SEC Company Response from BioCardia, Inc. (BCDA) (CIK 0000925741) (BCDA) — Jun 28, 2017
BioCardia, Inc. (BCDA) (CIK 0000925741)
Date: June 28, 2017 · CIK: 0000925741 · Accession: 0001437749-17-011915
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-21419, 333-218124
Referenced dates: June 15, 2017
Letter
Via EDGAR and Overnight Delivery Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Attention: Russell Mancuso, Branch Chief, Office of Electronics and Machinery File No. 333-218124 Annual Report on Form 10-K for Fiscal Year Ended December 31, 2016 Filed March 30, 2017 File No. 000-21419
Dear Mr. Mancuso:
On behalf of our client, BioCardia, Inc. (the “Company”), we submit this letter in response to comments from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by letter dated June 15, 2017 and relating to the Company’s Registration Statement on Form S-3 (File No. 333-218124) filed with the Commission on May 19, 2017 (the “Registration Statement”) and Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (File No. 000-21419) filed with the Commission on March 30, 2017 (the “2016 10-K”). The Company has also revised the Registration Statement in response to the Staff’s comments in respect of the Registration Statement and is filing concurrently with this letter a revised Registration Statement (the “Revised Registration Statement”) which reflects these revisions and updates and clarifies certain other information. For the convenience of the Staff, we are providing to the Staff by overnight delivery copies of this letter and the Revised Registration Statement (including a version marked against the Registration Statement filed on May 19, 2017), in care of Mr. Mancuso. The Company also intends to file an amendment to the 2016 10-K (the “10-K Amendment”) in order to provide additional or updated exhibits thereto and revisions to the disclosures therein, to the extent as may be requested by the Staff following receipt of this letter.
austin beijing brussels hong kong los angeles new york palo alto san diego san francisco seattle shanghai washington, dc wilmington, de
U.S. Securities and Exchange Commission
June 28, 2017
Page 2
In this letter, we have recited the comments from the Staff in bold italicized type and have followed each comment with the Company’s response. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Revised Registration Statement or the 2016 10-K, as applicable. Except as otherwise specifically indicated, page references herein correspond to the page of the Revised Registration Statement or the 2016 10-K, as applicable.
Form S-3
Common Stock, page 8
1.
Address in your description of your common stock the vote required for removal of directors.
In response to the Staff’s comment, the Company has revised the disclosure on page 8 in the Revised Registration Statement to include the required vote by holders of common stock to (i) remove a director or directors from the Company’s board of directors and (ii) amend the Company’s amended and restated bylaws.
Exhibits
2.
File the indentures, rather than forms of the indentures. Also include the information you indicate is included as exhibits 4.3 and 4.5.
In response to the Staff’s comment, the Company advises the Staff that the Company has not entered into any agreement to offer or issue debt securities that will be governed by an indenture. Rather, to comply with the Trust Indenture Act of 1939, the Company has filed with the Registration Statement forms of indentures for both senior and subordinated debt securities in order to provide generic, non-specific descriptions of such debt securities, with details to be provided in a subsequent supplemental indenture at the time any series of debt securities are to be offered.
Further, regarding exhibits 4.3 (the Form of Senior Debt Security) and 4.5 (the Form of Subordinate Debt Security), the Company advises the Staff that the information contained in Article 2, Sections 2.2 and 2.3 in each of the form indentures filed as exhibits 4.2 (with respect to senior debt securities) and 4.4 (with respect to subordinated debt securities) is sufficient to deem exhibits 4.3 and 4.5, respectfully, as having been included in the Registration Statement.
U.S. Securities and Exchange Commission
June 28, 2017
Page 3
Exhibit 5.1
3.
Confirm that, with each take-down of securities on the registration statement, you will file an amended opinion of counsel that does not contain inappropriate assumptions or limitations.
In response to the Staff’s comment, we and the Company confirm that an amended opinion of counsel will be filed with each take-down of securities under the Revised Registration Statement, once effective, and that all such opinions will not contain any inappropriate assumptions or limitations.
4.
Reconcile the second paragraph which indicates that subscription rights do not underlie the Units with footnote (4) to the fee table of your registration statement.
