Mail Stop 3561
March 8, 2006
Gary Cella, President
Physicians Remote Solutions, Inc.
5 Ridge Road
Cos Cob, Connecticut 06807
Re: Physicians Remote Solutions, Inc.
Registration Statement on Form SB-2
Filed February 6, 2006
File No. 333-131599
Dear Mr. Cella:
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
information so we may better understand your disclosure. After
reviewing this information, we may 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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. In view of the lack of specificity in your plan of operations,
and
your status as a development stage company which is issuing penny
stock, please advise in detail of the basis on which you believe
that
it does not qualify as a "blank check" company. See Rule 419 under
the Securities Act of 1933.
Prospectus Cover Page
2. In the fourth paragraph, please revise the first sentence to
include the representation that the selling stockholders "will",
rather than "may" sell their shares at the initial offering price
of
$.65 per share. Please also disclose in the registration
statement
that you will file a post-effective amendment to reflect the
change
to a market price when the shares begin trading on a market.
3. In the second sentence of that paragraph, please change the
reference to a "listing" on the over-the-counter Bulletin Board to
a
"quotation", since the Bulletin Board is not an exchange on which
shares are listed for trading.
4. Please furnish the information required by Item 501(a)(9)(iii)
and
(iv) of Regulation S-B to the extent applicable. Include, for
example, a statement of your intended minimum purchase requirement
and the outside, final date by which your offering will conclude,
or,
alternatively, disclosure that you have no planned termination
date
for the offering.
5. Please disclose clearly that there is no provision for refund
of
any funds received by you in the offering.
Prospectus Summary, page 5
Our Proposed Business, page 5
Corporate Information, page 5
6. Please expand this section to indicate, if true, that you have
no
timetable for the completion of testing on this system. Please
also
make clear that even if you raise additional capital, there is no
assurance that further manufacturing or development efforts will
proceed, or that they will be successful.
7. Please revise the Summary appropriately to make clear that
testing
and development of the proposed product may not occur in any case
because, in view of the best efforts nature of the offering, funds
received initially may be used entirely for expenses of the
offering.
Provide a reference to the Risk Factors section for further
disclosure.
Risk Factors, page 6
Please eliminate acronyms and spell out all defined terms.
Examples
include 8. SEC at pages 6 and 10, and HIPAA and PHI at pages 8
and
9.
9. Please add a further risk factor to discuss the possibility
that
you may not be able to secure quotation of your stock on the Over
the
Counter Bulletin Board and the consequences of this for your
trading
market.
10. Include an additional risk factor, appropriately captioned,
discussing the likelihood that funds received in the offering will
not be sufficient for any corporate purpose other than meeting
expenses of the offering, and that there will therefore be no
funds
available for testing, developing, or marketing of your product.
Please provide a cross-reference to the Use of Proceeds section.
Because of the limited capital available to us ..., page 6
11. Please present the second paragraph of this section in a
separate
risk factor, with an appropriate sub-heading, and clarify in that
section, if true, that you presently have no sources of capital
available to you, other than the proceeds of this offering.
Because our executive officers will devote only a portion of their
time to us ..., page 7
12. Please quantify the amount of time your officers intend to
spend
managing your affairs.
Our business decisions will likely be made without the benefit
....,
page 8
13. Please explain further why you intend to rely solely on the
subjective judgment of Dr. Del Pin.
If the use of the Dr. Speak system subjects physicians and others
to
violations of the Federal Health Insurance Portability and
Accountaability Act of 1996 ..., page 8
14. Please state definitively whether your use of the Dr. Speak
system will make you subject to this Act, and that you may incur
liabilities as a result.
The large number of share eligible for public sale after this
offering ..., page 9
15. Please state in this paragraph the specific number of shares
that
you expect to be outstanding after this offering.
Dilution, page 11
16. Please revise your Dilution table to present the first four
line
items in the table on a per share basis as is required by Item 506
of
Regulation S-B. Also ensure the disclosures are transparent in
terms
of how you calculate each amount disclosed.
Use of Proceeds, page 11
17. Please explain in this section that you will not receive any
of
the proceeds from the sales of selling shareholders.
Management`s Plan of Operation, page 12
18. Please revise this section to provide details of the
implementation of your proposed plan. Provide the information
required by Item 303(a) of Regulation S-B. Discuss your need for
additional capital, and provide, for example, the details of
proposed
developments required by Item 303(a)(1)(ii) and (iii) of
Regulation
S-B. Describe what standards you will use to evaluate the results
of
testing.
