May 18, 2005
Mail Stop 0409
Jim Karlak
Chairman, President and CEO
Systems Management Solutions, Inc.
7550 IH-10 West, 14th Floor
San Antonio, TX 78229
Re: Systems Management Solutions, Inc.
Form 10-KSB for the year ended June 30, 2004
Forms 10-QSB for the quarters ended September 30 and December
31, 2004
File No. 000-30803
Dear Mr. Karlak:
We have reviewed your response letter dated April 5, 2005
and
have the following additional comments. As previously stated,
these
comments should be addressed in all future filings with the
Commission.
Where indicated, we think you should revise your documents
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-KSB/A for the year ended June 30, 2004
Item 6. Management`s Plan of Operations, page 6
1. We note in your response that you have agreed to comply with
our
comments 1, 2 and 3 as they relate to required MD&A disclosures.
However, we also note that these disclosures have not been made in
the amended Form 10-KSB for the period ended June 30, 2004 or the
Form 10-KSB for the transition period ended December 31, 2004.
Please advise us why you did not include the required disclosures
in
the aforementioned documents and confirm to us that you intend to
include the following disclosures, as appropriate, in all future
filings with the Commission:
* A discussion of how you anticipate that you can satisfy your
current cash requirements on a short-term and long-term basis in
accordance with Item 303(a) of Regulation S-B
* The drivers of all material changes from period to period,
including any significant elements of income or loss that do not
arise from continuing operations
* Identification and discussion of your critical accounting
policies
in accordance with FR-60
Consolidated Statements of Cash Flows
2. We note your response to comment 6. Please summarize for us
the
historical cash flow impact of the series of transactions related
to
the $777,473 advance you received from the majority shareholder of
Biolynx for each period. Advise us of the effects of the initial
advance, the loan to Biolynx and the subsequent impairments of the
loan receivable from Biolynx as they relate to your consolidated
statements of cash flows.
Note 10 - Equity
3. In a previous comment, we asked you to clarify whether the
conversion rate for your Series A Cumulative Convertible Preferred
Stock was fixed at a rate of $0.20 per share, or if the rate was
determined based upon the fair market value of the common stock at
the date of conversion. You did not respond to this question, but
advised us that it would be discussed in future filings. We note
that this disclosure was not clarified in the amended Form 10-KSB
for
the period ended June 30, 2004 or the Form 10-KSB for the
transition
period ended December 31, 2004. Please advise us why the
disclosure
was not addressed in the aforementioned documents and confirm to
us
that you intend to clarify the disclosure in all future filings
with
the Commission, as applicable.
Note 13 - Restatements of Previously Reported Financial Statements
4. Please advise us why you did not file an Item 4.02 8-K in
connection with the restatement of your financial statements for
the
year ended December 31 , as well as your intentions to file one in
the future.
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your proposed revisions that
keys
your responses to our comments and provides any requested
supplemental information. Detailed cover letters greatly
facilitate
our review. Please file your cover letter on EDGAR. Please
understand that we may have additional comments after reviewing
your
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 Kristi Beshears, Staff Accountant, at (202)
551-3429 or me at (202) 551-3403 with any other questions.
Sincerely,
Steven Jacobs
Branch Chief
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Systems Management Solutions, Inc.
May 16, 2005
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