SEC Comment Letter for Phio Pharmaceuticals Corp. (PHIO) (CIK 0001533040) (PHIO) — Jan 31, 2012
Phio Pharmaceuticals Corp. (PHIO) (CIK 0001533040)
Date: Jan. 31, 2012 · CIK: 0001533040 · Accession: 0000000000-12-005385
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-177498
Letter
January 31, 2012 Via E-mail Dr. Mark J. Ahn, Ph.D. President RXi Pharmaceuticals Corporation 60 Prescott Street Worcester, MA 01605
Re: RXi Pharmaceuticals Corporation Amendment No. 3 to Form S-1 Filed January 23, 2012 File No. 333-177498
Dear Dr. Ahn:
We have reviewed your amended registra tion statement and response letter each filed on January 23, 2012 and have the following comments. In some of our comments, we may ask you to provide us with info rmation so we may better understand your disclosure. Please respond to this letter by am ending your registration statement and providing the requested information. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any further amendments to your registration statement and the information you provide in response to th ese comments, we may have additional comments.
Financial Statements Notes to Financial Statements 8. Stock-based Compensation 2011 Offerings, page F-24
1. Please refer to your response to comment 2. You state that the April 2011 warrant liability was allocated to RXi’s financial st atements “based on the expected use of the offering proceeds at the time the offering was completed, rather than on the basis of whether the proceeds were subse quently used for RXi’s operations.” It appears that RXi did not receive any of the April 2011 offering proceeds and thus
Dr. Mark J. Ahn RXi Pharmaceuticals Corporation January 31, 2012 Page 2 received no consideration for the 50% al location of the warrant liability. We continue to question why you believe it is appropriate to record the derivative relating to the April 2011 offeri ng in the historical financial statements of RXI. In addition, you state that at the time of the March 2011 offering, “Galena operated only one business, the RNAi business. It was not until the Apthera acquisition that occurred on April 13, 2011, that Gale na operated a business other than the RNAi business”. Thus, you have allocated 100% of the warrant liability related to the March offering to RXi’s financial st atements. However, at the time of the Apthera acquisition it appears that the offering proceeds should have been reallocated to the business in which the pr oceeds were to be used. In preparing the financial statements for RXI’s spin-off, amounts that are specifically applicable to a subsidiary should be r ecorded in the subsidiary’s financial statements. In absence of specific iden tification, a reasonable allocation may be made. As it appears that the proceeds from the March offering were not used for the business of RXI, it is not clear why a llocating the warrant liability associated with the offering is reasonable. Pleas e refer to the guidance in SAB 103 Topic 1.B.1. 12. Subsequent Events, page F-30
2. Please disclose your intended accounting treatment for the exchange of warrants for Galena stock and the elimination of the fair value of $2.5 million of warrant derivatives on your balance shee t. Clarify in the filing if the warrants associated with the March and April offerings will continue to be exercisable for Galena common stock after the spin-off and not RX I common stock. In addition, please confirm to us that the shares after distri bution in “Results of Distribution” on page 30 include the shares as a result of the exchange of warrants for Galena stock in December 2011. Exhibits
3. Please revise Exhibit 3.1 to file the fina l dated and signed vers ion of your current amended and restated certificate of incorporation.
4. Please file a copy of your form of amendm ent to the certificate of incorporation that will be filed with the Secretary of St ate of Delaware prior to the distribution. Please also confirm that you will file a c opy of the final amendment after it has been filed with the Secretary of State of Delaware.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Act of 1933 and all applicable Securities Act rules require. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
Dr. Mark J. Ahn RXi Pharmaceuticals Corporation January 31, 2012 Page 3 Notwithstanding our comments, in the ev ent you request acceleration of the effective date of the pending registration st atement please provide a written statement from the company acknowledging that: should the Commission or the staff, acti ng pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;
the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its full responsibility for the adequacy and accuracy of the disclo sure in the filing; and
the company may not assert staff comment s and the declaration of effectiveness as a defense in any proceeding initiat ed by the Commission or any person under the federal securities laws of the United States.
