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Attention:
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Jill
S. Davis
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Jennifer
O’Brien
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RE:
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Visual
Management Systems, Inc.
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Amendment
No. 2 to Registration Statement on Form S-1
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Filed
on July 18, 2008
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File
No. 333-148309
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Form
10-KSB for Fiscal Year Ended December 31, 2007
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Filed
April 16, 2008
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Form
10-Q for Fiscal Quarter Ended June 30, 2008
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Filed
August 14, 2008
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File
No. 333-133936
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1.
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With
respect to your assessment of the effectiveness of both your disclosure
controls and procedures and your internal control over financial
reporting, we note you identified a material weaknesses. Based
upon
consideration of your response to our prior comment number one,
please
expand your disclosure to address the following items with respect
to each
particular material weakness that was present as of the end of
the
respective reporting period.
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o
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Provide
a more fulsome discussion of the nature of your remediation efforts
and
the actions you’ve already taken;
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o
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Indicate
when you believe your remediation efforts will be
completed;
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o
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Disclose
the material costs associated with each remediation
procedure.
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2.
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We
have considered your response to prior comment number two and note
that
you continue to use the phrase “Other than the changes described above …”
Please note we do not believe the guidance in Item 308(c) of Regulation
S-B allows for such qualifying language in the disclosure. Please
modify
your disclosure to state clearly, if correct, that there were changes
in
your internal control over financial reporting that occurred during
your
last fiscal quarter (the fourth fiscal quarter in the case of an
annual
report) that have materially affected, or are reasonably likely
to
materially affect, your internal control over financial reporting.
This
comment also applies to your Form 10-Q for the fiscal quarter ended
June
30, 2008.
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3.
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We
have considered the revisions you made as reflected in Attachment
A to
your supplemental response letter dated August 5, 2008. Please
tell us why
the columns for Common Stock Shares and Amount do not include any
amounts
for the following transactions that occurred during
2007:
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o
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Sale
of common stock, totaling $871,230
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o
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Issuance
of common stock for interest, totaling
$4,000
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o
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Issuance
of common stock to placement agent for financing services - convertible
debt, totaling $25,000
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4.
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We
have considered the disclosure you intend to modify in response
to prior
comment number five. Please also indicate within this disclosure
that the
shares issued in connection with the merger occurred after the
1-for-7
reverse stock split, if true, or otherwise
advise.
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5.
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We
have reviewed your response to prior comment number 11. Please
indicate
the level of inputs included in your fair value calculation and
provide
all disclosure required by SFAS
157.
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6.
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We
have reviewed your response to prior comment number 12. Please
expand your
response to indicate whether or not the IDS operations will be
considered
discontinued as contemplated by SFAS 144. It is unclear what you
mean in
your response when you indicate that you “will not be utilizing the
business model employed by IDS.” If the amounts being adjusted do not
constitute a discontinued operation, it appears that the pro forma
adjustment may not comply with Article 11 of Regulation
S-X.
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7.
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We
note your disclosure that “Capitalization of computer software development
costs begins upon the establishment of technological feasibility,
as
defined in SFAS 86.” Please confirm, if true, that your capitalization of
software meets both criteria identified in paragraph 5 of SFAS
86 or
otherwise advise.
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8.
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We
note your statement that you periodically perform reviews of the
recoverability of your capitalized software development costs.
Please
confirm, if true, and modify your disclosure accordingly, to state
that
you evaluate your capitalized software costs at each balance sheet
date as
required by paragraph 10 of SFAS 86, or otherwise
advise.
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9.
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Please
continue to monitor your filing to ensure that you comply with
the
requirement to update your financial statements under Rule 3-12
of
Regulation S-X, when necessary.
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10.
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In
addition, please update your consents, if applicable. Refer to
number 23
of the Exhibit Table in Item 601 of Regulation
S-K.
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11.
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To
the extent you make changes in your filings in response to the
comments
above, please make conforming changes to your pending registration
statement and any other related filings, as
applicable.
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Very
truly yours,
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VISUAL
MANAGEMENT SYSTEMS, INC.
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By:
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/s/
James D. Gardner
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Name:
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James
D. Gardner
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Title:
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Chief
Financial Officer
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Brad
Muniz
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Philip
D. Forlenza, Esq.
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