Room 4561
April 27, 2006
Anthony Shupin
President and Chief Executive Officer
Digital Descriptor Systems, Inc.
2150 Highway 35, Suite 250
Sea Girt, NJ 08750
Re: Digital Descriptor Systems, Inc.
Form 10-KSB for year ended December 31, 2005
Filed April 17, 2006
File No. 000-26604
Dear Mr. Shupin:
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.
General
1. Tell us how you considered amending your Forms 10-QSB for the
quarters ended March 31, 2004, June 30, 2004, September 30, 2004,
March 31, 2005, June 30, 2005 and September 30, 2005 to restate
your
financial statements to properly reflect the embedded derivatives
associated with your convertible debentures and the change in fair
values of such instruments. Alternatively, tell us how you
considered including quarterly financial information in the
financial
statement footnotes to your Form 10-KSB, which show the previously
reported information and the restated information with a detailed
explanation for the restatement. Please advise.
Item 8A. Control and Procedures
Evaluation of Disclosure Controls and Procedures
2. We note your disclosures with regards to the Company`s
evaluation
of disclosure controls and procedures, where you state, "...Our
Chief
Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely
alerting
them to material information required to be included in our
periodic
reports that are filed with the Securities and Exchange
Commission."
Your conclusion is more limited than what is called for under Rule
13a-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 Commissions rules and forms" and 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 revise your disclosures to confirm,
if
true, that your disclosure controls and procedures were effective
in
meeting these requirements.
3. You also indicate that "It should be noted that the design of
any
system of controls is based in part upon certain assumptions about
the likelihood of future events, and there can be no assurance
that
any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote". Tell us
how
you determined that this statement complies with the requirements
SEC
Release No. 33-8238, available on our website at
http://www.sec.gov/rules/final/33-8238.htm as your disclosures
appear
to qualify your review.
4. We note your disclosure that "[t]here have been no significant
changes in [y]our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
[your] last evaluation." Please note that Item 308 of Regulation
S-B
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 quarter
ended December 31, 2005. Please also confirm to us that you will
consider this comment in preparing future periodic reports.
Report of Independent Registered Public Accounting Firm, pages 1
and
2
5. We note that the opinions provided by both Bagell, Josephs,
Levine
& Company LLC (Bagell) and Rosenberg Rich Baker Berman & Company
(Rosenberg) include a reference to the balance sheet as of
December
31, 2005 and the related statements of operations, stockholders`
impairment and cash flows for the year then ended. Help us
understand why both Bagell and Rosenberg provided audit opinions
related to the financial statements for the same period (i.e.
December 31, 2005) or amend your Form 10-KSB accordingly.
* * * * *
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 Patrick Gilmore at (202) 551-3406 or me at
(202)
551-3730 if you have questions regarding comments on the financial
statements and related matters.
Sincerely,
Kathleen Collins
Accounting Branch Chief
Mr. Anthony Shupin
Digital Descriptor Systems, Inc.
April 27, 2006
Page 1