SEC Company Response from BNB PLUS CORP. (BNBX) (CIK 0000744452) (BNBX) — Jun 16, 2005
BNB PLUS CORP. (BNBX) (CIK 0000744452)
Date: June 16, 2005 · CIK: 0000744452 · Accession: 0001013762-05-000747
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-122848
Referenced dates: March 15, 2005, May 23, 2005
Letter
Re: Applied DNA Sciences, Inc. Amendment No. 1 to Registration Statement on Form SB-2 File No. 333-122848 Amended Registration Statement filed April 29, 2005
Applied DNA Sciences, Inc. 9229 W. Sunset Boulevard, Suite 830 Los Angeles, California 90069
================================================================================
June 16, 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 May 23, 2005 (the "Comment Letter") relating to Amendment No. 1 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. 2 to the Company's Registration Statement.
FORM SB-2 ---------
General -------
1. Please revise to include a table of contents pursuant to Item 502 of Regulation S-B.
Response -------- We have revised our prospectus to include a table of contents pursuant to Item 502 of Regulation S-B.
<PAGE> Securities and Exchange Commission June 16, 2005 Page 2 of 11
2. Supplementally, please confirm if Rick Langley of RHL Management, Inc. is Richard Langley Jr.
Response -------- We hereby confirm that, to the best of our knowledge, Rick Langley of RHL Management, Inc. is Richard Langley Jr.
3. Prior to requesting acceleration for effectiveness, please consider Item 310(g) of Regulation S-B and, as necessary, file an amended registration statement on Form SB-2 to include your most recent interim financial statements as of and for the period ended March 31, 2005. In doing so, please also file as an exhibit an updated, signed consent report from your independent accountants.
Response -------- We have revised our prospectus to include the financial statements for the quarter ended March 31, 2005 as well as obtained a revised consent from our independent registered public accounting firm.
Risk Factors ------------
The Biomedical Research Products Industry is Very Competitive, and We.. page 11 --------------------------------------------------------------------------------
4. We note your response to comment 19 and reissue the comment. To the extent that market data information is available, please disclose your competitors' respective shares of your target market.
Response -------- We have revised our disclosure to indicate that although we still are not aware of the total market size, we have disclosed some of our competitors' revenues that we have been able to determine.
Managements Discussion and Analysis of Financial Condition and Results of Operations and Plan of Operation --------------------------------------------------------------------------------
Intellectual Property Development Product Operations & Partnerships, page 19 --------------------------------------------------------------------------------
5. We note your response to comment 33 and reissue the comment in part. Notwithstanding your amended disclosure, please revise the discussion to state that management believes Applied DNA uses highly reputable outside labs. In this regard, please tell us supplementally the extent to which you have utilized the services of labs other than Idaho National Laboratory. We may have additional comments. <PAGE> Securities and Exchange Commission June 16, 2005 Page 3 of 11
Response -------- We have revised our disclosure to state that we believe that we use highly reputable outside labs. We utilize Idaho national laboratories approximately 75% of the time, Biowell laboratories approximately 20% of the time, and Charles River laboratories, a contract laboratory located in Horsham, Pennsylvania, approximately 5% of the time.
Liquidity and Capital Resources, page 21 ----------------------------------------
6. We acknowledge your response to comments 37 and 38 per our letter dated March 15, 2005. However, we believe that Instruction 1 to Item 303 of Regulation S-B requires disclosure regarding the impact of material items that affect or will affect your results of operations. Please also refer to Interpretation; Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations Release Nos. 33-8350; 34-48960; FR-72. Please then expand your disclosure to address the increase in your accounts payable and accrued liabilities for the year ended September 30, 2004 and the three months ended December 31, 2004. Additionally, please include a discussion of your arrangement with Biowell Technology, specifically addressing the impact that the minimum purchase orders will have on your results of operations and cash flows in the near term.
Response -------- The Registrant has reviewed Instruction 1 to Item 303 of Regulation S-B and believes the instruction applies to issuers who have reported revenues from operations in each of the last two (2) years.
