SEC Company Response from ADMA BIOLOGICS, INC. (ADMA) (CIK 0001368514) (ADMA) — May 8, 2012
ADMA BIOLOGICS, INC. (ADMA) (CIK 0001368514)
Date: May 8, 2012 · CIK: 0001368514 · Accession: 0001193805-12-000863
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-180449
Referenced dates: April 24, 2012, March 9, 2012
Letter
Division of Corporation Finance Securities and Exchange Commission ADMA Biologics, Inc. Registration Statement on Form S-1 Filed March 29, 2012 File No. 333-180449
Dear Mr. Dobbie:
By letter dated April 24, 2012 (the “SEC Letter”), the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) provided comments on the registration statement on Form S-1 ( the “Original Filing”) filed by ADMA Biologics, Inc. (the “Company”). The Company has revised the Original Filing to reflect its responses to the SEC Letter in an amendment to the Original Filing (the “Amendment”), which is filed with the Commission concurrently herewith. Capitalized terms used but not defined herein have the meaning ascribed to such terms in the Amendment.
In order to facilitate your review, this letter responds, on behalf of the Company, to each of the comments set forth in the SEC Letter on a point-by-point basis. The numbered paragraphs set forth below respond to the Staff’s comments and correspond to the numbered paragraphs in the SEC Letter. Unless otherwise noted, page numbers refer to the marked copy of the Amendment.
General
1.
Since you appear to qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“the Act”), please disclose on your prospectus cover page that you are an emerging growth company, and revise your prospectus to provide the following additional disclosures:
·
Describe how and when a company may lose emerging growth company status;
·
A brief description of the various exemptions that are available to you, such as exemptions from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934; and
·
Your election under Section 107(b) of the Act:
U.S. Securities and Exchange
Commission
May 8, 2012
Page 2
o
If you have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act, include a statement that the election is irrevocable; or
o
If you have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2)(B) of the Act, provide a risk factor explaining that this election allows you to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. Please state in your risk factor that, as a result of this election, your financial statements may not be comparable to companies that comply with public company effective dates. Include a similar statement in your critical accounting policy disclosures in MD&A.
RESPONSE: The Company has added the requested disclosure to the prospectus cover page, as well as to pages 4, 32 and 61 of the Amendment.
2.
We note the comment letters from the staff dated March 9, 2012 and April 12, 2012 regarding your Form 8-K filed on February 13, 2012, as amended. Please be advised that your outstanding comments concerning the Form 8-K must be resolved prior to the effectiveness of this Form S-1 registration statement. Additionally, to the extent you amend the Form 8-K, in response to comments or otherwise, please revise to make any applicable conforming changes to this Form S-1.
RESPONSE: The Company acknowledges the Staff’s comments and will, to the extent it amends the Form 8-K, revise the registration statement on Form S-1 to make any applicable conforming changes. It has also revised the registration statement on Form S-1 to include applicable changes made in Amendment No. 2 to Form 8-K filed on April 24, 2012.
3.
We note your pending confidential treatment request related to Exhibits 10.8 and 10.9 incorporated by reference to your Form 8-K filed on February 13, 2012. Please note that the staff must act on this confidential treatment request before the acceleration of effectiveness of this Form S-1.
RESPONSE: The Company acknowledges the Staff’s comment.
4.
It appears that the offering by the selling stockholders may be an indirect primary offering rather than a secondary offering. Please revise to name each of the selling stockholders as underwriters and to conduct the offering at a fixed price or provide detailed legal analyses explaining why this is not necessary.
RESPONSE: Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), provides that “(a) Securities may be registered for an offering to be made on a continuous or delayed basis in the future, provided, that: (1) The registration statement pertains only to: (i) Securities which are to be offered or sold solely by or on behalf of a person or persons other than the registrant, a subsidiary of the registrant, or a person of which the registrant is a subsidiary….”
