SEC Comment Letter for DUOS TECHNOLOGIES GROUP, INC. (DUOT) (CIK 0001396536) (DUOT) — May 25, 2007
DUOS TECHNOLOGIES GROUP, INC. (DUOT) (CIK 0001396536)
Date: May 25, 2007 · CIK: 0001396536 · Accession: 0000000000-07-026194
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-142429
Letter
Mail Stop 4561 May 24, 2007 Joseph P. Coschera Chief Executive Officer Information Systems Associates, Inc. 2120 SW Danforth Circle Palm City, FL 34990
Re: Information Systems Associates, Inc. Registration Statement on Form SB-2 Filed on April 17, 2007 File No. 333-142429
Dear Mr. Coschera:
We have reviewed y our filing and have the following comments regarding your financial statements and related matters. Additional comments will be forthcoming. Where indicated, we think you should revise your document in response to these comments. If you disagree, we will consider your explanation as to why our commen t is inapplicable or a 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 th e purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the ove rall disclosure in your filing. We look forward to working with you in these re spects. 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.
Financial Summary Information, page 7 1. Please revise to correct the “Net income (loss)” caption or the corresponding dollar amounts. In this regard, the amounts reported for this caption appear to represent “Net income (loss) before taxes” from your statements of operations on page 39.
Joseph P. Coschera Information Systems Associates, Inc. May 24, 2007 Page 2
Financial Statements
General 2. Please revise your registration statement to in clude updated financial statements and related consents. Refer to Item 310(g) of Regulation S-B. 3. We note your risk factor disc losure on page 8 which indi cates that your losses from operations and limited cash "raise substantial doubt as to whether we can continue as a going concern." Please tell us whether your auditors have concluded that there is a substantial doubt about your ability to continue as a going concern. If your auditors have made such a conclusion, please tell us what consideration they gave to including a going concern emphasis paragraph in the accountant's report. Also, explain to us how you have considered providing the disclosures required by FRC 607.02. Alternatively, if your auditors have not made such a conclusion, please revise the risk fact or to be consistent.
Statement of Operations, page 39 4. Please describe the nature of the expenses included within the “consulting services – financing” line item. As part of your respons e, please explain your basis for recording these expenses as non-operating.
Statement of Stockholders’ Equity, page 41 5. We note that your disclosures on pages 20 and 52 do not appear to be consistent with your statements of stockholders’ equ ity and cash flows. For example, you indicate that shares were sold in November 2005 for cash, yet your 2005 financial statements do not appear to reflect these sales. In order to reconcile this information, provide us with a schedule of stock issuances that agree to your statements of stockholders’ equity and cash flows for each period presented within your registration statement. This schedule should include the date of each transaction, the num ber of shares issued, the reci pient of the shares, and the cash paid or amount at which the service transa ctions were recorded within your financial statements. The schedule should include subtotal s and totals that agree to your statements of stockholders equity for each year in th e two-year period ended December 31, 2006 and the subsequent interim period.
Note A – Summary of Significant Accounting Policies, page 42
Revenue Recognition, page 42 6. We note that your disclosures refer to software in describing your ar rangements, but it is unclear to us whether you actually deliver software to your customers or how SOP 97-2 applies to your arrangements, if at all. Please clarify for us how software is utilized by your
Joseph P. Coschera Information Systems Associates, Inc. May 24, 2007 Page 3
customers in the context of your typical arrangements and explain how you considered the SOP when determining the appropria te revenue recognition model. 7. To the extent your transactions involve multiple elements, revise your disclosure to identify all elements included in each significant t ype of sales transaction and explain how you determine whether elements should be considered separate units of accounting or combined with other elements. Clearly explain how you allocate revenue to each accounting unit and describe, for each unit, how you meet the rele vant revenue recognition criteria that are referred to in your policy, but not identified or discussed. Your disclosures should be robust and specific to the applicable guidance su ch as SAB 104, EITF 00-21, and SOP 97-2.
Impairment of Long-Lived Assets, page 43 8. Tell us how you considered SFAS 144, “Accounti ng for Impairment or Disposal of Long- Lived Assets.” In this regard, we note th at SFAS 121 is no longer applicable because it was superseded by SFAS 144.
Share-Based Payments, page 44 9. Your disclosures indicate that sh ares issued for services are recorded at fair value, which is generally the quote at the close of market trad ing on the day of issuance or the most recent sale. Please tell us how this is possible consid ering that your stock does not trade. Further, we note your disclosures on pages 21 and 51 indi cating that the common shares issued were valued at the estimated value of the servic es received. Please clarify how you account for these shares and revise your di sclosures accordingly. As part of your response, tell us how you considered the guidance in EITF 96-18 and EITF 00-18 when accounting for these shares.
