SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE
     Mail Stop 3030
        January 29, 2009
 Kevin R. Davidson Chief Executive Officer 2060 Centre Pointe Boulevard, Suite 7 Mendota Heights, Minnesota  55120
Re: BioDrain Medical, Inc.
Amendment No. 1 to Registrati on Statement on Form S-1
Filed January 12, 2009
  File No. 333-155299

Dear Mr. Davidson:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.
We welcome any questions you may have  about our comments or any other
aspect of our review.  Feel fr ee to call us at the telephone numbe rs listed at the end of this
letter.  Fee Table

   1. Please tell us, with a view toward disclo sure, how you concluded to register the
resale of 7,101,267 shares of common  stock and 4,689,290 shares underlying
warrants and that you have 8,180,831 shares ou tstanding.  It appears that adding
the numbers in the bullet points in your response to prior comment 1 does not result in the totals expressed prior to those bullet points, in  your fee table and
throughout your document.
 Prospectus Cover Page

   2. We will continue to evaluate your respons e to prior comment 4 after the warrants
underlying the convertible notes have been issued.

Kevin R. Davidson
BioDrain Medical, Inc.
January 29, 2009 Page 2   3. We note that you put in a price range.  Pr ior to effectivene ss, please state the
specific fixed price at which the securities  will be sold until they are trading on
the OTC Bulletin Board.
 Prospectus Summary, page 1

  4. If you have already received a United States patent for your product, as indicated
by your responses to prior comments 10 and 11, then please revise your second
paragraph here accordingly.

Risk Factors, page 3

We face intense competition . . ., page 5

5. We note your response to prior comment  12.  Because it appears you have not
provided us with the supplemental materi als we requested, we reissue the first
sentence of prior comment 12.  Also, pleas e reconcile your disclosure here and on
pages 38 and 46 regarding the market share currently held by Cardinal Health and
Stryker.
   If we do not succeed . . ., page 6

6. We note your responses to prior comments 6 and 15.

• Please clarify how the risk s disclosed in the last paragraph relate to the
restructuring agreement and how it may impact potential investors.  For
example, you refer here to the loss of management that could delay the
implementation of your business plan.  It is unclear how this poses a risk to
potential investors, given your disclo sure in the preceding paragraph, pages
53-54 and exhibit 10.42 that your operations  will cease and your assets will be
transferred to Privco.  Please revise; and
• Explain clearly, if true, that potential investors may own shares in a public
shell company if the FDA does not approve your product by the end of August 2009.
 Please also refer to comment 38 below.

We do not have a class of securi ties registered . . .,page 10

7. Regarding your response to prior comment 7:

Kevin R. Davidson
BioDrain Medical, Inc.
January 29, 2009 Page 3
• Revise your disclosure in the first para graph, which misstates the registrant’s
reporting obligations in the ev ent that it registers a cla ss of securities pursuant
to Section 12 of the Exchange Act;
• Clarify your reference in the caption and fi rst paragraph of this risk factor to
registering your securities on a “nationa l securities exchange.”  Do you mean
registering a class of your securi ties under the Exchange Act?;
• We reissue the second bullet in part  because that bullet requested an
explanation of the effects of the inapp licability of Section 16 of the Exchange
Act, not Section 26; and
• We note that you do not intend to register a class of your securities before this
registration statement is effective; however, your disclosure on page 68
indicates that you will register  a class of your securities at a later date.  Please
clarify when and whether you intend on re gistering a class of your securities
under the Exchange Act.  If you do not intend to so register, revise your
disclosure here and page 68 to remove  any implication to the contrary.

If our common stock is accepted for quotation . . ., page 11

8. We note your response to prior comment 17.  Rather than disclosing all listing
criteria applicable to the Nasdaq and NYSE markets, please revise to disclose the
listing criteria that you do not currently m eet, including the criteria noted in the
last sentence of this risk factor.
 Use of Proceeds, page 15

 9. Expand to disclose the warrant exercise prices for the warrants being registered.
 Market Price of and Dividends on the Registrant’s Common Equity…, page 17

 10. Reconcile the disclosure here with that on page 29 regarding outstanding
warrants.
 Critical Accounting Policies and Estimates, page 21

 11. Please clarify your reference on page 22 to TUV SUD being a regulatory body.  Is
their approval required before you can market and sell your products?  Or are they
a private company that perfor ms no regulatory oversight?

