SecProbe.io

September 26, 2024
Brian Hullinger
President and Chief Executive Officer
PSYCHEMEDICS CORP
5220 Spring Valley Road
Dallas, Texas 75254
Re:PSYCHEMEDICS CORP
Schedule 13E-3 filed September 3, 2024
File No. 005-39145
Preliminary Proxy Statement on Schedule 14A filed September 3, 2024
File No. 001-13738
Dear Brian Hullinger:
            We have reviewed your filing s and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments by providing the requested information or advise us as
soon as possible when you will respond. If you do not believe our comments apply to your facts
and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional
comments. Defined terms used herein have the same meaning as in your preliminary proxy
statement, unless otherwise indicated.
Preliminary Proxy Statement and Schedule 13E-3 filed September 3, 2024
General
In your response letter, please explain why neither Mr. Kamin nor any of the
entities affiliated with Mr. Kamin are affiliates of the Company engaged directly or
indirectly in the Rule 13e-3 transaction and should not be listed as signatories to the
Schedule 13E-3 signature page and included as filing persons. For guidance, refer to
Questions 101.02, 201.01, 201.05, and 201.06 of the Division of Corporation Finance’s
Compliance and Disclosure Interpretations for Going Private Transactions, Exchange Act
Rule 13e-3 and Schedule 13E-3. Alternatively, please revise and provide all of the
information required by Schedule 13E-3 as to each of Mr. Kamin and the
entities affiliated with Mr. Kamin individually to the extent not already provided. We may 1.

September 26, 2024
Page 2
have further comment.

Furthermore, we note disclosure on page 5 and elsewhere throughout the
preliminary proxy statement referring to "certain entities affiliated with Mr. Kamin" as
well as references to "Mr. Kamin and entities affiliated with him." Please revise to clarify
which entities are covered by these terms, such that all entities affiliated with Mr. Kamin
that are filing persons are providing the disclosure required by Schedule 13E-3.
2.The information required by Items 7, 8 and 9 of Schedule 13E-3 must appear in a “Special
Factors” section prominently disclosed in the front of the proxy statement, following a
summary term sheet. See Rule 13e-3(e)(1)(ii), Item 1 of Schedule 13E-3, and Item 1001
of Regulation M-A. Item 1001 of Regulation M-A requires the summary term sheet to
briefly describe in bullet point format the most material terms of the proposed transaction.
Please revise your preliminary proxy statement accordingly.
3.Please correct the cross references in the Schedule 13E-3 to a section of the proxy
statement titled “Financial Information,” which section is not in the preliminary proxy
statement.
4.Where an issuer elects to incorporate by reference the information required by Item
1010(a) of Regulation M-A, all of the summarized financial information required by Item
1010(c) must be disclosed in the document furnished to security holders. See Instruction 1
to Item 13 of Schedule 13E-3. In addition, please refer to Telephone Interpretation I.H.7
in the July 2001 supplement to our "Manual of Publicly Available Telephone
Interpretations" for guidance on complying with a similar instruction in the context of a
tender offer. Please revise the proxy statement to include the information required by Item
1010(c) of Regulation M-A. While we note that you have provided the book value per
share of your common stock as of June 30, 2024 on pages 51 and 53 of the
preliminary proxy statement, please revise the proxy statement to include the remaining
information required by Item 1010(c) of Regulation M-A.
5.Please attach a preliminary form of proxy to the preliminary proxy statement.
6.Please advise as to why two different figures are disclosed regarding stockholders of
record (i.e., 142 holders of record as of August 27, 2024, disclosed on page 33, and 214
holders of record as of July 12, 2024, disclosed on pages 50 and 90), what you believe
accounts for such a significant change in the number, and whether such change has had an
impact on your analysis as to how to implement the stock split.
Terms of the Transaction, page 26
7.We note the reference on page 29 to "the small effect of the proposed transaction on the
relative voting power of Continuing Stockholders" and the various references throughout
the document to the stakes of directors and executive officers decreasing by a "nominal
amount." Please reconcile such statements with the fact that it appears that Mr. Kamin's
shareholding stake will roughly triple as a result of the proposed transaction (from the
11.4% mark disclosed on page 21 to the 34.5% mark disclosed on page 62), and the stakes
of other Continuing Stockholders will presumably be diluted accordingly. Please also
disclose more prominently the 34.5% figure.
On page 40, we note the following disclosure: "Our total Transaction-related expenses 8.

