SEC Comment Letter for Enveric Biosciences, Inc. (ENVB) (CIK 0000890821) (ENVB) — Feb 11, 2009
Enveric Biosciences, Inc. (ENVB) (CIK 0000890821)
Date: Feb. 11, 2009 · CIK: 0000890821 · Accession: 0000000000-09-007263
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-264600
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Mail Stop 3030 December 11, 2008 Via Facsimile and U.S. Mail Mr. Jay Gottlieb Chairman of the Board and President Spatializer Audio Laboratories, Inc. 410 Park Avenue, 15 th Floor New York, NY 10022 Re: Spatializer Audio Laboratories, Inc. Form 10-K for the Year Ended December 31, 2007 Filed March 31, 2008 Forms 10-Q for the Quarter Ended September 30, 2008, June 30, 2008, and September 30, 2008 File No. 000-264600
Dear Mr. Gottlieb:
We have reviewed your filing and have the following comments. We have limited our review to only your financial st atements and related disclosures and will make no further review of your documents. Where indicated, we think yo u should revise your documents in response to these comments. If you disagree, we will consid er your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necess ary in your explanation. In some of our comments, we may ask you to pr ovide 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 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 thes e 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.
Spatializer Audio Laboratories, Inc. Mr. Jay Gottlieb December 11, 2008 Page 2 Form 10-K for the Year Ended December 31, 2007
Consolidated Statement of Operations, page 20 1. We note from page 23 and throughout the filing that you and your subs idiary sold all of your intellectual property assets to DTS, In c. during fiscal 2007. Please explain to us how you considered the guidance contained in paragraphs 41-43 of SFAS 144 on whether or not you should report the disposal of these assets and their related revenue streams as discontinued operations. Item 9A(T) Controls and Procedures, page 30
2. We note that your management concluded that your disclosure cont rols and procedures were effective as of December 31, 2007 even though you have a lack of segregation of duties which is deemed a material weakness in internal controls. We note similar disclosures within your March 31, 2008, June 30, 2008 and September 30, 2008 Forms 10-Q. Please tell us how management was able to conclude that it s disclosure controls and procedures were effective at December 31, 2007, March 31, 2008, June 30, 2008, and September 30, 2008 considering your lack of segregation of duties. 3. Further to the above, the language that is cu rrently included after th e word “effective” in your disclosure here and within your March 31, 2008, June 30, 2008 and September 30, 2008 Forms 10-Q appears to be superfluous, since the meaning of “disclosure controls and procedures” is established by Rule 13a-15( e) of the Exchange Act. Please remove the language in your future filings or revise the disclosure so that the language that appears after the word “effectiv e” is substantially similar in all material respects to the language that appears in the entire two-sent ence definition of “disclosure controls and procedures” set forth in Rule 13a-15(e).
4. It does not appear that your management has performed its assessment of internal control over financial reporting as of December 31, 2007. Since you were required to file or filed an annual report for the prior fiscal year, it appears you ar e required to report on your management’s assessment of internal contro l over financial reporting. Refer to Item 308(T) of Regulation S-K. If your management has not yet performed its assessment, we ask that you complete your evaluation and amend your filing within 30 calendar days to provide the required management's report on internal control over financial reporting. In performing your eval uation, you may find the following documents helpful:
• the Commission’s release Amendments to Rules Regarding Management’s Report on Internal Control Over Financial Reporting (Securities Act Release 8809/Financial Reporting Release 76). You can find this release at:
Spatializer Audio Laboratories, Inc. Mr. Jay Gottlieb December 11, 2008 Page 3 http://www.sec.gov/rules/final/2007/33-8809.pdf ;
• the Commission’s release Commission Guidance Regarding Management’s Report on Internal Control Over Financial Reporti ng Under Section 13(a ) or 15(d) of the Securities Exchange Act of 1934 (Securities Act Releas e 8010/Financial Reporting Release 77). You can find this release at http://sec.gov/rules/interp/2007/33-8810.pdf ; and
• the “Sarbanes-Oxley Section 404 – A Guid e for Small Business” brochure at: (http://www.sec.gov/info/smallbus/404guide.shtml ).
