Mail Stop 3561
July 1, 2005
Scott Gallagher
Chief Executive Officer
FTS Group, Inc.
7610 West Hillsborough Avenue
Tampa, FL 33615
Re: FTS Group, Inc.
Registration Statement on Form SB-2
Filed June 17, 2005
File No. 333-125958
Form 10-KSB for Fiscal Year Ended December 31, 2004
Filed April 5, 2005
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
Filed May 16, 2005
File No. 0-24829
Dear Mr. Gallagher:
We have limited our review of your filing to those issues we
have addressed in our 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.
Form 10-KSB for Fiscal Year Ended December 31, 2004
Controls and Procedures, page 25
1. We note your disclosure that your chief executive officer and
chief financial officer concluded that your "[d]isclosure controls
and procedures are currently effective but may not continue to be
effective as the Company grows." Please expand your disclosure to
specifically explain why your chief executive officer and chief
financial officer concluded that your disclosure controls and
procedures may not continue to be effective as you grow. Please
describe the specific actions that you will or are taking to
ensure
that your disclosure controls and procedures remain effective. In
this regard, we note your further disclosure, "Based on this
evaluation, the Chief Executive Officer and Chief Financial
Officer
will accelerate plans to implement additional operating and
financial
reporting controls and procedures...." Please fully describe the
additional operating and financial reporting controls and
procedures
to which you refer. We may have further comment upon review of
your
response.
2. We note your disclosure that your chief executive officer and
chief financial officer seek to ensure that information in reports
are "[r]ecorded, processed, summarized and reported within the
time
periods specified in Securities and Exchange Commission rules and
forms." As you have included a portion of the definition of
disclosure controls and procedures in your disclosure, you must
include the entire definition. As such, please revise to clarify,
if
true, that your disclosure controls and procedures are also
designed
to ensure that information required to be disclosed in the reports
that you file or submit under the Exchange Act is accumulated and
communicated to your management, including your chief executive
officer and chief financial officer, to allow timely decisions
regarding required disclosure. See Exchange Act Rule 13a-15(e).
Exhibits 31.1 and 31.2
3. We note that you have replaced the term "small business issuer"
with "registrant." Please revise, as the exact wording of the
certification provided in Item 601(b)(31) of Regulation S-B is
required. Also, you have referred to the definitions of
disclosure
controls and procedures as set forth in Rules 13a-14 and 15d-14
instead of referring to Rules 13a-15 and 15d-15. Please revise
the
corresponding exhibits filed with your quarterly report for the
fiscal year ended March 31, 2005 as well.
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
4. We note your disclosure that your chief executive officer and
chief financial officer made their conclusions based on their
evaluation performed "[w]ithin 90 days prior to the filing date of
this report." Please, however, revise your disclosure to clearly
indicate that the effectiveness conclusion is as of the end of the
period covered by the report. See Item 307 of Regulation S-B.
5. We note your disclosure that your chief executive officer and
chief financial officer concluded that your disclosure controls
and
procedures were "[e]ffective in gathering, analyzing and
disclosing
information needed to satisfy [y]our disclosure obligations under
the
Exchange Act." Your disclosure does not appear to accurately
reflect
the definition of disclosure controls and procedures.
Accordingly,
please revise to clarify, if true, that your disclosure controls
and
procedures are designed to ensure that information required to be
disclosed by FTS Group in the reports that it files or submits
under
the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in our rules and forms. Please
also revise to clarify, if true, that your disclosure controls and
procedures are also designed to ensure that information required
to
be disclosed in the reports that you file or submit under the
Exchange Act is accumulated and communicated to your management,
including your chief executive officer and chief financial
officer,
to allow timely decisions regarding required disclosure. See
Exchange Act Rule 13a-15(e).
******
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 your attention to Rules 460 and 461 regarding
requesting 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.
Please contact Kurt Murao, Attorney Advisor, at (202) 551-
3338,
Ellie Quarles, Special Counsel, at (202) 551-3238 or me at (202)
551-
3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: Amy M. Trombly, Esq.
Fax: (617) 243-0066
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Scott Gallagher
FTS Group, Inc.
July 1, 2005
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