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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB/AAmendment No. 2

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|INTERNATIONAL   SMART SOURCING, INC.                                  
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|(Exact Name   of Small Business Issuer as specified in its charter)   
|                                                                      
|Delaware                                                              
|(State or   other jurisdiction of   incorporation or organization)    
|                                                                      
|320 Broad Hollow Road   Farmingdale, NY 11735                         
|(Address of   principal executive offices)                            
|                                                                      
|(631) 293-4650                                                        
|(Issuers   telephone number)                                         
|                                                                      
|Securities registered under section   12(b) of the Exchange Act: None.
|Securities registered under section   12 (g) of the Exchange Act:     
|Common stock, Par value $.001                                         
|Common Stock Purchase Warrants                                        

Check whether the issuer is not required to file reports pursuant to section 13 or 15(d) of the Exchange Act

|Yes
o | No
x
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Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

|Yes
x | No
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Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. NO K

Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act)

|Yes
o | No
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The issuers net sales for the most recent fiscal year were $12,187,621.

The aggregate market value of the voting stock held by non-affiliates based upon the last sale price on March 24, 2006 was approximately $5,292,000. As of March 24, 2006, the Registrant had 18,899,435 shares of its Common Stock, $0.001 par value, issued and outstanding.

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EXPLANATORY NOTE

This amendment to our annual report on Form 10-KSB is being filed in response to guidance that we have received from staff at the Securities and Exchange Commission during the review of the proxy report originally filed on May 8, 2006. The revisions that are included in this amendment consist of changes to Item 8A, Controls and Procedures.

Except where specifically noted to the contrary, this Form 10-KSB/A does not reflect events occurring after the filing of the original Form 10-KSB, or modify or update the disclosure therein in any way other than as required to reflect the amendments set forth herein.

Pursuant to SEC rules, included as Exhibits 31.1 and 32.1 to this Form 10-KSB/A are currently dated certifications of the Companys President and Acting Chief Financial Officer.

Item 8A. Controls and Procedures.

Evaluation and Disclosure Controls and Procedures

The term disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the Act) is recorded, processed, summarized and reported within time periods specified in SEC rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

The Company has designed its disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports that it files under the Act is recorded, processed, summarized and reported within time periods specified in SEC rules and forms.  The Company has also designed its disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Companys management  to allow timely decisions regarding required disclosures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)).  Based upon that evaluation and the material weaknesses described below, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this Annual Report on Form 10-KSB our disclosure controls and procedures were not effective to enable us to accurately record, process, summarize and report certain information required to be included in the Companys periodic SEC filings within the required time period.  Additionally, the Companys  principal executive officers and principal financial officers have concluded that such controls and
procedures were not effective in ensuring that information required to be disclosed by the Company in the reports that the Company files or submits under the Act is accumulated and communicated to management of the Company, including the  Companys respective principal executive officers and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Controls

We are not an accelerated filer (as defined in the Securities Exchange Act) and are not required to deliver managements report on control over financial reporting until our fiscal year ended December 28, 2007.  The Companys management is responsible for designing and maintaining an effective system of internal control over financial reporting. We designed this system to provide reasonable assurance that assets are safeguarded from loss or unauthorized use, that transactions are recorded in accordance with GAAP under managements direction and that financial records are reliable to prepare financial statements. Nevertheless, we identified certain matters that would constitute material weaknesses (as such term is defined under the Public Company Accounting Oversight Board Auditing Standard No. 2) in our internal controls over financial reporting.

The material weaknesses consist of the lack of necessary accounting resources to ensure consistently complete and accurate reporting of financial information which included an inventory pricing error, sales cutoff adjustment and a nondisclosure of a related party transaction.

During the first quarter of 2005, our independent registered public accountants identified a lack of complete disclosure in reporting of financial information in respect to certain related party transactions.