Proposed Business, page 12
Out-Patient Billing, page 15
19. Please refer to Item 101(c)(3) of Regulation S-B. You are
encouraged to give your Internet address, if available.
20. We note your reference to a study dated 2001. Please advise
whether this information is proprietary or publicly available. If
the information is not publicly available, please provide the
consent
of the author.
21. Please also advise why you feel, in view of the lapse of time,
that this study is still representative of the conditions
described
in the report, and whether you intend to update or to qualify this
information.
Development and Testing of the DR SPEAK system, page 15
22. Please disclose what additional testing Dr. Pin believes is
required for this system, and what criteria must be met before you
will consider the system acceptable for manufacturing and
marketing
purposes.
23. Please also disclose what your timetable for these decisions,
if
any, may be. Explain how and by whom these decisions will be made.
We
note that your contract with the manufacturer provides that it
will
supply the product on demand.
Our Agreements with GetAGeek, Inc., page 20
24. Please disclose here that GetAGeek is a wholly owned
subsidiary
of your company.
Management, page 23
25. Please revise to disclose more clearly the principal
businesses
or organizations with which Messrs. Alfred Cella and Martin
Horowitz
were engaged during the past five years.
26. Please revise to include the additional information regarding
compensation paid, including non-cash compensation, to those
persons
designated under Item 402(a) (2) of Regulation S-B. We note
certain
disclosure regarding compensation in the Certain Transactions
section and in the Recent Sales of Unregistered Securities
section.
Security Ownership of Certain Beneficial Owners and Management,
page
24
27. Please include here, or at another appropriate place, the
information required by Item 201(b) of Regulation S-B.
Certain Transactions, page 25
28. Please disclose in further detail the services provided by
Messrs. Cella and Reisman in return for the issuance of common
stock
to them in April 2005, and explain how you determined the value of
the services.
Selling Shareholders, page 26
29. We note that this section lists a total of 428,000 shares
owned
by Richard Schreiber and Patricia Stewart, while Item 26 states
that
an aggregate of 300,000 shares was issued to them as finder`s fees
in
connection with a private placement in October and November 2005.
Please reconcile. We have noted the disclosure in the last
paragraph
of this section, which appears on page 27.
30. Please expand the disclosure in this section to provide also
all
relevant facts relating to the private sale of shares by the
founders
to Mr. Schreiber and Ms. Stewart, referred to in the last sentence
of
the text in this section, for which they received a finder`s fee.
31. If Richard Schreiber and Patricia Stewart are broker/dealers,
please disclose, for each of them, (a) whether he or she purchased
the shares for investment or to be resold in the ordinary course
of
business; and (b) whether, at the time of purchase, he or she had
any
agreements or understandings, directly or indirectly, with any
person
to distribute the securities.
Plans for Distribution, page 27
32. Please describe the methods that Mr. Cella will use in his
sales
efforts.
33. Please advise whether you believe Mr. Cella has an exemption
from
rules requiring his registration as a broker/dealer in connection
with the proposed offering, pursuant to Rule 3a4-1 under the
Securities Exchange Act, or otherwise.
34. In the second paragraph, the reference to "significantly less
due
diligence...." is unclear. Please delete, or revise to explain
fully
the basis on which you believe that an offering that is not
underwritten may justify a lesser standard of due diligence than
in
an underwritten offering.
35. We note your statement elsewhere that you determined the
offering
price arbitrarily and your reference in the third paragraph to the
factors that you considered in determining the offering price.
Please revise to explain how these factors were applied in
reaching
your determination, including any consideration you gave to your
recent private placements and their relevance on this issue.
36. Please explain also how the offering price of the shares of
the
selling shareholders was determined, and disclose why the
offering
price is higher than that of the shares being offered by the
company.
37. Please explain in this section what steps are necessary for
you
to qualify for trading on the over-the-counter bulletin board, and
the length of time you estimate this may take. Explain, for
example,
the need for the engagement of a market-maker, and any other
necessary steps in this process.
38. The reference to a "listing" on the over-the-counter Bulletin
Board is inappropriate, since prices there represent quotations.
39. Please clarify that there will not be trading by the selling
shareholders before the shares may be quoted on the Bulletin
Board.
40. Please provide an expanded discussion of the status of your
stock
as "penny stock", as defined in Rule 3a51-1 under the Securities
Exchange Act of 1934, and the implication of this for the
liquidity
of any market that may develop.
