SecProbe.io

CORRESP
1
filename1.htm

    Dykema
    Gossett PLLC

    111
    E. Kilbourn Ave.

    Suite
    1050

    Milwaukee,
    WI 53202

    www.dykema.com

    Tel:
    414-488-7300

    Kate
    Bechen

    Direct
    Dial: (414) 488-7333

    Email:
    KBechen@dykema.com

    September
    27, 2024

    U.S.
    Securities and Exchange Commission

    Division
    of Corporate Finance

    Office
    of Trade & Services

    100
    F Street, N.E.

    Washington,
    D.C. 20549

    Attention:
    Rucha Pandit

    Re:
    Danam
    Health, Inc.

    Amendment
    No. 1 to Registration Statement on Form S-1

    Filed
    August 2, 2024

    File
    No. 333-280945

Dear
Ms. Pandit:

This
response letter (this “Response”) is submitted on behalf of Danam Health, Inc. (the “Company”)
in response to the comment that the Company received from the staff of the Division of Corporation Finance (the “Staff”)
of the U.S. Securities and Exchange Commission (the “SEC”) in a letter addressed to Mr. Canning, dated August 29,
2024 (the “Comment Letter”), with respect to the Company’s Amendment No. 1 to Registration Statement on Form
S-1 (the “Registration Statement”), filed with the SEC on August 2, 2024. The Company is concurrently submitting a
second amendment to the Registration Statement (“Amendment No. 2”), which reflects the changes discussed in this Response
that the Company made to address the Staff’s comment.

For
reference purposes, each of the Staff’s numbered comments from the Comment Letter is set forth in bold text below, followed by
the Company’s response to each comment. All capitalized terms used but not defined in this Response have the meanings ascribed
to them in Amendment No. 1.

The
responses below are based on information provided to Dykema Gossett PLLC by the Company.

Amendment
No. 2 to Registration Statement on Form S-1

Risk
Factors

Changes
in economic conditions could adversely affect consumer/client buying practices . . ., page 13

1. We
                                            note your disclosure that “[i]n addition to general levels of inflation, Danam will
                                            also be subject to risk of specific inflationary pressures on product prices.” To the
                                            extent applicable, please revise your summary risk factors, include a standalone risk factor
                                            to disclose how recent inflationary pressures have materially impacted your business and
                                            operations. For example, identify the types of inflationary pressures you are facing and
                                            how your business has been affected. Lastly, please make conforming revisions in your Management’s
                                            Discussion and Analysis of Financial Condition and Results of Operations section.

Response:
In response the Staff’s comment, the Company has revised the applicable disclosure on pages 13 and 52 of Amendment No. 2.

California
| Illinois | Michigan | Minnesota | Texas | Washington, D.C. | Wisconsin

    U.S.
    Securities and Exchange Commission

    Division
    of Corporate Finance

    September
    27, 2024

    Page
    2

Risks
Related to Financial and Accounting Matters

Danam
and its subsidiaries have, and entities that Danam may acquire could have, significant outstanding debt . . ., page 25

2. Please
                                            disclose here the dollar amount of the outstanding debt and credit obligations of Danam and
                                            its subsidiaries.

Response:
In response the Staff’s comment, the Company has revised the applicable disclosure on page 25 of Amendment No. 2.

Danam’s
level of debt may negatively impact its liquidity . . ., page 27

3. We
                                            note your disclosure that “Danam’s bank debt contains a variable interest rate
                                            component based on its corporate credit ratings.” To the extent material, please revise
                                            your summary risk factors and risk factors sections to specifically identify this risk. In
                                            your risk factor disclosure, please discuss the impact of any rate increases on your operations
                                            and how your business has been affected. For example, describe whether your borrowing costs
                                            have recently increased or are expected to increase and your ability to pass along your increased
                                            costs to your customers.

Response:
In response the Staff’s comment, the Company has revised the applicable disclosure on pages 7 and 27 of Amendment No. 2.

