MERITZ & MUENZ LLP
COUNSELORS AT LAW
2021 O Street, NW
Washington, DC 20036
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Telephone: (202) 728-2909
Facsimile: (202) 728-2910
E-mail: Lmuenz@meritzmuenzllp.com
Lawrence A. Muenz*
*Also admitted in NY
August 7, 2008
Ms. Christine Davis
Assistant Chief Accountant
Corporate Finance
U.S. Securities and Exchange Commission
Washington, DC 20549
RE: IVOICE TECHNOLOGY, INC.
FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
FILE NO. 333-120490
Dear Ms. Davis:
My firm serves as corporate counsel to iVoice Technology, Inc. (the "Company").
I am in receipt of your letter dated July 21, 2008 and would like to respond on
behalf of the Company.
1. ITEM 8A (T) CONTROLS AND PROCEDURES, PAGES 40-42.
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The management did perform an assessment of internal control over financial
reporting as of December 31, 2007 as stated at the beginning of this Item 8A (T)
under the section captioned: "Evaluation of Disclosure Controls and Procedures".
However, as pointed out in your Comment No. 3, this section was contradicted by
a subsequent paragraph in the same section. Therefore, your comments are duly
noted and Item 8A (T) shall be deleted in its entirety and replaced with a new
Item 8A (T) that will filed with the Commission with an amended Form 10-KSB. The
new Item 8A (T) will read as follows:
Ms. Christine Davis
Assistant Chief Accountant
Corporate Finance
U.S. Securities and Exchange Commission
Page 2
ITEM 8A (T). CONTROLS AND PROCEDURES.
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EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
The evaluation of our disclosure controls and procedures included a review
of their objectives and design, our implementation of them and their effect
on the information generated for use in this Form 10-KSB. In the course of
the controls evaluation, we reviewed any data errors or control problems
that we had identified and sought to confirm that appropriate corrective
actions, including process improvements, were being undertaken. This type
of evaluation is performed on a quarterly basis so that the conclusions of
management, including our Chief Executive Officer and Chief Financial
Officer, concerning the effectiveness of the disclosure controls can be
reported in our periodic reports on Form 10-KSB and Form 10-QSB. Many of
the components of our disclosure controls and procedures are also evaluated
on an ongoing basis. The overall goals of these various evaluation
activities are to monitor our disclosure controls and procedures and to
modify them as necessary. The Company maintains a set of disclosure
controls and procedures designed to ensure that information required to be
disclosed by us in our reports filed under the Securities Exchange Act, is
recorded, processed, summarized, and reported within the time periods
specified by the SEC's rules and forms. Disclosure controls are also
designed with the objective of ensuring that this information is
accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
Our Board of Directors were advised by Bagell, Josephs, Levine and Company,
LLC, our independent registered public accounting firm, that during their
performance of review procedures for the year ended December 31, 2007, they
have identified a material weakness as defined in Public Accounting
Oversight Board Standard No. 2 in our internal control over financial
reporting. Our auditors have identified the following material weaknesses
in our internal controls as of December 31, 2007 and December 31, 2006:
A material weakness in the Company's internal controls exists in that there
is limited segregation of duties amongst the Company's employees with
respect to the Company's preparation and review of the Company's financial
statements.
Ms. Christine Davis
Assistant Chief Accountant
Corporate Finance
U.S. Securities and Exchange Commission
Page 3
This material weakness is a result of the Company's limited number of
employees. This material weakness may affect management's ability to
effectively review and analyze elements of the financial statement closing
process and prepare financial statements in accordance with U.S. GAAP.
