Mail Stop 6010 December 12,
2005
Herman Rappaport
Chief Executive Officer
Starmed Group, Inc.
2029 Century Park East
Suite 1112
Los Angeles, California 90067
Fax: 310-551-2724
Re: Starmed Group, Inc.
10-KSB for the period ending December 31, 2004
Dear Mr. Rappaport:
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.
Amendment No. 1 to Form 10-KSB for Fiscal Year Ended December 31,
2004
Item 7. Financial Statements and Supplementary Data, page 15
Consolidated Statement of Shareholders` Equity (Deficit), page F-4
1. Regarding your response to prior comment five, please tell us:
a. for each issuance of your common stock for services, how you
determined that the amounts invoiced by or agreed upon with the
vendor represented the fair value of the services and whether you
understand that those amounts were consistent with the
consideration
that the vendor received from its other customers for these
services;
b. why the common stock issued for services in January 2004 was
valued at $0.01 per share, but the common stock issued in exchange
for accounts payable in March 2004 was valued at $2.08 per shares;
c. why the common stock issued for services in June 2005 was
valued
at $0.01 per share, when your response indicated that, between
April
7 and September 30, 2005, the stock had traded at a high of $1.10
per
share and a low of $0.35 per share; and,
d. regarding part c., what the trading price for your stock was
when
you issued the common stock and why you do not appear to have
considered the fair value of the stock to be more reliably
measurable
than the fair value of the services provided.
Notes to Consolidated Financial Statements, page F-6
4. Long Term Debt, page F-8
Note Payable, page F-8
2. Regarding your response to prior comment seven, please tell us:
a. how you concluded that your common stock had a nominal value
when
the note was exchanged in July 2003 and that none of the gain on
extinguishment of debt you recognized should have been recorded as
additional paid-in capital;
b. how you appear to have concluded that the July 2003 exchange
did
not provide an indication that the value was more than nominal;
c. how your conclusions about the July 2003 exchange were
consistent
with those reached on your March 2004 exchange of accounts
payable,
where you appeared to equate the value of the common stock to the
amount of the accounts payable;
d. the extent to which you have subsequently considered whether
the
liability related to the guaranteed market price should be
adjusted
for changes in the value of the common stock; and
e. whether the guaranteed market price provision is within the
scope
of EITF 00-19 and, if so, how your accounting since the exchange
has
complied with it.
As appropriate, please amend your filings in response to these
comments. You may wish to provide us with marked copies of the
amendments to expedite our review. Please furnish a cover letter
with your amendments 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 Tabatha Akins at (202) 551-3658 or Jim
Rosenberg
at (202) 551-3674 if you have questions regarding comments on the
financial statements and related matters. Please contact Zafar
Hasan
at (202) 551-3653, or me at (202) 551-3715 with any other
questions.
Sincerely,
Jeffrey Riedler
Assistant Director
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