The
market price of Danam Common Stock may decline as a result of various market factors., page 38

4. We
                                            note your representation that “[i]f an active market for Danam’s securities develops
                                            and continues, the trading price of Danam’s securities could be volatile and subject
                                            to wide fluctuations in response to various factors, some of which will be beyond Danam’s
                                            control.” We also note instances of extreme stock price run-ups followed by rapid price
                                            declines and stock price volatility seemingly unrelated to company performance following
                                            a number of recent initial public offerings, particularly among companies with relatively
                                            smaller public floats. Please revise this risk factor to clearly state that such volatility,
                                            including any stock-run up, may be unrelated to your actual or expected operating performance
                                            and financial condition or prospects, making it difficult for prospective investors to assess
                                            the rapidly changing value of your stock.

Response:
In response the Staff’s comment, the Company has revised the applicable disclosure on pages 38 and 39 of Amendment No. 2.

Capitalization,
page 44

5. Please
                                            revise to include amounts due to related parties and due to seller in your total pro forma
                                            capitalization.

Response:
In response the Staff’s comment, the Company has revised the applicable disclosure on page 44 of Amendment No. 2.

    U.S.
    Securities and Exchange Commission

    Division
    of Corporate Finance

    September
    27, 2024

    Page
    3

Unaudited
Pro Forma Combined Financial Information, page 47

6. Please
                                            provide a pro forma combined statement of operations for only the most recent fiscal year
                                            and for the period from the most recent fiscal year end to the most recent interim date for
                                            which a balance sheet is required. Refer to Rule 11-02(c)(2)(i) of Regulation S-X.

Response:
The Company acknowledges the obligations set forth in Rule 11-02(c)(2)(i) of Regulation S-X and has revised the pro forma combined statements
of operations on pages 47 and 48 of Amendment No. 2.

7. Please
                                            tell us your consideration of presenting the acquisitions of Wood Sage LLC and Wellgistics
                                            LLC in the pro forma balance sheet as of the interim pro forma balance sheet date since the
                                            acquisition dates are subsequent to your latest interim pro forma balance sheet date presented.
                                            Refer to Rule 11-02(a)(6)(i)(A) of Regulation S-X. This comment also applies to adjustment
                                            (c) on page 49.

Response:
The Company acknowledges the obligations set forth in Rule 11-02(a)(6)(i)(A) of Regulation S-X and respectfully advises the Staff that
both Wood Sage LLC and Wellgistics LLC are included in the interim pro forma balance sheets of Amendment No. 2 as probable acquisitions
as of the most recent practicable date prior to the effective date given that the Company closed on the Wood Sage Acquisition prior to
June 30, 2024, and had entered into a definitive agreement governing the Wellgistics Acquisition.

8. Please
                                            present the transactions in your pro forma interim statement of operations and pro forma
                                            statement of operations for the year ended December 31, 2023 as if they occurred on January
                                            1, 2023. Refer to Rule 11-02(a)(6)(i)(B) of Regulation S-X.

Response:
The Company acknowledges the obligations set forth in Rule 11-02(a)(6)(i)(B) of Regulation S-X and has revised the pro forma interim
statements of operations on pages 47 and 48 of Amendment No. 2.

Unaudited
Pro Forma Combined Statement of Operations, page 47

9. Please
                                            revise to present pro forma basic and diluted per share amounts in your interim and year
                                            end pro forma combined statement of operations. Refer to Rule 11-02(a)(9) of Regulation S-X.

Response:
The Company acknowledges the obligations set forth in Rule 11-02(a)(6)(i)(A) of Regulation S-X and has revised the pro forma combined
statement of operations on pages 47 and 48 of Amendment No. 2.

10. Please
                                            tell us if you plan to continue to pay the management service fee to Nomad Capital disclosed
                                            on pages F-66 and F-82 subsequent to your acquisition and your consideration of making pro
                                            forma adjustments in your pro forma combined statements of operations for the period and
                                            year presented.

