Mail Stop 4561
August 3, 2005
Mr. Gary W. Brown
K2 Digital, Inc.
c/o Mr. Thomas G. Amon
500 Fifth Avenue, Suite 1650
New York, NY 10110
Re: K2 Digital, Inc.
Form 10-KSB for Fiscal Year Ended December 31, 2004
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
File No. 1-11873
Dear Mr. Brown:
We have reviewed your above referenced filings and have the
following comments. We have limited our review to only your
financial statements and related disclosures and do not intend to
expand our review to other portions of your documents. 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 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
filings.
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
Statement of Operations, page F-3
1. Please advise us of the facts and circumstances resulting in
the
gain you recognized from the disposition of liabilities in 2003
which
is included in other income. Please include the nature of the
liabilities and identify the creditor in your response. Also,
describe the terms under which you were released from these
obligations. Finally, explain how you considered paragraph 16 of
SFAS 140 in recognizing a gain on this transaction.
2. Please advise us of the nature of the items included in other
income for 2003, other than the gain on sale of available-for-sale
securities and the gain on disposition of liabilities. The gains
on
these two transactions as disclosed in the statement of cash flows
at
page F-5 appear to exceed the total other income per the statement
of
operations at page F-3.
3. We note from your MD&A discussion at page 5 that general and
administrative expenses primarily represent ongoing legal,
accounting
and other public company costs, net of amounts paid by merger
candidates and offset by excess accruals reversed in each year.
Please disclose to us the gross amounts of the expenses incurred,
the
gross amounts paid by merger candidates, and the amount of excess
accruals reversed for both 2004 and 2003. Further, please advise
us
of the accounting guidance you referenced in determining the
appropriateness of netting such expenses against the amounts paid
by
merger candidates. Please advise us of the same information for
the
quarters ended March 31, 2005 and March 31, 2004, as reported in
the
Form 10-QSB for the quarter ended March 31, 2005.
Item 8A - Controls and Procedures - page 19
4. Please revise to clarify, if true, that the certifying officer
found the disclosure controls and procedures (as defined in
Exchange
Act Rules 13a-15(e) and 15d-15(e)) to be effective as of the end
of
the period covered by the report based on the evaluation of these
controls and procedures required by Exchange Act Rules 13a-15(b)
or
15d-15(b), as required under Item 307 of Regulation S-B. Please
make
conforming changes in your Form 10-QSB.
Exhibits to Form 10-KSB for Fiscal Year Ended December 31, 2004
and
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
5. Please revise the certifications included as exhibit 31 to
conform
exactly to the presentation presented in Item 601(b)(31) of
Regulation S-B, if such statements continue to be true considering
the revised wording and evaluation date as of the period end,
rather
than as of a date within 90 days of the filing as indicated in
Form
10-QSB, of the Form 10-KSB for the year ended December 31, 2004
and
the Form 10-QSB for the quarter ended March 31, 2005.
As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. 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 file your cover letter on EDGAR.
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 filings to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 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.
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 filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; 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 filings or
in
response to our comments on your filings.
You may contact Amanda Sledge, Staff Accountant, at (202)
551-
3473 or the undersigned at (202) 551-3403 if you have questions.
Sincerely,
Steven Jacobs
Accounting Branch Chief
Mr. Gary W. Brown
K2 Digital, Inc.
August 3, 2005
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