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Design
Source, Inc.
100
Europa Drive, Suite 455
Chapel
Hill, NC 27517
February
__, 2010
VIA
EDGAR
U.S.
Securities and Exchange Commission
Mail Stop
3561
Washington,
DC 20549-7010
Attn: William
H. Thompson, Accounting Branch Chief
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Re:
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Design
Source, Inc.
Form
10-K for Fiscal Year Ended March 31, 2009
Filed
June 29, 2009
File
No. 0-52089
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Ladies
and Gentlemen:
Design
Source, Inc. (the “Company”) is in receipt of your February 12, 2010 letter (the
“Letter”) to Peter A. Reichard containing comments to the captioned
filing. The Company has amended the captioned filing under cover of
its Form 10-K/A to address such comments. Set forth below are your
comments, indicated in bold, together with responses thereto by the
Company.
Form 10-K for Fiscal year
Ended March 31, 2009
Item 9A. Controls and
Procedures, page 8
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1.
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We
note your disclosure regarding limitations on the effectiveness of your
disclosure controls and procedures and your internal controls, and in
particular the statement that a control system can provide only reasonable
assurance that the objectives of the control system are met. As such,
please clarify that your disclosure controls and procedures are designed
to provide reasonable assurance of achieving their objectives and to set
forth, if true, the conclusion of your principal executive and financial
officer that your disclosure controls and procedures are effective at the
“reasonable assurance” level. Please refer to Part II.F.4 of Final Rule
Release 33-8238 for guidance.
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Item 9A
has been revised to clarify that the Company’s disclosure controls and
procedures are designed to provide reasonable assurance of achieving their
objectives and that the Company’s principal executive and financial officer has
concluded that the Company’s disclosure controls and procedures are effective at
such “reasonable assurance” level.
U.S.
Securities and Exchange Commission
February
__, 2010
Page
2
Financial Statements, Page
F-1
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2.
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Please
provide an auditor’s report on the cumulative data presented in your
financial statements as required by Item 2.02 of Regulation S-K. An audit
report is required on an annual basis as long as an entity is in the
development stage and may be provided by your present accountant or
predecessor accountant. If you provide a report from your predecessor
accountant, the audit report of your present accountant should make
reference to the predecessor auditor that audited a portion of the
cumulative data. If it is impractical to obtain an audit of the cumulative
data you may request a waiver of the audit requirement from the Office of
the Chief Accountant of the Division of Corporation Finance. Your request
should be addressed to Mr. Wayne Carnall, Chief Accountant, Division of
Corporation Finance, U.S. Securities & Exchange Commission, 100 F
Street, NE, Washington, DC 20549 and sent via email to DCAOLetters@SEC.gov.
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The
Company requests a waiver from the requirement to provide an audit report from
its predecessor accountant on the grounds that it will be costly and difficult
to obtain, if obtainable at all. The predecessor accountant, Williams &
Webster PS has been succeeded by BehlerMick PS (“Behler”). Behler has advised us
that they will require a minimum of $2,500 to provide such report, if at all,
after conducting required reviews and obtaining required representations. This
represents a significant cost to a shell company such as Design Source, Inc.
with limited assets and operations. Further, the Company’s present accountants,
Sherb & Co., LLP, have advised us that they will not issue an audit report
that covers the cumulative data for periods prior to their retention.
Accordingly, the Company respectfully requests that it be allowed to provide the
cumulative data on an unaudited basis.
Exhibit
31.1/31.2
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3.
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Please
revise the certifications to comply with Item 601(b)(31) of Regulation
S-X. In particular, refer to the registrant rather than the smaller
reporting company in paragraphs 3 and 4(d) and revise paragraph 4(d) to
comply with the wording in Item 601(b)(31) of Regulation
S-X.
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The
certifications have been revised as requested.
In
responding to your comments we acknowledge that:
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·
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the
Company is responsible for the adequacy and accuracy of the disclosure in
the filing;
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U.S.
Securities and Exchange Commission
February
__, 2010
Page
3
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·
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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
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·
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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.
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Sincerely,
Design
Source, Inc.
By: /s/ Peter A.
Reichard
Name: Peter
A. Reichard
Title: Chief
Executive Officer