In addition, please evaluate whether manageme nt’s failure to perform or complete its report on internal control over financial repo rting impacts its conclusions regarding the effectiveness of your disclosure controls and pr ocedures as of the end of the fiscal year covered by the report and, as appropriate, re vise your conclusion of the effectiveness of disclosure controls and procedures at December 31, 2007 . In particular, please consider the definition of disclosure controls and procedures provide d in Rule 13a-15(e), which indicates that effective controls and procedures would ensure that information required to be disclosed by the issuer is recorded, processed, su mmarized and reported within the time periods specified in the Co mmission’s rules and forms. In addition, as discussed in Compliance and Disclosure Interpretation 115.02, which you can find at http://www.sec.gov/divisions/corpf in/guidance/regs-kinterp.htm , failure to file management's report on Internal Control ove r Financial Reporting rendered your annual report materially deficient and also rendere d the company not timel y or current in its Exchange Act Reporting. Finally, we note that you file d your Principal Executive Offi cer and Principal Financial Officer certifications under Item 601(b)(31) of Regulation S-K. Please revise these certifications to include the introductory language of paragraph 4 and the language of paragraph 4(b) of Item 601(b)(31) of Regulation S-K Exhibit 32.1
5. We note that your certification furnished pursuant to Rule 13 a-14(b) of the Exchange Act refers to the fiscal year ended December 31, 2006. We further note that the certifications contained within your March 31, 2008, June 30, 2008, and September 30, 2008 Forms 10-Q all refer to the quarter ended September 30, 2007. Please amend your December 31, 2007 Form 10-K and your March 31, 2008, June 30, 2008, and September 30, 2008 Forms 10-Q to include this certification for the appropriate periods. The amendments should include the entire filing w ith the revised certifications. 6. We also note that this cer tification and your Exhibit 31.1 certification are signed by the chairman of the board and secretary. We furt her note that you disclose on page 30 within your disclosure control and procedures sect ion that the chairman of the board and
Spatializer Audio Laboratories, Inc. Mr. Jay Gottlieb December 11, 2008 Page 4 secretary is the principle executive an d financial officer. Please revise the aforementioned certifications to clearly indica te your chairman of the board of directors and secretary is signing as the principal executive officer and pr incipal financial officer. Form 10-Q for the Quarter Ended September 30, 2008
Note 2. Significant Accounting Policies, page 5
-Recent Accounting Pronouncements, page 7
7. You state that SFAS 157 is e ffective for fiscal years be ginning after November 15, 2007 and interim reporting periods within those year s and that you have not yet determined the impact (if any) that the adoption of this stan dard will have on your financial statements. Please revise your future filings to state, if true, that you adopted SFAS 157 on January 1, 2008 and whether or not the adoption of this standard had a material impact on your financial statements.
Exhibit 31
8. We note here and within your March 31, 2008 and June 30, 2008 Forms 10-Q that the certifications filed as Exhibits 31.1 and 31.2 do not include all of the introductory language of paragraph 4 and the language of paragraph 4(b) requi red by Item 601(b)(31) of Regulation S-K. Please amend these filings to included revised certifications that provide all of the required statements.
As appropriate, please amend the Forms 10- K and 10-Q and respond to these comments within 10 business days or tell us when you will pr ovide us with a response. You may wish to provide us with marked copies of the amendments to expedite our review. Please furnish a cover letter with your amendment that keys your responses to our comments and provides any requested. Detailed cover letters greatly facilitate our review. Please file your cover letter on EDGAR. Please understand that we may have additional comments after reviewing your amendments and responses to our comments.
We urge all persons who are responsible fo r the accuracy and adequ acy of the disclosure in the filing to be certain that the filing includes all information re quired under the Securities Exchange Act of 1934 and that they have provi ded all information investors require for an informed investment decision. Since the compa ny and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the acc uracy and adequacy of the disclosures they have made.
Spatializer Audio Laboratories, Inc. Mr. Jay Gottlieb December 11, 2008 Page 5 In connection with responding to our comme nts, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclo sure in the filing; staff comments or changes to disclosure in re sponse to staff comments do not foreclose the Commission from taking any action with respect to the filing; and 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.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the sta ff of the Division of Corporati on Finance in our review of your filing or in response to our comments on your filing. You may contact Tara Harkins, Staff Accountant, at (202) 551-3639 or me at (202) 551- 3616 if you have questions regarding these comments. In this regard, do no t hesitate to contact Kevin Vaughn, Accounting Branch Chief, at (202) 551-3643. S i n c e r e l y ,
Lynn Dicker Reviewing Accountant
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Mail Stop 3030
December 11, 2008
Via Facsimile and U.S. Mail
Mr. Jay Gottlieb Chairman of the Board and President Spatializer Audio Laboratories, Inc. 410 Park Avenue, 15
th Floor
New York, NY 10022
Re: Spatializer Audio Laboratories, Inc.