U.S. Securities and Exchange
Commission
May 8, 2012
Page 3
In the event that an offering registered in reliance on Rule 415(a)(1)(i) is deemed to be an offering that is “by or on behalf of the registrant” as specified in Rule 415(a)(1)(x), Rule 415 contains additional limitations. Rule 415(a)(4) provides that:
“In the case of a registration statement pertaining to an at the market offering of equity securities by or on behalf of the registrant, the offering must come within paragraph (a)(1)(x) of this section. As used in this paragraph, the term ‘at the market offering’ means an offering of equity securities into an existing trading market for outstanding shares of the same class at other than a fixed price.”
As a result, if an offering which purports to be a secondary offering is recharacterized as an offering “by or on behalf of the registrant,” Rule 415 is only available to register an “at the market offering” if the registrant is eligible to use Form S-3 or Form F-3 to register a primary offering. The Company is currently not eligible to use Form S-3 to effect a primary offering. Therefore, it cannot use Rule 415 to register a primary offering “at the market.”
In the event that the offering covered by the registration statement is recharacterized as a primary offering on behalf of the Company, (i) the offering would have to be made on a fixed price basis (in other words, the selling stockholders would not be able to sell their securities at prevailing market prices), (ii) the selling stockholders would be deemed to be “underwriters” (with the attendant liabilities under Section 11 of the Securities Act) and (iii) in accordance with the Staff’s long-standing interpretive position, Rule 144 would never be available to them to effect resales of their securities.
Because of the requirements of Rule 415, the Staff’s interpretation that the resale of the securities covered by the registration statement (the “Registrable Shares”) appears to be a primary offering would have a dramatic impact on the ability of a selling stockholder to effect the resale of its shares. Because such a recharacterization would have such a dramatic impact, and a mischaracterization could have a chilling effect on the ability of smaller public companies, like the Company, to raise capital, the Staff should only recharacterize a secondary offering as being made on behalf of a registrant after careful and complete review of the relevant facts and circumstances.
In Compliance and Disclosure Interpretation 612.09 (“CDI 612.09”) with respect to the rules under the Securities Act, the Staff acknowledged that:
[i]t is important to identify whether a purported secondary offering is really a primary offering, i.e., the selling shareholders are actually underwriters selling on behalf of an issuer. Underwriter status may involve additional disclosure, including an acknowledgment of the seller’s prospectus delivery requirements. In an offering involving Rule 415 or Form S-3, if the offering is deemed to be on behalf of the issuer, the Rule and Form in some cases will be unavailable (e.g., because of the Form S-3 “public float” test for a primary offering, or because Rule 415(a)(1)(i) is available for secondary offerings, but primary offerings must meet the requirements of one of the other subsections of Rule 415). The question of whether an offering styled a secondary one is really on behalf of the issuer is a difficult factual one, not merely a question of who receives the proceeds. Consideration should be given to how long the selling shareholders have held the shares, the circumstances under which they received them, their relationship to the issuer, the amount of shares involved, whether the sellers are in the business of underwriting securities, and finally, whether under all the circumstances it appears that the seller is acting as a conduit for the issuer. (emphasis added)
U.S. Securities and Exchange
Commission
May 8, 2012
Page 4
After consideration of all of the factors listed in CDI 612.09, which are discussed in detail below in the context of the registration statement, it is the Company’s view that the offering of the Registrable Shares is a valid secondary offering and is eligible to be made under Rule 415(a)(1)(i) under the Securities Act as contemplated by the registration statement.
The date on which and the circumstances in which each selling stockholder received the shares and/or the overlying securities
1,828,128 of the 1,969,026 Registrable Shares were acquired by selling stockholders in the reverse merger in exchange for shares received in the 2012 Financing effected in connection with such reverse merger on February 13, 2012. 53,044 of the Registrable Shares were acquired by selling stockholders in exchange for shares received in connection with the organization of ParentCo in 2006. Furthermore, 87,865 of the Registrable Shares are issuable upon exercise of warrants acquired by the placement agent in exchange for warrants issued to the placement agent in the 2012 Financing.
In any event, however, the length of time for which the selling stockholders will have held their Registrable Shares or overlying securities prior to resale pursuant to the registration statement is only one factor cited in CDI 612.09, to be considered alongside the other factors listed therein in arriving at a conclusion, after careful and complete review of the relevant facts and circumstances, of whether the transaction at issue is in fact a primary offering.
