SEC Company Response from BNB PLUS CORP. (BNBX) (CIK 0000744452) (BNBX) — Apr 29, 2005
BNB PLUS CORP. (BNBX) (CIK 0000744452)
Date: April 29, 2005 · CIK: 0000744452 · Accession: 0001013762-05-000507
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-122848
Referenced dates: March 15, 2005
Letter
Re: Applied DNA Sciences, Inc. Registration Statement on Form SB-2 File No. 333-122848 Registration Statement filed February 15, 2005
Applied DNA Sciences, Inc. 9229 W. Sunset Boulevard, Suite 830 Los Angeles, California 90069
================================================================================
April 29, 2005
VIA EDGAR AND FEDERAL EXPRESS
Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549
Attn: Jeffrey Riedler, Assistant Director Division of Corporation Finance
Albert Lee, Esq.
Ladies and Gentlemen:
The following responses address the comments of the reviewing Staff of the Commission as set forth in a comment letter dated March 15, 2005 (the "Comment Letter") relating to the Registration Statement on Form SB-2 (the "Registration Statement") of Applied DNA Sciences, Inc. (the "Company"). The answers set forth herein refer to each of the Staffs' comments by number.
We are filing herewith Amendment No. 1 to the Company's Registration Statement.
FORM SB-2 ---------
General -------
1. Please note that where we provide examples to illustrate what we mean by our comments, they are examples and not complete lists. If our comments are applicable to portions of the filing that we have not cited as examples, please make the appropriate changes in accordance with our comments.
Response -------- We not that your examples are not complete lists. We have made changes throughout the registration statement, where applicable, in response to your comments. <PAGE> Securities and Exchange Commission April 29, 2005 Page 2 of 30
2. The first and third sentences in the first paragraph under "Applied DNA Sciences, Inc." substantially repeat themselves, please revise.
Response -------- We have removed the third sentence, as it was repetitious.
3. Please provide a "Plain English" explanation or substitute for the terms "botanical DNA" and "substrates".
Response -------- We have provided "Plain English" explanations for the terms botanical DNA and substrates.
4. Where applicable, please amend your Form 10-KSB for the year ended September 30, 2004 and your Form 10-Q for the quarter ended December 31, 2004 to comply with our comments on your Form SB-2.
Response -------- We will amend our 10-KSB and 10-QSB to comply with all these comments and all future comments from the SEC as soon as we have cleared all comments from the SEC that would require amending our 10-KSB and 10-QSB.
5. Where our comments address and call for revisions to the audited financial statements and related notes for the two years ended September 30, 2004, please apply those same comments, as applicable, to your unaudited financial statements for the periods ended December 31, 2004 and 2003, respectively, and revise them accordingly.
Response -------- We will amend our unaudited financial statements to reflect the changes made to our audited financial statements in accordance with your comments. <PAGE> Securities and Exchange Commission April 29, 2005 Page 3 of 30
Risk Factors ------------
General -------
6. Please revise the risk factors where appropriate to replace generic language with specific disclosure of exactly how these risks have affected and will affect your operations, financial condition or business, and if practicable to quantify, the specific and immediate effects to investors of each risk that you have identified. For example, you use general phrases such as "materially adversely affect" throughout the risk factor section. These generic phrases are subject to varying interpretations and, therefore, do not adequately explain the risk or concern to which you refer. Please revise to describe the adverse effect(s) in greater detail.
Response -------- We have revised the risk factors, where appropriate, to provide specific disclosure of the potential risks in lieu of generic risk factors. Please note, however, that in certain places, it is impossible to quantify or full explain the risk, and we therefore left the same disclosures.
7. Please include a separate risk factor disclosing the risks presented by the fact that you presently have no or limited manufacturing, sales, marketing or distribution capabilities.
Response -------- We have updated our disclosure to provide a risk factor that we currently have no or limited manufacturing, sales, marketing or distribution capabilities.
8. To the extent applicable, please include a risk factor, which discusses risks associated with reliance and use of third-party manufacturers and suppliers.
Response -------- We have revised our disclosure to provide for several risk factors relating to our reliance and use of third-party manufacturers and suppliers.
9. Please include a separate risk factor discussing your reliance on your relationship with Biowell and its technology, proprietary, and licensing rights.
Response -------- We have included a risk factor discussing our reliance on the licensing agreement with Biowell and its technology.
