Mail Stop 6010
January 4, 2006
MacDonald Tudeme
Chief Executive Officer
MT Ultimate Healthcare Corp.
18301 Von Karmen, Suite 205
Irvine, CA 92612
Re: MT Ultimate Healthcare Corp.
Schedule 14C
Filed December 9, 2005
File No. 0-49915
Dear Mr. Tudeme:
This is to advise you that our review of the above
information
statement indicates that it fails in several material respects to
comply with the requirements of the Securities Exchange Act of
1934,
the rules and regulations under that Act, and Schedule 14C. For
this
reason, we will not perform a detailed examination of the
information
statement and we will not issue a full set of comments because to
do
so would delay the review of other disclosure documents that do
not
appear to contain comparable deficiencies. The following comments
one through nine highlight some of the more blatant deficiencies.
Please be advised that if you mail the information statement in
its
present form that we will be required to consider what
recommendation, if any, we should make to the Commission.
The other comments in this letter indicate areas of the
document we think you should revise. As 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 information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments. Please note that Item 1 of Schedule 14C
incorporates many of the requirements of Schedule 14A.
Accordingly,
many of our comments refer to the requirements of Schedule 14A for
this reason.
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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. Regarding the two acquisitions, you disclose that these
transactions have already closed. It appears to us that if
applicable law or regulations require shareholder approval of
these
transactions, that you would be required to deliver the
information
statement 20 days before taking the action. Supplementally,
please
explain to us whether or not and why or why not shareholder
approval
of the transactions is required. If shareholder approval is not
required, explain in the information statement why you are seeking
the ratification of actions that have already been taken and the
reasons and the effects on shareholders of obtaining ratification.
2. We note that it appears that Messrs. Walters and Moore will
vote
the MT Ultimate shares you state they own in favor of the
acquisition
of iTech. Further, it appears to us that the two gentlemen will
receive the MT Ultimate shares they are voting to approve the
iTech
transaction as consideration paid to them by the registrant as
consideration in that transaction. Supplementally, please provide
an
analysis supporting your belief that these gentlemen can vote
these
shares on this matter and the others.
3. We note that the transactions described in proposals five and
seven concern material acquisitions and that proposal six concerns
the issuance of securities. Therefore, you should provide all of
the
disclosure required by Items 11, 13 and 14 of Schedule 14A in your
information statement. As currently prepared, your disclosure
does
not properly address these items. You should present this
disclosure
in narrative form and provide a detailed discussion of material
information for each item as required. We expect that you will
add
substantial additional disclosure to your filing in response to
this
comment.
4. Please provide the historical financial information required
for
the registrant, iTechexpress, Inc. and Drug Consultants, Inc., as
well as the required pro forma financial information giving effect
to
these acquisitions.
5. As to proposals five and seven pertaining to the acquisitions,
Item 14 of Schedule 14A requires that you disclose the material
terms
of the proposed transactions and that you must provide security
holders with sufficient information to understand the essential
features and significance of the transaction. Your discussion
should
include, but not be limited to, disclosure of all of the material
terms of the transaction, covenants, representations, warranties,
consideration, closing conditions, etc. It should also discuss
the
significance of the transactions to the registrant and security
holders. It should also provide sufficient information regarding
the
acquired companies. We expect you to provide significantly more
disclosure regarding the transaction in response to this comment.
6. Furthermore, you need to provide more information relating to
each
of the transactions, including the background of the transactions,
the reasons that the board believes that the transactions are in
the
best interests of the shareholders, and tax and accounting
treatment
for the transactions. You also need to disclose how the
consideration amounts were determined, a description of any
fairness
opinion obtained and if one was not obtained why it was not
obtained,
and the basis for the company`s belief that each of the
transactions
are in the best interest of shareholders.
Financial Statement and Audit Issues
7. Please provide audited financial statements for the two
acquisitions which occurred during 2004 in accordance with Rule
310(c) of Regulation S-B or tell us why audited financial
information
is not required.
