SEC Company Response from HUMAN BIOSYSTEMS INC (CIK 0001070181) — Dec 14, 2005
HUMAN BIOSYSTEMS INC (CIK 0001070181)
Date: Dec. 14, 2005 · CIK: 0001070181 · Accession: 0001091818-05-000404
AI Filing Summary & Sentiment
File numbers found in text: 333-128991
Referenced dates: December 1, 2005
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[LETTERHEAD]
Silicon Valley Law Group
December 14, 2005
VIA FEDERAL EXPRESS; FILED VIA EDGAR - CORRESPONDENCE
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Attn: Michael Reedich, Esq.
Division of Corporate Finance
Mail Stop 6010
Re: Human BioSystems
Registration Statement on Form SB-2
File No. 333-128991
Dear Mr. Reedich:
On behalf of Human BioSystems, a California corporation (the "Company"),
we have been authorized to present the following responses to that certain
letter from the Staff dated December 1, 2005 (the "Comment Letter"), relating
to the Company's Registration Statement on Form SB-2 (File No. 333-128991) (the
"Registration Statement").
Concurrently herewith, the Company is filing with the Commission Amendment
No. 2 to the Registration Statement ("Amendment No. 2"), which also responds to
the Comment Letter.
The Staff's comments have been set forth below in italics, and the
following paragraphs have been numbered to correspond to the numeration of the
Comment Letter.
We and our Chief Executive Officer are the subject of SEC and Justice
Department proceedings for securities fraud.
1. We note our prior comment 1 and your response. You should expand
the disclosure to explain why you believe, "the issues involved in this matter
were resolved over two years ago to the full satisfaction of all investors."
Disclose how much was repaid and to whom.
Pursuant to your request, we have expanded the disclosure in this risk
factor and in the section of Amendment No. 2 entitled "Business - Legal
Proceedings" to provide an explanation of why the Company believes that the
issues involved in the rescission offer have been resolved to the full
satisfaction of all of the subject investors. Please see pages 8 and 39 of
Amendment No.2.
2. Please explain why you believe the deferred prosecution agreement
between the government and Mr. Masuda should lead to a dismissal of all charges
against him. Absent a well- founded and factually supported belief that this
will happen, you should delete this prediction.
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The statement in question is derived from the January 2005 Pretrial
Diversion Agreement and the accompanying Addendum by and between Mr. Masuda and
the United States Attorney's Office. The Addendum specifically states "if
Harry Masuda complies with all of the terms of the Pretrial Diversion Agreement
and this Addendum thereto, [the United States Attorney's Office] will file a
motion to dismiss the charges against him contained in the above-captioned
superseding indictment (the "Indictment") and no further criminal charges will
be brought against Harry Masuda . . . ." This statement in the Addendum forms
the foundation for the Company's belief that the charges should be dismissed at
the end of the 18-month deferred prosecution term.
Liquidity and Capital Resources
3. We note our prior Comment 4 and your response and reissue the
comment. As to the Ben David transaction, please state how many shares Mr. Ben
David sold or transferred.
As indicated in our prior response, the Company does not currently know how
many shares Mr. Ben David has sold or transferred. Ben David originally had
one stock certificate representing an aggregate of 23,000,000 shares of common
stock. Pursuant to his request, the Company permitted Ben David to exchange the
original stock certificate for three certificates (one for 8,000,000 shares to
Ben David and one to each of two of his affiliates, Geneva Equities and
Shearson Foundation for an aggregate of 15,000,000 shares). After terminating
the Loan Agreement, the Company requested the return of all three stock
certificates. Ben David returned the one in his name (for an aggregate of
8,000,000 shares of common stock), but indicated that he no longer had the
other two certificates, and in fact the Company has been told by a German bank
that they are being held by German securities authorities due to concerns that
they are counterfeit. To date, the Company has not been able to secure the
return of the other two certificates from the German authorities.
As indicated in Amendment No. 2, in the second quarter of 2005, the Company
became aware that shares of common stock may have been sold in Germany without
authorization. Based on the allegations from the German securities
authorities, the Company believed that these shares might have been derived
from a copy of either the certificate returned by Ben David or the two
certificates being held by the German securities authorities. The Company is
currently conducting an exchange offer that will require German shareholders to
exchange their Company stock for new common stock; at that point it may learn
how many shares of Company common stock were sold by Ben David.
Please contact me if you have any questions or comments regarding this
response or Amendment No. 2 to the Registration Statement.
Very truly yours,
SILICON VALLEY LAW GROUP
A Law Corporation
/s/ Cathryn S. Gawne
By:___________________________
Cathryn S. Gawne, Esq.
Enclosures
cc: Mr. Harry Masuda
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