Mail Stop 6010
September 1, 2005
VIA U.S. MAIL AND FAX (651) 452-4948
Mr. John J. Jungbauer
Vice President, Finance and Chief Financial Officer
MedicalCV, Inc.
9725 South Robert Trail
Inver Grove Heights, Minnesota 55077
Re: MedicalCV, Inc.
Form 10-KSB for the year ended April 30, 2005
Filed July 21, 2005
File No. 000-33295
Dear Mr. Jungbauer:
We have reviewed your 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. 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 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
filings.
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 year ended April 30, 2005
Financial Statements
Note 9. Shareholders` Equity (Deficit), page 56
1. We see on April 1, 2005 you issued 18,035 shares of 5% Series A
Convertible Preferred Stock, warrants for the purchase of
27,052,500
shares of common stock to the preferred stock investors and
warrants
for the purchase in the aggregate of 1,635,960 shares of common
stock
to the placement agent and finder. Please tell us how your
accounting for this transaction complied with generally accepted
accounting principles, including Statement 133 and EITF`s 00-27
and
98-5. Please reference the authoritative literature that supports
your conclusions. We are especially interested in how you
addressed
any beneficial conversion feature matters and why you believe a
net
carrying value of zero for the preferred stock in your April 30,
2005
balance sheet is appropriate. We may have further comments after
reviewing your response.
Item 8A. Controls and Procedures, page 63
2. We note your disclosure that management has concluded that the
Company`s disclosure controls and procedures, as of the end of the
period covered by this report, "are effective in timely alerting
them
to material information required to be included in our periodic
filings with the SEC." The language that is currently included
after
the word "effective" in your disclosure appears to be superfluous,
since the meaning of "disclosure controls and procedures" is
established by Rule 13a-15(e) of the Exchange Act. However, if
you
do not wish to eliminate this language, please revise so that the
language that appears after the word "effective" is substantially
similar in all material respects to the language that appears in
the
entire two-sentence definition of "disclosure controls and
procedures" set forth in Rule 13a-15(e). Please revise future
filings to address our concerns.
3. We note on page 63 that your former auditor identified a
material
weaknesses in the design and operation of internal controls
relating
to documenting and reporting international distribution marketing
expenditures and related reimbursement, which relates to the years
ended April 30, 2003 and 2004 and through June 9, 2005. Tell us
the
nature of the material weakness identified and the specific steps
the
company has taken to remediate the weakness. Also, tell us how
the
officers concluded that the controls and procedures were
nonetheless
effective as of April 30, 2005.
As appropriate, please 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 that keys your
responses to our comments and provides any requested supplemental
information. Detailed cover letters greatly facilitate our
review.
Please understand that we may have 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 information required under the Securities
Exchange Act of 1934 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.
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 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 filing or in
response to our comments on your filing.
You may contact Julie Sherman, Staff Accountant, at (202)
551-
3640 or me at (202) 551-3603 if you have any questions regarding
these comments. In this regard, do not hesitate to contact Angela
Crane, Accounting Branch Chief, at (202) 551-3554.
Sincerely,
Jay Webb
Reviewing Accountant
Mr. John J. Jungbauer
MedicalCV, Inc.
September 1, 2005
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