8. Please provide pro forma financial information in compliance
with
Rule 310(d) of Regulation S-B or tell us why the pro forma
financial
information is not required.
9. In light of the fact that your former auditor is no longer
registered with the PCAOB, this auditor would not be able to
perform
the required restatement adjustments identified later in this
letter.
As a result, it appears a re-audit by a firm registered with the
PCAOB would be required.
General
10. Please consider including an introduction to the information
statement prior to discussing your proposals. We note that if
your
proposals are approved and the underlying transactions are
consummated, this will result in a substantial transformation of
the
company. Your introduction should explain these transactions and
explain the changes to the company that will result therefrom.
You
should also discuss the interdependence of the proposals.
11. Item 3 of Schedule 14C refers to certain interests of persons
in
the transactions to be acted upon. You have not disclosed any
such
interests in the filing. For each proposal, please provide this
information. We expect you to provide substantial disclosure in
response to this comment and may have further comments upon
reviewing
your revised disclosure.
Proposal 1 - Amendment to Articles of Incorporation, page 4
12. At the end of the second paragraph, you state that the summary
of
the amendments does not purport to be complete and qualify it in
its
entirety by reference to the certificate amendment. Please amend
this language to remove the qualification and state that all
material
terms of the amendment are disclosed in this subsection of the
information statement. We note similar disclosure concerning
other
documents and agreements throughout the information statement. As
a
non-exclusive example, you make a similar statement on page 10
concerning the bylaw amendments. Please revise the disclosure
throughout the filing to be consistent with this comment.
13. Where you discuss the creation of blank check preferred stock,
please disclose the risks of possible dilution that may occur if
you
issue preferred stock which is convertible into common stock.
14. On page 7, you state that the vote required to approve the
proposal is the affirmative vote of the Majority Stockholders,
which
you define as Messrs. Walters and Moore. This is not the case.
It
appears that the vote required is a majority of the outstanding
shares of common stock eligible to vote on this matter. Please
revise to state this fact and disclose, if true, that the
affirmative
votes of Messrs. Walters and Moore would be sufficient to approve
this matter. You make similar disclosure concerning the other
proposals in the document. Please revise these other disclosures
throughout the document to comply with this comment.
Proposal 2 - Approval of Reverse Stock Split, page 7
15. Please include disclosure in tabular form which describes your
capitalization both before and after the reverse spilt. This
should
include the number of shares authorized, issued and outstanding,
as
well as shares reserved for issuance in accordance with the terms
of
the convertible securities, warrants, etc. both before and after
the
reverse stock split.
16. You state that holders of common stock entitled to fractional
shares will receive whole shares of common stock upon surrender of
their stock certificates. Please explain in more detail exactly
what
steps shareholders will have to take and when to receive their new
shares.
Proposal 3 - To Ratify the Amendment of the Company`s Bylaws, page
10
17. Exhibit B indicates that the board of directors approved these
amendments to the bylaws in December 2005. Please explain why you
are seeking shareholder ratification of these amendments. Also,
state whether or not the amendments would be effective under
Nevada
corporate law and your charter and bylaws without shareholder
approval.
18. While you explain the advantages of the written consent
proposal
to the two Majority Stockholders, you do not adequately explain
the
disadvantages this action could have on the other shareholders.
Please explain in detail the anti-takeover and control issues
related
to this amendment.
19. You state that shareholders could act by written consent to
approve transactions and affairs without a shareholder meeting.
Please state whether or not any such actions are currently planned
or
contemplated. If they are, describe them.
Security Ownership of Management and Certain Security Holders,
page
13
20. As to the shares beneficially owned by Messrs. Walters and
Moore,
please tell us when these shares were actually issued to the
gentlemen and would be considered outstanding under Nevada law.
It
appears that the shares the company is obligated to issue to the
gentlemen may not yet be beneficially owned by them. See Rule
13d-3
of the Exchange Act.
