SecProbe.io

CORRESP
1
filename1.htm

Correspondence

Ward B. Hinkle

Partner

Direct Dial: 716.848.1281

Direct Facsimile: 716.849.0349

whinkle@hodgsonruss.com

                        September 7, 2005

Securities and Exchange Commission

100F Street, N.E.

Mailstop 6010

Washington, D.C. 20549

Attention: Song P. Brandon

John Krug

Jeffrey Riedler

Ladies/Gentlemen:

    Re:
    Minrad International, Inc.

    Registration Statement on Form SB-2

    File No. 333-126359

This letter responds to your letter dated July 28, 2005 to Minrad
International, Inc. ("Minrad") regarding the above registration. The following
numbered comments respond to your comments with the same numbers contained in
your letter. The changes discussed below are reflected in Amendment No. 1 to the
Registration Statement, which is being filed today.

General

                1. SEC Comment: In your response letter, please state our
        comment and then explain each change that has been made in response to a
        comment. In addition, you should also reference each page number in
        which disclosure has been revised in response to a comment so that we
        can easily place your revised disclosure in its proper context.

        Response: The requested procedure has been followed.

                2. SEC Comment: 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: The requested procedure has been followed.

                3. SEC Comment: We note that you have filed a confidential
        treatment request for certain of your exhibits. In that regard, please
        be advised that comments related to your requests for confidential
        treatment will be delivered under separate cover. We will not be in a
        position to consider a request for acceleration of effectiveness of this
        registration statement until we resolve all issues concerning the
        confidential treatment request.

                Response: The confidential treatment requests referred to
        relate to (1) a confidentiality request dated 2/24/05 filed with the SEC
        on 2/25/05 in connection with Exhibit 10.1 to Form 8-K dated February
        17, 2005, which was incorporated by reference as Exhibit 10.5 to the
        Form SB-2; and (2) a confidentiality request dated 5/13/05 filed with
        the SEC on 5/16/05 in connection with Exhibit 10.8 to the Form 10-QSB
        for the quarter ended 3/31/05, which was incorporated by reference as
        Exhibit 10.8 to the Registration Statement on Form SB-2. The requested
        confidential treatment related solely to item pricing under distribution
        agreements and did not appear to raise any significant legal issues. To
        date, we have not received any response from the SEC with respect to the
        requested confidential treatment. If acceleration of the registration
        statement is contingent upon resolution of issues related to the
        confidentiality requests filed in February and May, we respectfully
        request that you provide us with any comments on those requests
        immediately so that we may respond to them.

                4. SEC Comment: In your next amendment, please update the
        disclosure, including updated financial information, and in your risk
        factors section, as of a recent date practicable.

                Response: Updated financial information has been provided,
        including updated financial information contained in the Risk Factors
        section.

                5. SEC Comment: Provide interim financial information in
        accordance with Item 310(g) of Regulation S-B.

                Response: Updated interim financial information in accordance
        with Item 310(g) of Regulation S-B has been provided in the financial
        statements beginning at page F-1.

                6. SEC Comment: Where applicable, please amend your transition
        report on Form 10-KSB for the three-months ended December 31, 2004 and
        your Form 10-QSB for the quarter ended March 31, 2005 to comply with our
        comments on your Form SB-2.

                Response: When you have indicated that the changes to the
        Registration Statement that we have proposed in response to your
        requests are acceptable to you, Minrad will make conforming changes to
        its Form 10-KSB for the three-months ended December 31, 2004 and its
        Form 10-QSB for the quarter ended March 31, 2005. Please confirm that
        you are only requesting conforming changes relating to disclosures about
        historical events that occurred during the periods covered by those
        reports and not changes relating to disclosures about events that
        occurred subsequent to the periods covered by those reports or changes
        to forward looking statements made in those reports relating to periods
        subsequent to the periods covered by those reports.

        Registration Statement Cover Page

                7. SEC Comment: Although Form SB-2 does not contain a space to
        indicate that the securities are to be offered on a delayed or
        continuous basis pursuant to Rule 415 under the Securities Act, please
        revise to include this disclosure.

                Response: The language and check-box disclosure for a delayed
        or continuous offering pursuant to Rule 415 has been added to the cover
        page of Amendment No. 1 to the registration statement.

        Prospectus Cover Page

                8. SEC Comment: Please revise the third line where you
        disclose the number of shares of common stock to say "up to 25,120,561
        shares of common stock."

                Response: The reference to "up to 25,120,561 shares" has been
        added in the third line of the cover page of the prospectus.

        Risk Factors, page 4

                9. SEC Comment: We note your statement that, "The risks and
        uncertainties described below are not the only ones facing our company.
        Additional risks and uncertainties may also adversely impair our
        business operations." Please eliminate or revise these sentences as they
        imply that there are other risks that the investors should consider
        before investing in your company when the risk factors section should
        list all of the risks key to an investment decision.

                Response: The two sentences in the first paragraph on page 4
        of the prospectus have been deleted as requested.

    "We are currently in a growth stage and may experience setbacks in both
    business ....," page 4

                10. SEC Comment: Please clarify how long you have been
        manufacturing and marketing inhalation anesthetics.

                Response: Statement concerning the date on which the Company
        commenced manufacturing and marketing inhalation anesthetics and the
        status of production and marketing of the SabreSourceTM
        system have been inserted in the subject risk factor.

                11. SEC Comment: Please also clarify when you launched the
        SabreSource system, and explain how your operations in producing this
        system have been limited. Please provide examples to illustrate your
        point.

                Response: The disclosure in the subject risk factor has been
        modified to clarify that Minrad has just began production of SabreSource
        for testing purposes in August of 2005 and that Minrad expects to begin
        marketing SabreSource in September of 2005.