In response to the Staff’s comment, the legal opinion of Wilson Sonsini Goodrich & Rosati, P.C. (“WSGR”), filed as exhibit 5.1 to the Registration Statement (the “S-3 5.1 Opinion”), has been revised and filed with the Revised Registration Statement (such revised legal opinion to be referred to hereafter as the “Revised S-3 5.1 Opinion”), and such Revised S-3 5.1 Opinion makes clear that the Subscription Rights (as defined therein) do underlie the Units (as defined therein) as stated in the Registration Statement and Revised Registration Statement.
5.
With regard to the equity securities, file an opinion that addresses the laws of the jurisdiction in which the registrant is organized. We note that the penultimate opinion of this exhibit addresses federal laws and the laws of New York, but the facing page of your registration statement indicates that you are incorporated in Delaware.
We respectfully direct the attention of the Staff to the final paragraph on page 4 of the S-3 5.1 Opinion and Revised S-3 5.1 Opinion. The language confirms that the legal opinions provided therein address relevant laws from the State of Delaware (or more specifically, the Delaware General Corporation Law, defined therein as the “DGCL”). The legal opinions only address the laws of the State of New York as to the enforceability of the Debt Securities (as defined therein).
U.S. Securities and Exchange Commission
June 28, 2017
Page 4
Signatures
6.
Include the registrant’s name in its signature as required by Form S-3.
In response to the Staff’s comment, the Company has revised the signature page in the Revised Registration Statement to include the Company’s name, as the registrant and filer of the Revised Registration Statement.
Form 10-K for Fiscal Year Ended December 31, 2016
Special Note, page i
7.
You may not disclaim responsibility for your disclosure. Revise the penultimate sentence of the penultimate paragraph accordingly.
In response to the Staff’s comment, the Company will remove this sentence from the “Special Note Regarding Forward-Looking Statements” or similar sections in all future reports to be filed with Commission or any other public disclosures. However, if the Staff requires the Company to amend the 2016 10-K to this effect, the Company will include language in its forthcoming10-K Amendment that the sentence in question (“Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements”) has been deleted.
Business, page 1
8.
Tell us whether you compensated any of the identified parties that conducted the studies that you describe in this filing.
The Company acknowledges the Staff’s comment and respectfully informs the Staff that the parties identified as having conducted the studies described on page 1 of the 2016 10-K were compensated only on terms that were standard and customary in clinical study arrangements. The Company further intends to compensate the “Steering Committee” that is overseeing the current enrollment trial, which the Company is co-sponsoring.
9.
If your proposed product has not been cleared for marketing by the FDA, tell us the authority on which you rely to indicate that the product is “safe” or “effective” as you do on pages 6, 8 and 9.
The Company acknowledges the Staff’s comment and respectfully informs the Staff that the disclosures on the aforementioned pages of the 2016 10-K do not declare the product as “safe” or “effective” or having received any such determination from the FDA. Rather, the disclosures on these pages state only that the results of various trials have supported the findings of safety and efficacy with respect to the product and that the Company anticipates that future trials and studies (including the FDA accepted Phase III trial noted on page 7 of the 2016 10-K) will further these findings. While the final sentence of the third paragraph on page 8 (“Together, these findings supported that the direct injection of cellular grafts into damaged myocardium is safe and effective in the peri-infarct period.”) was included on page 91 of Amendment No. 2 to Form S-1 filed by BioCardia, Inc. on July 13, 2015 (the “July 2015 S-1/A”), the Company will replace this sentence in the forthcoming 10-K Amendment with the following:
“Together, these findings demonstrated the safety of directly injecting cellular grafts into damaged myocardium during the peri-infarct period and provided signals of efficacy.”
U.S. Securities and Exchange Commission
June 28, 2017
Page 5
Product Overview, page 4
10.
Tell us whether the studies have shown any material disadvantages or risks of your proposed products other than those mentioned in the fourth paragraph on page 5.
The Company acknowledges the Staff’s comment and respectfully informs the Staff that there have been no material disadvantages or risks of the Company’s proposed products other than as disclosed in the aforementioned paragraph of the 2016 10-K. The Company notes further that the same disclosure was also provided on page 86 of the July 2015 S-1/A, and that the Staff had no comments relating to that disclosure at the time.
11.
Clarify the difference between “post-acute myocardial infarction” mentioned on page 7 and the scope of your current IDE. We note your disclosure on page 4 that patients have been treated in post-acute infarction.