Also relevant to the analysis are the circumstances under which the selling stockholders received the Registrable Shares and/or the overlying securities. In the case at hand, the selling stockholders received the Registrable Securities and/or the overlying securities in the reverse merger in exchange for securities received either in the 2012 Financing or at the organization of ParentCo. In both cases, the issuances were valid private placements under Section 4(2) of the Securities Act and Regulation D promulgated thereunder.
All of the selling stockholders acquired their Registrable Shares, or in the case of the Placement Agent Warrants, such warrants, for investment and specifically represented to the Company that they were not acquiring their securities with a view to distribution or resale of the securities except in full compliance with all applicable provisions of the Securities Act. There is no evidence to suggest that those representations are false. The mere fact that the Registrable Shares are now being registered for resale is no evidence that the selling stockholders desire to effect an immediate distribution. In fact, there are a number of reasons why investors want shares registered other than to effect an immediate sale. Many private investment funds, for example, some of which are among the selling stockholders, are required to mark their portfolios to market. If portfolio securities are not registered, such investors are required to mark down the book value of those securities to reflect an illiquidity discount. That portfolio valuation does not depend on whether the selling stockholders intend to dispose of their shares or to hold them for an indefinite period. In addition, many investors are fiduciaries of other people’s money and have a common law duty to act prudently. It would be irresponsible for those investors not to have their shares registered. Not registering the shares would prevent them from taking advantage of market opportunities or from liquidating their investment if there is a fundamental shift in their investment judgment about the Company. Finally, registered shares of many issuers are eligible to be used as margin collateral under the Federal Reserve’s margin regulations. Restricted securities cannot be “margin stock.” The potential diminution of value of holding unregistered securities relative to holding registered securities explains why the selling stockholders negotiated for registration rights during the negotiations that preceded the 2012 Financing.
U.S. Securities and Exchange
Commission
May 8, 2012
Page 5
There is also no evidence that the selling stockholders are acting in concert to effect a distribution of the Registrable Shares. There are 16 persons or entities for whom the sale of securities is being registered in the registration statement. There is no evidence that the selling stockholders have any plan to act in concert with respect to their Registrable Shares. Under the Exchange Act of 1934, as amended (the “Exchange Act”), such a plan would make such investors a “group” under Section 13(d) of the Exchange Act. In similar circumstances, courts have found that investors who merely sign the same investment documents do not constitute a “group” for 13(d) purposes. See, e.g., Litzler v. CC Investments, 411 F.Supp. 2d 411 (S.D.N.Y. 2006) (investors participating in the same financing and signing the same investment documents prepared by one counsel are not a “group”). Accordingly, there does not appear to be any valid basis to impute to the selling stockholders any intent to act in concert.
Furthermore, under the Commission’s own rules, a “distribution” requires special selling efforts. Rule 100(b) of Regulation M defines a “distribution” as
“an offering of securities, whether or not subject to registration under the Securities Act, that is distinguished from ordinary trading transactions by the magnitude of the offering and the presence of special selling efforts and selling methods.” (Emphasis added)
There is no evidence in this case that any special selling efforts or selling methods have taken place or would take place if the sale of all of the Registrable Shares were registered. Again, it is unlikely that the selling stockholders in the 2012 Financing will band together to distribute their shares. Nor is there any evidence that any of the selling stockholders have conducted any road shows or taken any other actions to condition or “prime” the market for their shares. To do so would violate the detailed representations made by them in documents executed in connection with the 2012 Financing and the reverse merger.
Further reducing the probability of a distribution intent is the fact that approximately 74% of the Registrable Shares were issued to parties who are now affiliates of the Company (“Affiliates”) although certain of such parties were not Affiliates prior to the 2012 Financing. Under Section 16(b) under the Exchange Act and Rule 16b-6 thereunder, Affiliates would be subject to short-swing profit liability if they sold any of the Registrable Shares within six months of the 2012 Financing.