Form 10-K for the Year Ended December 31, 2007
Filed March 31, 2008 Forms 10-Q for the Quarter Ended September 30, 2008, June 30, 2008, and September 30, 2008 File No. 000-264600
Dear Mr. Gottlieb:
We have reviewed your filing and have the following comments. We have limited our
review to only your financial st atements and related disclosures and will make no further review
of your documents. Where indicated, we think yo u should revise your documents in response to
these comments. If you disagree, we will consid er your explanation as to why our comments are
inapplicable or a revision is unnecessary. Please be as detailed as necess ary in your explanation.
In some of our comments, we may ask you to pr ovide 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 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 thes e 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.
Spatializer Audio Laboratories, Inc.
Mr. Jay Gottlieb
December 11, 2008 Page 2 Form 10-K for the Year Ended December 31, 2007
Consolidated Statement of Operations, page 20
1. We note from page 23 and throughout the filing that you and your subs idiary sold all of
your intellectual property assets to DTS, In c. during fiscal 2007. Please explain to us
how you considered the guidance contained in paragraphs 41-43 of SFAS 144 on whether
or not you should report the disposal of these assets and their related revenue streams as
discontinued operations.
Item 9A(T) Controls and Procedures, page 30
2. We note that your management concluded that your disclosure cont rols and procedures
were effective as of December 31, 2007 even though you have a lack of segregation of
duties which is deemed a material weakness in internal controls. We note similar
disclosures within your March 31, 2008, June 30, 2008 and September 30, 2008 Forms
10-Q. Please tell us how management was able to conclude that it s disclosure controls
and procedures were effective at December 31, 2007, March 31, 2008, June 30, 2008, and September 30, 2008 considering your lack of segregation of duties.
3. Further to the above, the language that is cu rrently included after th e word “effective” in
your disclosure here and within your March 31, 2008, June 30, 2008 and September 30, 2008 Forms 10-Q appears to be superfluous, since the meaning of “disclosure controls
and procedures” is established by Rule 13a-15( e) of the Exchange Act. Please remove
the language in your future filings or revise the disclosure so that the language that
appears after the word “effectiv e” is substantially similar in all material respects to the
language that appears in the entire two-sent ence definition of “disclosure controls and
procedures” set forth in Rule 13a-15(e).
4. It does not appear that your management has performed its assessment of internal control
over financial reporting as of December 31, 2007. Since you were required to file or filed an annual report for the prior fiscal year, it appears you ar e required to report on your
management’s assessment of internal contro l over financial reporting. Refer to Item
308(T) of Regulation S-K. If your management has not yet performed its assessment, we ask that you complete your
evaluation and amend your filing within 30 calendar days to provide the required
management's report on internal control over financial reporting.
In performing your eval uation, you may find the following documents helpful:
• the Commission’s release Amendments to Rules Regarding Management’s Report on
Internal Control Over Financial Reporting (Securities Act Release 8809/Financial
Reporting Release 76). You can find this release at:
Spatializer Audio Laboratories, Inc.
Mr. Jay Gottlieb
December 11, 2008 Page 3
http://www.sec.gov/rules/final/2007/33-8809.pdf
;
• the Commission’s release Commission Guidance Regarding Management’s Report on
Internal Control Over Financial Reporti ng Under Section 13(a ) or 15(d) of the
Securities Exchange Act of 1934 (Securities Act Releas e 8010/Financial Reporting
Release 77). You can find this release at http://sec.gov/rules/interp/2007/33-8810.pdf
; and
• the “Sarbanes-Oxley Section 404 – A Guid e for Small Business” brochure at:
(http://www.sec.gov/info/smallbus/404guide.shtml ).