12. We re-issue prior comment 21.  Please re vise to provide a discussion of your
critical accounting policies and estimates.   This discussion should present your
analysis of the uncertaintie s involved in applying an accounting principle at a
given time or the variability that is reasonably likely to result from its application
over time. You should address specifically why your accounting estimates or

Kevin R. Davidson
BioDrain Medical, Inc.
January 29, 2009 Page 4
assumptions bear the risk of change. For example, it appears that there is
significant judgment in valuing stock options and warrants.  Refer to FR-72.   While we see the changes in response to the comment, the revisions do not
provide meaningful disclosure . Please further revise.

Results of Operations, page 22

Nine Months ended September 30, 2008 and 2007

13. Please reconcile your reference here to “paying” full annual salary rates with the
disclosure throughout your document that  you have accrued a salary expense,
which will be paid only when sufficient funds are available.
 Research and Development, page 22

14. We reference prior comment 24.  We see that you were notified in 2007 that you
would be billed $100,000 for product development work performed by a contractor in 2003 – 2007.   Please respond to the following:
• Tell us and disclose when you recorded the $100,000 accrual.
• Reconcile the disclosures in the “res earch and development” discussions on
pages 22 and 23 of MD&A.  From those di sclosures it is not clear whether the
$100,000 was accrued in 2006 or 2008.
• If the discussions on pages 22 and 23 ar e addressing different accruals, please
clarify the disclosure.  Please ensure  that you have provided a clear and
complete discussion of research and de velopment costs and the accruals for
those costs.
• Tell us why you did not make accruals for the work as that work was
performed.  In that regard, tell us why you believe there is no error in the
financial statements as it appears that  product development work performed in
prior years is expensed in a later year.

Years ended December 31, 2007 and 2006

 General and Administrative, page 22

15. We refer to your response to prior comm ent 27.  Please provide us and disclose a
clear basis in GAAP for the accounting app lied in the reducti on of the accrued
salaries.  While we see the revisions to the disclosure, those revisions do not
provide a clear and transparent discu ssion of the basis in GAAP for the
accounting.

Kevin R. Davidson
BioDrain Medical, Inc.
January 29, 2009 Page 5  Liquidity and Capital Resources, page 23

  16. We note your response to prior comment 29.  Please:

• Reconcile your disclosures on pages 23, 26 and 27 regarding the amount of
outstanding debt payments you are obligated to make;
• Expand the third paragraph on page 25 to clearly disclose the nature of the “risks to investors” from your early stag e position.  Also disc lose the “risk in
this process” mentioned in the penultimate paragraph on page 25.  For
example, do you anticipate providing an inducement similar to the restructuring agreement you provided the “Investors” in order to obtain funds through your October 2008 financing?;
• Expand the sixth paragraph on page 25 to  disclose the amount of funds from
your secondary financing that will be used to satisfy the obligations noted in
that paragraph;.
• Disclose the rights the holders of your debts have in the event they demanded
payment and you were unable to fulfill your obligations.  We note the
disclosure on page 25 that this woul d “create a liquidity issue,” which does
not appear to sufficiently describe th e results of a formal payment demand;
• Reconcile your disclosure in the first paragraph unde r this caption that you
expect research and development expenses  to increase with your disclosure in
the second paragraph on page 26 that there will be “nominal, if any, additional expenses incurred for the development of our product”;
• Expand to discuss in more detail “the progress we have made and the opportunities ahead of us” in raising additional funds.  Include in such
discussion the types of additiona l financing you are pursuing;
• Explain why you are “confident” that you will have the ability to raise $3
million during the first half of 2009, part icularly in light of your stage of
development, lack of revenues, and “current economic turmoil.”;
• Clarify the nature of the “other ope rating expenses” mentioned on page 23;
and
• Please tell us how you have communi cated and will communicate with
potential investors consistent with Section 5 of the Securities Act, in light of
this pending registration statement.
 Nine Months Ended September 30, 2008 and 2007, page 24

Kevin R. Davidson
BioDrain Medical, Inc.
January 29, 2009 Page 6  17. You indicate that cash used in operations in 2008 was impacted by an “increase in
escrow cash.”  Please tell us what you m ean by “escrow cash” and explain to us
why that item is appropriately report ed as an operating activity under SFAS 95.
18. Tell us the terms of the “escrow cash” and explain where the “escrow cash” is presented in the balance sheet.  If included in cash, tell us why that classification
is appropriate in GAAP.
19. You also indicate that cash used in operating activities in 2008 was increased by an “increase in vested options.”   Plea se revise to clarify what you mean by an
“increase in vested options ” and how that increase impacted cash flows from
operations.
Commitments and Contingencies, page 26

20. Please reconcile the amount of debt on the contractual obligation table to the balance sheet as of September 30, 2008 on page F-3.  Explain how $11,800 of
“long-term debt” can be due in less than one  year.  Please also revise to present
the $10,000 notes payable and the current portion of long-term  debt on the table.