The Instruction requires Registrants to provide a "discussion and analysis" focusing specifically on material events and uncertainties known to management that would cause reported financial information not to be necessarily indicative of future operating results or future financial condition
The Registrant does not provide a "discussion and analysis" of its results of operations and financial condition. As previously stated, the Registrant is a small business issuer that has not had revenues from operations in each of the last two fiscal years. As a result, the Registrant continues to believe it has met the disclosure requirements of Item 303 (a) and (c) and is not required to provide the information requested by Instruction 1. <PAGE> Securities and Exchange Commission June 16, 2005 Page 4 of 11
The Registrant acknowledges that once revenues from operations are generated, the Company shall comply with the reporting requirements of Item 303 (b) of Regulation S-B and provide the information required by Instruction 1.
Business -------- Overview, page 26 -----------------
7. We note your statement, "[w]e have a very seasoned and experienced management team." Please revise this and similar disclosure throughout the prospectus to indicate it is your belief and revise so as not to present the statements as fact. For example we note on page 33 you state that management and the board have a "unique combination of skills for providing integrated DNA anti-counterfeit..." In addition, you reference experience totaling more than 100 years in the areas of anti-counterfeiting technology, microchip technology, security...." Please provide a breakdown of management's experience in the areas of anti-counterfeiting technology and security, respectively, as this experience is not apparent from the background information provided. We may have additional comments.
Response -------- We have revised our disclosure throughout the prospectus to indicate that it is our belief that we have an experienced management team. Furthermore, we have provided a breakdown of the combined experience of our officers and directors to provide back-up to our claim that we have an experienced management team.
8. We note your response to comment 41. Please revise your disclosure to describe the effects of not closing on the acquisition of Biowell. Additionally, please include a stand alone risk factor addressing the unlikely acquisition of Biowell and the consequences should this occur. We may have further comments.
Response -------- We have revised our disclosure to discuss the pending acquisition of Biowell's technologies, including the effects of not closing on the acquisition. In addition, we have added a stand alone risk factor discussing the risks to us in the event that we do not close on the acquisition.
9. We note your response to comment 49. Please file the Memorandums of Understanding you refer to in your revised disclosure.
Response -------- Upon reviewing our files, we determined that we only had two memorandums of understanding and that both have since expired. Therefore we have removed all references to these memorandums of understanding or agreements between us. <PAGE> Securities and Exchange Commission June 16, 2005 Page 5 of 11
10. We note the Biowell license agreement has been suspended. Please file this modification agreement and other revisions to this material agreement as exhibits.
Response -------- We have filed the letter agreement between the Company and Biowell Technology Inc. agreeing to suspend payments under the license agreement.
11. Please expand the discussion to provide additional clarification concerning how you derive income from the Biowell agreement. It appears that in order to maintain the license you have to submit a certain amount of purchase orders to Biowell. Does Biowell fulfill the orders? How are you compensated and on what basis? In addition, the minimum orders necessary to maintain the license is less than $2 million in. the aggregate for the first five years. Is this an indication of the anticipated market for the product? If so, your business and MD&A sections should be expanded to explain this and how you anticipate generating profits.
Response -------- We have revised our disclosure to indicate that we place the orders with Biowell who fulfills the order. We charge our clients at a premium to our cost from Biowell, which is how we derive our revenue. We further revised our disclosure to indicate that the $2 million in aggregate purchase orders for the first five years of the license is not an indication of the market for the products, but a consideration of what is involved in the establishment of a new business product.
12. We note the Biowell agreement can be terminated under certain conditions several of which appear to be applicable, including failure to make minimum payment guarantees and insolvency. Please describe the steps you have taken to cure any breach of the agreement and the manner in which the original agreement may have been modified. In addition, in view of the large number of shares issued since you originally entered into the Biowell agreement, please tell supplementally why there has not been a change of control which would also result in a breach of the agreement.