21. Please disclose the name(s) of the natural person(s) who have
sole or shared investment and voting power of the securities owned
by
Nite Capital.
Certain Relationships and Related Transactions, page 15
22. You state that you anticipate entering into an agreement for
executive management services with a firm owned by Messrs. Walters
and Moore. Please disclose the name of this firm and terms of
this
proposed agreement.
23. On page 17, you state that you will "spin-off" the Abundant
business to the Tudemes. It does not appear that you received
shareholder approval for this transaction. Please explain to us
whether you will seek shareholder approval and if you do not plan
to
get such approval, tell us why you believe it is not necessary.
Proposal 6 - Ratification of Financing Arrangement, page 20
24. You state that the company has received $1.3 million of the
face
amount of the $3.0 million note. Please explain why the full
amount
of the note has not been received and when and under what
circumstances it will be received.
25. On page 21, you state that the convertible notes` conversion
price may be adjusted in the event the company is acquired.
Please
disclose and quantify how this adjustment will be calculated.
26. You state that there are some circumstances where the company
may
not be able to issue shares within five days of receipt of a
notice.
Please explain the circumstances under which this could happen.
27. Please explain and quantify the ratchet-type adjustments that
will occur in the conversion price if you issue additional
securities.
28. Please discuss and disclose any and all negative covenants
contained in the agreements with the investors that would restrict
action the registrant could take in connection with capital
raising
or other corporate activity.
Form 10-KSB for the year ended December 31, 2004
Item 1. Description of Business
Business Development, page 4
29. Please tell us your accounting policy regarding the referral
fees
paid to NEI in accordance with the Nurse Recruitment and Placement
Services Agreement.
Management`s Discussion and Analysis or Plan of Operation, page 14
Liquidity and Capital Resources, page 16
30. Disclose the steps you take in collecting accounts receivable.
Disclose your policy with respect to determining when a receivable
is
recorded as a bad debt and when a write off is recorded. Clarify
the
threshold (amount and age) for account balance write-offs.
Risk Factors
Risks Relating to our Business, page 18
31. Please tell us how you have complied with SFAS 5 regarding the
potential liabilities you may have incurred in connection with the
issuance of 6 million shares of S-8 registered common stock and
the
$135,000 in payroll taxes which you may owe on behalf of you
employees. Please address why there appears to be no accrual for
these amount recorded as of December 31, 2004 and there is no
disclosure within the financial statements of the potential
liability.
Consolidated Balance Sheet, page F-2
32. Please disclose the allowance for doubtful accounts on the
face
of the balance sheet or notes thereto.
33. Please tell us why it is appropriate to display "beneficial
conversion feature" as a separate line item on the face of your
balance sheet. It would appear that this should be recorded as a
debt discount and appropriately shown netted against the
outstanding
note payable.
Consolidated Statement of Cash Flows, page F-4
34. In the financing activities section, please tell us how
$100,000
for common stock is a cash transaction that should be included in
the
Statement of Cash Flows given your current disclosures within your
liquidity and capital resources section of your MD&A, which
stipulates that the stock was issued as a result of the conversion
of
debt. Similar discrepancies appear to be within the notes to the
consolidated financial statements. Please reconcile or clarify
the
current disclosure or amend your document to remove the
inconsistency.
Statement of Stockholders` Equity, page F-5
35. Please clarify for us what is included in the line item
"interest
cost associated with beneficial conversion features of notes
payable".
Notes to Financial Statements, page F-6
Note 1 - Summary of Significant Accounting Policies, page F-6
36. Please disclose your policy for stock based compensation to
employees as well as non-employees as you have issued stock to
both
for services rendered.
Note 2 - Equipment, page F-8
37. Please reconcile what appears to be contradictory disclosure.
The total cost basis of your property, plant, and equipment
appears
to be $192,081 as of December 31, 2004, yet your statement of cash
flows discloses that you spent $518,429 on property, plant and
equipment during the year ended December 31, 2004 and you only had
$32,147 in depreciation expense during the same period. Please
reconcile both disclosures.