Financial Statements
General
41. Please provide a capitalization table showing your actual
capitalization as of your most recent balance sheet date as well
as
your "as adjusted" capitalization reflecting the receipt and
application of each of the minimum and maximum proceeds of this
offering.
Report of Independent Registered Public Accounting Firm, page F-1
42. It appears that your independent accountants are issuing an
unqualified opinion with a going concern qualification. Please
advise your independent accountants that a going concern opinion
which does not use the words "substantial doubt" when referencing
a
going concern matter does not comply with the standards of the
Public
Company Accounting Oversight Board (United States). Please file
an
auditors` report that has been revised accordingly in your next
amendment to Form SB-2. Refer to the Codification of Auditing
Standards, section AU 341.12.
Consolidated Financial Statements, page F-1
43. Please provide a full set of audited financial statements in
your
next amendment. We may have further comment upon review of these
financial statements.
Note A - Summary of Significant Accounting Policies, page F-6
44. Pursuant to paragraphs 44 and 45 of SFAS 142, please disclose
with respect to your Dr Speak intangible asset: the period over
which
the asset is amortized, the amount of amortization expense
recorded
during the period, and estimated amortization expense for each of
the
next five years. Please also clarify your disclosure on page F-9
regarding impairment testing to indicate that in addition to the
annual impairment test, you also test the intangible asset for
impairment when impairment indicators arise. Refer to paragraph
17
of SFAS 142.
45. Because you discuss SFAS 123(R) in your summary of significant
accounting policies footnote, we assume that you have one or more
stock-based compensation plans. As required by paragraph 46 of
SFAS
123, please provide a description of the plan(s), such as vesting
requirements, the maximum term of option grants, and the number of
shares authorized for grants of options or other equity
instruments.
Further, please provide all disclosures required by paragraphs 45
through 48 of SFAS 128. If you do not have a stock-based
compensation plan, please revise to make that point clear.
46. You disclose on page II-2 that you have issued stock to your
executives and certain third parties in exchange for their
services.
Accordingly, please disclose how you account for these stock
issuances, including how you determine the fair value of each
exchange. Disclose also the applicable terms of the stock issued
in
exchange for services, including vesting requirements.
Part II
Recent Sales of Unregistered Securities
47. Please provide in this section all information required by
Item
701 of Regulation S-B. Include the specific dates of transactions
and
the amounts of consideration paid. Generally, revise to disclose
more
clearly the factual basis for the 4(2) exemption upon which you
relied.
48. Tell us whether or not you relied on Regulation D in
connection
with the sale of shares in October and November 2005 to the
selling
shareholders listed in the prospectus.
49. We note that your company was incorporated on April 5, 2005
and
that the private placement you refer to was made in October and
December 2005. Since the private placement related to 1,000,000
shares and the total number of shares being offered by selling
shareholders through this registration statement is 2,858,000, it
is
unclear how all unregistered transactions, as required by Item 701
of
Regulation S-B, have been disclosed. Please revise. We may have
further comments.
50. Regarding Richard Schreiber and Patricia Stewart, describe the
nature and extent of their participation in the private placement
which concluded in November 2005. Please state specifically
whether
these persons are broker/dealers, and, if so, how they made
contact
with the selling shareholders who acquired shares in that private
placement.
Exhibits
Exhibit 5.01 Opinion regarding securities being registered
51. Please include this opinion in your next amendment.
Exhibit 10.5
52. We note that this agreement lacks signatures and the list of
shareholders appended as an exhibit. Please re-file in complete
form.
Undertakings
53. Please include the revised form of undertakings required by
Item
512(a) and (g) of Regulation S-B. See Release 33-8591, effective
December 1, 2005.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. 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 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 to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the
filing effective , it does not foreclose the Commission from
taking any action with
respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness 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 connection with our review of your filing or in
response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct you attention to Rules 460 and 461 regarding
acceleration of a registration statement. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
You may contact Sarah Goldberg at (202) 551-3340 or Robyn
Manuel, Senior Accountant, at (202) 551-3823 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Albert Yarashus at (202) 551-3239, David Mittelman,
Legal Branch Chief, at (202) 551-3214, or me at (202) 551- 3720
with
any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: Jonathan B. Reisman, Esq.
FAX: (928) 569-8195
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Gary Cella
Physicians Remote Solutions, Inc.
March 8, 2006
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