We Have a History of Loses Which may Continue, Which May Negatively....page 7 -----------------------------------------------------------------------------
10. Please revise the disclosure to indicate that as a result of continuing losses, you may exhaust your resources and be unable to complete the development of your products. Additionally, clearly state that your accumulated deficit will continue to increase as you continue to incur losses. <PAGE> Securities and Exchange Commission April 29, 2005 Page 4 of 30
Response -------- We have revised our disclosure to indicate that as a result of continuing losses, we may exhaust our resources prior to completing the development of our products. Additionally, we have stated that as we continue to incur losses, our accumulated deficit will continue to increase, which might make it harder for us to obtain financing in the future.
If We Are Unable to Obtain Additional Funding Our Business Operations...page 7 ------------------------------------------------------------------------------
11. Please revise your disclosure to state that even if you receive additional financing, you may not be able to sustain and expand research and development activities or continue to conduct business operations.
Response -------- We have revised our disclosure to state that even if we receive additional financing, we may not be able to sustain and expand research and development activities or continue to conduct business operations.
Our Future Success May Depend on the Timely Introduction of New Products..page 8 --------------------------------------------------------------------------------
12. The disclosure in this risk factor is substantially similar and related to the preceding one, please revise to combine the two factors, eliminating any duplicative information.
Response -------- We have removed this risk factor as the disclosure is substantially similar to the preceding one and this risk factor added no further information to investors.
If We Fail to Introduce New Products, or Our existing Products are not....page 8 --------------------------------------------------------------------------------
13. If you have experienced any of the difficulties described in the bullet points, please revise to describe the difficulties you have experienced and the actual or expected consequences.
Response -------- We have revised our disclosure to state that we have not experienced any difficulties with the preceding factors, however, there can be no assurance that we will not experience difficulties in the future.
<PAGE> Securities and Exchange Commission April 29, 2005 Page 5 of 30
The Failure To Manage Our Growth In Operations And Acquisitions Of New....page 9 --------------------------------------------------------------------------------
14. Describe with more specificity the potential effects if you are unable to manage your growth.
Response -------- We have revised our disclosure to discuss in greater detail the risks if we are unable to manage our growth or acquisitions.
If We Are Unable to Retain the Services of Messrs. Hutchison, Brockelsby, Botash... page 9 ----------------
15. Please disclose which if any of the named executives you have employment agreements with, if none, please so state.
Response -------- We have revised our disclosure to indicate that we do not have employment agreements with any of the named executives.
16. Please disclose whether Messrs. Hutchison, Brockelsby, Botash or Klemm has plans to leave the company or retire in the near term.
Response -------- We have revised our disclosure to indicate that besides Mr. Hutchison's desire to retire within the next few months, we are not aware of any other named executive officer or director who has plans to leave us or retire.
Failure to Attract and Retain Qualified Scientific or Production Personnel....page 9 -------------------
17. Please discuss any difficulty you have had attracting and retaining qualified scientific or production personnel since your inception.
Response -------- Since our inception, we have not had any difficulty in attracting and retaining qualified scientific or production personnel; therefore, we did not update the disclosure. We currently have a Cooperative Research and Development Agreement with the Department of Energy and the USDA. These agreements give us access to over 12,00 scientists.
<PAGE> Securities and Exchange Commission April 29, 2005 Page 6 of 30
The Biomedical Research Products Industry is Very Competitive, and We ..Page 10 --------------------------------------------------------------------------------
18. Please revise to provide an estimate of the number of competitors and your competitive position. If a small number of competitors are dominant in the industry, then identify them.
Response -------- We have revised our disclosure to state that it is impossible to quantify the number of competitors since they include both the companies we attempt to sell our products and services to through their use of internal security and various other security product companies. We have further revised our disclosure to indicate some of our known competitors in the anti-counterfeiting and fraud protection field.
19. To the extent easily obtainable please disclose your competitors' respective shares of your target market.
Response -------- We have revised our disclosure to state that it is also impossible to determine market size and market data information because companies are secretive about what security methods they utilize and how much they spend on such measures.
Intellectual Property Litigation Could Harm Our Business....page 10 -------------------------------------------------------------------
20. To the extent you are aware of any intellectual proprietary rights that are being infringed upon or that you have been notified a third party's belief that you are infringing on their patent(s), please revise to disclose the situation and potential consequences.
Response -------- We have revised our disclosure to indicate that we are not currently aware of any infringement of any third party patent nor have we received written notification of a belief that we are or may be infringing.