In addition, please evaluate whether manageme nt’s failure to perform or complete its
report on internal control over financial repo rting impacts its conclusions regarding the
effectiveness of your disclosure controls and pr ocedures as of the end of the fiscal year
covered by the report and, as appropriate, re vise your conclusion of the effectiveness
of disclosure controls and procedures at December 31, 2007 . In particular, please consider the definition of disclosure controls and procedures provide d in Rule 13a-15(e),
which indicates that effective controls and procedures would ensure that information
required to be disclosed by the issuer is recorded, processed, su mmarized and reported
within the time periods specified in the Co mmission’s rules and forms. In addition, as
discussed in Compliance and Disclosure Interpretation 115.02, which you can find at
http://www.sec.gov/divisions/corpf in/guidance/regs-kinterp.htm
, failure to file
management's report on Internal Control ove r Financial Reporting rendered your annual
report materially deficient and also rendere d the company not timel y or current in its
Exchange Act Reporting. Finally, we note that you file d your Principal Executive Offi cer and Principal Financial
Officer certifications under Item 601(b)(31) of Regulation S-K. Please revise these
certifications to include the introductory language of paragraph 4 and the language of paragraph 4(b) of Item 601(b)(31) of Regulation S-K
Exhibit 32.1
5. We note that your certification furnished pursuant to Rule 13 a-14(b) of the Exchange Act
refers to the fiscal year ended December 31, 2006. We further note that the certifications
contained within your March 31, 2008, June 30, 2008, and September 30, 2008 Forms 10-Q all refer to the quarter ended September 30, 2007. Please amend your December 31, 2007 Form 10-K and your March 31, 2008, June 30, 2008, and September 30, 2008 Forms 10-Q to include this certification for the appropriate periods. The amendments
should include the entire filing w ith the revised certifications.
6. We also note that this cer tification and your Exhibit 31.1 certification are signed by the
chairman of the board and secretary. We furt her note that you disclose on page 30 within
your disclosure control and procedures sect ion that the chairman of the board and
Spatializer Audio Laboratories, Inc.
Mr. Jay Gottlieb
December 11, 2008 Page 4
secretary is the principle executive an d financial officer. Please revise the
aforementioned certifications to clearly indica te your chairman of the board of directors
and secretary is signing as the principal executive officer and pr incipal financial officer.
Form 10-Q for the Quarter Ended September 30, 2008
Note 2. Significant Accounting Policies, page 5
-Recent Accounting Pronouncements, page 7
7. You state that SFAS 157 is e ffective for fiscal years be ginning after November 15, 2007
and interim reporting periods within those year s and that you have not yet determined the
impact (if any) that the adoption of this stan dard will have on your financial statements.
Please revise your future filings to state, if true, that you adopted SFAS 157 on January 1,
2008 and whether or not the adoption of this standard had a material impact on your
financial statements.
Exhibit 31
8. We note here and within your March 31, 2008 and June 30, 2008 Forms 10-Q that the
certifications filed as Exhibits 31.1 and 31.2 do not include all of the introductory
language of paragraph 4 and the language of paragraph 4(b) requi red by Item 601(b)(31)
of Regulation S-K. Please amend these filings to included revised certifications that provide all of the required statements.
As appropriate, please amend the Forms 10- K and 10-Q and respond to these comments
within 10 business days or tell us when you will pr ovide us with a response. You may wish to
provide us with marked copies of the amendments to expedite our review. Please furnish a cover
letter with your amendment that keys your responses to our comments and provides any
requested. Detailed cover letters greatly facilitate our review. Please file your cover letter on
EDGAR. Please understand that we may have additional comments after reviewing your
amendments and responses to our comments.
We urge all persons who are responsible fo r the accuracy and adequ acy of the disclosure
in the filing to be certain that the filing includes all information re quired under the Securities
Exchange Act of 1934 and that they have provi ded all information investors require for an
informed investment decision. Since the compa ny and its management are in possession of all
facts relating to a company’s disclosure, they are responsible for the acc uracy and adequacy of
the disclosures they have made.
Spatializer Audio Laboratories, Inc.
Mr. Jay Gottlieb December 11, 2008 Page 5
In connection with responding to our comme nts, please provide, in writing, a statement
from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclo sure in the filing;
staff comments or changes to disclosure in re sponse to staff comments do not foreclose the
Commission from taking any action with respect to the filing; and
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.
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the sta ff of the Division of Corporati on Finance in our review of your
filing or in response to our comments on your filing.
You may contact Tara Harkins, Staff Accountant, at (202) 551-3639 or me at (202) 551-
3616 if you have questions regarding these comments. In this regard, do no t hesitate to contact
Kevin Vaughn, Accounting Branch Chief, at (202) 551-3643.
S i n c e r e l y ,
Lynn Dicker Reviewing Accountant