Mail Stop 6010
May 5, 2006
Terrance J. Bruggeman
Executive Chairman
Somanta Pharmaceuticals, Inc.
19200 Von Karman Avenue, Suite 400
Irvine, California 92612
Re: Somanta Pharmaceuticals, Inc.
Amendment No. 1 to Registration Statement on Form SB-2
Filed April 11, 2006
File No. 333-132176
Dear Mr. Bruggeman:
We have reviewed your filing and have the following
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.
Registration Statement Cover Page
1. Please revise the fee table to reflect your current offering
size.
Prospectus Cover Page
2. We note your response to prior comment 5 from our letter dated
March 29, 2006 and reissue it as it relates to shares beneficially
owned by SCO Capital Partners LLC. In the alternative, please
provide us with a detailed legal analysis of why you believe the
shares offered by SCO Capital Partners LLC should not be deemed
offered "by or on behalf of the issuer."
We are dependent on licenses, page 10
3. We note that the disclosure in response to comment 17 provides
only an example of why you do not know whether your licenses are
enforceable. With a view toward disclosure, please tell us the
other
reasons for your uncertainty.
Determination of Offering Price, page 17
4. We note your disclosure that you have no agreement with the
selling stockholders with respect to the offering price. If so,
please tell us how you know your disclosure that they will sell at
60
cents per share is accurate.
Selling Stockholders, page 18
5. We note your response to prior comment 21. Any selling
stockholder that is a broker-dealer must be identified in the
registration statement as an underwriter. For any selling
stockholder that is affiliate of a broker-dealer, revise the
prospectus to include the representations included in your
response
to prior comment 21.
6. Please disclose your net proceeds from the January 2006
transaction.
7. We note your response to prior comment 25. Please revise your
disclosure to include the relationships with SCO Financial Group
LLC
mentioned on page F-36.
8. Please reconcile the ownership disclosure in your selling
stockholders` table with the information in your beneficial
ownership
table on page 54. For example, we note the differences in
disclosure
regarding Lake End`s ownership.
Plan of Distribution, page 23
9. Your response to prior comment 26 does not clarify how the
events
in the disclosure (now appearing in the last paragraph on page 23)
would not be "additional or changed material information on the
plan
of distribution" as contemplated by Regulation S-B Item
512(a)(1)(iii). Therefore we reissue the comment.
Business, page 25
10. We note your response to prior comment 32. Please further
revise
your disclosure to address the agreement with Cypomics, Ltd.
referenced on page F-18.
11. We note your responses to prior comments 41, 42, 47, 48 and
66.
Please note that required or material information must be
disclosed,
even if confidential. See section II.B.2 of Staff Legal Bulletin
No.
1 (February 28, 1997), available on our web site at
http://www.sec.gov/interps/legal.shtml. We therefore reissue the
prior comments.
Products in Academic Investigator-Sponsored Clinical Development,
page 29
12. We note your response to prior comment 39 and reissue the
comment
in part. Please provide the specific disclosure requested and
avoid
general statements regarding geographic scope, nature and duration
of
material patents.
Phoenix, page 29
13. We note your response to prior comment 40. Please clarify
what
you mean by the statement that none of the patients "have suffered
any adverse irreversible side effects." Were there material side
effects that were reversed?
Sodium Phenylbutyrate, page 31
14. Given that your disclosure in response to comments 45 and 46
and
elsewhere in the discussion of your products cites expert reports,
please file the consents required by Rule 436.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 37
Results of Operations, page 38
Fiscal Year Ended April 30, 2005 Compared With Fiscal Year Ended
April 30, 2004, page 41
15. Please refer to prior comment 55. Please revise the filing to
clearly disclose the change in classification of your in-license
fees
in fiscal year 2006. MD&A should clearly discuss any factors
affecting the comparability between periods, such as the change in
classification of a primary expense.
16. We reissue comment 56 which sought specific information
regarding
known revenue or obligations to occur in upcoming periods.
17. We note your response to prior comment 57 and reissue the
comment. Please address this comment in all instances in the MD&A
section where you refer to consulting expenses and include the
duration as well as the nature and scope of consulting services.