The Company acknowledges the Staff’s comment to clarify the difference between “post-acute myocardial infarction” mentioned on page 7 of the 2016 10-K and the scope of the Company’s current IDE. The Company’s current IDE is the CardiAMP Heart Failure IDE, and the ongoing trial for this IDE (“CardiAMP HF”) is now entering the Phase III stage. This IDE is designed for patients suffering from chronic heart failure that is secondary to a myocardial infarction, or a heart attack. The CardiAMP cell therapy system is also being considered as part of treatments for patients in the immediate aftermath of a heart attack (i.e. “post-acute myocardial infarction (PMI) or “post-acute infarction,” which are equivalent terms here). The Company had used the CardiAMP’s Helix platform to deliver concentrated bone marrow cells for these types of patients in a Phase I study during 2016 (which took place in Europe), and as noted on page 7 of the 2016 10-K, the Company intends to submit a slightly modified IDE for trial (“CardiAMP PMI”) in the United States for these types of patients during 2017.
U.S. Securities and Exchange Commission
June 28, 2017
Page 6
Business Strategy, page 10
12.
Disclose the existence of and reasons for material delays. For example, you disclose on page 10 that a trial is expected to have top-line results in 2019. However, BioCardia, Inc. disclosed on page 79 of Amendment No. 2 to Form S-1 filed on July 13, 2015 the anticipation of top-line trial results in the second half of 2017.
The Company acknowledges the Staff’s comment and respectfully informs the Staff that the delays resulted from a lack of funding due to the failure of the Company to complete its initial public offering in 2015. Specifically, the disclosure on page 79 of the July 2015 S-1/A was conditioned on the assumption that the Company would complete its initial public offering and receive the necessary funding in order to complete its top-line trials during the second half of 2017. Without the necessary funding, the Company’s timeline and the implementation and execution of its business strategy were delayed by the additional time it took to raise money to fund the pivotal trial. The Company does not believe that any amendment to the disclosure on page 10 of the 2016 10-K is required; however, if the Staff deems that such amendment is necessary, the Company will add the following sentence after the last sentence in the first bullet point under the subheading, “Business Strategy”:
“While we originally expected to commence this trial in the second half of 2015 and obtain results in the second half of 2017, delays in our obtaining necessary funding at the time resulted in our postponing the trial until December 2017.”
Manufacturing, page 11
13.
Tell us the status of your resolution of the observations from the February 2017 inspection.
The Company respectfully informs the Staff that following the filing of the 2016 10-K, the observations from the February 2017 inspection have since been resolved to the satisfaction of the European notified body mentioned on page 11 of the 2016 10-K.
Intellectual Property, page 11
14.
We note your disclosure regarding patents expiring beginning in 2017. Provide us your analysis of the materiality of the patents that expire this year and in 2018-2019.
The Company respectfully informs the Staff that out of the Company’s more than 50 issued U.S. patents to which it holds exclusive rights, five will expire during 2017, six will expire during 2018 and none will expire during 2019. The Company does not believe that any of the patents that are due to expire during this time period are material for the Company’s leading products or will have a material impact on the Company’s business or results of operations.
U.S. Securities and Exchange Commission
June 28, 2017
Page 7
The patent protection of biotherapeutics is complex and uncertain, page 51
15.
Tell us why publication of information relating to your potential products may prevent you from enforcing patents as you mention in this risk factor.
The Company respectfully informs the Staff that certain elements of the Company’s potential products are part of confidential, non-public trials and are not publicly disclosed. If the elements of the Company’s products were to be published before the Company obtains a patent or files a patent application, then others may be able to use the information to develop and apply for their own patent or patents, which if filed prior to the Company’s, could be superior in rights to any later filed Company patent under the “first inventor-to-file” system contemplated by the Leahy-Smith America Invents Act. Thus, the Company would be potentially unable to obtain or enforce patents relating to such products.
Sales of a substantial number of shares of our common stock, page 59
16.
Clarify the effect on sales if you were determined to have been an issuer described in Rule 144(i)(1)(i). In this regard, we note your reference on page 98 regarding your exclusion of information based on guidance in a Compliance and Disclosure Interpretation referring to transactions such as those in which the legal acquirer is a non-operating public shell.