In 2004, the Company commenced the due diligence process in connection with preliminary discussions to acquire Rencol but ultimately concluded that it was not able to do so. Upon the decision of the Company to terminate discussions to acquire Rencol, a group of investors including Mr. Hale, Mr. Franzone, Mr. Kassel, and Mr. Mandel acquired Rencol through a company named Rencol Acquisitions, LLC.  Rencol Acquisitions, LLC agreed to reimburse the Company for all expenses incurred in the Companys pursuit of the acquisition of Rencol.  In March 2005, Rencol Acquisitions, LLC reimbursed the Company approximately $161,000 for expenses incurred by the Company as a result of its pursuit of the acquisition of Rencol, which was included in the Companys prepaid expenses and other current assets as of December 31, 2004.  While the Company disclosed the financial information surrounding the reimbursement, it did not provide complete disclosure with
respect to the related nature of the transaction.

In addition, during the December 30, 2005 year-end audit, adjustments were identified, which needed to be recorded related to sales cut-off and inventory pricing at the end of the fiscal year.

The Company was carrying an item in inventory at a cost above its net realizable value.  The item was originally purchased in preparation for the renewal of the government contract.  When the contract was not renewed, the Company had no other customers for this particular item.  The Company attempted to sell the item to the recipient of the new contract with the government. The recipient agreed to purchase the item at a substantially lower price.  The Company has recorded an audit adjustment to reduce the item to its net realizable value.

Additionally, the Company had directly shipped products from China to a customer.  It is the general practice of the Company to invoice the customer once it confirms receipt of the goods by the customer.  Due to the holidays, the Company was unable to obtain confirmation from the customer that the goods were received until after the end of the fiscal year.  The Company billed the customer for the shipment in 2006 and an entry was made to record the sale in the proper period.

The Company does not have a full time in house controller or chief financial officer. This decentralizes the financial reporting function and limits the effectiveness of the disclosure control procedures for financial reporting. In order to correct this deficiency in the future, management will seek additional qualified in house accounting personnel to ensure that management will have adequate resources in order to attain complete reporting of financial information disclosures in a timely matter.

We believe that for reasons described above, we will be able to improve our disclosure controls and procedures and remedy the material weaknesses identified above. We believe that these new management plans related to controls and procedures will provide reasonable assurance that assets are safeguarded from loss or unauthorized use, that transactions are recorded in accordance with GAAP under managements direction and that financial records are reliable to prepare financial statements.

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There were no significant changes in our internal controls over financial reporting that occurred during the year ended December 30, 2005 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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SIGNATURES

In accordance with Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-KSB to be signed on its behalf by the undersigned, thereunto duly authorized.

|                | INTERNATIONAL SMART SOURCING, INC.                                                      
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|                |                                                                                         
|August 25, 2006 |                                                                                         
|                |                                                                                         
|                | /s/ David Hale                                                                          
|                |                                                                                         
|                | David Hale                                                                              
|                | Chairman, President   (Principal Executive Officer)   and Acting Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons and in the capacities and on the dates indicated.

|Signature           |  | Title                                                            |  | Date           
|------------------- |  | ---------------------------------------------------------------- |  | ---------------
|                    |  |                                                                  |  |                
|/s/ David Hale      |  | Chairman of the Board of Directors, President                    |  | August 25, 2006
|                    |  | (Principal Executive Officer) and Acting Chief
Financial Officer |  |                
|                    |  |                                                                  |  |                
|/s/ Andrew Franzone |  | President of EHC, Director                                       |  | August 25, 2006
|                    |  |                                                                  |  |                
|                    |  |                                                                  |  |                
|/s/ Harry Goodman   |  | Vice President and Secretary, Director                           |  | August 25, 2006
|                    |  |                                                                  |  |                
|                    |  |                                                                  |  |                
|/s/ David Kassel    |  | Director                                                         |  | August 25, 2006
|                    |  |                                                                  |  |                
|                    |  |                                                                  |  |                
|/s/ Richard Peters  |  | Director                                                         |  | August 25, 2006
|                    |  |                                                                  |  |                
|                    |  |                                                                  |  |                
|/s/ Michael Rakusin |  | Director                                                         |  | August 25, 2006
|                    |  |                                                                  |  |                

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