Employees, page 42
18. Please clarify the nature of the facilities you cite. Are
these
rented offices in a commercial office complex?
Management, page 46
19. Please reconcile your disclosure that Mr. Epenetos has been
your
CEO since 2001 with the disclosure about your management in your
last
Form 10-KSB. In this regard, please:
* ensure that the references to the entities involved in your
history
are accurate throughout the document; and
* note your obligation to disclose compensation information for
each
person who acted as CEO during the last completed fiscal year.
20. Please disclose the business of Reventures Operating Co., and
describe Ms. Van Sleen`s role as a "principle."
Certain Relationships and Related Transactions, page 53
21. Please disclose in this section the amounts paid during each
of
the last two years under each of the agreements mentioned in this
section.
22. Please reconcile the amounts disclosed it this section with
the
amounts disclosed in Note 8 to your latest unaudited financial
statements.
23. Please include all applicable related-party transactions
during
the past two years, even if the parties who were related at the
time
of the transaction are no longer related to you. For example, we
note the exchange transaction mentioned on page II-2.
Security Ownership, page 54
24. Please identify the individuals who beneficially own the
shares
held in the name of the entities disclosed. For example, we note
the
disclosure regarding Walbrook.
25. Shares that a stockholder beneficially owns must be included
in
the table, even if the stockholder disclaims beneficial ownership.
For example, note your footnote (6).
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure, page 59
26. Please refer to prior comment 96. Please obtain and include a
letter from Meril Solomon Bertiger & Gutilla, P.C. that is filed
an
exhibit to this filing that is addressed to us stating whether it
agrees with the statements made by you in the filing and, if not,
stating the respects in which your former accountant does not
agree.
Refer to the guidance in Item 304(a)(3) of Regulation S-B.
Somanta Incorporated Consolidated Financial Statements, page F-1
Note 2. Significant Accounting Policies, page F-12
- -Translation of Foreign Currency in Financial Statements, page F-
13
27. We note your response to prior comment 78. We note that you
changed your functional currency as a result of the transaction
with
Bridge Oncology, a US-based corporation, in August of 2005.
Please
note that if the functional currency of a foreign entity changes
from
the currency of its country to the currency of its parent
company`s
country, the translation adjustments that apply to the entity and
that have been accumulated in other comprehensive income in prior
years should be retained in that account. In this regard, please
tell us why you have recorded an adjustment to reverse the
translation adjustments that apply to Somanta that have been
accumulated in other comprehensive income in prior years.
Alternatively, revise to remove the adjustment to accumulated
other
comprehensive loss relating to the foreign currency translation
adjustment.
Note 5. Related Party Transactions, page F-15
28. You state that in connection with the agreement with Virium
Pharmaceuticals in February 2005, you paid Virium $50,000. Please
tell us and revise the filing to clarify when this payment was
made.
In this regard, tell us why you have labeled this expense as
unaudited.
Note 8. Stockholder`s Transactions, page F-16
29. Please refer to prior comment 83. We continue to note your
disclosure that you determined the fair market value of the stock
during the year ended April 30, 2005 was $1.23 per share. You
state
that this was based on the most recent value at which shares were
being sold to unaffiliated investors. However, we note that
during
the year ended April 30, 2005, you sold 374,074 shares of common
stock to individual investors at approximately $1.33 per share.
Please clarify for us and revise your filing to explain why you
believe the fair market value was $1.23 per share rather than the
$1.33 per share evidenced by recent sales of stock to individual
investors. Within your discussion, please explain if the 374,074
shares sold in fiscal 2005 were sold to affiliated or unaffiliated
investors.
