December 17, 2004
B. Steven Springrose
President and Chief Executive Officer
Biotel Inc.
11481 Rupp Drive
Burnsville, Minnesota 55337
Re: Biotel Inc.
Amendment 1 to Registration Statement on Form 10-SB
Filed November 26, 2004
File No. 0-50914
Dear Mr. Springrose:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-SB
Item 1. Description of Business
General
1. We note your response to prior comment 3 and prior comment 9.
Please file the mentioned OEM Agreement as an exhibit to the Form
10-
SB. Also, discuss the material terms of the agreement, such as a
three year contract and identify the customer. In addition,
expand
the MD&A to discuss the material changes in revenues from such
customers.
Environmental Matters - Page 5
2. We note your response to prior comment 7 and the amended
disclosure on page 5. Please supplementally advise us as to the
status of your negotiations with the adjacent landowner. If you
have
decided to discontinue negotiations with the landowner, please
revise
your disclosure on page 5.
Item 5. Directors and Executive Officers - Pages 18 to 20
Executive Officers and Directors - Page 18 to 19
3. We note your response to prior comment 13 and we reissue the
comment. Item 401(b) of Regulation S-B requires disclosure of
information for a person "who is not an executive officer but who
is
expected...to make a significant contribution to the business."
Part F/S
Notes to consolidated Financial Statements - Page F-24
Note 1- Nature of Business and Corporate Information
4. In connection with your July 1, 2004 acquisition of Agility
Centralized Research Services, Inc. you should revise the filing
to
disclose the information required by paragraphs 51 to 57 of SFAS
141,
as applicable.
Note 12 - Income Taxes
5. We see on page F-33 you have not recorded any deferred tax
assets
at September 30, 2004 for net operating loss carryforwards. We
also
see disclosures on page F-18 that "The Company has federal and
state
net operating loss carryovers at September 30, 2004 totaling
approximately $531,000. These net operating loss carryforwards
expire
on various dates through 2017. The Company is not expecting to
realize the benefit from the majority of these net operating loss
carryforwards due to various Internal Revenue Service Code
limitations relating to the origination of these losses." Why do
the
disclosures on page F-18 appear to indicate a gross deferred asset
should be recorded at September 30, 2004 for net operating loss
carryforwards and that such amount may need to be offset by a
valuation allowance? Alternatively, do you disclose the wrong
date
on page F-33? Clarify supplementally and revise the filing as
necessary based on our concerns.
* * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; 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.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Eric Atallah at (202) 824-5266 or Jay Webb
at
(202) 942-1812 if you have questions regarding comments on the
financial statements and related matters. Please contact Adelaja
Heyliger at (202) 824-5082 or me at (202) 942-1927 with any other
questions.
Sincerely,
Thomas A. Jones
Senior Attorney
cc (via fax): Rick Hauser, Esq. Gray, Plant, Mooty, Mooty &
Bennett, P.A. 612.632.4095
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Biotel Inc.
December 17, 2004
Page 1