Finally, for practical purpose
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CORRESP
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Unassociated Document
SNR Denton US LLP
101 JFK Parkway
Short Hills, NJ 07078-2708 USA
Roland S. Chase
Partner
roland.chase@snrdenton.com
D +1 973 912 7179
T +1 973 912 7100
F +1 973 912 7199
snrdenton.com
May 8, 2012
Justin Dobbie, Esq.
Legal Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
100 F. Street, N.E.
Washington, D.C. 20549-3010
Re:
ADMA Biologics, Inc.
Registration Statement on Form S-1
Filed March 29, 2012
File No. 333-180449
Dear Mr. Dobbie:
By letter dated April 24, 2012 (the “SEC Letter”), the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) provided comments on the registration statement on Form S-1 ( the “Original Filing”) filed by ADMA Biologics, Inc. (the “Company”). The Company has revised the Original Filing to reflect its responses to the SEC Letter in an amendment to the Original Filing (the “Amendment”), which is filed with the Commission concurrently herewith. Capitalized terms used but not defined herein have the meaning ascribed to such terms in the Amendment.
In order to facilitate your review, this letter responds, on behalf of the Company, to each of the comments set forth in the SEC Letter on a point-by-point basis. The numbered paragraphs set forth below respond to the Staff’s comments and correspond to the numbered paragraphs in the SEC Letter. Unless otherwise noted, page numbers refer to the marked copy of the Amendment.
General
1.
Since you appear to qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“the Act”), please disclose on your prospectus cover page that you are an emerging growth company, and revise your prospectus to provide the following additional disclosures:
·
Describe how and when a company may lose emerging growth company status;
·
A brief description of the various exemptions that are available to you, such as exemptions from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934; and
·
Your election under Section 107(b) of the Act:
U.S. Securities and Exchange
Commission
May 8, 2012
Page 2
o
If you have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act, include a statement that the election is irrevocable; or
o
If you have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2)(B) of the Act, provide a risk factor explaining that this election allows you to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. Please state in your risk factor that, as a result of this election, your financial statements may not be comparable to companies that comply with public company effective dates. Include a similar statement in your critical accounting policy disclosures in MD&A.
RESPONSE: The Company has added the requested disclosure to the prospectus cover page, as well as to pages 4, 32 and 61 of the Amendment.
2.
We note the comment letters from the staff dated March 9, 2012 and April 12, 2012 regarding your Form 8-K filed on February 13, 2012, as amended. Please be advised that your outstanding comments concerning the Form 8-K must be resolved prior to the effectiveness of this Form S-1 registration statement. Additionally, to the extent you amend the Form 8-K, in response to comments or otherwise, please revise to make any applicable conforming changes to this Form S-1.
RESPONSE: The Company acknowledges the Staff’s comments and will, to the extent it amends the Form 8-K, revise the registration statement on Form S-1 to make any applicable conforming changes. It has also revised the registration statement on Form S-1 to include applicable changes made in Amendment No. 2 to Form 8-K filed on April 24, 2012.
3.
We note your pending confidential treatment request related to Exhibits 10.8 and 10.9 incorporated by reference to your Form 8-K filed on February 13, 2012. Please note that the staff must act on this confidential treatment request before the acceleration of effectiveness of this Form S-1.
RESPONSE: The Company acknowledges the Staff’s comment.
4.
It appears that the offering by the selling stockholders may be an indirect primary offering rather than a secondary offering. Please revise to name each of the selling stockholders as underwriters and to conduct the offering at a fixed price or provide detailed legal analyses explaining why this is not necessary.
RESPONSE: Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), provides that “(a) Securities may be registered for an offering to be made on a continuous or delayed basis in the future, provided, that: (1) The registration statement pertains only to: (i) Securities which are to be offered or sold solely by or on behalf of a person or persons other than the registrant, a subsidiary of the registrant, or a person of which the registrant is a subsidiary….”
