Mail Stop 6010
September 15, 2005
Marc Benou
President
Conolog Corporation
5 Columbia Road
Somerville, NJ 08876
Re: Conolog Corporation
Registration Statement on Form SB-2
Filed September 2, 2005
File No. 333-128089
Dear Mr. Benou:
We have limited our review of your filing to those issues we
have addressed in our comments. Where indicated, we think you
should
revise your document 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 information so we may better understand
your
disclosure. After reviewing this information, we may 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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form SB-2
Consolidated financial statements
General
1. Please update the audited financial statements in the next
amendment. Refer to Item 310(g)(2) of Regulation S-B. Please be
aware that updated financial statements should be accompanied by
updated Management`s Discussion and Analysis of Financial
Condition
and Results of Operations.
Report of Independent Registered Public Accounting Firm, page F-1
2. We see that you presented an audit report for only the 2004
year
end. The audit report(s) presented in the next amendment must
cover
both annual periods included in the filing. Refer to Item 310(a)
to
Regulation S-B. The updated filing should also include an updated
consent from your independent accountants.
Inventory, page F-9
3. We see the significance of inventory to your total assets and
we
see that $1.4 million of that inventory is classified as non-
current
at July 31, 2004. In a written response, describe the nature and
components of the inventory, with separate analysis for inventory
classified as current versus non-current. Also provide us an
aging
of your inventories as of July 31, 2004 and 2005. Identify and
quantify inventories classified as non-current for more than one
year. Describe the specific plan for realization of the non-
current
inventories. Tell us how you assessed inventory for impairment at
both year ends and provide objective support that the reported
amount
is recoverable. Please detailed and specific in supporting your
conclusions.
4. In light of the significance of the inventory to your assets
and
the classification of a significant amount as non-current, please
expand MD&A to provide expanded detail about the nature,
components
and aging of your inventories. Provide a robust description of
how
you assess inventories for recoverability; including how and when
you
expect to recover the non-current portion. The expanded disclosure
should fully describe why management believes the carrying amount
of
inventory is recoverable.
* * *
As appropriate, please amend your registration statement in
response to these comments. 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 information. Detailed cover
letters greatly facilitate our review. 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 filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness 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 connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Kristin Lochhead at (202) 551-3664 or Gary
Todd
at (202) 551-3605 if you have questions regarding comments on the
financial statements and related matters. Please contact Adelaja
Heyliger at (202) 551-3636 or me at (202) 551-3625 with any other
questions.
Sincerely,
Mary Beth Breslin
Attorney Adviser
cc (via fax): David Manno, Esq.
Milberg Weiss Bershad & Schulman LLP
212.273.4317
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John C. Ferrara
Lynch Corporation
July 28, 2005
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