SICHENZIA ROSS FRIEDMAN FERENCE LLP
1065 AVENUE OF THE AMERICAS NEW YORK NY 10018
TEL 212 930 9700 FAX 212 930 9725 WEB WWW. SRFF.COM
September 12, 2006
BY FEDERAL EXPRESS
Securities and Exchange Commission
100 F Street, NE
Washington D.C 20549
Attention: Patrick Gilmore
Room 4561
Re: Digital Descriptor Systems, Inc. (the "Company")
Form 10-KSB for year ended December 31, 2005
File No. 000-26604
Dear Sir:
On behalf of the Company, we are hereby enclosing for your review two copies of
an amendment to the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2005 (the "Form 10-KSB"), one of which has been marked to
show changes.
On April 27, 2006, the staff of the Securities and Exchange Commission (the
"Staff") issued comments on the Form 10-KSB. Following are the Company's
responses to the Staff's comments. For ease of reference, we have set forth the
Staff's comments in their entirety.
General
1. Tell us how you considered amending your Forms 10-QSB for the quarters
ended March 31, 2004, June 30,2004, September 30,2004, March 31,2005, June
30, 2005 and September 30, 2005 to restate your financial statements to
properly reflect the embedded derivatives associated with your convertible
debentures and the change in fair values of such instruments
Alternatively, tell us how you considered including quarterly financial
information m the financial statement footnotes to your Form l0-KSB, winch
show the previously reported information and. the restated information
with a detailed explanation for the restatement. Please advise.
The Company has added a new footnotes 14-16 to the financial statements which
detail the changes made to the financials included in each of the three
quarterly reports on Form 10-QSB filed during the fiscal year ended December 31,
2004 and 2005.
Item 8A. Control and Procedures
Evaluation of Disclosure Controls and Procedures
2. We note your disclosures with regards to the Company's evaluation of
disclosure controls and procedures, where you state, "...Our Chief
Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective m timely alerting them to
material information required to be included in our periodic reports that
are filed with the Securities and exchange Commission" Your conclusion is
more limited than what is called for under Rule I 3a-l 5(e) of the
Exchange act. The rule requires, among other matters, that the disclosure
controls and procedures be designed "to ensure that information required
to be disclosed by the issuer in the reports that It files or submits
under the Act is recorded, processed, summarized and reported, within the
time periods specified in the Commissions rules and forms" and to ensure
that "information required to be disclosed by an issuer in the reports
that it tiles or submits under the Act is accumulated and communicated to
the issuer's management as appropriate to allow timely decisions regarding
required disclosure" Please revise your disclosures to confirm, if true,
that your disclosure controls and procedures were effective in meeting
these requirements.
The Company has made revisions in accordance with the Staff's comment.
3. You also indicate that "It should be noted that the design of any system
of controls is based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance by design will succeed in
achieving its stated goals under all potential future conditions,
regardless of how remote" Tell us how you determined that this statement
complies with the requirements SEC Release No. 33-8238, available on our
website at http://www.sec.gov/ru1es/final/33-8238.html as your disclosures
appear to qualify your review.
The Company has removed this statement from the Form 10-KSB.
4. We note your disclosure that [t]here have been no significant changes in
[y]our internal controls or in other factors that could significantly
affect internal controls subsequent to the date of yours last evaluation"
Please note that Item 308 of Regulation S-B requires the disclosure of
"any" change in your internal controls that occurred "during [your] last
fiscal quarter" that has "materially affected, or is reasonably likely to
materially affect," your internal controls In light of the foregoing,
please advise us with respect to changes in your internal controls for the
quarter ended December 31,2005. Please also confirm to us that you will
consider this comment in preparing future periodic reports.
The Company has made revisions in accordance with the Staff's comment. The
Company hereby confirms that it will consider the Staff's comment in preparing
future periodic reports.
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Report of Independent Registered Public Accounting Firm, pages 1 and 2
5 We note that the opinions provided by both Bagell, Josephs, Levine &
Company LLC (Bagell) and Rosenberg Rich Baker Berman & Company (Rosenberg)
include a reference to the balance sheet as of December 31, 2005 and the
related statements of operations, stockholders' impairment and cash flows
for the year then ended. Help us understand why both Bagell and Rosenberg
provided audit opinions related to the financial statements for the same
period (i.e. December 31, 2005) or amend your Form l0-KSB accordingly.
The Company advises the Staff that the opinion issued by Rosenberg Rich Baker
Berman & Company contained a typographical error. Accordingly, a revised opinion
has been included in the Form 10-KSB.
Please do not hesitate to contact the undersigned at 212-981-6766 with any
questions or comments with respect to the foregoing.
Very truly yours,
/s/
Louis A. Brilleman
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