Response:
The Company respectfully advises the Staff that the Company does not plan to continue to pay the management service fee to Nomad Capital
following closing of the public offering. In response to the Staff’s comment, the Company has revised the pro forma financial statements
on pages 47 through 49 of Amendment No. 2.

    U.S.
    Securities and Exchange Commission

    Division
    of Corporate Finance

    September
    27, 2024

    Page
    4

Wellgistics
Membership Interest Purchase Agreement, page 50

11. Please
                                            describe in detail the changes to the purchase payment that the parties are negotiating.
                                            In doing so, please describe which of the payment terms are being negotiated, as well as
                                            any other material provisions that are being renegotiated. Please clarify why the parties
                                            are renegotiating the terms now, and explain how the renegotiation process commenced, including
                                            who initiated it. Further, please clarify whether, as a result of the renegotiation process,
                                            you still expect the transaction to close in the third quarter of 2024. Please clarify whether
                                            any of the proceeds from this offering could be used to satisfy payment obligations related
                                            to the transaction and revise your disclosure accordingly. Finally, please tell us whether
                                            there is now an increased risk that the transaction might not close on time or at all, and
                                            revise your disclosure, including your risk factor disclosure, accordingly.

Response:
In response the Staff’s comment, the Company respectfully advises the Staff that the Company and Wellgistics executed a Fourth
Amendment to the Wellgistics MIPA on August 23, 2024, and subsequently closed the Wellgistics Acquisition on August 30, 2024. As such,
the Company has revised its description of the Wellgistics MIPA, as amended, and the Wellgistics Acquisition throughout Amendment No.
2 to describe the amended terms of the Wellgistics Acquisition, the timing of Danam acquiring Wellgistics, and the post-closing integration
of the Company and Wellgistics.

Management’s
Discussion and Analysis of Financial Condition and Results of Operations of Wood Sage

Key
Components of Results of Operations

Revenues,
page 57

12. With
                                            a view to providing investors with a complete and balanced picture of Wood Sage’s business
                                            and revenues, please disclose here a breakdown of revenue for each of CSP’s major services.
                                            In this regard, we note your disclosure on pages 69-70 that CSP’s general and specialty
                                            pharmacy services include (i) patient care coordination, (ii) clinical services, (iii) compliance
                                            and persistency programs, (iv) patient financial assistance, (v) prior authorization and
                                            (vi) risk evaluation and mitigation strategy; however, it is not clear how much of these
                                            services contributes to CSP’s revenue.

Response:
The Company respectfully advises the Staff that the Wood Sage Acquisition closed in June 2024, and that the Company has removed the
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Wood Sage in Amendment No. 2. Such disclosures
have been incorporated into the revised Management’s Discussion and Analysis of Financial Condition and Results of Operations of
Danam in Amendment No. 2. In response the Staff’s comment, the Company has revised the applicable disclosure related to Wood Sage’s
business and revenues on page 65 of Amendment No. 2.

Business,
page 68

13. We
                                            note the risk factor on page 25 that “Danam’s quarterly results may fluctuate
                                            significantly based on seasonality and other factors.” Please revise here to include
                                            a discussion of the manner in which seasonality affects your business. Refer to Item 101(c)(1)(v)
                                            of Regulation S-K.

Response:
The Company acknowledges the obligations set forth in Rule 101(c)(1)(v) of Regulation S-K and has revised the applicable disclosure
on page 68 of Amendment No. 2.

    U.S.
    Securities and Exchange Commission

    Division
    of Corporate Finance

    September 27, 2024

    Page
    5

Pharmacies,
page 75

14. We
                                            note your representation that DelivMeds’ digital pharmacy concept provides the enumerated
                                            benefits. Please provide your basis for the stated benefits, or revise to characterize them
                                            as management’s belief.

Response:
In response the Staff’s comment, the Company has revised the applicable disclosure on page 70 of Amendment No. 2.

Information
Technology, page 79

15. This
                                            section contains lengthy, technical information. For example, you discuss Dart and Flutter,
                                            Angular and TypeScript as well as their roles in your core engine. Please