Please refer to Rules 460 and 461 regard ing requests for acceleration. We will consider a written request for acceleration of the effective date of the registration statement as confirmation of th e fact that those requesting acc eleration are aware of their respective responsibilities unde r the Securities Act of 1933 a nd the Securities Exchange Act of 1934 as they relate to the proposed public offering of the securi ties specified in the above registration statement. Please allo w adequate time for us to review any amendment prior to the requested effective da te of the registration statement. You may contact James Pekl enk at (202) 551-3661 or Mary Mast at (202) 551- 3613 if you have questions regarding comments on the financial statements and related matters. Please contact Jennifer Riegel, Sp ecial Counsel, at (202) 551- 3575 or me at (202) 551-3715 with any other questions. Sincerely, /s/ Jennifer Riegel for Jeffrey Riedler Assistant Director cc: Dale E. Short, Esq. TroyGould PC 1801 Century Park East, Suite 1600 Los Angeles, CA 90067-2367
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January 31, 2012 Via E-mail Dr. Mark J. Ahn, Ph.D. President RXi Pharmaceuticals Corporation 60 Prescott Street Worcester, MA 01605 Re: RXi Pharmaceuticals Corporation Amendment No. 3 to Form S-1 Filed January 23, 2012 File No. 333-177498 Dear Dr. Ahn: We have reviewed your amended registra tion statement and response letter each filed on January 23, 2012 and have the following comments. In some of our comments, we may ask you to provide us with info rmation so we may better understand your disclosure. Please respond to this letter by am ending your registration statement and providing the requested information. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any further amendments to your registration statement and the information you provide in response to th ese comments, we may have additional comments. Financial Statements Notes to Financial Statements 8. Stock-based Compensation 2011 Offerings, page F-24 1. Please refer to your response to comment 2. You state that the April 2011 warrant liability was allocated to RXi’s financial st atements “based on the expected use of the offering proceeds at the time the offering was completed, rather than on the basis of whether the proceeds were subse quently used for RXi’s operations.” It appears that RXi did not receive any of the April 2011 offering proceeds and thus Dr. Mark J. Ahn RXi Pharmaceuticals Corporation January 31, 2012 Page 2 received no consideration for the 50% al location of the warrant liability. We continue to question why you believe it is appropriate to record the derivative relating to the April 2011 offeri ng in the historical financial statements of RXI. In addition, you state that at the time of the March 2011 offering, “Galena operated only one business, the RNAi business. It was not until the Apthera acquisition that occurred on April 13, 2011, that Gale na operated a business other than the RNAi business”. Thus, you have allocated 100% of the warrant liability related to the March offering to RXi’s financial st atements. However, at the time of the Apthera acquisition it appears that the offering proceeds should have been reallocated to the business in which the pr oceeds were to be used. In preparing the financial statements for RXI’s spin-off, amounts that are specifically applicable to a subsidiary should be r ecorded in the subsidiary’s financial statements. In absence of specific iden tification, a reasonable allocation may be made. As it appears that the proceeds from the March offering were not used for the business of RXI, it is not clear why a llocating the warrant liability associated with the offering is reasonable. Pleas e refer to the guidance in SAB 103 Topic 1.B.1. 12. Subsequent Events, page F-30 2. Please disclose your intended accounting treatment for the exchange of warrants for Galena stock and the elimination of the fair value of $2.5 million of warrant derivatives on your balance shee t. Clarify in the filing if the warrants associated with the March and April offerings will continue to be exercisable for Galena common stock after the spin-off and not RX I common stock. In addition, please confirm to us that the shares after distri bution in “Results of Distribution” on page 30 include the shares as a result of the exchange of warrants for Galena stock in December 2011. Exhibits 3. Please revise Exhibit 3.1 to file the fina l dated and signed vers ion of your current amended and restated certificate of incorporation. 4. Please file a copy of your form of amendm ent to the certificate of incorporation that will be filed with the Secretary of St ate of Delaware prior to the distribution. Please also confirm that you will file a c opy of the final amendment after it has been filed with the Secretary of State of Delaware. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Act of 1933 and all applicable Securities Act rules require. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. Dr. Mark J. Ahn RXi Pharmaceuticals Corporation January 31, 2012 Page 3 Notwithstanding our comments, in the ev ent you request acceleration of the effective date of the pending registration st atement please provide a written statement from the company acknowledging that: should the Commission or the staff, acti ng pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing; the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its full responsibility for the adequacy and accuracy of the disclo sure in the filing; and the company may not assert staff comment s and the declaration of effectiveness as a defense in any proceeding initiat ed by the Commission or any person under the federal securities laws of the United States. Please refer to Rules 460 and 461 regard ing requests for acceleration. We will consider a written request for acceleration of the effective date of the registration statement as confirmation of th e fact that those requesting acc eleration are aware of their respective responsibilities unde r the Securities Act of 1933 a nd the Securities Exchange Act of 1934 as they relate to the proposed public offering of the securi ties specified in the above registration statement. Please allo w adequate time for us to review any amendment prior to the requested effective da te of the registration statement. You may contact James Pekl enk at (202) 551-3661 or Mary Mast at (202) 551- 3613 if you have questions regarding comments on the financial statements and related matters. Please contact Jennifer Riegel, Sp ecial Counsel, at (202) 551- 3575 or me at (202) 551-3715 with any other questions. Sincerely, /s/ Jennifer Riegel for Jeffrey Riedler Assistant Director cc: Dale E. Short, Esq. TroyGould PC 1801 Century Park East, Suite 1600 Los Angeles, CA 90067-2367