Mail Stop 4561
September 28, 2005
Kelly Hankinson
Chief Financial Officer
Thinkpath, Inc.
201 Westcreek Boulevard
Brampton, Ontario Canada L6T 5S6
(905) 460-3042
Re: Thinkpath, Inc.
Form 10-KSB: For the Fiscal Year Ended December 31, 2004
Filed April 15, 2005
Form 10-QSB: For the Quarterly Period Ended March 31,
2005
Filed May 23, 2005
Form 10-QSB: For the Quarterly Period Ended June 30,
2005
Filed August 22, 2005
File No. 001-14813
Dear Ms. Hankinson,
We have reviewed your response letter dated September 15,
2005
and have the following comments. We may ask you to provide us
with
information so we may better understand your disclosure. Please
be
as detailed as necessary in your explanation. 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 on 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 the Fiscal Year Ended December 31, 2004
Financial Statements
1. Based on your responses to prior comments 3 and 7 in your
letter
dated July 12, 2005 and the responses to prior comments 1, 2 and 3
in
your letter dated September 15, 2005, it appears that you have
concluded that your previously issued financial statements should
no
longer be relied upon because of an error in such financial
statements. As such, a Form 8-K should be filed pursuant to Item
4.02 of the Form.
2. You indicate in response to prior comment number 3 in your
letter
dated September 15, 2005 that you plan to file a revision to your
Form 10-KSB to reflect the restatements. The amended financial
statements should be filed as soon as practical. Tell us when you
plan to file the amended Form 10-KSB. Also tell us whether you
also
plan to amend both of your Form 10-QSBs for the subsequent interim
periods ended March 31, 2005 and June 30, 2005 to reflect the
restatements.
Note 10. Convertible Debentures, page F-14
3. In response to prior comment number 3 in your letter dated
September 15, 2005, you indicate your intention to amend the
financial statements to limit the amount of beneficial conversion
feature to the amount of proceeds allocated to the convertible
debentures. Please provide us with the calculation of your
proposed
adjustments to the 2003 and 2004 financial statements. In this
regard, we note that the adjusted amount of beneficial conversion
feature for the 2003 debentures is approximately $2,210 thousand,
however the amount of proceeds allocated to the convertible
debentures was $924 thousand. In addition, we note that the
adjusted
amount of beneficial conversion feature for the 2004 debentures is
approximately $1,242 thousand, however the amount of proceeds
allocated to the convertible debentures was $731 thousand.
Controls and Procedures
4. In your proposed revised disclosure included in your response
to
prior comment number 4 in your letter dated September 15, 2005,
you
indicate that, as of December 31, 2004, two material weaknesses
were
identified. Disclose in greater detail the nature of the material
weaknesses identified in your disclosure. Describe the facts and
circumstances leading to the identification of the material
weaknesses.
5. In your proposed revised disclosure included in your response
to
prior comment number 4 in your letter dated September 15, 2005,
you
indicate that management has spent a considerable amount of time,
effort and resources to improve your control environment.
Disclose
in greater detail the nature of these improvements, including the
specific steps you have taken to address each of the material
weaknesses identified in your disclosure.
6. In your proposed revised disclosure included in your response
to
prior comment number 4 in your letter dated September 15, 2005,
you
indicate that there were no changes in internal control over
financial reporting during the year ended December 31, 2004, other
than described above. Revise to state clearly, if true, that
there
were changes in your internal control over financial reporting
that
occurred during the period covered by the report.
Form 10-QSB for the Quarterly Period Ended June 30, 2005
Financial Statements
Notes to Interim Consolidated Financial Statements
Note 12. Convertible Financing Facility, page F-16
7. In the closing paragraph of your response letter dated
September
15, 2005, you indicate that you must file a registration statement
on
an expeditious basis pursuant to covenants made to the Laurus
Master
Fund, Ltd. Further describe the registration rights associated
with
the Laurus financing. In light of these covenants, explain how
you
considered the guidance in SFAS 133 and EITF 00-19 in determining
the
classification and measurement of the warrants and options. Also
tell us how you considered the guidance in SFAS 133 in determining
whether the embedded conversion feature should be accounted for
separately as a derivative and the guidance in EITF 00-19 in
determining the classification.
Controls and Procedures
8. Your disclosure suggests that your disclosure controls and
procedures are effective in alerting the officers on a timely
basis
to material information required to be included in your Exchange
Act
reports. As previously requested in prior comment number 5 of our
letter dated July 28, 2005, please confirm whether your officers
have
also concluded on the effectiveness of disclosure controls and
procedures as defined in Rule 13a-15(e) of the Exchange Act. In
this
regard, provide us with and include in any amendment to your
filing a
statement regarding whether your officers concluded that your
disclosure controls and procedures are also effective in ensuring
that information required to be disclosed is recorded, processed,
summarized and reported within the time periods specified in the
Commissions rules and forms.
9. We note your disclosure that "since the evaluation date, there
have not been any significant changes in [y]our internal controls
or
in other factors that could significantly affect such controls."
As
previously requested in prior comment number 6 of our letter dated
July 28, 2005, provide us with and include in any amendment to
your
filing a definitive statement regarding whether there has been any
change in your internal control over financial reporting
identified
in connection with your evaluation that occurred during the period
covered by the report that has materially affected or is
reasonably
likely to materially affect your internal control over financial
reporting. Refer to Section II.F.4 of Release No. 33-8238 for
additional guidance.
10. In light of the fact that material weaknesses existed as of
December 31, 2004, tell us and disclose in any amendment in
reasonable detail the basis for the officers` conclusion that your
disclosure controls and procedures were nonetheless effective as
of
June 30, 2005. In this regard, describe why you believe that the
material weaknesses no longer exist.
* * * * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T. You
may wish to provide us with marked copies of any amendment to
expedite our review. Please furnish a cover letter with any
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 any amendment and your responses to our comments.
You may contact Steve Williams at (202) 551-3478 or Melissa
Walsh (202) 551-3224 if you have any questions regarding comments
on
the financial statements and related matters. Please contact me
at
(202) 551-3730 with any other questions.
Sincerely,
Stephen Krikorian
Accounting Branch Chief
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Kelly Hankinson
Thinkpath, Inc.
September 28, 2005
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