30. Please refer to prior comments 84, 86, 98, 99, 101, and 105.
We
note from you responses to these comments that you determined the
fair value of your common stock to be $.60 and that you used this
fair value within the following situations:
* The determination of the fair value of your stock options issued
to
purchase 406,670 shares of common stock during the six months
ended
October 31, 2005;
* The determination of the fair value of your stock options issued
to
purchase 1,366,485 shares of common stock during the three months
ended January 31, 2006;
* The determination of the fair value of the common stock issued
in
connection with your licensing agreements disclosed in Notes 10
and
11;
* The calculation of the beneficial conversion feature related to
your $1.25 million convertible note that was issued during
November
2005, including the determination of the number of shares into
which
the note is convertible;
* The determination of the fair value of your warrants issued to
purchase 866,534 shares of common stock to SCO Capital Partners;
* The calculation of the deemed dividend related to your Series A
preferred stock issued in January 2006;
* The determination of the fair value of your warrants issued to
purchase 4,938,598 shares of common stock to the shareholders in
the
private placement transaction; and
* The determination of the fair value of your warrants issued to
purchase 987,720 shares of common stock to the placement agent in
the
private placement transaction.
You state that the fair value of $.60 per share is based on the
conversion price of your Series A preferred stock. However, on
page
14, you state that the initial offering price of $.60 per share of
common stock is not based upon earnings or operating history and
does
not reflect your actual value. We also note that based on stock
sales in fiscal year 2005, the fair value of your common stock at
that time was approximately $1.33 per share. Please note that
conversion prices of preferred stock to common stock negotiated in
private placement transactions are not necessarily indicative of
the
fair value of your common stock. Please revise to provide an
estimate of the fair value of your common stock at the time of
each
of the aforementioned transactions or provide a substantive
analysis
showing why the fair value of your common stock was $.60 at the
time
of each of the aforementioned transactions.
31. We note your response to prior comment 85. We have the
following
additional comments. Please tell us and revise your filing to
address the following:
* Clarify for us the purpose of this warrant issuance. For
example,
tell us and revise the filing to disclose if the warrants were
issued
in exchange for goods or services or for another reason.
* If these warrants were issued for goods or services, please tell
us
and revise your filing to explain why you did not record the
warrant
issuance based on the fair value of the services received in
accordance with paragraph 8 of SFAS 123 and EITF 96-18.
* Please explain why used an expected useful life of zero within
your
Black Scholes valuation model since the warrants can be exercised
over a five year period.
* Confirm to us whether the fair market value used in the Black
Scholes calculation was $.60 per share. If so, please revise this
calculation as appropriate in response to our other comments
above.
Note 10. Significant Contracts and Licenses, page F-18
32. Please refer to prior comment 86. We continue to request that
you revise this note and Note 11 to disclose the fees paid in cash
and stock in connection with these license transactions.
Note 11. Subsequent Events, page F-20
Share Exchange Agreement and Plan of Merger Agreement, page F-22
33. We note your response to prior comment 87. You state that the
total of 13,697,834 shares outstanding consists of 5,832,834
shares
of common stock issued to the prior stockholders of Somanta
Limited
and 7,865,000 shares of common stock held by the prior holders of
Bridge Oncology Products, Inc. However, we note on page F-58 that
Bridge Oncology Products, Inc. had only 1,000 shares of common
stock
outstanding at June 30, 2005. Please tell us and revise your
disclosures to explain why the Bridge Oncology`s outstanding
shares
increased from 1,000 at June 30, 2005 to 7,865,000.
Somanta Pharmaceuticals, Inc. Condensed Financial Statements as of
and for the Nine Months Ended January 31, 2006
Note 5. Private Placement, page F-37
34. Please refer to prior comments 102 and 103. We note from
your
response that you have recorded and classified the maximum
penalties
as mezzanine since the registration of your shares is outside of
your
control pursuant to paragraph 9 of EITF D-98. Please note that
regardless of the view taken in connection with EITF 05-4,
penalties
associated with your registration rights agreements related to the
underlying shares of the Series A preferred stock and warrants
should
be presented as liabilities and accounted for under SFAS 5.
Please
revise or advise.
* * * * *
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.
You may contact Tara Harkins at (202) 551-3639 or Kevin
Vaughn
at (202) 551-3643 if you have questions regarding comments on the
financial statements and related matters. Please contact Donald
C.
Hunt at (202) 551-3647 or me at (202) 551-3617 with any other
questions.
Sincerely,
Russell Mancuso
Branch Chief
cc (via fax): Adam C. Lenain, Esq. - Foley & Lardner LLP
Terrance J. Bruggeman
Somanta Pharmaceuticals, Inc.
May 5, 2006
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