SecProbe.io

CORRESP
1
filename1.htm

SEC Response Letter dated July 7, 2005

[Millennium
Cell Letterhead]

July 7,
2005

CONFIDENTIAL

Ms.
Angela Crane

Securities
and Exchange Commission

Division
of Corporate Finance

Mail Stop
6010

450 Fifth
Street, N.W.

Washington,
D.C. 20549

Millennium
Cell Inc.--

Annual
Report on Form 10-K for the fiscal year ended December 31, 2004;
and

Current
Report on Form 8-K filed on May 2, 2005

Dear Ms.
Crane:

We are
writing in response to the comments of the staff (the “Staff”) of the
Securities and Exchange Commission (the “Commission”)
contained in your letter to Millennium Cell Inc., a Delaware corporation (the
“Company”), dated
June 28, 2005 (the “Comment
Letter”),
regarding the above-referenced periodic reports. For the convenience of the
Staff, we have restated the contents of the Comment Letter and responded to the
comments in the order set forth therein.

Form
10-K for the year ended December 31, 2004

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 9

    1.

      We
      see that you have elected to present stock based compensation expense as a
      separate line item on the face of the income statement. In view of the
      relative significance of this item, please expand you discussions of the
      various expense categories to also discuss variances in line items
      inclusive of related stock compensation charges in future
      filings.

Response: The
Company notes the Staff’s comment and will draft future filings to include an
expanded discussion in more detail of the stock based compensation expense
categories, including a discussion regarding variances in line items inclusive
of related stock compensation charges.

Item
9-A - Controls and Procedures, page 17

    2.

      We
      note that your certifying officers disclose their conclusions as to the
      effectiveness of your disclosure controls and procedures “within 90 days
      prior to the filing date of this annual report.” However, Item 307 of
      Regulation S-K requires that your certifying officers disclose their
      conclusions regarding the effectiveness of your disclosure controls and
      procedures “as of the end of the period covered by the report.” Please
      revise future filings accordingly.

Response: The
Company notes the Staff’s comment and in future periodic report filings will
cause its certifying officers to disclose their conclusions as to the
effectiveness of the Company’s disclosure controls and procedures as of the end
of the period covered by the applicable report.

Consolidated
Statements of Operations, page F-4

    3.

      We
      note you present stock based compensation expense as a separate line item
      on the face of your statement of operations. Revise to disclose how it is
      allocated to other line items right on the face of the statement. This can
      be done by parenthetically noting with the appropriate line item, like
      G&A, the amount of stock compensation charge that is excluded because
      it’s presented as a separate line item. Similar disclosures should
      accompany your Selected Financial Data presentation on page
      9.

Response:
The
Company notes the Staff’s comment and in future filings, the Company will note
the amount allocated to each department.

    4.

      As
      a related matter, we assume that none of the stock compensation charge
      would be allocated to cost of goods sold. If our assumption is not
      correct, the portion of the charge should be reclassified to the cost of
      sales section of the income statement. We will not object if you wish to
      break it out as a separate line item within that section. Please advise or
      revise in future filings.

Response:
Management has determined that none of the Company’s stock compensation charges
are required to be allocated to cost of goods sold.

    5.

      Please
      revise future filings to show all equity issuances since inception as
      required by paragraph 11(d) of SFAS 7. Please disclose the following for
      each issuance:

  The
  date and number of shares of stock or other equity securities issued for cash
  or other consideration;

  The
  dollar amounts assigned to the consideration received;
  and

  The
  basis for assigning amounts to any non-cash consideration
  received.

Response: The
Company notes the Staff’s comment and the Company will draft future filings in a
manner that discloses the requested information for all equity issuances since
inception.

Form
8-K filed May 2, 2005

    6.

      We
      note that you present several non-GAAP measures, including “loss from
      operations - adjusted,” “net loss - adjusted” and “net loss per share -
      adjusted,” which have not been described to investors. Please note that
      Instruction 2 to Item 2.02 of Form 8-K requires that when furnishing
      information under this item you must provide all the disclosures required
      by paragraph (c)(1)(i) of Item 10 of Regulation S-K. Please revise your
      Form 8-K in future periods to include a discussion, in sufficient detail,
      of the following for each
      non-GAAP measure:

    ·

      The
      substantive reasons why management believes each non-GAAP measure provides
      useful information to investors;

    ·

      The
      specific manner in which management uses each non-GAAP measure to conduct
      or evaluate its business;

    ·

      The
      economic substance behind management’s decision to use each measure; and

    ·

      The
      material limitations associated with the use of each non-GAAP measure as
      compared to the use of the most directly comparable GAAP measure and the
      manner in which management compensates for these limitations when using
      the non-GAAP measure.

Response: The
Company notes the Staff’s comment and the Company will draft future filings to
include the requested information in instances in which the Company is
disclosing non-GAAP measures.

In
addition, please note that the Company acknowledges that it is responsible for
the adequacy and accuracy of the disclosure in the filings; that Staff comments
or changes to disclosure in response to Staff comments in the filings reviewed
by the Staff 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 law of the United States.

          Please do not hesitate to contact
me ((732) 542-4000) should you wish to discuss any matter
further.

Very
truly yours,

/s/ John
D. Giolli, CPA

Chief
Financial Officer

Copies
to:

Mr. Eric
Atallah

Securities
and Exchange Commission

Division
of Corporate Finance

Mail Stop
6010

450 Fifth
Street, N.W.

Washington,
D.C. 20549