Stock Options and Warrants, page 28

21. For each issuance in the transactions be ginning on page 31, state the warrant or
option exercise price.

Description of Business, page 35

Overview, page 35
   22. Please reconcile your response to prior comment 38 with exhibit 3.1, which was
included as an exhibit to your original filing.
   23. We note your response to prior comment 39; however, we also note that you
continue to make claims regarding the sa fety and efficacy of your product.  For
example, you state on page 39 that the FMS “greatly reduces” safety issues and is
“uniquely positioned to dominate its market segment.”  You also state on page 40 that your product is “unique” and disclose on page 44 that FMS will “redefine the manner in which [infectious fluid] is colle cted, measured and di sposed.”  Please
reconcile these statements with your re sponse to prior comment 60 and the fact
other companies have already developed and sold fluid collection and disposal
systems in your target market withou t exposure to healthcare workers.
     Private Placement Financing, page 35

 24. Disclose the date or dates when th e warrants become exercisable.

Kevin R. Davidson
BioDrain Medical, Inc.
January 29, 2009 Page 7   Current Techniques of Collecting Infectious Fluids, page 37

25. We note your response to prior comme nt 49.  Clarify how your product will
“significantly reduce the risk of healthcare worker exposure” to infectious fluids,
as stated in the second paragraph on page 38, given your disclosure in the
following paragraph regarding products al ready developed and marketed by your
competitors that “address the deficiencies described above.”  Also expand the last
bullet point on page 40 to compare how the competitors’ products mentioned in
the second paragraph on page 38 ar e different from your own.
 The Fluid Management System (FMS), page 38

26. Regarding your responses to prior comments 42 and 55:

• Clarify how the estimated installation cost disclosed on page 50 accounts for
the uncertainty regarding the accessibility of sewer lines and suction systems
noted on page 39.  Also clarify the basis for your estimates regarding the cost
and time of installation, given that it a ppears you have not yet installed your
product in any facility; and
• Revise the last sentence of the penultimate paragraph on page 39 to clarify whether the information in that senten ce reflects your opinion.  Your current
disclosure appears to attribute such in formation to third parties; and
 27. We note your response to prior comment 43.  While your disclosure on pages 40
and 52 refers to “established timeframes and plans” for the regulatory process, it appears that the work you have done in  preparation of your submission to the
FDA solely involves the hiring of regulatory consultants.  Please revise to clarify
what work, if any, you have done in prepar ation of that submission.  For example,
have you or your regulatory consultant begun compiling any of the documents or
preparing the “Submittal Document” referenced on page 52?

Patents and Intellectual Properties, page 41

28. We note from your response to prior comment 45 that you “do not expect to
acquire ownership of any patent rights or claims pertaining to such fluid.”
Expand to state whether you currently have  any intellectual property rights with
respect to your disposable cleaning kit.  Also disc lose whether you have any
agreements with any party regardi ng the disposable cleaning kit.
 29. Please clarify how the continuous operat ion feature mentioned in the last
paragraph on page 41 provides you with a significant competitive advantage,
given your disclosure on page 37 that cu rrent techniques and products are also
capable of continuous operation.

Kevin R. Davidson
BioDrain Medical, Inc.
January 29, 2009 Page 8   The Disposable Cleaning Kit, page 43

30. Please expand your response to prior co mment 47 to disclose all material
obstacles to achieving the “razor blade business model” referenced in your
disclosure.  For example, given your re sponse to prior comment 45 regarding your
lack of intellectual propert y rights to the cleaning kit,  including the “special
adapter,” it appears that medical providers  could use kits made by others rather
than those made by you.  Please revise.

31. Please tell us how the “forecast” menti oned in the second paragraph under this
caption satisfies the requirements of  Item 10 of Regulation S-K.

Drainage Systems, page 46

32. Please reconcile your disclosures here and the second and third paragraphs on page