Room 4561
November 3, 2005
Mr. James P. Dore
Chief Financial Officer
Bitstream Inc.
245 First Street, 17th Floor
Cambridge, MA 02142
Re: Bitstream Inc.
Form 10-K for Fiscal Year Ended December 31, 2004
Forms 10-Q for Fiscal Quarters Ended March 31 and June 30, 2005
Forms 8-K filed on May 9 and August 9, 2005
File No. 000-21541
Dear Mr. Dore:
We have reviewed the above referenced filings and have the
following comments. Please note that we have limited our review
to
the matters addressed in the comments below. We may ask you to
provide us with supplemental 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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the year ended December 31, 2004
ITEM 9A. Controls and Procedures, page 28
1. We note your disclosure indicating that your Chief Executive
Officer and Chief Financial Officer have concluded that the
Company`s
disclosure controls and procedures are "sufficiently" effective.
Given the qualifier "sufficiently," it remains unclear whether
your
CEO and CFO have concluded that your disclosure controls and
procedures are effective. Please confirm to us, in clear and
unqualified language, the conclusions reached by your Officers on
the
effectiveness of your disclosure controls and procedures and
revise
your future filings to remove such qualifying language.
2. We note your disclosure indicating that your disclosure
controls
and procedures are "sufficiently effective to ensure that
information
required to be disclosed by the Company in this annual report on
Form
10-K was recorded, processed, summarized and reported within the
time
periods specified in the SEC`s rules and Form 10-K." This
language
appears to be more limited than what is called for under Rule13a-
15(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 Commission`s rules and forms" and to ensure that
"information
required to be disclosed by an issuer . . . is accumulated and
communicated to the issuer`s management . . . as appropriate to
allow
timely decisions regarding required disclosure." Please confirm,
if
true, that your disclosure controls and procedures for the
relevant
periods met all of the requirements of this section and that you
will
conform your disclosure in future filings.
3. We note your disclosure indicating that there were no
significant
changes in your internal controls over financial reporting
subsequent
to the date of their evaluation that could significantly affect
these
controls. Please note that Item 308 of Regulation S-K 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 quarters ended December 31, 2004
and March 31, 2005. Please also confirm to us that you will
consider
this comment in preparing future periodic reports.
4. We note your disclosure that a control system, no matter how
well
conceived, "can provide only reasonable, not absolute, assurance
that
the objectives of the control system are met." Please confirm to
us,
if true, the conclusions of management that the disclosure
controls
and procedures are effective at the "reasonable assurance" level.
Refer to SEC Release No. 34-47986 (June 5, 2003), Section F.4.
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.
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
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 filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; 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 filing or in
response to our comments on your filing.
You may contact Chauncey Martin, Staff Accountant, at (202)
551-
3441 or Mark Kronforst, Senior Staff Accountant, at (202) 551-
3451
if you have questions regarding the above comments. If you need
further assistance, you may contact me at (202) 551- 3489.
Sincerely,
Brad Skinner
Accounting Branch Chief
Mr. James P. Dore
Bitstream Inc.
October 3, 2005
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