September 26, 2024
Page 3
could be larger or smaller depending on, among other things, the number of fractional
shares that will be outstanding after the Stock Split as a result of purchases, sales and
other transfers of our shares of common stock by our stockholders, or an increase in the
costs and expenses of the Transaction." Please add to the foregoing list of factors a
specific reference to a potential deviation from the assumed 1-for-5,000 Reverse Split
ratio. Please do the same on page 51.
Purpose of and Reasons for the Transaction, page 41
9.Please reconcile the specific annual cost savings figure of $844,788 disclosed on page 42
with the various references throughout the document to "approximately $900,000."
Background of the Transaction, page 43
10.Refer to the following disclosure throughout this section indicating that:

• as of December 2023, Mr. Kamin had expressed an interest to finance a potential “going
dark” transaction through an equity financing of the Company;
• during May 2024, Mr. Kamin delivered to the Transaction Committee multiple term
sheets outlining the terms of a potential financing of the Company to fund the Company’s
proposed “going dark” transaction and entered into discussions with the Transaction
Committee regarding the terms of such potential transaction, including agreeing on a
purchase price per share;
• during June 2024, Mr. Kamin continued to discuss the terms of the potential transaction
with the Transaction Committee and members thereof, including communicating to the
Transaction Committee a revised proposal for such transaction; and
• as of July 2024, Mr. Kamin had accepted a revised proposal from the Transaction
Committee.

Please tell us why Mr. Kamin did not file an amendment to his Schedule 13D until
August 13, 2024, the day after the Stock Purchase Agreement was executed.
11.On page 47, please explain why, despite the less positive outlook reflected in the May
Revised Preliminary Forecast, Mirus's preliminary valuation figures actually increased
from a $2.29 to $2.94 per share range (discounted cash flow analysis) and a $2.95 to
$3.82 per share range (leveraged buyout analysis) to a $2.47 to $3.12 per share range
(discounted cash flow analysis) and a $2.96 to $3.88 per share range (leveraged buyout
analysis).
12.On page 48, please disclose additional detail regarding the negotiation of the Stock
Purchase Agreement.
Fairness of the Transaction, page 55
The factors listed in Instruction 2 to Item 1014 of Regulation M-A and paragraphs (c), (d)
and (e) of Item 1014 are generally relevant to each filing person's fairness determination
and should be discussed in reasonable detail. See paragraph (b) of Item 1014 of
Regulation M-A and Questions 20 and 21 of Exchange Act Release No. 34-17719 (April
13, 1981). Please revise this section to include the factors described in paragraphs (c), (d)
and (e) of Item 1014, as well as clauses (i) through (vii) of Instruction 2 to Item 1014 or 13.

September 26, 2024
Page 4
explain why such factors were not deemed material or relevant to the fairness
determination of the Board. If the procedural safeguards in Item 1014(c), (d) and (e) were
not considered, please explain why the Board believes the Rule 13e-3 transaction is fair in
the absence of such safeguards. To the extent that Board intends to rely on the Transaction
Committee’s analyses as opposed to providing its own analysis that satisfies the
disclosure described in Item 1014(b) of Regulation M-A, the Board must expressly adopt
such discussion. See Question and Answer No. 20 in Exchange Act Release 17719. In
such case, the Transaction Committee’s analyses must full address each of the above
factors. Currently, the Transaction Committee’s analyses does not appear to address
clauses (i) or (iv) of Instruction 2 to Item 1014 or the factors described in paragraphs (c),
(d) or (e) of Item 1014.

Furthermore, we note that it appears the Transaction Committee did not engage
independent legal counsel. If that is the case, please advise how the
Transaction Committee and Board considered the lack of independent legal counsel in
their procedural fairness determination, particularly in light of the fact that the
Transaction is not subject to approval by a majority of unaffiliated stockholders.
Fairness Opinion of Financial Advisor, page 59
14.Please include a subsection that summarizes the presentations that are attached to the
Schedule 13E-3 as Exhibits (c)(iii) and (c)(iv).
15.Please expand the disclosure in the last paragraph of this section to address any
relationship between Mirus and Mr. Kamin or entities affiliated with him. Refer to Item
1015(b)(4)(ii) of Regulation M-A.
Financial Forecast Information, page 68
16.We note your statement in this section that "the June Forecast reflects numerous estimates
and assumptions of the Company’s management with respect to operating expense, capital
expenditures, industry performance, general business, economic, regulatory, market and
financial conditions and matters specific to the Company’s business..." Please disclose
these assumptions and quantify them where practical.
17.In addition to the June Forecast, please disclose the Initial Preliminary Forecast and the
May Revised Preliminary Forecast.
Proposal 5, page 84
18.We note the following disclosure on page 84: "The Board expects that the Forward Stock
Split ratio set by the Board will be the inverse of the Reverse Stock Split ratio set by the
Board." With a view toward revised disclosure, please explain under what circumstances
the former ratio would not simply be the inverse of the latter ratio, and the impact on
relative shareholdings that might result. Alternatively, please clarify both here and under
Proposal 4 above that the Forward Stock Split ratio will be a mirror image of the Reverse
Stock Split ratio.
            We remind you that the filing persons are responsible for the accuracy and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of action by the staff.

September 26, 2024
Page 5
            Please direct any questions to Brian Soares at 202-551-3690  or David Plattner at 202-
551-8094.
Sincerely,
Division of Corporation Finance
Office of Mergers & Acquisitions