Note 3 - Common Stock, page F-9
38. Please explain to us how you determined a $.25 per share price
for your common stock issued for services rendered.
Note 6 - Acquisition, page F-11
39. Please disclose the purchase price for each acquisition as
required by SFAS 141, including the condensed financial
information
about the assets acquired and liabilities assumed for both your
acquisitions.
Note 7 - Notes Payable and Capital Leases, page F-12
40. Please explain to us how management accounted for the
convertible
debt and warrants issued on August 31st, 2004. It appears that
the
conversion feature of the convertible debt needs to be bifurcated
in
accordance with SFAS 133 and EITF 00-19 as the provisions
stipulate
that it could be converted into unlimited number of shares and
that
the shares are required to be registered or liquidating damages
will
be assessed. It would appear that similar provisions would result
in
the warrants being classified as liabilities. Please advise.
41. Please reconcile the amounts of the outstanding notes payable
as
of December 31, 2004 as disclosed within the notes to the
financial
statements to the amounts reported on the balance sheet. For the
debt issuances which have not been disclosed, if any, please
revise
your disclosures to include the terms, conditions and balances.
42. We notice that you have entered into several leases for
computers
and telephone equipment at are being capitalized. Please revise
to
include the disclosures required by paragraph 16 of SFAS 13
Note 8 - Leases, page F-13
43. As your scheduled rent payments increase over the live of the
lease, please disclose the amount of deferred rent recorded on the
balance sheet as of December 31, 2004.
Note 9 - Impairment Loss, page F-13
44. Please provide to us an explanation as to why an impairment of
the outstanding goodwill was necessary during 2004 as the goodwill
in
question was established as a result of acquisitions which
occurred
during 2004. Additionally, please provide all disclosures as
required by paragraph 44 - 47 of FAS 142, Goodwill and Other
Intangible Assets, for your impairment loss.
Form 10-QSB for the interim period ended September 30, 2005
Item 1. Financial Statements
Notes to the Consolidated Financial Statements
Note 1 - Description of Business and Basis of Financial Statement
Presentation, page 6
45. We note that you have terminated the operations of BP as of
June
2005. Please tell us how you have complied with paragraph 27 of
SFAS
144 and not classified the operations of BP as discontinued within
the financial statements.
Item 3. Controls and Procedures
46. Please confirm to us, if true, that your disclosure controls
and
procedures were designed to provide "reasonable assurance" that
the
controls and procedures will meet their objectives. We are
requesting this information to determine whether the objective for
the design of the disclosure controls and procedures is consistent
with your principal executive officer and principal financial
officer`s conclusion that your disclosure controls and procedures
are
effective at that "reasonable assurance" level. If true, please
represent to us that you will clarify this in future filings. If
not
true, please provide us an explanation.
Form 8-K, dated November 4, 2005
Item 1.01 - Entry into a Material Definitive Agreement, page 1
47. Please explain to us how management plans to account for the
callable secured convertible notes and associated warrants. It
appears that the conversion feature of the convertible debt needs
to
be bifurcated and the associated warrants recorded as liabilities
in
accordance with SFAS 133 and EITF 00-19. Please advise.
Item 9.01. Financial Statements and Exhibits, page 19
48. Please amend filing to include pro-forma financial statements
showing the spin-off of NewCo, which occurred on November 4, 2005.
* * *
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 Christine Allen at (202) 551-3652 or Kevin
Woody
at (202) 551-3629 if you have questions regarding comments on the
financial statements and related matters. Please contact Michael
Reedich at (202) 551-3612 or me at (202) 551-3710 with any other
questions.
Sincerely,
Jeffrey Riedler
Assistant Director
cc: David M. Loev
2777 Allen Parkway, Suite 1000
Houston, Texas 77019
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