April 5, 2005
via U.S. mail and facsimile
Mr. John Bingman
Chief Financial Officer
CCA Industries, Inc
200 Murray Hill Parkway
East Rutherford, NJ 07073
Re: CCA Industries, Inc.
Form 10-K for the year ended November 30, 2004
File No. 1-31643
Dear Mr. Bingman:
We have reviewed your response letter dated March 20, 2005
and
have the following additional comments. If you disagree, we will
consider your explanation as to why our comment is inapplicable.
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.
Form 10-K for the year ended November 30, 2004
Independent Registered Public Accountant
1. We note that your independent accounting firm has changed
names.
Please tell us what consideration you have given to filing a
report
under Item 4.01 of Form 8-K to disclose this event. We refer you
to
the Commission`s Releases 33-8400 and 33-8400A, effective August
23,
2004 regarding the current Form 8-K requirements.
Management`s Discussion and Analysis, page 11
2. We have reviewed your revised Management`s Discussion and
Analysis
and note that you have made some improvements to your disclosure.
However, in future filings, please continue to enhance your
discussion to include a more in-depth analysis of changes in your
financial position. In addition, please consider adding a
discussion
related to the revenue results by product line.
Item 15. Exhibits, page 29
3. We note your response to our prior comment 11. Please confirm
to
us that you have considered and applied Item 1.01 and 1.02 of Form
8-
K when deciding which of your arrangements constitutes a material
agreement.
Consolidated Statement of Shareholders` Equity, page 6
4. We note in your response to our prior comment 12 that the
common
stock shares issued from stock option grants were "adjusted to
reflect the effect of the 2% stock dividend." It is unclear to us
if
this adjustment measured the stock dividend at fair value. Please
explain.
5. In future filings, please describe the pertinent rights and
privileges of both your Class A and Common Stock.
Note 2. Summary of Significant Accounting Policies, page 8
Advertising Costs, page 11
6. We note your response to our prior comment 14. However, as
noted
in APB 28, advertising costs may only be deferred during an
interim
period if the benefits "clearly extend" beyond the period in which
the expenditures are made. Based on the response you have
provided
as well as the disclosure in your filings, it appears that you do
not
perform a substantive analysis of when the benefits from an
advertising expenditure are expected to be received. Rather, you
expense your total expected advertising costs ratably over the
fiscal
year. In future filings, please expense your advertising
expenditures as they are incurred unless you can provide a
substantive analysis of why the benefits from a given expenditure
would extend beyond the interim period.
Note 5. Intangible Assets, page 12
7. Please provide us with a detailed listing of your individual
trademarks and patents as well as each of their remaining useful
lives. In addition, provide us with amount of revenue generated
from
the sale of their related products during each of the two most
recent
fiscal years and the current interim period.
Note 9. Stock Options, page 21
8. We note in your response to prior comment 16 that you measure
your
volatility based on the stock price over the last 36 months.
Please
tell us what consideration you gave to measuring the volatility
based
on the stock price over the last 5 years which is the expected
life
of your options. Reference paragraph 285 of FAS 123.
9. We note in your response to our prior comment 17 that no new
stock
options were granted in fiscal 2003 and 2002. However, in
accordance
with FAS 123, compensation expense should be recognized over the
vesting period of a given option grant. Therefore, even if no new
options grants existed, we would expect to see a proforma effect
of
recognizing stock compensation under FAS 123 for fiscal 2003 and
2002
related to prior option grants. Please explain.
10. We note your response to our prior comment 18. Please expand
on
the information you have provided us. Tell us whether there was
any
compensation expense recognized when the modifications to the
option
grants were made and if there is any ongoing compensation expense.
In addition, please tell us how your accounting treatment complies
with the guidance set forth in FASB Interpretation No. 44.
Note 12. Commitments and Contingencies, page 27
11. We note your response to our prior comment 20. In future
filings, please consider including more specific information
regarding the royalty costs by licensor. In addition, we
previously
inquired as to where you classified these costs in your income
statement. However, you did not respond to our inquiry. Please
do
so now.
12. In future filings, please ensure that your disclosure is
updated
to include the specific points of the two remaining cases that you
have discussed in your response to our prior comment 21. In
particular, ensure that you update Item 3 of your Form 10-K. In
addition, as each case is resolved, please add that fact to your
disclosures.
13. We note your response to our prior comment 22. For future
compliance with respect to these matters, we refer you to SEC
Staff`s
letter to the Center for Public Company Audit Firms dated February
7,
2005 regarding certain leasing issues.
As appropriate, 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
provides any requested supplemental information. Detailed
response
letters greatly facilitate our review. Please file your response
letter on EDGAR. Please understand that we may have additional
comments after reviewing your responses to our comments.
If you have any questions regarding these comments, please
direct them to Patricia Armelin, Staff Accountant, at (202) 824-
5563,
Nathan Cheney at (202) 942-1804 or, in their absence, to the
undersigned at (202) 824-5373.
Sincerely,
John Cash
Accounting Branch Chief
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Mr. John Bingman
April 5, 2005
Page 1 of 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0404
DIVISION OF
CORPORATION FINANCE