SICHENZIA ROSS FRIEDMAN FERENCE LLP
1065 AVENUE OF THE AMERICAS NEW YORK NY 10018
TEL 212 930 9700 FAX 212 930 9725 WEB WWW. SRFF.COM
August 10, 2005
BY FEDERAL EXPRESS
Securities and Exchange Commission
450 Fifth Street, NW
Washington D.C 20549
Attention: Scott Anderegg, Esq.
Mail Stop 0308
Re: Roaming Messinger, Inc. (the "Company")
Form SB-2 File No. 333-124600
Dear Sir:
On behalf of the Company, we are hereby enclosing for your review two copies of
Amendment No. 3 (the "Amendment") to the Company's registration statement on
Form SB-2 (the "Registration Statement"). One of the copies has been marked to
show changes from Amendment No. 2 to the Registration Statement ("Amendment No.
2"). On the date hereof, we are also filing the Amendment by EDGAR transmission.
Amendment No 2 was filed on July 22, 2005. The staff of the Securities and
Exchange Commission (the "Staff") issued comments on Amendment No. 2 by letter
dated August 5, 2005. Following are the Company's responses to the Staff's
comments. For ease of reference, we have set forth the Staff's comments in their
entirety.
In previous letters, the Staff requested that the Company make, to the extent
applicable, corresponding revisions to its Annual Report on Form 10-KSB for the
year ended June 30, 2004 and to its Quarterly Report on Form 10-QSB for the
three months ended March 31, 2005 (Commission File No. 0-13215). We are filing
both of these documents on the date hereof.
Revenue Recognition, page F-7
1. We note your response to comment 4 in our letter dated July 12,
2005. Please confirm in your response you do not ask customers to
pay a one-time license fee upon activation for Roaming Messenger
Communication, as disclosed on page 15 of the Business section. If
this disclosure is not an accurate description of this revenue
source, tell us the nature of the transaction, your present
accounting policy and the supporting accounting guidance. If you do
ask customers to pay a one-time license fee upon activation for
Roaming Messenger Communication, please tell us your present
accounting treatment. Please note the staff has historically
objected to up-front revenue recognition even with an accrual of the
related costs.
The Company advises the Staff supplementally that, as set forth in
the Registration Statement, it has not generated any material
revenues from its Roaming Messenger product line. For the nine
months ended March 31, 2005, it only generated fees in the amount of
$1,474 for one small customer paying a monthly fee of $330 during a
period four and one half months. No activation fees were paid by
this customer. For the fiscal year ended June 30, 2004, the Roaming
Messenger product line generated no revenue.
In the future, the Company intends to charge its customers a
one-time license fees upon activation of the Roaming Messenger
products. The Company undertakes to recognize future revenues from
the Roaming Messenger products in accordance with SOP 97-2.
2. Also confirm to us that end users of Warp 9 ICS services do not have
the option nor do they take possession of your software in any web
hosting arrangements. See EITF No. 00-3. If end users do not take
possession of your software, please tell us if you account for the
up-front customization or enhancement services and monthly service
fees in accordance with EITF No. 00-21. In your response include an
evaluation of all deliverables in the arrangement to determine the
separate units of accounting or, alternatively, tell us the
applicable accounting guidance. See paragraph 9 of EITF No. 00-21.
If end users do take possession of your software please tell us if
your accounting policy is in accordance with SOP 97-2.
The Company confirms to the Staff that end users of Warp9 ICS
services do not have the option nor do they take possession of the
software, and therefore EITF No. 00-3 and 97-2 do not apply to Warp
9 ICS activities. The Company accounts for the (1) enhancement
service fees, and (2) for the monthly service fees in accordance
with EITF No. 00-21.
The Company's Analysis as to the Applicability of EITF 00-21
Paragraph 9
There are two deliverables, which constitute two units of
accounting:
o Enhancement services; and
o Monthly services.
These deliverables qualify as two separate units of accounting
because they meet all of the following criteria:
a) The delivered item, i.e. enhancement services, has value on a
standalone basis because the enhancement services may be performed
separately by any other service provider.
b) There is objective and reliable evidence of the fair value of the
undelivered items, i.e. monthly services. The monthly services are
offered to other customers at the same fixed fees. The fees for
monthly services are the same whether or not the customers contract
Warp 9 for enhancement services.
c) The customer has a right of return with respect to the delivered
enhancement services because it may ask for modifications. However,
performance of the undelivered item, i.e. monthly services, is
considered probable and substantially in the control of the vendor.
The customer has signed a contract for the monthly services, which
is a separate and independent contract.
3. Please revise your current revenue disclosures for Roaming Messenger
Communication and Warp 9 ICS to reflect the substance of these
transactions and your present accounting policies.
The Company has made revisions to the Registration Statement in accordance
with the Staff's comment.
Please do not hesitate to contact the undersigned at 212-981-6766 with any
questions or comments with respect to the foregoing.
Very truly yours,
/s/
Louis A. Brilleman