SEC Comment Letter for PHYTOMEDICAL TECHNOLOGIES INC (CIK 0001002422) — Sep 6, 2005
PHYTOMEDICAL TECHNOLOGIES INC (CIK 0001002422)
Date: Sept. 6, 2005 · CIK: 0001002422 · Accession: 0000000000-05-046030
AI Filing Summary & Sentiment
File numbers found in text: 000-28790
Referenced dates: August 10, 2005, August 24, 2005
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<TYPE>LETTER
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<FILENAME>filename1.txt
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Via Facsimile and U.S. Mail
Mail Stop 6010
September 6, 2005
Mr. Derek Cooper
Director, Secretary, Treasurer, and Principal Financial Officer
Phytomedical Technologies, Inc.
1628 West 1st Avenue, Suite 216
Vancouver, British Columbia V6J 1G1
CANADA
Re: Phytomedical Technologies, Inc.
Form 10-KSB for the Fiscal Year Ended December 31, 2004
Filed March 31, 2005
File No. 000-28790
Dear Mr. Cooper:
We have reviewed your response letter dated August 24, 2005
to
our comment letter dated August 10, 2005 and have the following
comments. We have limited our review of the above referenced
filing
to only those issues addressed. In our comments, we ask you to
provide us with supplemental information so we may better
understand
your disclosure.
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 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.
Item 7. Financial Statements
Notes to Consolidated Financial Statements
7. Option Purchase and Rights Agreement
1. In your response to our prior comment number one, you noted
that
you did not account for the options to purchase shares of stock of
your subsidiary, PhytoMedical Technologies Corporation, granted to
NYU and the NYU scientist/inventor because the subsidiary is: a
holding company only; has no assets; and, is not publicly traded
and
cannot be fairly valued by way of market capitalization. Please
clarify why you appear to believe that these options had no value.
In so doing, please also address each of the following:
* Please explain why the options were granted if they had no value
and whether they represented part of the consideration for the
license being granted.
* While you may not be able to value the subsidiary based on its
own
market capitalization, it would appear to still have a value.
Please
tell us what other valuation methods you employed to determine
that
it had no value.
* Based on your disclosure, it appears that the subsidiary is the
entity that entered into the license agreement. Please tell us
why
the license would not represent an asset, for purposes of
ascribing
value to the options granted, of the subsidiary.
* We noted that the subsidiary agreed to reimburse NYU for its
patent
costs incurred to date and to pay royalties on sales of products
and
sublicense fees. Please clarify how a holding company with no
assets
would ultimately be able to satisfy these obligations.
* Under Item 6, we noted that the options were for a combined
equity
position of 25% in the subsidiary and the terms of the options
contemplated investment by other equity holders. Please tell us
how
you anticipate someone investing in a holding company with no
assets
or explain where it would derive its value.
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
letter that keys your responses to our comments and provide the
requested information. Detailed letters greatly facilitate our
review. Please file your letter on EDGAR under the form type
label
CORRESP. Please understand that we may have additional comments
after reviewing your responses to our comments.
You may contact Tabatha Akins, Staff Accountant, at (202)
551-
3658 or Oscar M. Young, Jr., Senior Accountant, at (202) 551-3622
if
you have questions regarding the comments. Please contact me at
(202) 551-3679 with any other questions.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief
Accountant
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Mr. Derek Cooper
Phytomedical Technologies, Inc.
September 6, 2005
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