Mail Stop 0407
May 24, 2005
Via U.S. Mail and Fax (770-512-7199)
Mr. David C. Burns
Chief Financial Officer
i2 Telecom International, Inc.
1200 Abernathy Rd., Suite 1800
Atlanta, GA 30328
RE: i2 Telecom International, Inc.
Form 10-KSB for the fiscal year ended December 31, 2004
Filed March 31, 2005
Form 10-QSB for the quarter ended March 31, 2005
Filed May 16, 2005
File No. 0-27704
Dear Mr. Burns:
We have reviewed the above referenced filings and have the
following comments. We have limited our review to only your
financial statements and related disclosures and will make no
further
review of your documents. As such, all persons who are
responsible
for the adequacy and accuracy of the disclosure are urged to be
certain that they have included all information required pursuant
to
the Securities Exchange Act of 1934. Please address the following
comments in future filings. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a future
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 supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
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 year ending December 31, 2004
Consolidated Statements of Stockholders` Equity, page F-6
1. It is unclear to us whether you have retroactively restated
the
historical stockholders` equity of the acquirer prior to the
merger
(a recapitalization) for the equivalent number of shares received
in
the transaction after giving effect to any difference in par value
of
the issuer`s and acquirer`s stock with an offset to paid-in
capital.
If you have not done so, please amend your Form 10-KSB for the
period
ended December 31, 2004.
2. In your response please provide us with a clear and concise
explanation that reconciles the activity shown in your
consolidated
statements of stockholders` equity for the year ended December 31,
2004 with the descriptions as currently disclosed in footnotes 18
and
19 of your financial statements.
Note 1. Organization and Basis of Presentation, page F-8
3. In view of the uncertainties concerning the Company`s continued
existence as a going concern, ask your auditors whether they
considered issuing you a modified auditors report for going
concern.
In this regard we refer you to the last sentence in the fourth
paragraph within your liquidity discussion on page 14. Revise or
advise.
4. In future filings revise this note to include a more detailed
description of management`s specific viability plans that are
intended to mitigate the conditions concerning the Company`s
continued existence as a going concern, and management`s
assessment
of the likelihood that such plans can be effectively implemented.
The viability plan description should be included in management`s
discussion and analysis of liquidity and in the footnotes to the
financial statements. This discussion should be updated quarterly
as
necessary. Refer to Item 303 of Regulation S-K and Financial
Reporting Codification paragraph 607.02.
Note 19. Merger with Digital Data Networks, Inc., page F-20
5. We note you characterized your transaction with DDN as a
"merger"
and as an "exchange between companies under common control." From
your description of the facts of the exchange, we believe that, at
a
minimum, you should clarify the legal and accounting form of the
transaction as follows:
a. Provide a clear description of the exchange as a
recapitalization
of i2 Telecom International`s equity;
b. Explain that the capital structure of the Company is now
different
from that appearing in the historical financial statements of i2
Telecom International in earlier periods due to the
recapitalization;
c. Disclose that the name of DDN, the accounting acquiree, was
changed to the name of i2 Telecom International, Inc., the
accounting
acquirer; and
d. Explain that the historical financial statements are a
continuation of the financial statements of i2 Telecom
International
(also known as i2 Delaware) and not of DDN.
* * * *
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
letter that keys your responses to our comments and provides any
requested supplemental information. Please file your response
letter
on EDGAR.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed 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 Joe Cascarano, Staff Accountant, at (202) 551-3376
or
Ivette Leon, Assistant Chief Accountant, at (202) 551-3351 if you
have questions regarding comments on the financial statements and
related matters. Please contact me at (202) 551-3810 with any
other
questions.
Sincerely,
Larry Spirgel
Assistant Director
Mr. David C. Burns
i2 Telecom International, Inc.
May 24, 2005
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