21. Please also disclose that even an unsuccessful infringement action against you would be expensive to defend.
Response -------- We have revised our disclosure to reflect the additional risks of a potential infringement action against us, including the costs we would incur to defend such action.
<PAGE> Securities and Exchange Commission April 29, 2005 Page 7 of 30
Potential Product Liability Claims Could Affect Our Earnings and Financial Condition, page 11 ------------------
22. Please disclose the amount of your product liability insurance coverage.
Response -------- We have revised our disclosure to state that we currently do not have any product liability coverage but are attempting to obtain coverage, which we will believe to be adequate.
We Are Currently Subject to Governmental Regulation...page 11 -------------------------------------------------------------
23. Please make this risk factor more specific by identifying the laws that are of particular concern. For example, which laws are especially difficult for your business to comply with, Additionally, include the names of the agencies which have regulatory oversight over the company.
Response -------- We have removed this risk factor. We are currently not subject to government regulation, although in the future we may be subject to regulation by the Food and Drug Administration if our products are used in connection with cosmetics. Also, although we current have cooperative research and development agreements with the Department of Energy and the Department of Defense, these agreements do not subject us to any regulation by the government.
New Corporate Governance Requirements are Likely to Increase...page 11 ----------------------------------------------------------------------
24. As currently worded, this risk factor could apply to any issuer or any offering. Unless there is unique or company specific reason for including this type of disclosure, please remove it from this section. In the alternative, please specify the provisions of the Sarbanes-Oxley Act or of reporting obligations that are of particular concern. Please revise or advise.
Response -------- We have deleted this risk factor.
There Are Large Number of Shares Underlying Our Warrants That May....page 11 ----------------------------------------------------------------------------
25. Please revise the words "may cause" in the heading and subsequent paragraph to state "will cause immediate and substantial dilution," <PAGE> Securities and Exchange Commission April 29, 2005 Page 8 of 30
Response -------- We have revised our disclosure to indicate that the issuance of shares upon exercise of the warrants will cause immediate and substantial dilution.
If We Fail to Remain Current on Our Reporting Requirements, We could.....page 11 --------------------------------------------------------------------------------
26. Please revise the disclosure to highlight that your common stock being designated a penny stock on the OTC Bulletin Board, may not only affect adversely your common stock's liquidity, but also its price.
Show Raw Text
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<TEXT>
Applied DNA Sciences, Inc.
9229 W. Sunset Boulevard, Suite 830
Los Angeles, California 90069
================================================================================
April 29, 2005
VIA EDGAR AND FEDERAL EXPRESS
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Attn: Jeffrey Riedler, Assistant Director
Division of Corporation Finance
Albert Lee, Esq.
Re: Applied DNA Sciences, Inc.
Registration Statement on Form SB-2
File No. 333-122848
Registration Statement filed February 15, 2005
Ladies and Gentlemen:
The following responses address the comments of the reviewing Staff of the
Commission as set forth in a comment letter dated March 15, 2005 (the "Comment
Letter") relating to the Registration Statement on Form SB-2 (the "Registration
Statement") of Applied DNA Sciences, Inc. (the "Company"). The answers set forth
herein refer to each of the Staffs' comments by number.
We are filing herewith Amendment No. 1 to the Company's Registration
Statement.
FORM SB-2
---------
General
-------
1. Please note that where we provide examples to illustrate what we mean by
our comments, they are examples and not complete lists. If our comments are
applicable to portions of the filing that we have not cited as examples,
please make the appropriate changes in accordance with our comments.
Response
--------
We not that your examples are not complete lists. We have made changes
throughout the registration statement, where applicable, in response to
your comments.
<PAGE>
Securities and Exchange Commission
April 29, 2005
Page 2 of 30
2. The first and third sentences in the first paragraph under "Applied DNA
Sciences, Inc." substantially repeat themselves, please revise.
Response
--------
We have removed the third sentence, as it was repetitious.
3. Please provide a "Plain English" explanation or substitute for the terms
"botanical DNA" and "substrates".
Response
--------
We have provided "Plain English" explanations for the terms botanical DNA
and substrates.
4. Where applicable, please amend your Form 10-KSB for the year ended
September 30, 2004 and your Form 10-Q for the quarter ended December 31,
2004 to comply with our comments on your Form SB-2.
Response
--------
We will amend our 10-KSB and 10-QSB to comply with all these comments and
all future comments from the SEC as soon as we have cleared all comments
from the SEC that would require amending our 10-KSB and 10-QSB.
