SEC Comment Letter for Imunon, Inc. (IMNN) (CIK 0000749647) (IMNN) — Aug 21, 2007
Imunon, Inc. (IMNN) (CIK 0000749647)
Date: Aug. 21, 2007 · CIK: 0000749647 · Accession: 0000000000-07-040906
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-14242
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE Mail Stop 6010 August 21, 2007 Mr. Anthony P. Deasey Vice President, Finance and Chief Financial Officer Celsion Corporation 10220-L Old Columbia Road Columbia, MD 21046
Re: Celsion Corporation Form 10-K as of December 31, 2006 Form 10-Q as of June 30, 2007 File No. 000-14242
Dear Mr. Deasey:
We have reviewed your filings and have the following comments. Where indicated, we think you should re vise your documents in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your explanation. In some of our comments, we may ask you to provi de us with information so we may better understand your disclosure. After reviewing th is information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Anthony P. Deasey Celsion Corporation August 21, 2007 Page 2 Form 10-K as of December 31, 2006
Financial Statements
Note 4, Investments, page F-15
1. We see that the sale of the operations in Canada was 100% financed with a note receivable and that you continue d to advance funds to that op eration after the sale. Please tell us why it was a ppropriate to recognize a ga in on a transaction that appears to have been substantially fina nced by Celsion. In this regard, please fully explain how your accounting considers the substance of the guidance from SAB Topic 5-U.
Form 10-Q as of June 30, 2007
Statements of Operations, page 6
2. In future filings please present income (loss) per share for loss from continuing operations, income (loss) from disconti nued operations and net income (loss). Refer to paragraph 37 to SFAS 128.
Note 5, Note Receivable, page 12
3. We see that you recorded an allowance for the transition services agreement receivable from your former Canadian opera tions. Please tell us why there is no impairment of the note receivable from th e Canadian operations. Please tell us how your accounting considers the guidance from SFAS 114.
Note 6, Advances under the Celsion (Canada) Limited Transitions Services Agreement, page 12
4. We see that you impaired all but $200,000 of the amount due under the transition services agreement. Please further explai n to us why the entire balance is not impaired. In that regard further explain to us how amounts due under the consulting agreement secure repayment of the advances. Also clarify why your rationale does not produce a result where a charge for a doubtful receivable is pushed to a future accounting period.
Note 11, Discontinued Operations, page 14
5. In future filings please disclose a schedul e clarifying the calculation of the gain on disposition of the Prolieve business.
Mr. Anthony P. Deasey Celsion Corporation August 21, 2007 Page 3 6. Disclosure in MD&A indicates that you provided a $5 million liability for potential indemnifications under the Prolie ve transaction. Please tell us and in future filings disclose how you estimated the amount provided. Explain why you believe you have made a reasonable estimate.
7. As a related matter, please explain to us the basis in GAAP for presenting the $5 million as a liability in your balance sh eet. In connection with explaining the accounting rationale, please explain the terms and mechanics of the indemnification arrangement. For instance, explain the extent to which Celsion may be required to make payments under the indemnification. If indemnification obligations would be funded through a reduction of amounts received from Boston Scientific, please explain why the estimated potential reduction should not be presented as a reduction of the related note receivable from Boston Scientific. Also explain why the amount not recognized in earnings should not be characterized as a contingent ga in under paragraph 17 to SFAS 5.
8. We see the qualifying language in the last paragraph of the footnote. Your footnote should include full disclosure about all terms important to an understanding of the arrangement with Boston Scientific and the related accounting. Please disclose a representati on that you have done so or remove the qualifying language from future filings.
************
As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Please furnish a cover letter with your response that provides any requested informati on. Detailed cover lette rs greatly facilitate our review. Please understand that we may have additional commen ts after reviewing your responses to our comments.
We urge all persons who are responsi ble for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed decision. Since the company and its management are in possession of all facts relating to a company’ s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
Mr. Anthony P. Deasey Celsion Corporation August 21, 2007 Page 4 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
the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
You may contact me at (202) 551-3605 or Brian Cascio, Branch Chief, at (202) 551-3676 if you have questions regarding thes e comments. Please do not hesitate to contact Martin James, Senior Assistant Chief Accountant at (202) 551-3671 with any other questions.