Response -------- We have revised our disclosure to indicate that all payments due or to become due under the license agreement have been suspended in contemplation of the proposed acquisition. With regards to potential breaches for insolvency or change of control, although our debts exceed our assets, we have not ceased paying our debts and we have been able to meet our debts as they become due. When we executed the license agreement, our liabilities exceeded our assets and it was understood between the parties that such would not change. Also, although we have issued more than 50% of our stock in a number of unrelated transactions, which could conceivably trigger a change of <PAGE> Securities and Exchange Commission June 16, 2005 Page 6 of 11
control, most of those shares were issued in connection with conditions we negotiated with Biowell for the acquisition of their technology. For example, conditions precedent to the acquisition of the Biowell technology was the raising of over $5 million in a private placement and the elimination of all our debt, which were done through the issuance of a significant number of shares.
13. We note your response to comment 48 and reissue the comment Please expand the discussion in the business section to address the projects referred to in "Product research and development" on page 20. We may have additional comments.
Response -------- We have expanded our disclosure to provide full and fair disclosure regarding our research and development projects.
Giuliani Partners, page 36 --------------------------
14. Supplementally, please tell us why your agreement with Giuliani Partners was terminated on April 11, 2005.
Response -------- As stated in our disclosure and in the termination agreement, the decision to terminate the agreement with Giuliani Partners was mutual. We felt that the agreement was no longer in our best interests and we discussed the matter with Giuliani Partners, who agreed that it was best for both parties to mutually terminate the agreement.
15. Please file the settlement agreement with Giuliani Partners as an exhibit.
Response -------- We have incorporated the filed settlement agreement as an exhibit.
Management, page 38 -------------------
16. We note your response to comment 54 and reissue the comment in part. Please note that Item 401 of Regulation S-B requires a brief description of the business experience of your officers and directors during each of the last five years. Currently, you have gaps of time for one or more executive officers, please account for all periods of time within the last five years. Additionally, your disclosure in this section is difficult and cumbersome to read, please revise to clearly describe their chronological employment histories. <PAGE> Securities and Exchange Commission June 16, 200
Show Raw Text
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<TEXT>
Applied DNA Sciences, Inc.
9229 W. Sunset Boulevard, Suite 830
Los Angeles, California 90069
================================================================================
June 16, 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.
Amendment No. 1 to Registration Statement on Form SB-2
File No. 333-122848
Amended Registration Statement filed April 29, 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 May 23, 2005 (the "Comment
Letter") relating to Amendment No. 1 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. 2 to the Company's Registration
Statement.
FORM SB-2
---------
General
-------
1. Please revise to include a table of contents pursuant to Item 502 of
Regulation S-B.
Response
--------
We have revised our prospectus to include a table of contents pursuant
to Item 502 of Regulation S-B.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 2 of 11
2. Supplementally, please confirm if Rick Langley of RHL Management, Inc.
is Richard Langley Jr.
Response
--------
We hereby confirm that, to the best of our knowledge, Rick Langley of
RHL Management, Inc. is Richard Langley Jr.
3. Prior to requesting acceleration for effectiveness, please consider
Item 310(g) of Regulation S-B and, as necessary, file an amended
registration statement on Form SB-2 to include your most recent
interim financial statements as of and for the period ended March 31,
2005. In doing so, please also file as an exhibit an updated, signed
consent report from your independent accountants.
Response
--------
We have revised our prospectus to include the financial statements for
the quarter ended March 31, 2005 as well as obtained a revised consent
from our independent registered public accounting firm.
Risk Factors
------------
The Biomedical Research Products Industry is Very Competitive, and We.. page 11
--------------------------------------------------------------------------------
4. We note your response to comment 19 and reissue the comment. To the
extent that market data information is available, please disclose your
competitors' respective shares of your target market.
Response
--------
We have revised our disclosure to indicate that although we still are
not aware of the total market size, we have disclosed some of our
competitors' revenues that we have been able to determine.