5. Where our comments address and call for revisions to the audited financial
statements and related notes for the two years ended September 30, 2004,
please apply those same comments, as applicable, to your unaudited
financial statements for the periods ended December 31, 2004 and 2003,
respectively, and revise them accordingly.
Response
--------
We will amend our unaudited financial statements to reflect the changes
made to our audited financial statements in accordance with your comments.
<PAGE>
Securities and Exchange Commission
April 29, 2005
Page 3 of 30
Risk Factors
------------
General
-------
6. Please revise the risk factors where appropriate to replace generic
language with specific disclosure of exactly how these risks have affected
and will affect your operations, financial condition or business, and if
practicable to quantify, the specific and immediate effects to investors of
each risk that you have identified. For example, you use general phrases
such as "materially adversely affect" throughout the risk factor section.
These generic phrases are subject to varying interpretations and,
therefore, do not adequately explain the risk or concern to which you
refer. Please revise to describe the adverse effect(s) in greater detail.
Response
--------
We have revised the risk factors, where appropriate, to provide specific
disclosure of the potential risks in lieu of generic risk factors. Please
note, however, that in certain places, it is impossible to quantify or full
explain the risk, and we therefore left the same disclosures.
7. Please include a separate risk factor disclosing the risks presented by the
fact that you presently have no or limited manufacturing, sales, marketing
or distribution capabilities.
Response
--------
We have updated our disclosure to provide a risk factor that we currently
have no or limited manufacturing, sales, marketing or distribution
capabilities.
8. To the extent applicable, please include a risk factor, which discusses
risks associated with reliance and use of third-party manufacturers and
suppliers.
Response
--------
We have revised our disclosure to provide for several risk factors relating
to our reliance and use of third-party manufacturers and suppliers.
9. Please include a separate risk factor discussing your reliance on your
relationship with Biowell and its technology, proprietary, and licensing
rights.
Response
--------
We have included a risk factor discussing our reliance on the licensing
agreement with Biowell and its technology.
We Have a History of Loses Which may Continue, Which May Negatively....page 7
-----------------------------------------------------------------------------
10. Please revise the disclosure to indicate that as a result of continuing
losses, you may exhaust your resources and be unable to complete the
development of your products. Additionally, clearly state that your
accumulated deficit will continue to increase as you continue to incur
losses.
<PAGE>
Securities and Exchange Commission
April 29, 2005
Page 4 of 30
Response
--------
We have revised our disclosure to indicate that as a result of continuing
losses, we may exhaust our resources prior to completing the development of
our products. Additionally, we have stated that as we continue to incur
losses, our accumulated deficit will continue to increase, which might make
it harder for us to obtain financing in the future.
If We Are Unable to Obtain Additional Funding Our Business Operations...page 7
------------------------------------------------------------------------------
11. Please revise your disclosure to state that even if you receive additional
financing, you may not be able to sustain and expand research and
development activities or continue to conduct business operations.
Response
--------
We have revised our disclosure to state that even if we receive additional
financing, we may not be able to sustain and expand research and
development activities or continue to conduct business operations.
Our Future Success May Depend on the Timely Introduction of New Products..page 8
--------------------------------------------------------------------------------
12. The disclosure in this risk factor is substantially similar and related to
the preceding one, please revise to combine the two factors, eliminating
any duplicative information.
Response
--------
We have removed this risk factor as the disclosure is substantially similar
to the preceding one and this risk factor added no further information to
investors.
If We Fail to Introduce New Products, or Our existing Products are not....page 8
--------------------------------------------------------------------------------
13. If you have experienced any of the difficulties described in the bullet
points, please revise to describe the difficulties you have experienced and
the actual or expected consequences.
Response
--------
We have revised our disclosure to state that we have not experienced any
difficulties with the preceding factors, however, there can be no assurance
that we will not experience difficulties in the future.
<PAGE>
Securities and Exchange Commission
April 29, 2005
Page 5 of 30
The Failure To Manage Our Growth In Operations And Acquisitions Of New....page 9
--------------------------------------------------------------------------------
14. Describe with more specificity the potential effects if you are unable to
manage your growth.
Response
--------
We have revised our disclosure to discuss in greater detail the risks if we
are unable to manage our growth or acquisitions.
If We Are Unable to Retain the Services of Messrs. Hutchison, Brockelsby,
Botash... page 9
----------------
15. Please disclose which if any of the named executives you have employment
agreements with, if none, please so state.
Response
--------
We have revised our disclosure to indicate that we do not have employment
agreements with any of the named executives.
