remaining fiscal 2009 general and administrative expenses.
Response:
We have revised the fiscal 2009 “General and Administrative Expenses” subsection in the Form 10 to correct the amount of each subcategory of expenses under the general and administrative expenses line item.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 13
COMMENT 10.
Please expand your disclosure to discuss the causes for any material changes in your results of operations from period to period.
Response:
We have expanded our disclosure under the “Management’s Discussion and Analysis” section of the Form 10 to discuss the causes for any material changes in our results of operations from period to period.
Liquidity and Capital Resources, page 15
COMMENT 11.
We note your response to comment 16 in our letter dated January 28, 2010 and reissue a portion of our comment. Please provide a discussion and analysis of your cash flows from operating, investing and financing activities for the periods covered by the financial statements. This discussion and analysis of liquidity should focus on material changes in operating, investing and financing cash flows, as depicted in the statement of cash flows, and the reasons underlying those changes Please refer to the Instructions to Item 303(A) of Regulation S-K and SEC Release 33-8350 for guidance on this matter.
Response:
We have updated the “Liquidity and Capital Resources” section of the Form 10 and revised it to include subsections titled “Cash Flow Activity” and “Supplemental Cash Flow Activity”, in which we focus on material changes in our cash flows and the reasons underlying those changes.
Item 5. Directors and Executive Officers, page 16
COMMENT 12.
We note your response to comment 17 in our letter dated January 28, 2010, as well as your revised disclosure that Mr. Dempster currently is the Chairman of Tran-Leisure Corp. Please revise your disclosure to state the date from which Mr. Dempster has served in this capacity. Please also revise your disclosure to state briefly the type of business in which each of Interpharm Holdings, Inc. and Authentidate Holding Corp. is engaged. In addition, please revise your disclosure to identify the SPAC of which Mr. Waters was the CFO. Finally, please disclose Mr. Waters' employment since 2008 or confirm to us that there is no such employment information to disclose.
Response:
We have revised the “Directors and Executive Officers” section of the Form 10 to state the date from which Mr. Dempster has served as the Chairman of Tran-Leisure Corp., to state briefly the type of business in which Interpharm Holdings, Inc., and Authentidate Holding Corp. is engaged, to identify the SPAC of which Mr. Waters was the CFO, and to disclose Mr. Waters’ employment since 2008.
COMMENT 13.
Please discuss the specific experience, qualifications, attributes or skills that led to the conclusion that each director should serve in such capacity. Refer to Item 401(e)(1) of Regulation S-K.
Response:
We have expanded the disclosure in the “Directors and Executive Officers” section of the Form 10 to include the specific experience, qualifications, attributes or skills that led to the conclusion that each director should serve in such capacity.
COMMENT 14.
Please describe the board leadership structure, and disclose the board's role in risk oversight. Refer to Item 407(h) of Regulation S-K.
Response:
We have added a “Board Structure; Board’s Role in Risk Management” subsection to the “Board Independence and Committees” section of the Form 10, in which we describe the board leadership structure and disclose the board’s role in risk oversight.
Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters, page 21
COMMENT 15.
We note your response to comment 21 in our letter dated January 28, 2010, which indicates that you issued warrants to purchase 2,310,000 shares of common stock to two consultants. However, your disclosure in this section indicates that you issued these warrants to five consultants. Please revise or advise. In addition, please also disclose the issuance of these warrants in Item 10 of your filing.
Response:
We have revised the disclosure in the “Equity Compensation Plan Information” section of the Form 10 to provide that the warrants in question were issued to 3 consultants. The current disclosure in the Item 10 section of the Form 10 accurately reflects the foregoing.
Item 10. Recent Sales of Unregistered Securities, page 22
COMMENT 16.
We note your response to comment 22 in our letter dated January 28, 2010. For each issuance of securities, please ensure that you disclose all of the information required by Item 701 of Regulation S-K, including the names or class of persons to whom the securities were sold, the offering price of the securities or, if issued otherwise than for cash, the nature of the transaction and the nature and aggregate amount of consideration received by the registrant, and the terms, fair values and reason for issuance of any options and warrants. In addition, please either confirm that the issuances of options and common stock to Mr. Salerno and Ms. Luqman in 2007 were made more than three years ago or disclose them here.
Response:
We have revised the disclosure in the “Recent Sales of Unregistered Securities” section of the Form 10, to provide additional detail regarding the securities issuances set forth therein, as requested. The designated issuances to Mr. Salerno and Ms. Luqman were effected more than 3 years ago.
Item 15. Financial Statements and Exhibits, page 24
COMMENT 17.
We reviewed your response to comment 23 in our letter dated January 28, 2010. The test set forth in Rule 8-04(b)(3) of Regulation S-X is applicable to your fact pattern. Please note that it is the Staff's position that if the registrant and/or the acquired business reported a pretax loss, the absolute value should be used when calculating significance. Please provide us with the significance test performed pursuant to this Rule. To the extent applicable, please amend to include the Jekyll Island Ventures, Inc. financial statements and pro forma financial information required by Rule 8-04 and 8-05 of Regulation S-X.
Response:
We are in the process of having the Jekyll Island Ventures, Inc. financial statements and pro forma financial information required by Rule 8-04 and 8-05 of Regulation S-X prepared, and will incorporate said financial statements into the requisite filings via amendment upon completion.
Report of Independent Registered Public Accountant, page F-1
COMMENT 18.
In future audit reports, please have your auditor revise the first sentence in the second paragraph of the audit report to state that the audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board. Refer to PCAOB Auditing Standard No. 1.
Response:
In future audit reports, we will have our auditor revise the first sentence in the second paragraph of the audit report to state that the audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board.
Annual Financial Statements, page F-2
Consolidated Statements of Cash flows, page F-5
COMMENT 19.
Please explain why "Assets of acquired business" are presented as an adjustment to reconcile net income to net cash provided by operating activities since such adjustment would appear to represent a non-cash investing activity and such adjustment had no impact on net income.
Response:
We have revised our statement of cash flows for the year ended December 31, 2009, to reflect the following changes:
*
Assets of acquired business of $73,974 was removed as an adjustment to reconcile net income to net cash provided by operating activities and included in the supplemental disclosures of cash flow information as a non-cash investing activity.
*
Write off of fixed assets (from acquired business) of $2,993 was included as an adjustment to reconcile net income to net cash provided by operating activities.
*
Changes in