Recent Accounting Pronouncements, page 44 10. Your disclosure indicates that the adoption of SAB 108 is not expected to have a material effect. Please be advised that since your registration statement will not be declared effective until after Novemb er 15, 2006, you must apply the guidance in SAB 108 to the financial statements included in this registra tion statement. Refer to footnote 6 of SAB 108 and revise accordingly.
As appropriate, please amend your registration statement in response to these comments. You may wish to provide us with marked copies of the amendment to exped ite our review. Please furnish a cover letter with your amendment that ke ys your responses to ou r comments and provides any requested supplemental information. Detailed c over letters greatly facil itate our review. We may have additional comments based on reviewing your amendment and responses to our comments.
Joseph P. Coschera Information Systems Associates, Inc. May 24, 2007 Page 4
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 th at they have provided all information investors require for an informed decision. Since the comp any and its management are in possession of all facts relating to a company’s disclosure, they ar e responsible for the accur acy and adequacy of the disclosures they have made.
Notwithstanding our comments, in the even t the company requests acceleration of the effective date of the pending registration statement, it should furnish a letter, at the time of such request, acknowledging that:
should the Commission or the staff, acting pu rsuant to delegated authority, declare the filing effective, it does not forecl ose the Commission from taking any action with respect to the filing;
the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does no t relieve the company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and
the company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.
In addition, please be advised that the Division of Enforcemen t has access to all information you provide to the staff of the Di vision of Corporation Finance in connection with our review of your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective date of the registration statement as a confirmation of the fact that those requesting accelerat ion are aware of their respective responsibilitie s under the Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed public offeri ng of the securities specified in the above registration statement. We w ill act on the request and, pursuant to delegated authority, grant acceleration of the effective date. You may contact Christine Davis at 202-551-3408 or Mark Kronforst, Accounting Branch Chief, at 202-551-3451 if you have questions regarding comments on the financial statements and related matters. Please addre ss all other comments to Maryse Mills-Apenteng at 202-551-3457 or, in her absence, to the undersigned at 202-551-3735.
S i n c e r e l y ,
B a r b a r a C . J a c o b s A s s i s t a n t D i r e c t o r cc: Via facsimile: 772-286-3031 Information Systems Associates, Inc.
Show Raw Text
Mail Stop 4561
May 24, 2007
Joseph P. Coschera
Chief Executive Officer
Information Systems Associates, Inc.
2120 SW Danforth Circle
Palm City, FL 34990
Re: Information Systems Associates, Inc.
Registration Statement on Form SB-2
Filed on April 17, 2007
File No. 333-142429
Dear Mr. Coschera:
We have reviewed y our filing and have the following comments regarding your financial
statements and related matters. Additional comments will be forthcoming. Where indicated, we
think you should revise your document in response to these comments. If you disagree, we will
consider your explanation as to why our commen t is inapplicable or a 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 th e purpose of our review process is to assist you in your compliance
with the applicable disclosure requirements and to enhance the ove rall disclosure in your filing.
We look forward to working with you in these re spects. 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.
Financial Summary Information, page 7
1. Please revise to correct the “Net income (loss)” caption or the corresponding dollar amounts. In this regard, the amounts reported for this caption appear to represent “Net income (loss) before taxes” from your statements of operations on page 39.
Joseph P. Coschera
Information Systems Associates, Inc.
May 24, 2007
Page 2
Financial Statements
General
2. Please revise your registration statement to in clude updated financial statements and related
consents. Refer to Item 310(g) of Regulation S-B.
3. We note your risk factor disc losure on page 8 which indi cates that your losses from
operations and limited cash "raise substantial doubt as to whether we can continue as a
going concern." Please tell us whether your auditors have concluded that there is a
substantial doubt about your ability to continue as a going concern. If your auditors have
made such a conclusion, please tell us what consideration they gave to including a going
concern emphasis paragraph in the accountant's report. Also, explain to us how you have
considered providing the disclosures required by FRC 607.02. Alternatively, if your
auditors have not made such a conclusion, please revise the risk fact or to be consistent.
Statement of Operations, page 39
4. Please describe the nature of the expenses included within the “consulting services –
financing” line item. As part of your respons e, please explain your basis for recording these
expenses as non-operating.