16. Please disclose whether Messrs. Hutchison, Brockelsby, Botash or Klemm has
plans to leave the company or retire in the near term.
Response
--------
We have revised our disclosure to indicate that besides Mr. Hutchison's
desire to retire within the next few months, we are not aware of any other
named executive officer or director who has plans to leave us or retire.
Failure to Attract and Retain Qualified Scientific or Production
Personnel....page 9
-------------------
17. Please discuss any difficulty you have had attracting and retaining
qualified scientific or production personnel since your inception.
Response
--------
Since our inception, we have not had any difficulty in attracting and
retaining qualified scientific or production personnel; therefore, we did
not update the disclosure. We currently have a Cooperative Research and
Development Agreement with the Department of Energy and the USDA. These
agreements give us access to over 12,00 scientists.
<PAGE>
Securities and Exchange Commission
April 29, 2005
Page 6 of 30
The Biomedical Research Products Industry is Very Competitive, and We ..Page 10
--------------------------------------------------------------------------------
18. Please revise to provide an estimate of the number of competitors and your
competitive position. If a small number of competitors are dominant in the
industry, then identify them.
Response
--------
We have revised our disclosure to state that it is impossible to quantify
the number of competitors since they include both the companies we attempt
to sell our products and services to through their use of internal security
and various other security product companies. We have further revised our
disclosure to indicate some of our known competitors in the
anti-counterfeiting and fraud protection field.
19. To the extent easily obtainable please disclose your competitors'
respective shares of your target market.
Response
--------
We have revised our disclosure to state that it is also impossible to
determine market size and market data information because companies are
secretive about what security methods they utilize and how much they spend
on such measures.
Intellectual Property Litigation Could Harm Our Business....page 10
-------------------------------------------------------------------
20. To the extent you are aware of any intellectual proprietary rights that are
being infringed upon or that you have been notified a third party's belief
that you are infringing on their patent(s), please revise to disclose the
situation and potential consequences.
Response
--------
We have revised our disclosure to indicate that we are not currently aware
of any infringement of any third party patent nor have we received written
notification of a belief that we are or may be infringing.
21. Please also disclose that even an unsuccessful infringement action against
you would be expensive to defend.
Response
--------
We have revised our disclosure to reflect the additional risks of a
potential infringement action against us, including the costs we would
incur to defend such action.
<PAGE>
Securities and Exchange Commission
April 29, 2005
Page 7 of 30
Potential Product Liability Claims Could Affect Our Earnings and Financial
Condition, page 11
------------------
22. Please disclose the amount of your product liability insurance coverage.
Response
--------
We have revised our disclosure to state that we currently do not have any
product liability coverage but are attempting to obtain coverage, which we
will believe to be adequate.
We Are Currently Subject to Governmental Regulation...page 11
-------------------------------------------------------------
23. Please make this risk factor more specific by identifying the laws that are
of particular concern. For example, which laws are especially difficult for
your business to comply with, Additionally, include the names of the
agencies which have regulatory oversight over the company.
Response
--------
We have removed this risk factor. We are currently not subject to
government regulation, although in the future we may be subject to
regulation by the Food and Drug Administration if our products are used in
connection with cosmetics. Also, although we current have cooperative
research and development agreements with the Department of Energy and the
Department of Defense, these agreements do not subject us to any regulation
by the government.
New Corporate Governance Requirements are Likely to Increase...page 11
----------------------------------------------------------------------
24. As currently worded, this risk factor could apply to any issuer or any
offering. Unless there is unique or company specific reason for including
this type of disclosure, please remove it from this section. In the
alternative, please specify the provisions of the Sarbanes-Oxley Act or of
reporting obligations that are of particular concern. Please revise or
advise.
Response
--------
We have deleted this risk factor.
There Are Large Number of Shares Underlying Our Warrants That May....page 11
----------------------------------------------------------------------------
25. Please revise the words "may cause" in the heading and subsequent paragraph
to state "will cause immediate and substantial dilution,"
<PAGE>
Securities and Exchange Commission
April 29, 2005
Page 8 of 30
Response
--------
We have revised our disclosure to indicate that the issuance of shares upon
exercise of the warrants will cause immediate and substantial dilution.
If We Fail to Remain Current on Our Reporting Requirements, We could.....page 11
--------------------------------------------------------------------------------
26. Please revise the disclosure to highlight that your common stock being
designated a penny stock on the OTC Bulletin Board, may not only affect
adversely your common stock's liquidity, but also its price.