Mail Room 4561
June 7, 2005
Christopher J. Spencer
President and Chief Executive Officer
Wizzard Software Corporation
424 Gold Way
Pittsburgh, Pennsylvania 15213
Re: Wizzard Software Corporation
Amendment No. 1 to Registration Statement on Form SB-2
Filed May 10, 2005
File No. 333-123715
Post-Effective Amendment No. 1 to Registration Statement
on
Form SB-2
File No. 333-114791
Filed on May 16, 2005
Form 10-K/A for the year ended December 31, 2004
Form 10-Q for the period ended March 31, 2005
File No. 0-33381
Dear Mr. Spencer:
We have reviewed your responses and have the following
comments.
Please note that the comments relating to the controls and
procedures
disclosure in the periodic reports are applicable to the Post-
Effective Amendment cited above. Please amend your periodic
filings
in response to these comments within 10 days.
1. Please update the financial statements pursuant to Rule 310(g)
of
Regulation S-B prior to effectiveness.
2. Please refer to prior comment 1 of our letter dated April 27,
2005. Please revise the subheading of the revised risk factor
relating to the material weakness. The subheading should
succinctly
state that the risk to the investor of a material weakness in
internal controls over financial reporting is that the financial
statements may contain errors. Moreover, the risk factor
discussion
should reference Management`s Discussion or another appropriate
section of the filing where you discuss the steps to be taken to
address the material weakness, the status of efforts to implement
those steps, and any material costs involved. State clearly
whether
the material weakness still exists or has been fully addressed.
We
note your disclosure in MD&A on page 50 that the costs associated
with the remedial steps have not yet been determined. Please
explain
why you have not been able to do so. To the extent that you have
already taken steps to address the material weakness as indicated
in
the Form 10-K/A, discussed below, the associated costs should be
discussed, if material. Please revise accordingly.
Amendment No. 1 to the Form 10-KSB for the year ended December 31,
2004
Disclosure Controls and Procedures
3. We note your statement that the chief executive officer and
chief
financial officer have concluded that the company`s disclosure
controls and procedures "are at the reasonable assurance level"
subject to the material weakness identified. It does not appear
that
your certifying officers have reached a clear conclusion that your
disclosure controls and procedures are effective at the reasonable
assurance level. In particular, the conclusion expressed is
"subject
to the foregoing material weaknesses." Please revise your
disclosure
to state in clear unqualified language the conclusions reached by
your certifying officers on the effectiveness or ineffectiveness
of
your disclosure controls and procedures. For example, if true,
you
can state that your disclosure controls and procedures are
effective
notwithstanding the material weakness, so long as you provide
appropriate disclosure explaining why you nevertheless concluded
the
disclosure controls and procedures were effective. Or, if true,
you
can state that given the material weakness, your disclosure
controls
and procedures are not effective. You should not, however, state
that your disclosure controls and procedures are effective, except
to
the extent of the material weakness you reference.
4. In discussing the steps taken by the company to remediate the
material weakness, clarify whether the company believes that the
material weakness still existed at the end of the period covered
by
the report.
Form 10-QSB for the period ended March 31, 2005
Disclosure Controls and Procedure
5. The conclusion of your principal executive and financial
officer
as to the effectiveness of your controls and procedures are based
on
an evaluation carried out "within 90 days prior to the date of
this
Report." Item 307 requires that the conclusion of your principal
officers regarding the effectiveness of your controls and
procedures
should be provided "as of the end of the period covered by the
report." Please revise accordingly.
6. We reissue prior comment 3 in connection with the March 31,
2005
Form 10-Q. Your conclusion that your disclosure controls and
procedures are effective in "timely alerting [management] to
material
information required to be included in our periodic Securities and
Exchange Commission reports" is more limited than what is called
for
under Rules13a-15(e) or 15d-15(e) of the Exchange Act. This
definition provides that the disclosure controls and procedures be
designed "to ensure that information required to be disclosed by
an
issuer in the reports that it files or submits under the Act is
accumulated and communicated to the issuer`s management . . . as
appropriate to allow timely decisions regarding required
disclosure."
Please amend the filing to include the appropriate definitional
language and confirm that your disclosure will conform to the
disclosure requirements on a going-forward basis.
7. We note your disclosure that there can be "no assurance" that
the
design of any control system will succeed in achieving its stated
goals. In this and in future filings, please revise this
statement
to clarify that the disclosure controls and procedures are
designed
to provide reasonable assurance of achieving your objectives and
to
set forth, if true, the conclusions of the principal executive and
principal financial officers that the controls and procedures are,
in
fact, effective at the "reasonable assurance" level. See
Management`s Reports on Internal Control Over Financial Reporting
and
Certification of Disclosure in Exchange Act Periodic Reports,
Release
No. 33-8238, dated June 5, 2003.
8. The disclosure in the first quarter report states in part that
there were "no significant changes in our internal controls or in
other factors that could significantly affect those controls
subsequent to the date of our last evaluation." Note that Item
308(c) requires disclosure of any change in the registrant`s
internal
control over financial reporting that occurred during the
registrant`s last fiscal quarter that has materially affected, or
is
reasonably likely to materially affect, the registrant`s internal
controls over financial reporting. Given your disclosure in the
amended Form 10-K for the period ended December 31, 2004 regarding
the remedial steps taken by the company during 2005 to address a
material weakness, it is unclear on what basis you are able to
state
that there were "no significant changes" in your internal control
over financial reporting that occurred in this quarter. How and
when
did you address the deficiencies identified in the Form 10-K? If
you
did not make any such changes in your internal controls, disclose
how
your certifying officer was able to conclude that your disclosure
controls and procedures "are effective" given the existing
material
weakness. Alternatively, describe in reasonable detail the nature
of
the material weakness and status of your remedial efforts.
Any questions should be directed to Maryse Mills-Apenteng at
(202) 551-3457. In her absence, please contact the undersigned at
(202) 551-3730. If you need further assistance, you may contact
Barbara C. Jacobs, Assistant Director, at (202) 551-3730.
Sincerely,
Mark P. Shuman
Branch Chief - Legal
cc: Via facsimile: 801-355-7126
Branden T. Burningham, Esq.
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Mr. Spencer
Wizzard Software Corporation
June 7, 2005
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