U.S. Securities and Exchange
Commission
May 8, 2012
Page 3
In the event that an offering registered in reliance on Rule 415(a)(1)(i) is deemed to be an offering that is “by or on behalf of the registrant” as specified in Rule 415(a)(1)(x), Rule 415 contains additional limitations. Rule 415(a)(4) provides that:
“In the case of a registration statement pertaining to an at the market offering of equity securities by or on behalf of the registrant, the offering must come within paragraph (a)(1)(x) of this section. As used in this paragraph, the term ‘at the market offering’ means an offering of equity securities into an existing trading market for outstanding shares of the same class at other than a fixed price.”
As a result, if an offering which purports to be a secondary offering is recharacterized as an offering “by or on behalf of the registrant,” Rule 415 is only available to register an “at the market offering” if the registrant is eligible to use Form S-3 or Form F-3 to register a primary offering. The Company is currently not eligible to use Form S-3 to effect a primary offering. Therefore, it cannot use Rule 415 to register a primary offering “at the market.”
In the event that the offering covered by the registration statement is recharacterized as a primary offering on behalf of the Company, (i) the offering would have to be made on a fixed price basis (in other words, the selling stockholders would not be able to sell their securities at prevailing market prices), (ii) the selling stockholders would be deemed to be “underwriters” (with the attendant liabilities under Section 11 of the Securities Act) and (iii) in accordance with the Staff’s long-standing interpretive position, Rule 144 would never be available to them to effect resales of their securities.
Because of the requirements of Rule 415, the Staff’s interpretation that the resale of the securities covered by the registration statement (the “Registrable Shares”) appears to be a primary offering would have a dramatic impact on the ability of a selling stockholder to effect the resale of its shares. Because such a recharacterization would have such a dramatic impact, and a mischaracterization could have a chilling effect on the ability of smaller public companies, like the Company, to raise capital, the Staff should only recharacterize a secondary offering as being made on behalf of a registrant after careful and complete review of the relevant facts and circumstances.
In Compliance and Disclosure Interpretation 612.09 (“CDI 612.09”) with respect to the rules under the Securities Act, the Staff acknowledged that:
[i]t is important to identify whether a purported secondary offering is really a primary offering, i.e., the selling shareholders are actually underwriters selling on behalf of an issuer. Underwriter status may involve additional disclosure, including an acknowledgment of the seller’s prospectus delivery requirements. In an offering involving Rule 415 or Form S-3, if the offering is deemed to be on behalf of the issuer, the Rule and Form in some cases will be unavailable (e.g., because of the Form S-3 “public float” test for a primary offering, or because Rule 415(a)(1)(i) is available for secondary offerings, but primary offerings must meet the requirements of one of the other subsections of Rule 415). The question of whether an offering styled a secondary one is really on behalf of the issuer is a difficult factual one, not merely a question of who receives the proceeds. Consideration should be given to how long the selling shareholders have held the shares, the circumstances under which they received them, their relationship to the issuer, the amount of shares involved, whether the sellers are in the business of underwriting securities, and finally, whether under all the circumstances it appears that the seller is acting as a conduit for the issuer. (emphasis added)
U.S. Securities and Exchange
Commission
May 8, 2012
Page 4
After consideration of all of the factors listed in CDI 612.09, which are discussed in detail below in the context of the registration statement, it is the Company’s view that the offering of the Registrable Shares is a valid secondary offering and is eligible to be made under Rule 415(a)(1)(i) under the Securities Act as contemplated by the registration statement.
The date on which and the circumstances in which each selling stockholder received the shares and/or the overlying securities
1,828,128 of the 1,969,026 Registrable Shares were acquired by selling stockholders in the reverse merger in exchange for shares received in the 2012 Financing effected in connection with such reverse merger on February 13, 2012. 53,044 of the Registrable Shares were acquired by selling stockholders in exchange for shares received in connection with the organization of ParentCo in 2006. Furthermore, 87,865 of the Registrable Shares are issuable upon exercise of warrants acquired by the placement agent in exchange for warrants issued to the placement agent in the 2012 Financing.
In any event, however, the length of time for which the selling stockholders will have held their Registrable Shares or overlying securities prior to resale pursuant to the registration statement is only one factor cited in CDI 612.09, to be considered alongside the other factors listed therein in arriving at a conclusion, after careful and complete review of the relevant facts and circumstances, of whether the transaction at issue is in fact a primary offering.
