SEC Comment Letter for Sonoma Pharmaceuticals, Inc. (SNOA) (CIK 0001367083) (SNOA) — Dec 17, 2008
Sonoma Pharmaceuticals, Inc. (SNOA) (CIK 0001367083)
Date: Dec. 17, 2008 · CIK: 0001367083 · Accession: 0000000000-08-062013
AI Filing Summary & Sentiment
Reasoning
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE Mail Stop 3030 December 17, 2008 Mr. Robert Miller Chief Financial Officer Oculus Innovative Sciences, Inc. 1129 N. McDowell Blvd. Petaluma, CA 94954 RE: Oculus Innovative Sciences, Inc. Form 10-K for the fiscal year ended March 31, 2008 Filed May June 13, 2008 File No. 1-33216
Dear Mr. Miller: We have reviewed your filing and have the following comments. Where indicated, we think you should revise your document in future filings 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. Pl ease be as detailed as necessary in your explanation. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. After reviewing this 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 on any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Robert Miller Oculus Innovative Sciences, Inc. December 17, 2008 Page 2 Form 10-K for the Period Ended March 31, 2008
Consolidated Financial Statements, page 63
Notes to Consolidated Financial Statements, page 71
Note 3 Summary of Significant Accounting Policies, page 73
Foreign Currency Reporting, page 77
1. We note you recorded foreign currenc y gains of $2,594,000 for the year ended March 31, 2008 in other income that relate to working capital loans you made to your foreign subsidiaries. You see you indicate these loans will be paid back to the Company in the future when subsidiaries begin to generate cash. Please tell us how the inclusion of this gain in determining net income complies with paragraphs 15 and 20 of FAS 52 or othe r U.S. GAAP. We note the Company subsequently renegotiated the loans a nd effective April 1, 2008 classifies exchange gains and losses on the loans as other comprehensive income and loss. Form 10-Q for the Period Ended September 30, 2008
Condensed Consolidated Statements of Operations, page 4
2. We refer to the $217,000 loss on disposal of manufacturing equipment presented as a component of Other Income (Expens e), net in the six month period ended September 30, 2008. We generally believe that gains and losse s resulting from write-down or sale of assets previously us ed in operations should be classified as operating items in the income statement. This treatment appears consistent with the guidance prescribed by SFAS 144, as we ll. Accordingly, in future filings please classify these items in the operati ng section of the income statement, or advise us why you consider the present classification appropriate.
Note 1. Organization and Summary of Si gnificant Accounting Policies, page 6
Foreign Currency Reporting, page 6
3. We note disclosures on page 7 that “Foreign currency transaction gains (losses) relate primarily to working capital loans that the Company has made to its foreign subsidiaries. The Company record ed foreign currency transaction gains (losses) of $(60,000) and $809,000 for the six months ended September 30, 2008 and 2007, respectively. The related gains (losses) were recorded in other income (expense) in the accompanying condensed cons olidated statements of operations .
Robert Miller Oculus Innovative Sciences, Inc. December 17, 2008 Page 3 Loans made to subsidiaries OTM and OIS Europe will be paid back to the Company in the future when the subsidiaries begin to generate cash.” We also noted disclosures on page 7 that “In acco rdance with the provisions of SFAS 52, if it is determined that an intercompany lo an will not be repaid in the foreseeable future, foreign exchange gains and losses related to the translation of the loans from local currency to U.S. Dollars shoul d be classified as other comprehensive income and loss. The Company believes that given the inability to foresee settlement of the loans, it is appropriate to record the exchange gains and losses related to these loans in other comprehensive income and loss .” Please tell us how you have presented foreign currency tr ansaction gains (lo sses) related to working capital loans that you have made to your foreign subsidiaries in your September 30, 2008 and 2007 financial statements. Revise your disclosures in future filings to clearly describe ho w you have presented and accounted for the referenced foreign currency transac tions in your financial statements.
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 keys your responses to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please submit your cover letter on EDGAR. Pleas e understand that we may ha ve additional comments after reviewing your responses to our comments.
We urge all persons who are responsible 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 invest ment decision. Since the company and its management are in possession of all facts re lating 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 filings; 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.