        "We have historically experienced operating losses and expect to
        continue to ....," page 5

                12. SEC Comment: To the extent possible, please quantify the
        significant up-front expenditures you have incurred in the production
        and marketing activities of your inhalation anesthetics and image
        guidance system products as well as the amount of revenue you have
        derived from the sale of these products to date.

                Response: Additional disclosure concerning accumulated
        aggregate deficits and revenues has been inserted in the risk factor.
        Please note that the reference to "up-front expenditures" is intended to
        refer to all expenditures that may be incurred in the future before
        significant revenues are realized. Your question, for disclosure of all
        "significant" up-front expenditures that have already been experienced
        in the production and marketing of inhalation anesthetics and image
        guidance system products would require a recapitulation of the
        expenditures incurred by Minrad since its inception in 1994. With regard
        to image guidance, most of Minrad's revenues were generated during the
        period that it actively marketed its first generation DRTS® system from
        1999 to 2002, a period for which Minrad does not have discrete, separate
        financial information between the lines of business.

                Moreover, although Minrad's up-front expenditures have been large
        (as reflected by its cumulative deficit), their size has resulted more
        from their cumulating over many years than from the magnitude of
        individual expenditures. The acquisition of the Bethlehem, PA plant for
        $1.36 million in December of 2000 was the largest single expenditure.
        Because of the extended time period and the lack of large, individual
        expenditures, we believe that quantification of individual up-front
        expenditures would not appear to be meaningful or helpful to investors.

                Minrad has provided revenue information for the period from October
        1, 2002 through June 30, 2005 in the risk factor.

    "We will need to raise additional capital to fulfill our business
    strategies. We may ....," page 5

                13. SEC Comment: We note your disclosure relating to the need
        to raise additional capital. To the extent possible, please quantify how
        much capital you intend to need or raise in the next 12 to 18 months.
        Please also provide similar disclosure in your Liquidity and Capital
        Resources section.

                Response: The disclosure under this risk factor has been
        revised to indicate the uncertainties concerning the amount of
        additional funding that may be required in the short to term and to
        indicate the prospective amounts and sources that Minrad has currently
        planned to raise. Similar disclosure has been provided in the "Liquidity
        and Capital" section on page [__].

                14. SEC Comment: Please disclose how long you will be able to
        maintain your operations without obtaining additional funds. To the
        extent possible, please put your cash needs in a context by stating the
        amount of cash you currently have available to you and the average
        amount of cash you are using on a monthly basis. Please also provide
        similar disclosure in your Liquidity and Capital Resources section.

                Response: As indicated in the revised risk factor, Minrad is
        unable to estimate its expenses and revenues with sufficient accuracy to
        reasonably predict how long it could maintain its operations without
        obtaining additional funds. Information concerning cash available and
        average monthly cash usage has been provided in the risk factor.

                15. SEC Comment: In addition, please note that each risk
        factor should discuss one risk. We note that the discussion in the last
        three sentences of this risk factor appear to be discussing two separate
        risks. More specifically, the separate risk that if you issued
        additional capital, the dilution consequences of such an issuance; and
        the separate risk of debt financing, which may involve unfavorable
        financial terms or significant restrictive covenants. Please revise this
        section such that each risk factor is presented separately.

                Response: As requested, the last three sentences of the risk
        factor have been revised into two new risk factors that follow
        immediately after the subject risk factor.

        "The loss of the services of key personnel would adversely affect our
        business....," page 6

                16. SEC Comment: Please identify the positions that each of
        William Burns and John McNeirney have with your company in this risk
        factor.

                Response: The positions of Mr. Burns and Mr. McNeirney have
        been indicated in the risk factor.

                17. SEC Comment: Please also briefly indicate the status of
        your conscious sedation program, including when you expect to complete
        the program.

                Response: Disclosure that of the expected completion date for
        the conscious sedation program has been added to the risk factor.

                18. SEC Comment: In addition, please indicate if you maintain
        any key life insurance policies or employment agreements with these
        individuals.

                Response: Disclosure concerning key-man life insurance
        policies and employment agreements for Messrs. Burns and McNeirney has
        been added to the risk factor.

        "We must hire and retain skilled technical and managerial personnel,"
        page 6

                19. SEC Comment: To the extent that you have experienced
        problems hiring or retaining employees, please revise to disclose the
        problems and resulting consequences.

                Response: The risk factor has been revised to emphasize the
        fact that this is a prospective risk. Minrad has not experienced
        significant problems hiring or retaining employees to date, but with the
        anticipated growth of the company and the concomitant need to
        substantially increase its technical and marketing staff, acquisition
        and retention of these kinds of employees is a foreseeable problem.

        "We depend on strategic partnerships and relationships," page 7

                20. SEC Comment: To the extent you have established any
        alliances with strategic partnerships and relationships that you believe
        are material to your business, please identify those partnerships and
        relationships in the Business section of your prospectus, please provide
        the material terms of any agreements you have with such partners. Please
        also file the agreements as exhibits to your registration statement. In
        the alternative, please provide an analysis as to why such agreements
        are not material to you.

                Response: Minrad has material distributorship agreements with
        RxElite Corporation and with Merck Génériques. (Please note that
        references to "E. Merck" have been replaced with references to "Merck
        Génériques," the company's formal name). Additional description of the
        RxElite Agreement has been added to its description under BUSINESS --
        Anesthesia and Analgesia Competitive Strategy on page [43] and a new
        paragraph concerning the Merck Génériques agreement has been added
        immediately thereafter. The agreements were previously filed as exhibits
        10.5 and 10.8 to the registration statement. Minrad has numerous other
        distributorship arrangements (none of which are currently material to
        its revenues) for inhalation anesthesia products, which are