Managements Discussion and Analysis of Financial Condition and Results of
Operations and Plan of Operation
--------------------------------------------------------------------------------
Intellectual Property Development Product Operations & Partnerships, page 19
--------------------------------------------------------------------------------
5. We note your response to comment 33 and reissue the comment in part.
Notwithstanding your amended disclosure, please revise the discussion
to state that management believes Applied DNA uses highly reputable
outside labs. In this regard, please tell us supplementally the extent
to which you have utilized the services of labs other than Idaho
National Laboratory. We may have additional comments.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 3 of 11
Response
--------
We have revised our disclosure to state that we believe that we use
highly reputable outside labs. We utilize Idaho national laboratories
approximately 75% of the time, Biowell laboratories approximately 20%
of the time, and Charles River laboratories, a contract laboratory
located in Horsham, Pennsylvania, approximately 5% of the time.
Liquidity and Capital Resources, page 21
----------------------------------------
6. We acknowledge your response to comments 37 and 38 per our letter
dated March 15, 2005. However, we believe that Instruction 1 to Item
303 of Regulation S-B requires disclosure regarding the impact of
material items that affect or will affect your results of operations.
Please also refer to Interpretation; Commission Guidance Regarding
Management's Discussion and Analysis of Financial Condition and
Results of Operations Release Nos. 33-8350; 34-48960; FR-72. Please
then expand your disclosure to address the increase in your accounts
payable and accrued liabilities for the year ended September 30, 2004
and the three months ended December 31, 2004. Additionally, please
include a discussion of your arrangement with Biowell Technology,
specifically addressing the impact that the minimum purchase orders
will have on your results of operations and cash flows in the near
term.
Response
--------
The Registrant has reviewed Instruction 1 to Item 303 of Regulation
S-B and believes the instruction applies to issuers who have reported
revenues from operations in each of the last two (2) years.
The Instruction requires Registrants to provide a "discussion and
analysis" focusing specifically on material events and uncertainties
known to management that would cause reported financial information
not to be necessarily indicative of future operating results or future
financial condition
The Registrant does not provide a "discussion and analysis" of its
results of operations and financial condition. As previously stated,
the Registrant is a small business issuer that has not had revenues
from operations in each of the last two fiscal years. As a result, the
Registrant continues to believe it has met the disclosure requirements
of Item 303 (a) and (c) and is not required to provide the information
requested by Instruction 1.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 4 of 11
The Registrant acknowledges that once revenues from operations are
generated, the Company shall comply with the reporting requirements of
Item 303 (b) of Regulation S-B and provide the information required by
Instruction 1.
Business
--------
Overview, page 26
-----------------
7. We note your statement, "[w]e have a very seasoned and experienced
management team." Please revise this and similar disclosure throughout
the prospectus to indicate it is your belief and revise so as not to
present the statements as fact. For example we note on page 33 you
state that management and the board have a "unique combination of
skills for providing integrated DNA anti-counterfeit..." In addition,
you reference experience totaling more than 100 years in the areas of
anti-counterfeiting technology, microchip technology, security...."
Please provide a breakdown of management's experience in the areas of
anti-counterfeiting technology and security, respectively, as this
experience is not apparent from the background information provided.
We may have additional comments.
Response
--------
We have revised our disclosure throughout the prospectus to indicate
that it is our belief that we have an experienced management team.
Furthermore, we have provided a breakdown of the combined experience
of our officers and directors to provide back-up to our claim that we
have an experienced management team.
8. We note your response to comment 41. Please revise your disclosure to
describe the effects of not closing on the acquisition of Biowell.
Additionally, please include a stand alone risk factor addressing the
unlikely acquisition of Biowell and the consequences should this
occur. We may have further comments.
Response
--------
We have revised our disclosure to discuss the pending acquisition of
Biowell's technologies, including the effects of not closing on the
acquisition. In addition, we have added a stand alone risk factor
discussing the risks to us in the event that we do not close on the
acquisition.