The Company acknowledges the Staff’s comment and respectfully informs the Staff that it believes pursuant to Rule 144(i)(2), holders of unregistered shares of the Company’s common stock wi
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CORRESP 1 filename1.htm bcda20170627_corresp.htm 650 Page Mill Road Palo Alto, CA 94304-1050 PHONE 650.493.9300 FAX 650.493.6811 www.wsgr.com June 28, 2017 Via EDGAR and Overnight Delivery Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Attention: Russell Mancuso, Branch Chief, Office of Electronics and Machinery Brian Cascio, Accounting Branch Chief Julie Sherman Tom Jones Re: BioCardia, Inc. Registration Statement on Form S-3 Filed May 19, 2017 File No. 333-218124 Annual Report on Form 10-K for Fiscal Year Ended December 31, 2016 Filed March 30, 2017 File No. 000-21419 Dear Mr. Mancuso: On behalf of our client, BioCardia, Inc. (the “Company”), we submit this letter in response to comments from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by letter dated June 15, 2017 and relating to the Company’s Registration Statement on Form S-3 (File No. 333-218124) filed with the Commission on May 19, 2017 (the “Registration Statement”) and Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (File No. 000-21419) filed with the Commission on March 30, 2017 (the “2016 10-K”). The Company has also revised the Registration Statement in response to the Staff’s comments in respect of the Registration Statement and is filing concurrently with this letter a revised Registration Statement (the “Revised Registration Statement”) which reflects these revisions and updates and clarifies certain other information. For the convenience of the Staff, we are providing to the Staff by overnight delivery copies of this letter and the Revised Registration Statement (including a version marked against the Registration Statement filed on May 19, 2017), in care of Mr. Mancuso. The Company also intends to file an amendment to the 2016 10-K (the “10-K Amendment”) in order to provide additional or updated exhibits thereto and revisions to the disclosures therein, to the extent as may be requested by the Staff following receipt of this letter. austin beijing brussels hong kong los angeles new york palo alto san diego san francisco seattle shanghai washington, dc wilmington, de U.S. Securities and Exchange Commission June 28, 2017 Page 2 In this letter, we have recited the comments from the Staff in bold italicized type and have followed each comment with the Company’s response. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Revised Registration Statement or the 2016 10-K, as applicable. Except as otherwise specifically indicated, page references herein correspond to the page of the Revised Registration Statement or the 2016 10-K, as applicable. Form S-3 Common Stock, page 8 1. Address in your description of your common stock the vote required for removal of directors. In response to the Staff’s comment, the Company has revised the disclosure on page 8 in the Revised Registration Statement to include the required vote by holders of common stock to (i) remove a director or directors from the Company’s board of directors and (ii) amend the Company’s amended and restated bylaws. Exhibits 2. File the indentures, rather than forms of the indentures. Also include the information you indicate is included as exhibits 4.3 and 4.5. In response to the Staff’s comment, the Company advises the Staff that the Company has not entered into any agreement to offer or issue debt securities that will be governed by an indenture. Rather, to comply with the Trust Indenture Act of 1939, the Company has filed with the Registration Statement forms of indentures for both senior and subordinated debt securities in order to provide generic, non-specific descriptions of such debt securities, with details to be provided in a subsequent supplemental indenture at the time any series of debt securities are to be offered. Further, regarding exhibits 4.3 (the Form of Senior Debt Security) and 4.5 (the Form of Subordinate Debt Security), the Company advises the Staff that the information contained in Article 2, Sections 2.2 and 2.3 in each of the form indentures filed as exhibits 4.2 (with respect to senior debt securities) and 4.4 (with respect to subordinated debt securities) is sufficient to deem exhibits 4.3 and 4.5, respectfully, as having been included in the Registration Statement. U.S. Securities and Exchange Commission June 28, 2017 Page 3 Exhibit 5.1 3. Confirm that, with each take-down of securities on the registration statement, you will file an amended opinion of counsel that does not contain inappropriate assumptions or limitations. In response to the Staff’s comment, we and the Company confirm that an amended opinion of counsel will be filed with each take-down of securities under the Revised Registration Statement, once effective, and that all such opinions will not contain any inappropriate assumptions or limitations. 