Also relevant to the analysis are the circumstances under which the selling stockholders received the Registrable Shares and/or the overlying securities. In the case at hand, the selling stockholders received the Registrable Securities and/or the overlying securities in the reverse merger in exchange for securities received either in the 2012 Financing or at the organization of ParentCo. In both cases, the issuances were valid private placements under Section 4(2) of the Securities Act and Regulation D promulgated thereunder.
All of the selling stockholders acquired their Registrable Shares, or in the case of the Placement Agent Warrants, such warrants, for investment and specifically represented to the Company that they were not acquiring their securities with a view to distribution or resale of the securities except in full compliance with all applicable provisions of the Securities Act. There is no evidence to suggest that those representations are false. The mere fact that the Registrable Shares are now being registered for resale is no evidence that the selling stockholders desire to effect an immediate distribution. In fact, there are a number of reasons why investors want shares registered other than to effect an immediate sale. Many private investment funds, for example, some of which are among the selling stockholders, are required to mark their portfolios to market. If portfolio securities are not registered, such investors are required to mark down the book value of those securities to reflect an illiquidity discount. That portfolio valuation does not depend on whether the selling stockholders intend to dispose of their shares or to hold them for an indefinite period. In addition, many investors are fiduciaries of other people’s money and have a common law duty to act prudently. It would be irresponsible for those investors not to have their shares registered. Not registering the shares would prevent them from taking advantage of market opportunities or from liquidating their investment if there is a fundamental shift in their investment judgment about the Company. Finally, registered shares of many issuers are eligible to be used as margin collateral under the Federal Reserve’s margin regulations. Restricted securities cannot be “margin stock.” The potential diminution of value of holding unregistered securities relative to holding registered securities explains why the selling stockholders negotiated for registration rights during the negotiations that preceded the 2012 Financing.
U.S. Securities and Exchange
Commission
May 8, 2012
Page 5
There is also no evidence that the selling stockholders are acting in concert to effect a distribution of the Registrable Shares. There are 16 persons or entities for whom the sale of securities is being registered in the registration statement. There is no evidence that the selling stockholders have any plan to act in concert with respect to their Registrable Shares. Under the Exchange Act of 1934, as amended (the “Exchange Act”), such a plan would make such investors a “group” under Section 13(d) of the Exchange Act. In similar circumstances, courts have found that investors who merely sign the same investment documents do not constitute a “group” for 13(d) purposes. See, e.g., Litzler v. CC Investments, 411 F.Supp. 2d 411 (S.D.N.Y. 2006) (investors participating in the same financing and signing the same investment documents prepared by one counsel are not a “group”). Accordingly, there does not appear to be any valid basis to impute to the selling stockholders any intent to act in concert.
Furthermore, under the Commission’s own rules, a “distribution” requires special selling efforts. Rule 100(b) of Regulation M defines a “distribution” as
“an offering of securities, whether or not subject to registration under the Securities Act, that is distinguished from ordinary trading transactions by the magnitude of the offering and the presence of special selling efforts and selling methods.” (Emphasis added)
There is no evidence in this case that any special selling efforts or selling methods have taken place or would take place if the sale of all of the Registrable Shares were registered. Again, it is unlikely that the selling stockholders in the 2012 Financing will band together to distribute their shares. Nor is there any evidence that any of the selling stockholders have conducted any road shows or taken any other actions to condition or “prime” the market for their shares. To do so would violate the detailed representations made by them in documents executed in connection with the 2012 Financing and the reverse merger.
Further reducing the probability of a distribution intent is the fact that approximately 74% of the Registrable Shares were issued to parties who are now affiliates of the Company (“Affiliates”) although certain of such parties were not Affiliates prior to the 2012 Financing. Under Section 16(b) under the Exchange Act and Rule 16b-6 thereunder, Affiliates would be subject to short-swing profit liability if they sold any of the Registrable Shares within six months of the 2012 Financing.
Finally, for practical purpose