Management of the Company has evaluated, with the participation of the
Chief Executive Officer and Chief Financial Officer of the Company, the
effectiveness of the Company's disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) as of the end of the fiscal year
covered by this Annual Report on Form 10-KSB. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer of the Company have
concluded, as of the end of the fiscal year covered by this Annual Report
on Form 10-KSB, that our disclosure controls and procedures have not been
effective to provide reasonable assurance that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act was recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the Securities and
Exchange Commission and that the information required to be disclosed in
the reports was accumulated and communicated to management, including our
Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure. However, at this time, our
resources and size prevent us from being able to employ sufficient
resources to enable us to have adequate segregation of duties within our
internal control system. The Company intends to remedy the material
weakness by hiring additional employees and reallocating duties, including
responsibilities for financial reporting, among the Company's employees as
soon as the Company has the financial resources to do so. Management is
required to apply judgment in evaluating the cost-benefit relationship of
possible changes in our disclosure controls and procedures.
Other than the material weakness indicated above, no accounting errors or
misstatements have been identified by our disclosure controls and
procedures or by our independent registered public accounting firm that
would have a material effect on our Financial Statements.
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's
Ms. Christine Davis
Assistant Chief Accountant
Corporate Finance
U.S. Securities and Exchange Commission
Page 4
report was not subject to attestation by our registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission
that permit us to provide only management's report in this annual report.
Our registered public accounting firm will be required to attest to our
management's assessment of internal control over financial reporting
beginning with our annual report for the year ended December 31, 2009.
CHANGES IN INTERNAL CONTROLS.
Management of the Company has evaluated, with the participation of the
Chief Executive Officer of the Company, any change in the Company's
internal control over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) that occurred during the year covered
by this Annual Report on Form 10-KSB. There was no change in the Company's
internal control over financial reporting identified in that evaluation
that occurred during the fiscal year covered by this Annual Report on Form
10-KSB that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting, other than
what has been reported above.
RISK FACTOR RELATED TO CONTROLS AND PROCEDURES
The Company has limited segregation of duties amongst its employees with
respect to the Company's preparation and review of the Company's financial
statements due to the limited number of employees, which is a material
weakness in internal controls, and if the Company fails to maintain an
effective system of internal controls, it may not be able to accurately
report its financial results or prevent fraud. As a result, current and
potential stockholders could lose confidence in the Company's financial
reporting which could harm the trading price of the Company's stock.
Management has found it necessary to limit the Company's
administrative staffing in order to conserve cash, until the Company's
level of business activity increases. As a result, there is very limited
segregation of duties amongst the administrative employees, and the Company
and its independent public accounting firm have identified this as a
material weakness in the Company's internal controls. The Company intends
to remedy this material weakness by hiring additional employees and
reallocating duties, including responsibilities for
Ms. Christine Davis
Assistant Chief Accountant
Corporate Finance
U.S. Securities and Exchange Commission
Page 5
financial reporting, among the employees as soon as there are sufficient
resources available. However, until such time, this material weakness will
continue to exist. Despite the limited number of administrative employees
and limited segregation of duties, management believes that the Company's
administrative employees are capable of following its disclosure controls
and procedures effectively.
2. ITEM 8A (T) CONTROLS AND PROCEDURES, PAGES 40-42.
-------------------------------------------------
Please see our response to your Comment No. 1.
3. ITEM 8A (T) CONTROLS AND PROCEDURES, PAGES 40-42.
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Please see our response to your Comment No. 1. Your comment related to Item 4(T)
in Form 10-Q for the quarter ended March 31, 2008 is duly noted. The Company
will file an amendment to this Form 10-Q consistent with our response to your
Comment No. 1.
4. PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER CERTIFICATION.
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The certification required pursuant to Item 601(b)(31) of Regulation S-B will be
refiled in an amendment to Form 10-KSB for the fiscal year ended December 31,
2007 and to Form 10-Q for the quarter ended March 31, 2008, without the the
header and introductory paragraph as noted in your comment.
5. The Company has advised me that it wishes to acknowledge that:
a. The Company is responsible for the adequacy and accuracy of the
disclosure in the filing;
b. 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
c. 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.
Ms. Christine Davis
Assistant Chief Accountant
Corporate Finance
U.S. Securities and Exchange Commission
Page 6
Thank you in advance for your assistance in resolving this matter.
Respectfully yours,
Lawrence A. Muenz