4. Reconcile the second paragraph which indicates that subscription rights do not underlie the Units with footnote (4) to the fee table of your registration statement. In response to the Staff’s comment, the legal opinion of Wilson Sonsini Goodrich & Rosati, P.C. (“WSGR”), filed as exhibit 5.1 to the Registration Statement (the “S-3 5.1 Opinion”), has been revised and filed with the Revised Registration Statement (such revised legal opinion to be referred to hereafter as the “Revised S-3 5.1 Opinion”), and such Revised S-3 5.1 Opinion makes clear that the Subscription Rights (as defined therein) do underlie the Units (as defined therein) as stated in the Registration Statement and Revised Registration Statement. 5. With regard to the equity securities, file an opinion that addresses the laws of the jurisdiction in which the registrant is organized. We note that the penultimate opinion of this exhibit addresses federal laws and the laws of New York, but the facing page of your registration statement indicates that you are incorporated in Delaware. We respectfully direct the attention of the Staff to the final paragraph on page 4 of the S-3 5.1 Opinion and Revised S-3 5.1 Opinion. The language confirms that the legal opinions provided therein address relevant laws from the State of Delaware (or more specifically, the Delaware General Corporation Law, defined therein as the “DGCL”). The legal opinions only address the laws of the State of New York as to the enforceability of the Debt Securities (as defined therein). U.S. Securities and Exchange Commission June 28, 2017 Page 4 Signatures 6. Include the registrant’s name in its signature as required by Form S-3. In response to the Staff’s comment, the Company has revised the signature page in the Revised Registration Statement to include the Company’s name, as the registrant and filer of the Revised Registration Statement. Form 10-K for Fiscal Year Ended December 31, 2016 Special Note, page i 7. You may not disclaim responsibility for your disclosure. Revise the penultimate sentence of the penultimate paragraph accordingly. In response to the Staff’s comment, the Company will remove this sentence from the “Special Note Regarding Forward-Looking Statements” or similar sections in all future reports to be filed with Commission or any other public disclosures. However, if the Staff requires the Company to amend the 2016 10-K to this effect, the Company will include language in its forthcoming10-K Amendment that the sentence in question (“Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements”) has been deleted. Business, page 1 8. Tell us whether you compensated any of the identified parties that conducted the studies that you describe in this filing. The Company acknowledges the Staff’s comment and respectfully informs the Staff that the parties identified as having conducted the studies described on page 1 of the 2016 10-K were compensated only on terms that were standard and customary in clinical study arrangements. The Company further intends to compensate the “Steering Committee” that is overseeing the current enrollment trial, which the Company is co-sponsoring. 9. If your proposed product has not been cleared for marketing by the FDA, tell us the authority on which you rely to indicate that the product is “safe” or “effective” as you do on pages 6, 8 and 9. The Company acknowledges the Staff’s comment and respectfully informs the Staff that the disclosures on the aforementioned pages of the 2016 10-K do not declare the product as “safe” or “effective” or having received any such determination from the FDA. Rather, the disclosures on these pages state only that the results of various trials have supported the findings of safety and efficacy with respect to the product and that the Company anticipates that future trials and studies (including the FDA accepted Phase III trial noted on page 7 of the 2016 10-K) will further these findings. While the final sentence of the third paragraph on page 8 (“Together, these findings supported that the direct injection of cellular grafts into damaged myocardium is safe and effective in the peri-infarct period.”) was included on page 91 of Amendment No. 2 to Form S-1 filed by BioCardia, Inc. on July 13, 2015 (the “July 2015 S-1/A”), the Company will replace this sentence in the forthcoming 10-K Amendment with the following: “Together, these findings demonstrated the safety of directly injecting cellular grafts into damaged myocardium during the peri-infarct period and provided signals of efficacy.” U.S. Securities and Exchange Commission June 28, 2017 Page 5 Product Overview, page 4 10. Tell us whether the studies have shown any material disadvantages or risks of your proposed products other than those mentioned in the fourth paragraph on page 5. The Company acknowledges the Staff’s comment and respectfully informs the Staff that there have been no material disadvantages or risks of the Company’s proposed products other than as disclosed in the aforementioned paragraph of the 2016 10-K. The Company notes further that the same disclosure was also provided on page 86 of the July 2015 S-1/A, and that the Staff had no comments relating to that disclosure at the time. 11. Clarify the difference between “post-acute myocardial infarction” mentioned on page 7 and the scope of your current IDE. We note your disclosure on page 4 that patients have been treated in post-acute infarction. The Company acknowledges the Staff’s comment to clarify the difference between “post-acute myocardial