SEC Company Response from Quadrant Biosciences Inc (CIK 0001651239) — Feb 14, 2020
Quadrant Biosciences Inc (CIK 0001651239)
Date: Feb. 14, 2020 · CIK: 0001651239 · Accession: 0001104659-20-021536
AI Filing Summary & Sentiment
Referenced dates: January 24, 2020
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CORRESP
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Tim Buchmiller, Staff Attorney
Celeste Murphy, Legal Branch Chief
Office of Life Sciences
Division of Corporate Finance
United States Securities and Exchange Commission
Washington, D.C. 20549
February 14, 2020
Re:
Quadrant Biosciences Inc.
Draft Offering Statement on Form 1-A
Filed January 2, 2020
File No. 367-00228
Dear Mr. Buchmiller and Ms. Murphy,
Thank you for your comments dated January 24, 2020 regarding
the Draft Offering Statement of Quadrant Biosciences Inc. (the “Company”). We appreciate the opportunity to respond
to your comments.
Cover Page
1. Please include a
row in your table on page 1 to indicate the "Total Minimum" amounts. Please refer to Item 1(e) of Part II of Form 1-A.
We have amended the table on the cover
as requested.
Risks Related to our Intellectual Property, page 13
2. We note your reference
to "our patents" in the second bullet point of this section. As appropriate, please balance this disclosure with your
disclosure on page 34 that you "currently do not solely own any issued patents or pending patent applications," and with
your disclosure on page 53 that your intellectual property includes "potential patent rights that may be obtained through
patent applications jointly invented and owned by the company and the Foundations or invented and owned by the Foundations."
We have amended the language on page 13 as well
as amended the risk factor now entitled, “Though we currently do not solely own any issued patents or pending patent applications,
our goal is to either solely or jointly with our partners to receive patent protection. We may become involved in lawsuits to protect
or enforce our patents or other intellectual property, which could be expensive, time-consuming and ultimately unsuccessful.”
Risks Related to Investments in the Shares, page 14
3. Please revise to
indicate that there is no public market for your shares and, if true, that you do not anticipate a public market to develop.
We have added a risk factor entitled, “There
is currently no public market for our Common Stock, and a public market for our Common Stock may never develop.” And have
accordingly amended the language on page [14].
The company has a convertible note that it is treating as
debt, page 21
4. Please disclose the conversion terms under the note purchase
agreement as currently in effect. Please also include appropriate disclosure under "Future Dilution" and "Security
Ownership of Management and Certain Securityholders" as appropriate.
We have amended the language in “Risk Factors
– The company has a convertible note that it is treating as debt” as well as added disclosure in “Dilution”.
We note that no disclosure related to the note purchase agreement is required in “Security Ownership of Management and Certain
Securityholders.”
Intellectual Property, page 53
5. Please disclose the royalty rates or royalty ranges
payable on sales of licensed products as well as the aggregate milestone payments and minimum royalties that may be payable
under the License Agreements. Please also disclose the duration and the material termination provisions of these
agreements.
We have amended the language on page [53], and
provided additional details on the terms of the License Agreements.
Nine Months Ended September 30, 2019 Compared to Nine Months
Ended September 30, 2018, page 66
6. Please disclose the material causes that led to the decline
in product sales in Interim 2019.
We have amended the disclosure on page [66], to
reflect the material cause that led to the decline in product sales.
Compensation of Directors and Executive Officers, page 80
7. Refer to Item 11 of Part II of Form 1-A and update your
disclosure in this section for your last completed fiscal year.
We have updated the information in “Compensation
of Directors and Executive Officers” to reflect the fiscal year ended December 31, 2019.
Ongoing Reporting and Supplements to this Offering Circular,
page 84
8. We note your disclosure that you incorporate by
reference information on any Form 1-K, 1-SA or 1-U filed after the date of your offering circular. Please note that Form 1-A
does not permit issuers to incorporate by reference information filed after the qualification of the offering statement.
Please revise as appropriate.
As requested, we have amended the language in the
“Ongoing Reporting and Supplements to this Offering Circular” section.
Consolidated Financial Statements for the Years Ended December
31, 2018 and 2017, page 106
9. We note that your audited financial statements for the fiscal
year ended December 31, 2017, are labeled "as adjusted". Please amend your filing to disclose the nature and circumstance
of this adjustment or restatement and quantify such amounts. If the financial statements were restated to correct an error, please
provide the footnote disclosure required by ASC 250-10-50.
We refer you to footnote B of the audited financial
statements, which contains the disclosure required by ASC 250-10-50.
Part III. Item 17, page 127
10. Please file as exhibits the licensing agreement with the
Research Foundation for the State University of New York and the Pennsylvania State Research Foundation, and the contractual arrangement
referred to in the last paragraph on page 62 with Admera Health. Refer to Item 17.6 of Part III of Form 1-A.
We have filed the requested agreements as exhibits
6.3, 6.4, 6.5 and 6.6 to the Offering Circular.
Exhibit 4.1, page III-1
11. We note the second through last sentences of Section 4(f)
of the form of subscription agreement. Since investors are entitled to rely on your offering circular to make an investment decision,
these sentences appear inappropriate. Please revise.
As requested, the company has amended Section 4(f)
of the form of subscription agreement.
12. We note section 6 of the form of subscription agreement
regarding waiver rights to trial by jury. Please revise your offering statement to:
• disclose the jury trial provision, including how it will
impact your investors;
• describe any questions as to enforceability under federal
and state law;
• clarify whether this provision applies to claims under
the federal securities laws and whether it applies to claims other than in connection with this offering;
• to the extent the provision applies to federal securities
law claims, please revise the disclosure to state that by agreeing to the provision, investors will not be deemed to have waived
the company´s compliance with the federal securities laws and the rules and regulations thereunder; and
• clarify whether purchasers of interests in a secondary
transaction would be subject to the jury trial waiver provision.
Section 6 of the form of subscription
agreement has been amended.
Thank you again for the opportunity to respond to your questions
to the Draft Offering Statement of Quadrant Biosciences Inc. If you have additional questions or comments, please contact me at
jamie@crowdchecklaw.com.
Sincerely,
/s/Jamie Ostrow
Jamie Ostrow
Partner
CrowdCheck Law, LLP
cc: James Croke
General Counsel
Quadrant Biosciences Inc.
505 Irving Avenue, Suite 3100AB
Syracuse, NY 13210