Robert Miller Oculus Innovative Sciences, Inc. December 17, 2008 Page 4 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 Dennis Hult, Staff Accountant, at (202) 551-3618 or myself if you have questions regarding comments on the financial statements and related matters. Please contact me at (202) 551-3603 with any other questions. In this regard, do not hesitate to contact Angela J. Crane, Accounting Branch Chief, at (202) 551-3554. S i n c e r e l y , J a y W e b b Reviewing Accountant
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 3030
December 17, 2008
Mr. Robert Miller Chief Financial Officer Oculus Innovative Sciences, Inc. 1129 N. McDowell Blvd. Petaluma, CA 94954
RE: Oculus Innovative Sciences, Inc.
Form 10-K for the fiscal year ended March 31, 2008
Filed May June 13, 2008
File No. 1-33216
Dear Mr. Miller:
We have reviewed your filing and have the following comments. Where
indicated, we think you should revise your document in future filings 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. Pl ease be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. After reviewing this 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 on any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Robert Miller
Oculus Innovative Sciences, Inc.
December 17, 2008 Page 2 Form 10-K for the Period Ended March 31, 2008
Consolidated Financial Statements, page 63
Notes to Consolidated Financial Statements, page 71
Note 3 Summary of Significant Accounting Policies, page 73
Foreign Currency Reporting, page 77
1. We note you recorded foreign currenc y gains of $2,594,000 for the year ended
March 31, 2008 in other income that relate to working capital loans you made to
your foreign subsidiaries. You see you indicate these loans will be paid back to
the Company in the future when subsidiaries begin to generate cash. Please tell
us how the inclusion of this gain in determining net income complies with paragraphs 15 and 20 of FAS 52 or othe r U.S. GAAP. We note the Company
subsequently renegotiated the loans a nd effective April 1, 2008 classifies
exchange gains and losses on the loans as other comprehensive income and loss.
Form 10-Q for the Period Ended September 30, 2008
Condensed Consolidated Statements of Operations, page 4
2. We refer to the $217,000 loss on disposal of manufacturing equipment presented
as a component of Other Income (Expens e), net in the six month period ended
September 30, 2008. We generally believe that gains and losse s resulting from
write-down or sale of assets previously us ed in operations should be classified as
operating items in the income statement. This treatment appears consistent with
the guidance prescribed by SFAS 144, as we ll. Accordingly, in future filings
please classify these items in the operati ng section of the income statement, or
advise us why you consider the present classification appropriate.
Note 1. Organization and Summary of Si gnificant Accounting Policies, page 6
Foreign Currency Reporting, page 6
3. We note disclosures on page 7 that “Foreign currency transaction gains
(losses) relate primarily to working capital loans that the Company has made to its
foreign subsidiaries. The Company record ed foreign currency transaction gains
(losses) of $(60,000) and $809,000 for the six months ended September 30, 2008
and 2007, respectively. The related gains (losses) were recorded in other income
(expense) in the accompanying condensed cons olidated statements of operations .
Robert Miller
Oculus Innovative Sciences, Inc.
December 17, 2008 Page 3
Loans made to subsidiaries OTM and OIS Europe will be paid back to the Company in the future when the subsidiaries begin to generate cash.” We also noted disclosures on page 7 that “In acco rdance with the provisions of SFAS 52,
if it is determined that an intercompany lo an will not be repaid in the foreseeable
future, foreign exchange gains and losses related to the translation of the loans
from local currency to U.S. Dollars shoul d be classified as other comprehensive
income and loss. The Company believes that given the inability to foresee
settlement of the loans, it is appropriate to record the exchange gains and losses
related to these loans in other comprehensive income
and loss .” Please tell us
how you have presented foreign currency tr ansaction gains (lo sses) related to
working capital loans that you have made to your foreign subsidiaries in your
September 30, 2008 and 2007 financial statements. Revise your disclosures in
future filings to clearly describe ho w you have presented and accounted for the
referenced foreign currency transac tions in your financial statements.
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 keys your responses to our comments and provides any requested
information. Detailed cover letters greatly facilitate our review. Please submit your
cover letter on EDGAR. Pleas e understand that we may ha ve additional comments after
reviewing your responses to our comments.
We urge all persons who are responsible 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 invest ment decision. Since the company and its
management are in possession of all facts re lating 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
filings;
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.
Robert Miller
Oculus Innovative Sciences, Inc. December 17, 2008 Page 4
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 Dennis Hult, Staff Accountant, at (202) 551-3618 or myself if
you have questions regarding comments on the financial statements and related matters.
Please contact me at (202) 551-3603 with any other questions. In this regard, do not
hesitate to contact Angela J. Crane, Accounting Branch Chief, at (202) 551-3554.
S i n c e r e l y , J a y W e b b Reviewing Accountant