infarction” mentioned on page 7 of the 2016 10-K and the scope of the Company’s current IDE. The Company’s current IDE is the CardiAMP Heart Failure IDE, and the ongoing trial for this IDE (“CardiAMP HF”) is now entering the Phase III stage. This IDE is designed for patients suffering from chronic heart failure that is secondary to a myocardial infarction, or a heart attack. The CardiAMP cell therapy system is also being considered as part of treatments for patients in the immediate aftermath of a heart attack (i.e. “post-acute myocardial infarction (PMI) or “post-acute infarction,” which are equivalent terms here). The Company had used the CardiAMP’s Helix platform to deliver concentrated bone marrow cells for these types of patients in a Phase I study during 2016 (which took place in Europe), and as noted on page 7 of the 2016 10-K, the Company intends to submit a slightly modified IDE for trial (“CardiAMP PMI”) in the United States for these types of patients during 2017. U.S. Securities and Exchange Commission June 28, 2017 Page 6 Business Strategy, page 10 12. Disclose the existence of and reasons for material delays. For example, you disclose on page 10 that a trial is expected to have top-line results in 2019. However, BioCardia, Inc. disclosed on page 79 of Amendment No. 2 to Form S-1 filed on July 13, 2015 the anticipation of top-line trial results in the second half of 2017. The Company acknowledges the Staff’s comment and respectfully informs the Staff that the delays resulted from a lack of funding due to the failure of the Company to complete its initial public offering in 2015. Specifically, the disclosure on page 79 of the July 2015 S-1/A was conditioned on the assumption that the Company would complete its initial public offering and receive the necessary funding in order to complete its top-line trials during the second half of 2017. Without the necessary funding, the Company’s timeline and the implementation and execution of its business strategy were delayed by the additional time it took to raise money to fund the pivotal trial. The Company does not believe that any amendment to the disclosure on page 10 of the 2016 10-K is required; however, if the Staff deems that such amendment is necessary, the Company will add the following sentence after the last sentence in the first bullet point under the subheading, “Business Strategy”: “While we originally expected to commence this trial in the second half of 2015 and obtain results in the second half of 2017, delays in our obtaining necessary funding at the time resulted in our postponing the trial until December 2017.” Manufacturing, page 11 13. Tell us the status of your resolution of the observations from the February 2017 inspection. The Company respectfully informs the Staff that following the filing of the 2016 10-K, the observations from the February 2017 inspection have since been resolved to the satisfaction of the European notified body mentioned on page 11 of the 2016 10-K. Intellectual Property, page 11 14. We note your disclosure regarding patents expiring beginning in 2017. Provide us your analysis of the materiality of the patents that expire this year and in 2018-2019. The Company respectfully informs the Staff that out of the Company’s more than 50 issued U.S. patents to which it holds exclusive rights, five will expire during 2017, six will expire during 2018 and none will expire during 2019. The Company does not believe that any of the patents that are due to expire during this time period are material for the Company’s leading products or will have a material impact on the Company’s business or results of operations. U.S. Securities and Exchange Commission June 28, 2017 Page 7 The patent protection of biotherapeutics is complex and uncertain, page 51 15. Tell us why publication of information relating to your potential products may prevent you from enforcing patents as you mention in this risk factor. The Company respectfully informs the Staff that certain elements of the Company’s potential products are part of confidential, non-public trials and are not publicly disclosed. If the elements of the Company’s products were to be published before the Company obtains a patent or files a patent application, then others may be able to use the information to develop and apply for their own patent or patents, which if filed prior to the Company’s, could be superior in rights to any later filed Company patent under the “first inventor-to-file” system contemplated by the Leahy-Smith America Invents Act. Thus, the Company would be potentially unable to obtain or enforce patents relating to such products. Sales of a substantial number of shares of our common stock, page 59 16. Clarify the effect on sales if you were determined to have been an issuer described in Rule 144(i)(1)(i). In this regard, we note your reference on page 98 regarding your exclusion of information based on guidance in a Compliance and Disclosure Interpretation referring to transactions such as those in which the legal acquirer is a non-operating public shell. The Company acknowledges the Staff’s comment and respectfully informs the Staff that it believes pursuant to Rule 144(i)(2), holders of unregistered shares of the Company’s common stock wi