Statement of Stockholders’ Equity, page 41
5. We note that your disclosures on pages 20 and 52 do not appear to be consistent with your
statements of stockholders’ equ ity and cash flows. For example, you indicate that shares
were sold in November 2005 for cash, yet your 2005 financial statements do not appear to reflect these sales. In order to reconcile this information, provide us with a schedule of
stock issuances that agree to your statements of stockholders’ equity and cash flows for
each period presented within your registration statement. This schedule should include the
date of each transaction, the num ber of shares issued, the reci pient of the shares, and the
cash paid or amount at which the service transa ctions were recorded within your financial
statements. The schedule should include subtotal s and totals that agree to your statements
of stockholders equity for each year in th e two-year period ended December 31, 2006 and
the subsequent interim period.
Note A – Summary of Significant Accounting Policies, page 42
Revenue Recognition, page 42
6. We note that your disclosures refer to software in describing your ar rangements, but it is
unclear to us whether you actually deliver software to your customers or how SOP 97-2
applies to your arrangements, if at all. Please clarify for us how software is utilized by your
Joseph P. Coschera
Information Systems Associates, Inc.
May 24, 2007
Page 3
customers in the context of your typical arrangements and explain how you considered the
SOP when determining the appropria te revenue recognition model.
7. To the extent your transactions involve multiple elements, revise your disclosure to identify
all elements included in each significant t ype of sales transaction and explain how you
determine whether elements should be considered separate units of accounting or combined
with other elements. Clearly explain how you allocate revenue to each accounting unit and
describe, for each unit, how you meet the rele vant revenue recognition criteria that are
referred to in your policy, but not identified or discussed. Your disclosures should be robust
and specific to the applicable guidance su ch as SAB 104, EITF 00-21, and SOP 97-2.
Impairment of Long-Lived Assets, page 43
8. Tell us how you considered SFAS 144, “Accounti ng for Impairment or Disposal of Long-
Lived Assets.” In this regard, we note th at SFAS 121 is no longer applicable because it was
superseded by SFAS 144.
Share-Based Payments, page 44
9. Your disclosures indicate that sh ares issued for services are recorded at fair value, which is
generally the quote at the close of market trad ing on the day of issuance or the most recent
sale. Please tell us how this is possible consid ering that your stock does not trade. Further,
we note your disclosures on pages 21 and 51 indi cating that the common shares issued were
valued at the estimated value of the servic es received. Please clarify how you account for
these shares and revise your di sclosures accordingly. As part of your response, tell us how
you considered the guidance in EITF 96-18 and EITF 00-18 when accounting for these shares.
Recent Accounting Pronouncements, page 44
10. Your disclosure indicates that the adoption of SAB 108 is not expected to have a material
effect. Please be advised that since your registration statement will not be declared effective until after Novemb er 15, 2006, you must apply the guidance in SAB 108 to the
financial statements included in this registra tion statement. Refer to footnote 6 of SAB 108
and revise accordingly.
As appropriate, please amend your registration statement in response to these comments.
You may wish to provide us with marked copies of the amendment to exped ite our review. Please
furnish a cover letter with your amendment that ke ys your responses to ou r comments and provides
any requested supplemental information. Detailed c over letters greatly facil itate our review. We
may have additional comments based on reviewing your amendment and responses to our comments.
Joseph P. Coschera
Information Systems Associates, Inc.
May 24, 2007
Page 4
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 th at they have provided all information investors
require for an informed decision. Since the comp any and its management are in possession of all
facts relating to a company’s disclosure, they ar e responsible for the accur acy and adequacy of the
disclosures they have made.
Notwithstanding our comments, in the even t the company requests acceleration of the
effective date of the pending registration statement, it should furnish a letter, at the time of such
request, acknowledging that:
should the Commission or the staff, acting pu rsuant to delegated authority, declare
the filing effective, it does not forecl ose the Commission from taking any action
with respect to the filing;
the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does no t relieve the company from its full
responsibility for the adequacy and accuracy of the disclosure in the filing; and
the company may not assert this action as a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of the United States.
In addition, please be advised that the Division of Enforcemen t has access to all information
you provide to the staff of the Di vision of Corporation Finance in connection with our review of
your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective date of the registration
statement as a confirmation of the fact that those requesting accelerat ion are aware of their
respective responsibilitie s under the Securities Act of 1933 and the Securities Exchange Act of
1934 as they relate to the proposed public offeri ng of the securities specified in the above
registration statement. We w ill act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
You may contact Christine Davis at 202-551-3408 or Mark Kronforst, Accounting Branch
Chief, at 202-551-3451 if you have questions regarding comments on the financial statements and
related matters. Please addre ss all other comments to Maryse Mills-Apenteng at 202-551-3457 or,
in her absence, to the undersigned at 202-551-3735.
S i n c e r e l y ,
B a r b a r a C . J a c o b s
A s s i s t a n t D i r e c t o r
cc: Via facsimile: 772-286-3031
Information Systems Associates, Inc.