Sincerely,
Gary Todd
Review Accountant
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 6010
August 21, 2007
Mr. Anthony P. Deasey
Vice President, Finance and Chief Financial Officer
Celsion Corporation
10220-L Old Columbia Road
Columbia, MD 21046
Re: Celsion Corporation
Form 10-K as of December 31, 2006
Form 10-Q as of June 30, 2007
File No. 000-14242
Dear Mr. Deasey:
We have reviewed your filings and have the following comments. Where
indicated, we think you should re vise your documents in response to these comments. If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary. Please be as deta iled as necessary in your explanation. In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure. After reviewing th is information, we may raise additional
comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our
review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Anthony P. Deasey
Celsion Corporation
August 21, 2007 Page 2
Form 10-K as of December 31, 2006
Financial Statements
Note 4, Investments, page F-15
1. We see that the sale of the operations in Canada was 100% financed with a note
receivable and that you continue d to advance funds to that op eration after the sale.
Please tell us why it was a ppropriate to recognize a ga in on a transaction that
appears to have been substantially fina nced by Celsion. In this regard, please
fully explain how your accounting considers the substance of the guidance from SAB Topic 5-U.
Form 10-Q as of June 30, 2007
Statements of Operations, page 6
2. In future filings please present income (loss) per share for loss from continuing
operations, income (loss) from disconti nued operations and net income (loss).
Refer to paragraph 37 to SFAS 128.
Note 5, Note Receivable, page 12
3. We see that you recorded an allowance for the transition services agreement receivable from your former Canadian opera tions. Please tell us why there is no
impairment of the note receivable from th e Canadian operations. Please tell us
how your accounting considers the guidance from SFAS 114.
Note 6, Advances under the Celsion (Canada) Limited Transitions Services Agreement,
page 12
4. We see that you impaired all but $200,000 of the amount due under the transition services agreement. Please further explai n to us why the entire balance is not
impaired. In that regard further explain to us how amounts due under the
consulting agreement secure repayment of the advances. Also clarify why your
rationale does not produce a result where a charge for a doubtful receivable is
pushed to a future accounting period.
Note 11, Discontinued Operations, page 14
5. In future filings please disclose a schedul e clarifying the calculation of the gain on
disposition of the Prolieve business.
Mr. Anthony P. Deasey
Celsion Corporation
August 21, 2007 Page 3
6. Disclosure in MD&A indicates that you provided a $5 million liability for
potential indemnifications under the Prolie ve transaction. Please tell us and in
future filings disclose how you estimated the amount provided. Explain why you believe you have made a reasonable estimate.
7. As a related matter, please explain to us the basis in GAAP for presenting the $5
million as a liability in your balance sh eet. In connection with explaining the
accounting rationale, please explain the terms and mechanics of the
indemnification arrangement. For instance, explain the extent to which Celsion
may be required to make payments under the indemnification. If indemnification obligations would be funded through a reduction of amounts received from
Boston Scientific, please explain why the estimated potential reduction should not
be presented as a reduction of the related note receivable from Boston Scientific. Also explain why the amount not recognized in earnings should not be characterized as a contingent ga in under paragraph 17 to SFAS 5.
8. We see the qualifying language in the last paragraph of the footnote. Your
footnote should include full disclosure about all terms important to an understanding of the arrangement with Boston Scientific and the related accounting. Please disclose a representati on that you have done so or remove the
qualifying language from future filings.
************
As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response. Please furnish a cover letter with your
response that provides any requested informati on. Detailed cover lette rs greatly facilitate
our review. Please understand that we may have additional commen ts after reviewing
your responses to our comments.
We urge all persons who are responsi ble for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed decision. Since the company and its management are in
possession of all facts relating to a company’ s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the
filing;
Mr. Anthony P. Deasey
Celsion Corporation
August 21, 2007 Page 4
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
the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
You may contact me at (202) 551-3605 or Brian Cascio, Branch Chief, at (202)
551-3676 if you have questions regarding thes e comments. Please do not hesitate to
contact Martin James, Senior Assistant Chief Accountant at (202) 551-3671 with any
other questions.
Sincerely,
Gary Todd
Review Accountant