9. We note your response to comment 49. Please file the Memorandums of
Understanding you refer to in your revised disclosure.
Response
--------
Upon reviewing our files, we determined that we only had two
memorandums of understanding and that both have since expired.
Therefore we have removed all references to these memorandums of
understanding or agreements between us.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 5 of 11
10. We note the Biowell license agreement has been suspended. Please file
this modification agreement and other revisions to this material
agreement as exhibits.
Response
--------
We have filed the letter agreement between the Company and Biowell
Technology Inc. agreeing to suspend payments under the license
agreement.
11. Please expand the discussion to provide additional clarification
concerning how you derive income from the Biowell agreement. It
appears that in order to maintain the license you have to submit a
certain amount of purchase orders to Biowell. Does Biowell fulfill the
orders? How are you compensated and on what basis? In addition, the
minimum orders necessary to maintain the license is less than $2
million in. the aggregate for the first five years. Is this an
indication of the anticipated market for the product? If so, your
business and MD&A sections should be expanded to explain this and how
you anticipate generating profits.
Response
--------
We have revised our disclosure to indicate that we place the orders
with Biowell who fulfills the order. We charge our clients at a
premium to our cost from Biowell, which is how we derive our revenue.
We further revised our disclosure to indicate that the $2 million in
aggregate purchase orders for the first five years of the license is
not an indication of the market for the products, but a consideration
of what is involved in the establishment of a new business product.
12. We note the Biowell agreement can be terminated under certain
conditions several of which appear to be applicable, including failure
to make minimum payment guarantees and insolvency. Please describe the
steps you have taken to cure any breach of the agreement and the
manner in which the original agreement may have been modified. In
addition, in view of the large number of shares issued since you
originally entered into the Biowell agreement, please tell
supplementally why there has not been a change of control which would
also result in a breach of the agreement.
Response
--------
We have revised our disclosure to indicate that all payments due or to
become due under the license agreement have been suspended in
contemplation of the proposed acquisition. With regards to potential
breaches for insolvency or change of control, although our debts
exceed our assets, we have not ceased paying our debts and we have
been able to meet our debts as they become due. When we executed the
license agreement, our liabilities exceeded our assets and it was
understood between the parties that such would not change. Also,
although we have issued more than 50% of our stock in a number of
unrelated transactions, which could conceivably trigger a change of
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 6 of 11
control, most of those shares were issued in connection with
conditions we negotiated with Biowell for the acquisition of their
technology. For example, conditions precedent to the acquisition of
the Biowell technology was the raising of over $5 million in a private
placement and the elimination of all our debt, which were done through
the issuance of a significant number of shares.
13. We note your response to comment 48 and reissue the comment Please
expand the discussion in the business section to address the projects
referred to in "Product research and development" on page 20. We may
have additional comments.
Response
--------
We have expanded our disclosure to provide full and fair disclosure
regarding our research and development projects.
Giuliani Partners, page 36
--------------------------
14. Supplementally, please tell us why your agreement with Giuliani
Partners was terminated on April 11, 2005.
Response
--------
As stated in our disclosure and in the termination agreement, the
decision to terminate the agreement with Giuliani Partners was mutual.
We felt that the agreement was no longer in our best interests and we
discussed the matter with Giuliani Partners, who agreed that it was
best for both parties to mutually terminate the agreement.
15. Please file the settlement agreement with Giuliani Partners as an
exhibit.
Response
--------
We have incorporated the filed settlement agreement as an exhibit.
Management, page 38
-------------------
16. We note your response to comment 54 and reissue the comment in part.
Please note that Item 401 of Regulation S-B requires a brief
description of the business experience of your officers and directors
during each of the last five years. Currently, you have gaps of time
for one or more executive officers, please account for all periods of
time within the last five years. Additionally, your disclosure in this
section is difficult and cumbersome to read, please revise to clearly
describe their chronological employment histories.
<PAGE>
Securities and Exchange Commission
June 16, 200