Mail Stop 0407
March 18, 2005
Via U.S. Mail and Fax (214-382-3631)
Mr. Michael J. Poss
Chief Financial Officer
Lighting Science Group Corporation
2100 McKinney Ave., Suite 1555
Dallas, TX 75201
RE: Lighting Science Group Corporation
Form 10-KSB for the fiscal year ended December 31, 2004
Filed February 9, 2005
File No. 0-20354
Dear Mr. Poss:
We have reviewed the above referenced filings and have the
following comments. We have limited our review to only your
financial statements and related disclosures and will make no
further
review of your documents. As such, all persons who are
responsible
for the adequacy and accuracy of the disclosure are urged to be
certain that they have included all information required pursuant
to
the Securities Exchange Act of 1934. Where indicated, we think
you
should revise 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 detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure. After reviewing this information, we
may
or may not 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 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.
Form 10-KSB for the fiscal year ended December 31, 2004
Financial Statements
1. We note that you have not presented audited pre-emergence
comparative financial statements for the period January 1 through
September 26, 2003. We understand that paragraph 40 of SOP 90-7
states that comparative financial statements that straddle a
confirmation date should not be presented. However, as footnote 2
of
that paragraph indicates, it is the staff`s position to require
the
presentation of predecessor financial statements. We would not
object if you presented those statements in far right hand column
after "cumulative from September 26, 2003 through December 31,
2004,"
separating the predecessor financial statements column with a bold
face line. Please revise or advise.
Note 1: Nature of Business and Summary of Significant Accounting
Policies
Acquisition-related intangible assets
2. We note your intellectual property is being amortized over
twenty
years beginning June 1, 2004. Tell us how you determined its
estimated useful life.
Impairment
3. We note your reorganization value in excess of amounts
allocable
to identifiable assets of $2,793,224 and that in accordance with
FAS
142 the reorganization value is treated the same as goodwill and
is
not amortized. The circumstances giving rise to this
reorganization
value were created from the bankruptcy of the company prior to the
acquisition of the Lighting Science, Inc. We also note that as of
the date of your report, the Company continues with its plans to
develop and sell products based upon the technology acquired in
the
acquisition of Lighting Science. Based on the above information
and
per paragraph 36 of FAS 142, it appears that you have two
reporting
units, one for the company`s assets prior to the acquisition of
Lighting Science, Inc. and one for Lighting Science, Inc assets
acquired on June 1, 2004. Tell us and disclose how you have
tested
reorganization value, specifically addressing the two step
approach,
and the reporting units used. Please revise or advise.
Item 8A. Controls and Procedures
4. We note your statement that your chief executive officer and
your
chief financial officer "have concluded that adequate internal
controls and systems are in place to alert management to matters
that
require disclosure to appropriate reporting authorities." It does
not appear that your certifying officers have reached a conclusion
that your disclosure controls and procedures are effective
(emphasis
added). Please amend your Form 10-KSB to comply with the
disclosure
requirements of Item 307 of Regulation S-B. That is, you must
disclose the conclusion of your certifying officers regarding the
effectiveness of your disclosure controls and procedures as of the
end of the period covered by the report, based upon the evaluation
of
these controls and procedures (emphasis added).
* * * *
As appropriate, please amend your Forms 10-KSB and respond
to
these comments within 10 business days or tell us when you will
provide us with a response. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
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 amendment and responses
to
our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that 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 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 filings; 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 advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
You may contact Inessa Berenbaum, Staff Accountant, at (202)
824-5288 or Carlos Pacho, Senior Assistant Chief Accountant, at
(202)
942-1876 if you have questions regarding comments 1 through 3 on
the
financial statements and related matters. Please contact Reginald
Norris, Staff Attorney, at (202) 942-2875 regarding comment 4, or
me,
at (202) 942-1990 with any other questions.
Sincerely,
Larry Spirgel
Assistant Director
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Mr. Michael J. Poss
Lighting Science Group Corporation
March 18, 2005
Page 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE