SecProbe.io

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 CAPSTONE HOLDING CORP.

 5141 W. 122nd Street

 Alsip, IL 60803

 August 7, 2025

 VIA EDGAR

 U.S. Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Washington, DC 20549

 Re:
 Capstone Holding Corp.

 Registration Statement on Form S-1, File No. 333-289222

 REQUEST FOR ACCELERATION OF EFFECTIVENESS

 Requested Date: August 11, 2025

 Requested Time: 9:15 am, Eastern Time

 Ladies and Gentlemen:

 Capstone Holding Corp. (the "Company")
hereby requests that the effective date of the Company's Registration Statement on Form S-1 (File No. 333-289222), be accelerated
pursuant to Rule 461 under the Securities Act of 1933, as amended, so that it is declared and becomes effective at 9:15 am Eastern Time
on August 11, 2025, or as soon thereafter as possible.

 Please contact our counsel, Steven Lipstein of
Lucosky Brookman LLP at (732) 395-4416 with any questions you may have regarding this request. In addition, the Company requests that
you kindly notify Mr. Lipstein by telephone when this request for acceleration has been granted.

 Sincerely yours,

 CAPSTONE HOLDING CORP.

 /s/ Matthew E. Lipman

 Matthew E. Lipman

 Chief Executive Officer

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 August 6, 2025

Matthew Lipman
Chief Executive Officer
Capstone Holding Corp.
5141 W. 122nd Street
Alsip, IL 60803

 Re: Capstone Holding Corp.
 Registration Statement on Form S-1
 Filed August 4, 2025
 File No. 333-289222
Dear Matthew Lipman:

 This is to advise you that we have not reviewed and will not review your
registration
statement.

 Please refer to Rules 460 and 461 regarding requests for acceleration.
We remind you
that the company and its management are responsible for the accuracy and
adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action
by the staff.

 Please contact Brian Fetterolf at 202-551-6613 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Trade &
Services
cc: Steven Lipstein
</TEXT>
</DOCUMENT>

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 Capstone Holding Corp.

 5141 W. 122nd Street

 Alsip, IL 60803

 June 9, 2025

 VIA EDGAR

 U.S. Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Washington, DC 20549

 Re:
 Capstone Holding Corp.

 Registration Statement on Form S-1, File No. 333-287745

 REQUEST FOR ACCELERATION OF EFFECTIVENESS

 Requested Date: June 11, 2025

 Requested Time: 5:00 p.m., Eastern Time

 Ladies and Gentlemen:

 Capstone Holding Corp. (the "Company")
hereby requests that the effective date of the Company's Registration Statement on Form S-1, as amended (File No. 333-287745), be
accelerated pursuant to Rule 461 under the Securities Act of 1933, as amended, so that it is declared and becomes effective at 5:00 p.m.
Eastern Time on June 11, 2025, or as soon thereafter as possible.

 Please contact our counsel, Steven Lipstein of
Lucosky Brookman LLP at (732) 395-4416 with any questions you may have regarding this request. In addition, the Company requests that
you kindly notify Mr. Lipstein by telephone when this request for acceleration has been granted.

 Sincerely yours,

 Capstone Holding Corp.

 /s/ Matthew Lipman

 Matthew Lipman

 Chief Executive Officer

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 June 6, 2025

Matthew Lipman
Chief Executive Officer
Capstone Holding Corp.
5141 W. 122nd Street
Alsip, IL 60803

 Re: Capstone Holding Corp.
 Registration Statement on Form S-1
 Filed June 3, 2025
 File No. 333-287745
Dear Matthew Lipman:

 This is to advise you that we have not reviewed and will not review your
registration
statement.

 Please refer to Rules 460 and 461 regarding requests for acceleration.
We remind you
that the company and its management are responsible for the accuracy and
adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action
by the staff.

 Please contact Eddie Kim at 202-551-8713 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Trade &
Services
cc: Lawrence Metelitsa
</TEXT>
</DOCUMENT>

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Joseph Gunnar & Co., LLC

1000 RXR Plaza

Uniondale, New York 11556

February 12, 2025

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Trade & Services

100 F Street, N.E.

Washington, DC 20549

    Re:
    Capstone Holding Corp.

    Registration Statement on Form S-1 (Registration No. 333-284105)

    Concurrence in Acceleration Request

Ladies and Gentlemen:

Joseph Gunnar & Co.,
LLC (“Joseph Gunnar”), as representative of the underwriters for the referenced offering, hereby concurs in the request
by Capstone Holding Corp. that the effective date of the above-referenced registration statement be accelerated to 4:30 p.m. (Eastern
Time), or as soon as practicable thereafter, on February 14, 2025, pursuant to Rule 461 under the Securities Act of 1933, as amended (the
“Securities Act”). Joseph Gunnar affirms that it is aware of its obligations under the Securities Act in connection
with this offering.

    Very truly yours,

    Joseph Gunnar & Co., LLC

    By:
    /s/ Stephan A. Stein

    Name:
    Stephan A. Stein

    Title:
    President

CORRESP
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Capstone Holding Corp.

5141 W. 122nd Street

Alsip, IL 60803

February 12, 2025

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Trade & Services

100 F Street, N.E.

Washington, DC 20549

    Re:
    Capstone Holding Corp.

    Registration Statement on Form S-1, File No. 333-284105

REQUEST FOR ACCELERATION OF EFFECTIVENESS

Requested Date: February 14, 2025

Requested Time: 4:30 p.m., Eastern Time

Ladies and Gentlemen:

Capstone Holding Corp. (the “Company”)
hereby requests that the effective date of the Company’s Registration Statement on Form S-1, as amended (File No. 333-284105), be
accelerated pursuant to Rule 461 under the Securities Act of 1933, as amended, so that it is declared and becomes effective at 4:30 p.m.
Eastern Time on February 14, 2025, or as soon thereafter as possible.

Please contact our counsel, Steven Lipstein of Lucosky
Brookman LLP at (732) 395-4416 with any questions you may have regarding this request. In addition, the Company requests that you kindly
notify Mr. Lipstein by telephone when this request for acceleration has been granted.

    Sincerely yours,

    Capstone Holding Corp.

    /s/ Matthew Lipman

    Matthew Lipman

    Chief Executive Officer

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Capstone Holding Corp.

5141 W. 122nd Street

Alsip, IL 60803

February 11, 2025

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Trade & Services

100 F Street, N.E.

Washington, DC 20549

Attention: Amy Geddes, Doug Jones, Jenna Hough
and Dietrich King

    Re:
    Capstone Holding Corp.

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

Filed February
6, 2025

File No. 333-284105

Ladies and Gentlemen:

In a telephone conversation
on February 10, 2025 among Ms. Hough, Mr. Jones, and our counsel, you (the “Staff”) provided Capstone Holding Corp.
(the “Company”, “we”, “us” or “our”) with its comments to
the Company’s Amendment No. 2 to the registration statement on Form S-1 submitted on February 6, 2025. We are in receipt of your
comments and we have set forth below our responses to the Staff’s comments. For your convenience, the comments are listed below,
followed by the Company’s responses.

Amendment No. 2 to Form S-1 Filed February
6, 2025

Description of Capital Stock, page 66

Series B Preferred Stock, page 67

1. Explain how you determined
the purchase price of the shares of Series B Preferred Stock and whether such purchase price equals the estimated fair value of the Series
B Preferred Stock. If the purchase price does not equal the estimated fair value of the Series B Preferred Stock, please explain the accounting
treatment of the issuance of the shares at less than estimated fair value.

Response: We engaged
Loop Capital Financial Consulting Services LLC (“Loop Capital”) in November 2024 to perform a fair value assessment
of the Company’s Series B Preferred Stock (the “Series B”). Loop Capital is a leading full-service investment
bank, brokerage, and advisory firm headquartered in Chicago, Illinois. Loop Capital’s valuation and fairness opinion practice specializes
in complex securities, including preferred stock, convertible instruments, and structured financial products.

Loop Capital’s fair
value assessment was performed in accordance with applicable financial reporting standards and regulatory guidelines. The objective of
their assessment was to determine a reasonable and supportable fair value estimate for the Series B as of the valuation date. Their approach
incorporated industry-standard valuation techniques with a particular emphasis on methodologies suitable for convertible and equity-linked
securities. The assessment was conducted in compliance with ASC 820 (Fair Value Measurement) guidelines.

Valuation Methodology

Given the complex features
of the Series B, Loop Capital’s assessment considered two primary valuation techniques:

1.
Black-Scholes Option Pricing Model

The Black-Scholes model was
used to estimate the value of the Series B. This method is widely recognized for valuing financial derivatives and options by incorporating
key market variables, including:

 ● Stock
Price (S): Anticipated offering price of $4.00 per share for the Company’s common stock.

 ● Exercise
(Conversion) Price (K): Determined based on the Certificate of Designation’s conversion formula, with a hurdle rate of $40
per common stock share.

 ● Time
to Expiration (T): Minimum two-year holding period before conversion eligibility. Time used in the model ranged from 4 to 5 years.

 ● Risk-Free
Rate (r): Based on U.S. Treasury yields of corresponding duration which ranged from 4.21% to 4.25%.

 ● Volatility
(σ): Historical stock price volatility of comparable publicly traded firms which ranged from 40% to 43% for the purposes of
the assessment.

2.
Monte Carlo Simulation Analysis

Monte Carlo simulations were considered to model
the nature of potential share price paths of the Company’s stock price and estimate the probability of achieving and exceeding the
conversion trigger price of $40 per common stock share.

Key Findings and Conclusion

After applying the valuation methodologies, a discount
was applied for lack of marketability attributed to the non-traded status of the Series B and the unregistered nature of the shares of
common stock underlying the Series B, the two-year prohibition against conversion, and the time required to register such shares of common
stock.

Based on the combined results of the valuation
methodologies and the application of the discount, the fair value of the Series B was determined to be $0.0304549 per share. As a result,
the purchase price of 985,063 shares of Series B is $30,000.

The accompanying addendum
further discusses the valuation approach relative to the guidelines of ASC 820.

Thank you for
your assistance in reviewing this response.

    Very truly yours,

    /s/ Matthew Lipman

    Matthew Lipman

    Chief Executive Officer

    2

Addendum on Application of ASC - 820

Pursuant to ASC 820 – Fair Value Measurement, Loop Capital was
engaged to conduct a fair value assessment of the Series B of the Company. Their assessment adheres to the fair value framework outlined
by the Financial Accounting Standards Board (FASB) and complies with applicable disclosure requirements. The following outlines their
approach to ensuring compliance with ASC 820.

1. Compliance with ASC 820 – Fair Value Definition

ASC 820 defines fair value as:

“The price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date.”

To comply with ASC 820, the valuation reflects a market-based measurement,
using inputs and assumptions that align with how market participants would evaluate the fair value of the Series B.

2. Selection of Valuation Methodologies

ASC 820 permits the use of market, income, or cost-based approaches
to determine fair value. Given the lack of an active trading market for the Series B, the Market Approach was deemed inappropriate.
Instead, Loop Capital employed the following methodologies under the Income Approach:

 ● Black-Scholes
                                            Option Pricing Model and Monte Carlo Simulation – to estimate the theoretical
                                            value of the Series B given the Hurdle Share Price ($40 per share) required for conversion.

3. Fair Value Hierarchy Classification

ASC 820 establishes a three-level fair value hierarchy, prioritizing
observable market data over unobservable inputs:

 ● Level 1: Quoted prices in active markets for identical
assets.

 ● Level 2: Observable inputs other than quoted prices,
such as market transactions for similar securities.

 ● Level 3: Unobservable inputs, requiring the use of
financial models and management assumptions.

Since the Series B is not publicly traded and contains complex features
such as convertibility, marketability restrictions, and contingent conversion conditions, its valuation falls under Level 3, necessitating
reliance on financial models and professional judgment.

    Addendum Page 1

4. Key Inputs and Market Participant Assumptions

ASC 820 mandates the use of observable inputs when available and unobservable
inputs when necessary. The valuation incorporated the following key assumptions:

    Input

    Category

    Source

    Stock Price (S)

    Observable (Level 2)

    Anticipated offering price of $4.00 per share for the Company’s common stock.

    Exercise Price (K)

    Partially Observable (Level 2/3)

    Defined in the Certificate of Designation, with a hurdle rate of $40 per common stock share.

    Time to Expiration (T)

    Observable (Level 2)

    Minimum two-year holding period before conversion eligibility, with a modeled estimate of 4 to 5 years.

    Risk-Free Rate (r)

    Observable (Level 1)

    Based on U.S. Treasury yields (4.21% to 4.25%) for corresponding durations.

    Stock Volatility (σ)

    Unobservable (Level 3)

    Historical stock price volatility of comparable publicly traded firms (40% to 43%).

In addition, a discount for lack of marketability (DLOM) was applied
due to:

 ● The unregistered nature of the underlying shares of common
stock.

 ● The two-year prohibition against conversion and the non-marketability
of the Series B shares.

 ● The estimated time required to register such shares of common
stock.

5. Market Participant Considerations & Fair Value Determination

Under ASC 820, fair value must reflect the assumptions of market participants,
not the specific intentions of the reporting entity. Given the features of the Series B, investors would evaluate its conversion potential,
time constraints, and probability of conversion.

To reflect this, Loop Capital modeled:

 ● Conversion Scenarios: Considering Black-Scholes Option Pricing
Model and Monte Carlo simulations, Loop Capital projected future stock prices and the likelihood of achieving the $40 per share Hurdle
Price.

 ● Market Volatility: Examined historical volatility of comparable
public companies over 2, 4, and 5 year time horizons.

 ● Discount for Lack of Marketability (DLOM): To reflect liquidity
constraints and registration delays, Loop Capital applied an appropriate marketability discount.

 ● Fair Value Synthesis: The final valuation combines an assessment
of conversion potential and marketability constraints.

    Addendum Page 2

6. ASC 820 Disclosures & Compliance Summary

To ensure compliance with ASC 820, Loop Capital’s valuation methodology
follows the measurement and disclosure requirements as outlined below:

    ASC 820 Requirement

    Loop Capital’s Approach

    Fair Value Measurement Basis

    Used market participant assumptions for preferred stock valuation.

    Valuation Methodologies

    Applied Black-Scholes Model and Monte Carlo Simulation to determine fair value.

    Fair Value Hierarchy

    Classified as Level 3 due to reliance on unobservable inputs.

    Use of Observable Inputs

    Incorporated stock price, Treasury rates, and credit spreads where available.

    Use of Unobservable Inputs

    Estimated volatility, time to conversion, and probability of conversion.

    Marketability Discount

    Applied to reflect stock registration and liquidity constraints.

    Required Disclosures

    Provided assumptions, valuation methodology, and sensitivity analysis.

Based on this assessment, the fair value of the Series B was determined
to be $0.0304549 per share. As a result, the purchase price of 985,063 shares of Series B is $30,000.

The valuation reflects market-based inputs, fair value hierarchy guidelines,
and risk-adjusted considerations.

Addendum Page 3

February 3, 2025
Matthew Lipman
Chief Executive Officer
Capstone Holding Corp.
5141 W. 122nd Street
Alsip, IL 60803
Re:Capstone Holding Corp.
Amendment No. 1 to Registration Statement on Form S-1
Filed January 27, 2025
File No. 333-284105
Dear Matthew Lipman:
            We have reviewed your amended registration statement and have the following
comment(s).
            Please respond to this letter by amending your registration statement and providing
the requested information. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your registration statement and the information
you provide in response to this letter, we may have additional comments. Unless we note
otherwise, any references to prior comments are to comments in our January 21, 2025 letter.
Amendment No. 1 to Form S-1 Filed January 27, 2025
Capitalization, page 32
1.The pro forma as adjusted reflects several transactions. For ease of understanding to
investors, please revise your presentation to show a column as "pro forma" that solely
reflects the effects of the offering and a column as " pro forma as adjusted" that
reflects the effects of the other noted transactions that will take place. Include notes to
the table that clearly describes changes between the columns as appropriate.
You disclose under "Use of Proceeds" you will repay $826,667 of a term loan issued
by Berkshire Bank, but this transaction does not appear to be reflected here. Please
revise as appropriate. In doing so, clarify if the repayment is for principal and/or
interest, and the respective amounts thereof. Additionally, you disclose
$42(000) of the $28,580 in the actual column for Class B and Class C Preferred 2.

February 3, 2025
Page 2
Interests is for Class C that are to be cancelled in the restructuring, but it appears all of
the $28,580 is reflected in pro forma additional paid in capital/total stockholders'
equity. Please revise as appropriate.
            Please contact Amy Geddes at 202-551-3304 or Doug Jones at 202-551-3309 if you
have questions regarding comments on the financial statements and related matters. Please
contact Jenna Hough at 202-551-3063 or Dietrich King at 202-551-8071 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services
cc:Lawrence Metelitsa

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Capstone Holding Corp.

5141 W. 122nd Street

Alsip, IL 60803

January 24, 2025

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Trade & Services

100 F Street, N.E.

Washington, DC 20549

Attention: Amy Geddes, Doug Jones, Jenna Hough
and Dietrich King

    Re:
    Capstone
    Holding Corp.

Registration
Statement on Form S-1

Filed December
31, 2024

File No. 333-284105

Ladies and Gentlemen:

By letter dated January 21,
2025, the staff (the “Staff”, “you” or “your”) of the U.S. Securities and Exchange
Commission (the “Commission”) provided Capstone Holding Corp. (the “Company”, “we”,
“us” or “our”) with its comments to the Company’s registration statement on Form S-1 submitted
on December 31, 2024. We are in receipt of your letter and we have set forth below our responses to the Staff’s comments. For your
convenience, the comments are listed below, followed by the Company’s responses.

Registration Statement on Form S-1 filed December
31, 2024

Risk Factors, page 14

1. We
note your disclosure on page 38 that your liquidity is largely dependent on your ability to borrow funds on the Revolver, and that if
you fail to fulfill your financial covenant requirements, your ability to continue as a going concern could be at risk. Where appropriate,
please provide a risk factor discussing this risk.

Response: We have provided the
risk factor as requested on page 23.

Capitalization, page 31

2. Here
and elsewhere you refer to the cancellation of the Class C Preferred Interests. Please tell us the amount outstanding for the Class C
Preferred Interests and where it is reported in your financial statements. Also, it appears the pro forma basis reflects exchange of
the Special Preferred Membership Interests of $1,006(000) for loans in like aggregate principal amount as disclosed elsewhere. Please
revise as appropriate.

Response: We have
provided the amount outstanding for the Class C Preferred Interests, which is included in TotalStone’s Class B Preferred
Interests on the Company’s consolidated balance sheet, on pages 32, 33, and 51. With respect to the Special Preferred
Membership Interest, we have revised the Capitalization section on page 32 and the Dilution section on page 33 to clarify that this
outstanding amount is being converted into loans in a like aggregate principal amount.

Thank you for
your assistance in reviewing our amended submission.

    Very truly
    yours,

    /s/
    Matthew Lipman

    Matthew Lipman

    Chief Executive Officer

January 21, 2025
Matthew Lipman
Chief Executive Officer
Capstone Holding Corp.
5141 W. 122nd Street
Alsip, IL 60803
Re:Capstone Holding Corp.
Registration Statement on Form S-1
Filed December 31, 2024
File No. 333-284105
Dear Matthew Lipman:
            We have reviewed your amended registration statement and have the following
comment(s).
            Please respond to this letter by amending your registration statement and providing
the requested information. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your registration statement and the information
you provide in response to this letter, we may have additional comments. Unless we note
otherwise, any references to prior comments are to comments in our December 19, 2024
letter.
Registration Statement on Form S-1 filed December 31, 2024
Risk Factors, page 14
1.We note your disclosure on page 38 that your liquidity is largely dependent on your
ability to borrow funds on the Revolver, and that if you fail to fulfill your financial
covenant requirements, your ability to continue as a going concern could be at risk.
Where appropriate, please provide a risk factor discussing this risk.
Capitalization, page 31
Here and elsewhere you refer to the cancellation of the Class C Preferred Interests.
Please tell us the amount outstanding for the Class C Preferred Interests and where it
is reported in your financial statements.  Also, it appears the pro forma basis reflects 2.

January 21, 2025
Page 2
exchange of the Special Preferred Membership Interests of $1,006(000) for loans in
like aggregate principal amount as disclosed elsewhere.  Please revise as appropriate.
            Please contact Amy Geddes at 202-551-3304 or Doug Jones at 202-551-3309 if you
have questions regarding comments on the financial statements and related matters. Please
contact Jenna Hough at 202-551-3063 or Dietrich King at 202-551-8071 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services
cc:Lawrence Metelitsa

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Capstone Holding Corp.

5141 W. 122nd Street

Alsip, IL 60803

December 31, 2024

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Trade & Services

100 F Street, N.E.

Washington, DC 20549

Attention: Amy Geddes, Doug Jones, Jenna Hough
and Dietrich King

    Re:
    Capstone Holding Corp.

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

Submitted December
3, 2024

CIK No. 0000887151

Ladies and Gentlemen:

By letter dated December 19, 2024, the staff (the
“Staff”, “you” or “your”) of the U.S. Securities and Exchange Commission (the
“Commission”) provided Capstone Holding Corp. (the “Company”, “we”, “us”
or “our”) with its comments to the Company’s confidential draft registration statement on Form S-1 submitted
on December 3, 2024. We are in receipt of your letter and we have set forth below our responses to the Staff’s comments. For your
convenience, the comments are listed below, followed by the Company’s responses.

Amendment No. 1 to Draft Registration Statement
on Form S-1 submitted December 3, 2024

Summary Consolidated Financial Information,
page 10

 1. You present statements of operations for the nine months ended September 30, 2024 and 2023 on pages 11
and 12 with amounts that vary from one another. If the intention is for one of them to represent the three months ended September 30,
2024 and 2023, please revise accordingly. Otherwise, eliminate the inapplicable nine months statement.

Response: We have eliminated
the inapplicable nine months statement.

Use of Proceeds, page 28

 2. We note your revised disclosure pursuant to prior comment 10 and reissue in part. Please disclose the
interest rate associated with the Berkshire Bank loan.

Response: We have revised this
disclosure to include the interest rate associated with the Berkshire Bank loan.

Management’s Discussion and Analysis of Financial
Condition and Results of Operations Results of Operations,

page 35

 3. In regard to changes in sales, you refer to the effects of changes in prices and volumes. Please disclose
the extent of each. Refer to Item 303(b)(2)(iii) of Regulation S-K. We further note you still have not quantified each factor cited in
your explanations of period-to-period variances in selling, general and administrative expenses per the guidance we previously cited.
Please revise accordingly.

Response: We have revised
our disclosure as requested.

Note 6 - Investment in Non-Marketable Securities,
page F-11

 4. We note from your disclosure on page 56 that the counterparty to the debt forgiven on the transfer of
the $8 million investment in DPH to a third party is Brookstone XXI, a party under common control with you. Please tell us how you considered
this relationship in evaluating whether the gain you recognized in the transaction of $7.2 million should be considered a contribution
of capital under SAB Topic 5T and provide us with the basis for your accounting.

Response:
With respect to the $7.2 million debt forgiveness, we have taken into account that Brookstone XXI is a party under common control with
the Company and whether the gain should have been recognized as a contribution of capital under SAB Topic 5T. Taking SAB Topic 5T into
consideration, we concluded that the $7.2 million gain should be recognized in the consolidated statement of operations and not as a contribution
of capital in the consolidated statement of stockholders’ equity. The following is our basis of the accounting treatment for the
recognition of the $7.2 million gain on extinguishment of debt.

In summary, SAB
Topic 5T indicates: In a transactions where a principal stockholder pays an expense for the company, unless the stockholder’s action is
caused by a relationship or obligation completely unrelated to his position as a stockholder or such action clearly does not benefit the
company, consideration should be given to the recognition of the related income or gain transaction as a contribution of capital versus
recognition in the statement of operations.

The purpose of
the DPH transaction executed in 2021 was twofold: 1) to further maximize the availability of Capstone’s net operating loss carryforwards
through investments in other entities whereby income recognized on those investments could result in tax efficient cash flows to the Company
and its shareholders and 2) provide Capstone with the upside potential increase in the value of those investments while limiting its downside
risks to limited amounts relative to the investment.

The intent of
the parties (Brookstone and the special committee of the Company’s independent board of directors) was to limit the downside risk
to Capstone at $800,000, the amount of the limited guaranty associated with the $8 million note payable. The terms of the secured note
payable between Capstone Beta and Brookstone XXI included provisions whereby if the membership interests in Diamond Products, LLC (“Diamond”)
were sold or otherwise disposed, the remaining payments to Brookstone XXI were limited to the cash proceeds received by Capstone Beta
in such a sale transaction.

In November of
2023, in connection with a restructuring and recapitalization of the operating entities controlled by Diamond and other Diamond related
entities, controlled by Brookstone XXI, entered into a transaction that resulted in the sale of all of the membership interests in Diamond
to an unrelated entity controlled by an unrelated private equity firm. Diamond, Brookstone XXI, Capstone and its subsidiaries, received
no proceeds from the sale of the membership interests in Diamond. The consideration received primarily related to forgiveness of guarantees
of senior debt of the Diamond operating entities. Since no cash proceeds were received on the sale of the membership interests in Diamond
pursuant to the provisions of the note agreement that limited remaining payments of the note principal to the cash proceeds from the sale
of Diamond’s membership interest, the $8 million note payable was forgiven and a new note payable issued to Brookstone XXI in exchange
for accrued interest and the $800,000 limited guaranty obligation.

We believe U.S.
GAAP requires the $8 million write-off of the Company’s investment in DPH in the statement of operations. Furthermore, the form,
substance and intent of the 2021 and November 2023 DPH transactions with consideration of the guidance in SAB Topic 5T also warranted
the recognition of the $7.2 million gain on extinguishment of debt in the statement of operations to appropriately reflect the substance
of the Company’s downside economic risk of $800,000.

SAB Topic 5T indicates
that a fact pattern where the income or gain transaction might not be warranted as recognized as contributed capital includes those transactions
where a stockholder’s action is caused by a relationship or obligation completely unrelated to his position as a stockholder. With respect
to the November 2023 DPH transactions, Brookstone XXI’s actions were necessitated by relationships and obligations associated with
other investments unrelated to Capstone. The reason for Brookstone XXI authorizing the sale of the membership interest in Diamond was
motivated by its much greater economic interests in the other investments in contrast to its net $800,000 interest in DPH held by Brookstone
via related party ownership interests in Capstone.

The other fact
pattern indicated in SAB Topic 5T where recognition of the income or gain transaction may not be warranted as contributed capital is where
the action of the stockholder clearly does not benefit the Company. With respect to the debt forgiveness, there was no subjective decision
or action made by the Company’s majority shareholder to forgive the debt. The debt forgiveness was compelled by the terms of the
2021 secured note agreement as well as the intent of the Company’s majority shareholder and the special committee of independent
directors when negotiating the terms of the 2021 transaction and limiting the downside risks to Capstone. In summary, there was no new
benefit provided in the November 2023 transaction in comparison to the benefit (limitation of downside risk) provided in 2021 upon inception
of the arrangements.

    2

The 2021 Diamond
transaction was a complex arrangement involving a significant number of agreements, a third-party valuation of the investment that also
warranted the involvement and approval of a special committee of independent directors and their consultations with outside advisors.
Our intent has always been to provide transparent and reasonable disclosure of the DPH transaction in balance with the understanding that
the investment in DPH is not the focus of our business. Reflecting on your comment relative to this matter, we have revisited all of the
Diamond related disclosures in the Registration Statement and enhanced our disclosures with a focus of providing more disclosure of the
substance and intent of the transactions that may provide additional clarity as to why we determined that recognition of the gain on debt
forgiveness was recognized in the statement of operations for this transaction.

Consolidated Financial Statements of Capstone
Holding Corp. as of December 31, 2023 Notes to Consolidated Financial Statements.

Note 16 - Subsequent Events, page F-19

 5. Your disclosure here indicates the amended terms provided a waiver for your compliance of the financial
covenants not met through September 30, 2024. Please revise your subsequent events disclosure to state whether or not you were in compliance
through December 3, 2024, the date of the independent accountant’s report. Similar disclosure, as well as potential impacts to your financial
position and liquidity, should be added to your discussion in Liquidity and Capital Resources.

Response: We have revised our
subsequent events disclosure and our discussion in Liquidity and Capital Resources as requested.

 6. You disclose in the subsequent events note of the interim period financial statements you entered into
the Termination of Securities Purchase, Loan and Security Agreement on November 13, 2024, which terminates the Securities Purchase, Loan
and Security Agreement so that your liabilities and obligations with respect to the loan are solely set forth in the note payable with
BP Peptides, LLC. Please tell us why this disclosure is not included here. Further, clarify the impact this termination agreement has
on your financial statements, including liabilities outstanding, and compliance with any affected debt.

Response: We have revised
our disclosure regarding the Termination of Securities Purchase, Loan and Security Agreement (the “Termination
Agreement”) on November 13, 2024 and have clarified that the Termination Agreement has no impact on the Company’s
financial statements or any liabilities outstanding or compliance with any affected debt.

General

 7. We note your revisions pursuant to prior comment 28 and reissue in part. Please explain what you mean
when you disclose that you believe you are strategically positioned to capitalize on market conditions within the building products sector,
as you do on page 41.

Response: We have revised our
disclosure to further explain the statement that we are strategically positioned to capitalize on market conditions within the building
products sector.

Thank you for your assistance in reviewing
our amended submission.

    Very truly yours,

    /s/ Matthew Lipman

    Matthew Lipman

    Chief Executive Officer

3

December 19, 2024
Matthew Lipman
Chief Executive Officer
Capstone Holding Corp.
5141 W. 122nd Street
Alsip, IL 60803
Re:Capstone Holding Corp.
Amendment No. 1 to Draft Registration Statement on Form S-1
Submitted December 3, 2024
CIK No. 0000887151
Dear Matthew Lipman:
            We have reviewed your amended draft registration statement and have the following
comment(s).
            Please respond to this letter by providing the requested information and either
submitting an amended draft registration statement or publicly filing your registration
statement on EDGAR. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing the information you provide in response to this letter and your
amended draft registration statement or filed registration statement, we may have additional
comments. Unless we note otherwise, any references to prior comments are to comments in
our November 4, 2024 letter.
Amendment No. 1 to Draft Registration Statement on Form S-1 sumbitted December 3, 2024
Summary Consolidated Financial Information, page 10
1.You present statements of operations for the nine months ended September 30, 2024
and 2023 on pages 11 and 12 with amounts that vary from one another. If the
intention is for one of them to represent the three months ended September 30, 2024
and 2023, please revise accordingly. Otherwise, eliminate the inapplicable nine
months statement.

December 19, 2024
Page 2
Use of Proceeds, page 28
2.We note your revised disclosure pursuant to prior comment 10 and reissue in part.
Please disclose the interest rate associated with the Berskire Bank loan.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations, page 35
3.In regard to changes in sales, you refer to the effects of changes in prices and
volumes. Please disclose the extent of each. Refer to Item 303(b)(2)(iii) of Regulation
S-K. We further note you still have not quantified each factor cited in your
explanations of period-to-period variances in selling, general and administrative
expenses per the guidance we previously cited. Please revise accordingly.
Note 6 - Investment in Non-Marketable Securities, page F-11
4.We note from your disclosure on page 56 that the counterparty to the debt forgiven on
the transfer of the $8 million investment in DPH to a third party is Brookstone XXI, a
party under common control with you. Please tell us how you considered this
relationship in evaluating whether the gain you recognized in the transaction of $7.2
million should be considered a contribution of capital under SAB Topic 5T and
provide us with the basis for your accounting.
Consolidated Financial Statements of Capstone Holding Corp. as of December 31, 2023
Notes to Consolidated Financial Statements
Note 16 - Subsequent Events, page F-19
5.Your disclosure here indicates the amended terms provided a waiver for your
compliance of the financial covenants not met through September 30, 2024. Please
revise your subsequent events disclosure to state whether or not you were in
compliance through December 3, 2024, the date of the independent accountant's
report. Similar disclosure, as well as potential impacts to your financial position and
liquidity, should be added to your discussion in Liquidity and Capital Resources.
6.You disclose in the subsequent events note of the interim period financial statements
you entered into the Termination of Securities Purchase, Loan and Security
Agreement on November 13, 2024, which terminates the Securities Purchase, Loan
and Security Agreement so that your liabilities and obligations with respect to the loan
are solely set forth in the note payable with BP Peptides, LLC. Please tell us why this
disclosure is not included here. Further, clarify the impact this termination agreement
has on your financial statements, including liabilities outstanding, and compliance
with any affected debt.
General
7.We note your revisions pursuant to prior comment 28 and reissue in part. Please
explain what you mean when you disclose that you believe you are strategically
positioned to capitalize on market conditions within the building products sector, as
you do on page 41.

December 19, 2024
Page 3
            Please contact Amy Geddes at 202-551-3304 or Doug Jones at 202-551-3309 if you
have questions regarding comments on the financial statements and related matters. Please
contact Jenna Hough at 202-551-3063 or Dietrich King at 202-551-8071 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services
cc:Lawrence Metelitsa

November 4, 2024
Matthew Lipman
Chief Executive Officer
Capstone Holding Corp.
5141 W. 122nd Street
Alsip, IL 60803
Re:Capstone Holding Corp.
Draft Registration Statement on Form S-1
Submitted October 8, 2024
CIK No. 0000887151
Dear Matthew Lipman:
            We have reviewed your draft registration statement and have the following
comment(s).
            Please respond to this letter by providing the requested information and either
submitting an amended draft registration statement or publicly filing your registration
statement on EDGAR. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing the information you provide in response to this letter and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement on Form S-1 submitted October 8, 2024
Cover Page
1.Here and elsewhere as appropriate, please disclose that you will be considered a
"controlled company" following this offering under Nasdaq listing standards, if true.
If this is the case, please also disclose whether you intend to rely on the exemptions to
corporate governance requirements as a controlled company.
2.Please disclose here that BP Peptides, LLC, a related party, will have the ability to
control all matters requiring shareholder approval, if true. Also disclose their percent
voting power and the natural persons, namely, your chief executive officer and
chairman, who control BP Peptides, LLC.

November 4, 2024
Page 2
Business Overview, page 1
3.Please clarify what you mean by the following statement in the fourth paragraph in
this sub-section: "Over financial cycles the sector has grown by 5-7%, with the peak
of the interest rate cycle providing the ideal backdrop to execute value-creating,
accretive acquisitions."
Our Business Strategy and Operating Model, page 1
4.Please revise here and on page 38 to provide support for your statement that your
team has a "a proven track record of identifying, acquiring and building successful
building products companies." Similarly revise to provide support for your statement
on page 41 that your management team has a "proven track record of driving growth
and delivering results."
5.Here and elsewhere in the prospectus, such as on pages 38 and 39, please explain
what you mean when you state that you intend to expand your "market leadership."
TotalStone, LLC, page 2
6.Here and elsewhere, where you disclose that you have a controlling interest in
TotalStone, please disclose the percentage interest you hold.
Risk Factors, page 13
7.Please revise this section to provide a risk factor addressing the risks associated with
future issuances of securities with rights that are superior to the rights of holders of
your common stock (e.g., superior voting rights).
8.Please revise to provide a risk factor addressing whether you have been able to
historically retain your clients and attract new clients. To the extent that the loss of
any particular client(s) would have a material impact on your results of operations,
please disclose the client(s) and discuss your dependence on this client(s). To this
extent, we note your disclosure on page 31 that you have over 620 customers, and
your disclosure on page 41 that you have 350 active and recurring customers. Please
revise to clarify what figure properly represents current customers, and if your figure
citing 620 customers refers to total number of customers historically, please state as
much.
Risk Factors
Risks related to our securities
Capstone Holding Corp. is a holding company ... , page 21
9.You disclose here you are a holding company with no operations of your own, your
operations are conducted entirely through your subsidiaries and your ability to
generate cash for the noted items is highly dependent on funds from your subsidiaries.
In view of this, please explain to us your consideration of Rules 4-08(e), 5-04(c)
Schedule I and 12-04 of Regulation S-X.

November 4, 2024
Page 3
Use of Proceeds, page 26
10.Please revise to disclose the amount, by percentage, of proceeds that will be used for
each intended purpose disclosed here. Refer to Item 504 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of Operations,
page 31
11.Please provide support for, or explain what you mean by, your statement that your
"sales and marketing tools are industry leading."
Results of Operations, page 32
12.Please quantify each factor cited in your explanations of period-to-period variances
for annual and interim periods. For example, between the annual periods 2023 and
2022, you state revenue for your owned and controlled brands was down $4.8 million
driven by price reductions and offset by a slight increase in volume, and for your other
brands revenue was down $8.4 million primarily attributed to price reductions and
lower volume. Refer to the guidance in Item 303(b) of Regulation S-K and section
III.D of Release No. 33-6835 (501.04 of our Codification of Financial Reporting
Policies).
13.Please disclose the reason for the decrease in your profit margin in the latest annual
and interim periods relative to the corresponding prior periods.
14.In your explanation of the change in sales between the interim periods, it appears the
third paragraph under "Sales" on page 34 is a copy of the explanation for the annual
period comparison. Please revise for the interim period as appropriate.
Liquidity and Capital Resources, page 34
15.You state in the third paragraph hereunder you believe cash provided from operations
in 2024, in addition to cash from other sources, will be sufficient to satisfy your cash
requirements for at least the next 12 months. For the six months ended June 30, 2024
you report cash used in operations. Please discuss why you believe cash will be
provided from operations in 2024. Refer to Item 303(a), (b) and (b)(1).
Critical Accounting Policies and Significant Judgments and Estimates
Goodwill and Other Intangible Assets, page 36
16.Goodwill comprises approximately 44% and 43% of total assets as of December 31,
2023 and June 30, 2024, respectively. It appears any impairment charges that may be
required could have a material impact on your results of operations. Please
significantly revise your discussion of your policy for assessing goodwill for
impairment to include qualitative and quantitative information necessary to
understand the estimation uncertainty and how it relates to required impairment
testing and assessment of the necessity of an impairment test for both annual and
interim periods. Include in this discussion how you considered your loss from
operations position for the year ended December 31, 2023 and interim period ended
June 30, 2024, as well as your accumulated deficit and total equity at these respective
dates in your assessment of whether an impairment test was necessary. Refer to the
guidance in Item 303(b)(3) of Regulation S-K.

November 4, 2024
Page 4
Business, page 38
17.We note your disclosure that Instone is your current operating platform, which is
integral to your business strategy and competitive edge. Please revise to provide a
discussion of this platform, including how the platform operates, how it is accessed by
customers, distribution methods of the products or services, and any other detail
material to an understanding of this platform. Refer to Item 101(h) of Regulation S-K.
18.Please provide support for your statement that your management team has a "proven
track record of driving growth and delivering results" on page 41.
19.Where you discuss your market share, please revise to disclose what your market
share is, if known.
20.We note your disclosure on page 15 referring to your intellectual property rights.
Please disclose here the intellectual property you hold and the duration and effect of
such intellectual property. Refer to Item 101 of Regulation S-K.
21.We note your disclosure on page 43 regarding regulatory and environmental matters.
Please revise this section to disclose (a) your need for any government approval of
principal products or services, and if government approval is necessary, that you have
not yet received that approval, and discuss the status of the approval within the
government approval process; (b) the effect of existing or probable governmental
regulations on your business; and (c) costs and effects of compliance with
environmental laws. Refer to Item 101(h)(4)(viii), (ix), and (xi) of Regulation S-K.
Item 1. Business
TotalStone, LLC
Future TotalStone Equity Interests Transactions, page 45
22.There are several equity transactions detailed here that appear will impact your
ownership structure and capitalization post offering. Please tell us how you plan to
reflect the pro forma impact of these transactions in "Capitalization." Also explain to
us whether there is a basis for these transactions to impact the historical financial
statements included in the filing.
Security Ownership of Certain Beneficial Owners and Management, page 53
23.Please increase the holdings for Lipman and Toporek to reflect the holdings of BP
Peptides, LLC as well. In this regard, we note that by virtue of their roles with BP
Peptides, LLC each would appear to beneficially own BP Peptides, LLC's holdings for
reporting purposes. In addition, please revise footnote 5 to disclose the percent
ownership interest Lipman and Toporek each have in BP Peptides, LLC.
Consolidated Financial Statements of Capstone Holding Corp. as of December 31, 2023
Notes to Consolidated Financial Statements
Note 6 - Investment in Non-Marketable Securities, page F-11
You disclose here that on November 16, 2023 you transferred 100% of your
ownership in DPH to a third party and, as a result, you wrote-off in full your $8.0
million investment in DPH and wrote-down its debt liability to $800.0 thousand plus
interest. Please tell us whether:24.

November 4, 2024
Page 5
•the third party assumed the associated $7.2 million in debt liability and whether
any other consideration was transferred;
•our understanding is correct that the $800.0 thousand represents limited payment
guaranty of Beta's promissory note to Brookstone XXI. If correct, tell us and
disclose what, if any, assets now secure this liability.

General
25.Throughout the prospectus where you disclose that you are controlled by a private
equity group, please disclose that this group is Brookstone Partners, which is
controlled by your chief executive officer, Matthew Lipman, and your chairman,
Michael Toporek.
26.Please provide us with supplemental copies of all written communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your
behalf, present to potential investors in reliance on Section 5(d) of the Securities Act,
whether or not they retain copies of the communications.
27.Where you discuss that you own or control over 50% of the brands you sell, please
also disclose that this reflects five out of eight brands, if true.
28.Throughout the prospectus, where you disclose that you are strategically positioned
to capitalize on market conditions, please explain what you mean.
            Please contact Amy Geddes at 202-551-3304 or Doug Jones at 202-551-3309 if you
have questions regarding comments on the financial statements and related matters. Please
contact Jenna Hough at 202-551-3063 or Dietrich King at 202-551-8071 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services
cc:Lawrence Metelitsa

CORRESP
1
filename1.htm

July 3, 2019

David M. Plattner

Special Counsel

Office of Mergers & Acquisitions

Securities and Exchange Commission

Division of Corporate Finance

    Re:
    Capstone Therapeutics Corp.

    Schedule 13E-3 filed by Capstone Therapeutics Corp.

    Filed May 31, 2019

        File No. 005-42745

    Preliminary Proxy Statement on Schedule 14A

        Filed May 31, 2019

        File No. 000-21214

Dear Mr. Plattner:

Capstone Therapeutics Corp. (the “Company”) is submitting
this letter in response to the written comments of the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”), dated June 27, 2019, with respect to the Company’s Schedule 13E-3 filed with the Commission
on May 31, 2019 (File No. 005-42745) and the Company’s Preliminary Proxy Statement on Schedule 14A filed with the Commission
on May 31, 2019 (File No. 000-21214). Each of the Staff’s comments is set forth below, followed by the Company’s corresponding
response. For ease of reference, the headings and numbered paragraphs below correspond to the headings and numbered comments in
the Staff’s comment letter. The references in our responses are to, as applicable, the amended Preliminary Proxy Statement
(the “Amended Proxy Statement”) and the amended Schedule 13E-3, which are being filed today by electronic submission.

Capitalized terms used and not defined herein have the meanings
given in the Amended Proxy Statement.

Schedule 13E-3

 1. Please advise us as to what consideration has been given to whether BP Peptides, LLC, Mr. Toporek, and Mr. Lipman are
affiliates engaged in the going private transaction and, accordingly, should be filing persons on the Schedule 13E-3. Alternatively,
please revise the Schedule 13E-3 to include such parties as filing persons.

Response:

The Company respectfully advises the Staff that the Company considered
a number of factors in determining whether BP Peptides, LLC, Mr. Toporek, and Mr. Lipman are affiliates engaged in the going private
transaction. In particular, the Company notes to the Staff that there will be no special treatment for BP Peptides, LLC, Mr. Toporek
and Mr. Lipman in the transaction. In addition, the Company is paying for the expenses in connection with the reverse stock split,
including the Cash-Out Payment. Lastly, the impact of the reverse stock split on the percentage ownership of Continuing Stockholders,
including BP Peptides, LLC, Mr. Toporek and Mr. Lipman, will be negligible. Accordingly, BP Peptides, LLC, Mr. Toporek, and Mr.
Lipman are not deemed to be engaged in the transaction and, thus, are not required to file a Schedule 13E-3 in connection with
the transaction.

Preliminary Proxy Statement on Schedule 14A

Summary of Terms of Reverse Stock Split, page 4

 2. We note the disclosure on page 4 and elsewhere that states that you “currently anticipate” that in lieu of
issuing fractional shares, you will aggregate all fractional shares and have your exchange agent sell the aggregated amount. Please
explain why this is phrased merely as an expectation and what circumstances would lead to a different result.

Response:

The Company respectfully notes to the Staff that certain logistical actions to be taken
pertaining to the fractional shares relate to the Company’s agreement with its exchange agent, Computershare, and Computershare’s
ability provide the applicable services. The Company’s agreement with Computershare gives Computershare the right to cancel
such agreement for any reason with 30-days-notice. However, the Company is currently unaware of any reason for such cancellation
by Computershare and does not anticipate Computershare to do. In the unlikely event that Computershare were to cancel the agreement,
the Company would seek to engage an alternative exchange agent. To provide clarification, the Company has revised the disclosures
on pages 4 and 12 of the Amended Proxy Statement to replace the “currently anticipate” language as set forth below
(new language is shown in underline):

“Subject to our agreement with our exchange agent, in lieu of
issuing fractional shares, the aggregate of all fractional shares otherwise issuable to the holders of record of Common Stock shall
be issued to our exchange agent for the Common Stock, as agent, for the accounts of all holders of record of Common Stock otherwise
entitled to have a fraction of a share issued to them.”

 3. We note the disclosure on page 4 and elsewhere that indicates that the sale of the aggregated fractional interests will
occur “as soon as practicable” after the Effective Date on the basis of prevailing market prices of the Common Stock
at the time of sale. Please be more precise about the timing of such sale.

Response:

The Company respectfully acknowledges the Staff’s comment and has added additional
language on pages 4 and 12 of the Amended Proxy Statement to clarify that the Company expects that its exchange agent will conduct
the sale in an orderly fashion at a reasonable pace and that it may take several days to sell all of the aggregated fractional
shares of common stock.

 4. We note the disclosure on page 4 that refers to the payment of net proceeds to shareholders “after customary brokerage
commissions and other expenses.” At the bottom of page 8, however, the disclosure states that the Reverse Stock Split will
allow liquidation by small stockholders of their shares “without having to pay brokerage commissions.” Please reconcile
these two apparently contradictory statements.

Response:

The Company respectfully acknowledges the Staff’s comment and notes to the Staff
that the intent of the language at the bottom of page 8 was to convey that the reverse stock split will allow small stockholders
to liquidate shares of common stock at a market price without having to directly pay full brokerage fees. Many of the affected
stockholders hold 200 or fewer shares, making brokerage fees to sell those shares greater than the price of the shares. When the
fractional interests are aggregated and sold by Computershare, there will be brokerage fees, but those fees should be proportionally
much less for the affected stockholders. The Company has revised the disclosure on page 8 of the Amended Proxy Statement to clarify
this point.

Alternatives Considered, page 15

 5. We note the disclosure that states, “The Board considered issuer purchases, e.g., by tender offer, but concluded
that the Company did not have sufficient resources to effectuate such purchases at the level that would reduce record stockholders
to below 300.” Please provide additional detail as to why such alternative transactions would require resources beyond what
is required to effectuate the Reverse Stock Split.

Response:

The Company respectfully advises the Staff that a tender offer transaction would potentially
involve increased expenses compared to a reverse stock split, including higher legal costs and other transactional expenses, in
addition to uncertainty in whether such transaction would result in less than 300 stockholders of record. The Company has revised
the disclosure on page 15 of the Amended Proxy Statement to clarify this point.

Fairness of the Reverse Stock Split, page 15

 6. We note the disclosure on page 16 that states, “The Board believes the Cash-Out Payment is fair to our stockholders
as it is based on the arms-length trading activity as reported on the OTCQB stock exchange.” Elsewhere the disclosure speaks
to the likelihood of the Reverse Stock Split resulting in a negative impact on the market price and trading activity of the Common
Stock following the Effective Date (see, e.g., “Disadvantages of the Reverse Stock Split” on pages 14-15). Please explain
how the Board has been able reasonably to conclude that the Cash-Out Payment will be fair when (i) the Cash-Out Payment is unknown
until after the Reverse Stock Split occurs, (ii) by its very nature the Reverse Stock Split is likely to drive down the value of
the Cash-Out Payment, (iii) no downside protection in favor of cashed-out shareholders appears to have been built into the pricing
mechanism in the event that the market price does indeed decline following the Effective Date, and (iv) there do not appear to
be any specific timing constraints associated with the Company’s obligation to effect the sale of the aggregated fractional
shares and disburse the Cash-Out Payment.

Response:

The Company respectfully advises the Staff that the Board considered
a number of factors in concluding that the Cash-Out Payment is fair to the Cashed-Out Stockholders. In particular, the Company
notes to the Staff:

 · While the Cash-Out Payment will not be known until after the reverse stock split occurs, it is
entirely speculative whether the trading price of the common stock will be up or down following the reverse stock split. A decline
in price is certainly a possibility but it is by no means the assured outcome, especially given the low trading volume of the common
stock and the possibility that the reverse stock split and related going private transaction may be viewed favorably in light of
the potential benefits described in the proxy statement. The Board thus focused on a “fair process” and determined
that an aggregation and sale by an independent party on the established OTCQB market is a fair process for determining the value
of the stock.

 · Regardless of the Cash-Out Payment amount, Cashed-Out Stockholders will still receive the CVRs
since they will have been stockholders as of the record date. Accordingly, the Cashed-Out Stockholders will retain the potential
upside value of the development efforts of the Company’s LipimetiX Development, Inc. joint venture.

 · Given that many of the Cashed-Out Stockholders hold 200 or fewer shares, the brokerage fees to
sell such shares will be greater than the price of the shares. However, when the fractional interests are aggregated and sold by
Computershare, there will be brokerage fees, but those fees should be proportionally much less for the affected stockholders.

With respect to the disclosure of timing constraints associated
with the Company’s obligation to effect the sale of the aggregated fractional shares and to disburse the Cash-Out Payment,
the Company has added additional language on pages 4 and 12 of the Amended Proxy Statement to clarify that the Company expects
that its exchange agent will conduct the sale in an orderly fashion at a reasonable pace and that it may take several days to sell
all of the aggregated fractional shares of common stock.

The Company notes to the Staff that the proposed reverse stock split is anticipated to
affect less than 400,000 shares of the Company’s outstanding shares of common stock, or less than .7% of the shares outstanding,
and the affected shares have a market value, at market close on June 27, 2019, of less than $10,000. A holder of 999 shares, the
maximum amount for an individual holder that would become a Cashed-Out Stockholder, would have stock with a value at June 27, 2019
of less than $24 affected by the transaction.

The Company further notes to the Staff that the Company has disclosed to stockholders
on pages 12 through 13 and 17 of the Amended Proxy Statement that if a particular stockholder does not hold sufficient shares of
pre-split common stock to receive at least one post-split share of common stock, such stockholder can purchase a sufficient number
of shares of common stock so that they would hold at least 1,000 shares of common stock prior to the implementation of the reverse
stock split. Thus, any potential Cashed-Out Stockholder has the opportunity to purchase a few more shares for an investment of
less than $24 to avoid the Cash-Out Payment.

In light of the factors described above and the particular circumstances of the Company
and its business, the Board was able reasonably to conclude that the Cash-Out Payment is fair.

Trading Market and Price, page 19

 7. Please provide trading information for the first and second quarters of 2019.

Response:

The Company respectfully acknowledges the Staff’s comment and has added the additional
trading information on page 19 of the Amended Proxy Statement.

Form of Proxy

 8. Please revise the form of proxy to clearly identify it as being preliminary. Refer to Rule 14a-6(e)(1) of Regulation
14A.

Response:

The Company respectfully acknowledges the Staff’s comment and has revised the form
of proxy included in the Amended Proxy Statement to identify it as being preliminary.

* * *

Respectively submitted,

/s/ Les M. Taeger

Les M. Taeger

CFO

June 27 , 201 9

Daniel M. Mahoney , Esq.
Snell & Wilmer L.L.P.
One Arizona Center
400 East Van Buren
Phoenix, Arizona 85004

Re: Capstone Therapeutics Corp.
 Schedule 13E-3 filed by Capstone Therapeutics Corp.
Filed May 31, 2019
File No. 005 -42745

Preliminary  Proxy Statement on Schedule 14A
Filed May 31, 2019
File No. 000 -2121 4

Dear Mr. Mahoney :

We have review ed the filing s referenced above and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand the disclosure.

Please respond to this letter by amending the filing s, by providing the requested
information, or by advising us when you will provide the requested response.  If you do not
believe our comments apply to the facts and circumstances or do not believe an amendment is
appropriate, please tell us why in your response.

After reviewing any amendment to the filing s and the information you provide i n
response to these comments, we may have additional comments.   Please note that capitalized
terms used but not defined herein have the meanings ascribed to them in the filings.

Schedule 13E -3
1. Please advise us as to what consideration has been  given to whether BP Peptides, LLC ,
Mr. Toporek, and Mr. Lipman  are affiliate s engaged in the going private transaction and,
accordingly, should be filing person s on the Schedule 13E -3.  Alternatively, please revise
the Schedule 13E -3 to include  such parties as filing person s.

Daniel M. Mahoney , Esq.
June 27, 201 9
Page 2

 Preliminary  Proxy Statement on Schedule 14A

Summary of Terms of Reverse Stock Split, page 4
2. We note t he disclosure on page 4  and elsewhere that states that you “currently anticipate ”
that in lieu of issuing fractional shares, you will aggregate all fractional shares and have
your excha nge agent sell the aggregated amount .  Please e xplain why this is phrased
merely as an expectation  and what circumstances would lead to a different result.
3. We note the disclosure on page 4 and elsewhere  that indicates that  the sale of the
aggregated fracti onal interests will occur “as soon as practicable ” after the Effective Date
on the basis of prevailing market prices of the Common Stock at the time of s ale.  Please
be more precise about the t iming of such sale.
4. We note the disclosure on page 4 that refers to the payment of net proceeds t o
shareholders “after customary brokerage commissions and other expenses. ”  At the
bottom of  page 8, however,  the disclosure states that t he Re verse Stock Split will allow
liquidation by small stockholders of their shares “without having to pay brokerage
commissions. ”  Please reconcile  these two apparently contradictory statements.

Alternatives Considered, page 15
5. We note the disclosure t hat states, “The Board considered issuer purc hases, e.g., by
tender offer, but concluded that the Company did not have sufficient resources to
effectuate such purchases at the level that would reduce record stockholders to below
300.”  Please provi de additional detail as to why such alternative transactions would
require resources beyond what is required to effectuate the Reverse Stock Split.

Fairness of the Reverse Stock Split , page 15
6. We note the disclosure on page 16 that states, “The Board believes the Cash -Out
Payment is fair to our stockholders as it is based on the arms -length trading activity as
reported on the OTCQB stock exchange. ”  Elsewhere the disclosure speak s to the
likelihood of  the Reverse Stock Split result ing in a negative impact on the market price
and trading activity  of the Common Stock  following the Effective Date  (see, e.g.,
“Disadvantages of the Reverse Stock Split ” on pages 14 -15).  Please e xplain how the
Board has been able reasonably to conclude that the Cash -Out Payment will  be fair when
(i) the Cash -Out Payment is unknown until after the Reverse Stock Split occurs, (ii) by its
very nature the Reverse Stock Split is likely to drive dow n the value of the Cash -Out
Payment, (iii) no downside protection in favor of cashed -out shareholders appears to have
been  built into the pricing mechanism  in the event that the market price does indeed
decline following the Effective Date,  and (iv) there do not appear to be any specific
timing constraints associated with the Company ’s obligation to effect the sale of the
aggregated fractional shares an d disbur se the Cash -Out Payment .

Daniel M. Mahoney , Esq.
June 27, 201 9
Page 3

Trading Market and Price , page 19
7. Please provide trading information for the first and second quarters of 2019 .

Form of Proxy
8. Please revise the form of proxy to clearly identify it as being preliminary.  Refer to
Rule  14a-6(e)(1) of Regulation 14A.

Please contact me at (202) 551 -8094  if you have any questions regarding our comments.

Sincerely,

 /s/ David M. Plattner

David M. Plattner
Special Counsel
Office of Mergers & Acquisitions

December 8, 2011
 Via E-mail

John M. Holliman, III Executive Chairman Capstone Therapeutics Corp. 1275 West Washington Street, Suite 101 Tempe, AZ  85281
Re: Capstone Therapeutics Corp.
 Form 10-K
Filed March 29, 2011 File No. 001-33560

Dear Mr. Holliman:
 We have completed our review of your f iling.  We remind you that our comments or
changes to disclosure in res ponse to our comments do not for eclose the Commission from taking
any action with respect to the company or th e filing and the company may not assert staff
comments as a defense in any proceeding ini tiated by the Commission or any person under the
federal securities laws of the United States.  We urge all pers ons who are responsible for the
accuracy and adequacy of the disclosure in the fi ling to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Jennifer Riegel for

Jeffrey Riedler Assistant Director

CORRESP
1
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    corresp_112811.htm

November 28, 2011

Jeffrey Riedler

Assistant Director

United States Securities and Exchange Commission

100 First Street, N.E.

Washington, DC 20549

Re:

Capstone Therapeutics Corp. (the “Company”)

Item 1. Business

Patents, Licenses and Proprietary Rights, page 6

Form 10-K

Filed on March 29, 2011

File No. 001-33560

Your letter dated November 18, 2011.

Mr. Riedler:

Following is our response to your letter dated November 18, 2011. We have included your specific comment prior to our response to facilitate your review.

Item 1. Business

Patents, Licenses and Proprietary Rights, page 6.

1. We note your response to our prior comment, however we believe that royalty rates and termination provisions are material terms of your license agreements and material to an investor’s understanding of your business. Based on Section 16 of your agreement with AzTE it appears that either party may terminate the agreement under the circumstances described therein. Accordingly, please provide proposed disclosure that expands your discussion of your agreements with AzTE and the University of Texas to include the royalty rates payable on sales of future products and, for your agreement with AzTE, to include the termination provisions of the agreement.

Our Response:

We continue to believe the response included in our letter to you dated October 29, 2011 is correct and that the terms you describe are not material to the understanding of our business and not required disclosure under Regulation S-K, Item 101(h)(4)(vii).

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● www.capstonethx.com

SEC Correspondence

November 28, 2011

Page 2 of 3

However, while we disagree with the SEC’s interpretation of its regulations, we also believe the requested disclosure will not be materially misleading and we therefore agree to include the following expanded disclosure under Patents, Licenses and Proprietary Rights in our next annual report on Form 10-K (as it may be further modified to reflect new developments or other changes in our business):

Patents, Licenses and Proprietary Rights

As part of our purchase of CBI on August 5, 2004, the license agreements between CBI and OrthoLogic for the development, use, and marketing of the therapeutic products utilizing Chrysalin were replaced by a direct license agreement between OrthoLogic and the University of Texas.   Subsequently, we entered into an agreement whereby the University of Texas assigned to us certain patents previously exclusively licensed to us.  Under this agreement, we must pay the University of Texas royalties of 3.3% of covered product sales, and 5% of covered sublicense fees and we must pay various other fees in connection with filing and maintaining Chrysalin-related patents. This obligation will expire upon the expiration of the subject patents. Chrysalin has been patented in the United States and in some other countries for a number of methods of use, including cardiovascular indications.  A composition of matter patent covering European countries expired in 2007 and the corresponding United States patent expired in 2011.  Our other patents for Chrysalin expire between 2021 and 2024.

As part of the February 27, 2006 AzERx transaction, we acquired a license from AzTE, an affiliate of Arizona State University, for worldwide rights to AZX100 for all indications.  Under the license agreement with AzTE, we are required to pay patent filing, maintenance and other related patent fees as well as royalties of 3% of covered product sales and 5% of covered license revenue.  These obligations will end on the expiration of the last patent.  The license is supported by patents that expire from 2022 to 2024.  The license agreement is subject to termination by AzTE for events such as non-compliance with material terms of the license agreement, bankruptcy or liquidation, Force Majeure and non-payment of amounts due.

As part of the February 27, 2006 AzERx transaction we also acquired a non-exclusive license from Washington University for transduction domain carrier patents which form part of AZX100.  Under the license, we are required to pay license maintenance payments and royalties of 2% of covered product sales. The license is supported by patents that expire in 2018. These obligations will end on the expiration of the last patent.

We are a development stage research and development company with no products currently approved by the FDA for marketing.  We do not expect to have products approved for marketing before 2016, if ever.  Accordingly, the foregoing royalty obligations currently do not affect our reported results.

Capstone Therapeutics is a registered United States domestic trademark of Capstone Therapeutics Corp.

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● www.capstonethx.com

SEC Correspondence

November 28, 2011

Page 3 of 3

The Company acknowledges that:

·

The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

·

Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

·

The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please contact me if we can be of further assistance.

Sincerely,

/s/   Les M. Taeger

Les M. Taeger

Senior Vice President and Chief Financial Officer

Capstone Therapeutics Corp

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● www.capstonethx.com

November 18, 2011
 Via E-mail

John M. Holliman, III Executive Chairman Capstone Therapeutics Corp. 1275 West Washington Street, Suite 101 Tempe, AZ  85281
Re: Capstone Therapeutics Corp.
 Form 10-K
Filed March 29, 2011 File No. 001-33560

Dear Mr. Holliman:
 We have reviewed your response letter da ted October 28, 2011 and have the following
comment.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe our comment applies to your facts a nd circumstances, please tell us why in your
response.
 After reviewing the information you provide in  response to our comment, we may have
additional comments.

Item 1.  Business

Patents, Licenses and Proprietary Rights, page 6

1. We note your response to our prior comment, how ever we believe that royalty rates and
termination provisions are material terms of your license agreements and material to an
investor’s understand ing of your business.  Based on Section 16 of your agreement with
AzTE it appears that either party may terminate the agreement under the circumstances
described therein. Accordingly, please provide  proposed disclosure that expands your
discussion of your agreements with AzTE and the University of Texas to include the
royalty rates payable on sales of future pr oducts and, for your agreement with AzTE, to
include the termination provisions of the agreement.  We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are

John M. Holliman, III Capstone Therapeutics Corp. November 18, 2011 Page 2

 in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 Please contact Karen Ubell, Staff Attorne y, at (202) 551-3873, Jennifer Riegel, Special
Counsel, at (202) 551-3575 or me at ( 202) 551-3715 with any other questions.

Sincerely,
   /s/ Jennifer Riegel for
Jeffrey Riedler Assistant Director

CORRESP
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    corresp_102811.htm

October 28, 2011

Jeffrey Riedler

Assistant Director

United States Securities and Exchange Commission

100 First Street, N.E.

Washington, DC 20549

Re:

Capstone Therapeutics Corp. (the “Company”)

Item 1. Business

Patents, Licenses and Proprietary Rights, page 6

Form 10-K

Filed on March 29, 2011

File No. 001-33560

Your letter dated October 21, 2011.

Following is our response to your letter dated October 21, 2011. We have included your specific comment prior to our response to facilitate your review.

Item 1. Business

Patents, Licenses and Proprietary Rights, page 6

1.

Please revise your disclosure to expand your discussion of your agreements with University of Texas and Arizona State University to describe for each the termination provisions of the agreements and the royalty rates due on sales of future products and all other material payments made or required to be made pursuant to the terms of each agreement. Further, please file a copy of the license agreement with Washington University that you have assumed and revise your disclosure to expand your discussion of your agreement with Washington University to include the termination provisions of the agreement and the license maintenance payments made to date and payable annually and the royalty rate. Alternatively, please provide us with a detailed analysis which supports your conclusion that your business is not substantially dependent on this license agreement.

Our Response:

The license agreement for AZX100 between the Arizona Science & Technology Enterprises, LLC, an Arizona limited liability company, dba Arizona Technology Enterprises, LLC (“AzTE”) (the technology entity for Arizona State University) and OrthoLogic Corp. (OrthoLogic Corp. changed its name to Capstone Therapeutics Corp. on May 21, 2010) was filed as Exhibit 10.5 to the Company’s Registration statement on Form S-3 filed with the Securities and Exchange Commission (SEC) on April 25, 2006 (Listed in Exhibit Index to the Annual Report on Form 10-K filed on March 29, 2011 as Exhibit 2.4).

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● Fax 602-926-2641●www.capstonethx.com

SEC Correspondence

October 28, 2011

Page 2 of 4

The license agreement for Chrysalin between the Board of Regents (“Board”) of The University of Texas System, an agency of the State of Texas, whose address is 201 West 7th Street, Austin, Texas 78701 (“System”), through its component institution, The University of Texas Medical Branch at Galveston (“University”), and Chrysalis Biotechnology, Inc., was filed as Exhibit 10.1 to the Company’s Registration statement on Form S-4 filed with the Securities and Exchange Commission (SEC) on June 3, 2004 (the “S-4”) (Listed in Exhibit Index to the Annual Report on Form 10-K filed on March 29, 2011 as Exhibit 2.1). As part of the purchase transaction described it the S-4, the License agreement was assigned to OrthoLogic Corp.

The Company is a development stage research and development company with no current products approved for marketing by the FDA. These contracts were deemed by the Company to be material contracts, not because of the financial terms, but because the intellectual property covered by the contracts gives the Company protection against competition for potential future products. As shown in the publicly available contracts, the royalty rates on product sales are 3% (AZX100) and 3.3% (Chrysalin) with both contracts providing for an additional payment of 5% on non-product sale revenue, excepting the proceeds from the sale of the Company. The payment obligations were not deemed material to the understanding of the Company’s business. It is currently not expected that the Company will have products approved for marketing before 2016, if ever, and accordingly, the contract obligations are not currently affecting reported results.

The non-Exclusive License Agreement between Washington University (Licensor) and AzERx (Licensee), assigned to OrthoLogic Corp. as part of the purchase transaction described in the Asset Purchase Agreement and Plan of Reorganization by and between OrthoLogic Corp. and AzERx, dated February 23, 2006, filed as Exhibit 10.5 to the Company’s Registration statement on Form S-3 filed with the Securities and Exchange Commission on April 25, 2006 (Listed in Exhibit Index to the Annual Report on Form 10-K filed on March 29, 2011 as Exhibit 2.4) was not deemed to be a material contract by the Company as intellectual property covered by the contract does not give the Company protection against competition for potential future products, as it is non-exclusive, the maximum royalty rate is only 2% of product sales and the underlying patents expire in 2018. Given it is not expected that the Company will have products approved for marketing before 2016, if ever, the contract and related royalty obligations will be effective for a very short period and not be expected to have a material impact on our operations in any period. AXZ100 is a two part molecule consisting of a cargo and a carrier (protein transduction domain or “PTD”). We mention the contract in our filings only because we often are asked where the PTD originated. The PTD was provided by Washington University.

The instructions to Form 10-K Part 1, Item1. Business are as follows:

Furnish the information required by Item 101 of Regulation S-K (§229.101 of this chapter) except that the discussion of the development of the registrants business need only include developments since the beginning of the fiscal year for which the report is filed.

 As noted in our Form 10-K filed on March 29, 2011, we qualify as a Smaller Reporting Company and thus our disclosures are governed by Regulation S-K, Item 101, (h) (4) (vii) as follows:

                (4) Business of Smaller Reporting Companies: Briefly describe the business and include, to the extent material to the understanding of the smaller reporting company:

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● Fax 602-926-2641●www.capstonethx.com

SEC Correspondence

October 28, 2011

Page 3 of 4

                           (vii)     Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration.

The disclosure in our Form 10-K filed March 29, 2011 was as follows:

Patents, Licenses and Proprietary Rights

As part of our purchase of CBI on August 5, 2004, the license agreements between CBI and OrthoLogic for the development, use, and marketing of the therapeutic products utilizing Chrysalin were replaced by a direct license agreement between OrthoLogic and the University of Texas.  Subsequently, we entered into an agreement whereby the University of Texas assigned to us certain patents previously exclusively licensed to us.  We must pay the University of Texas royalties on future sales of products, sublicense fees and various other fees in connection with filing and maintaining Chrysalin-related patents. This obligation will expire upon the expiration of the subject patents. Chrysalin has been patented in the United States and in some other countries for a number of methods of use, including cardiovascular indications.  A composition of matter patent covering European countries expired in 2007 and the corresponding United States patent expires in 2011.  Our other patents for Chrysalin expire between 2021 and 2024.

As part of the February 27, 2006 AzERx transaction, we acquired a license from AzTE, an affiliate of Arizona State University, for worldwide rights to AZX100 for all indications.  Under the license agreement with AzTE, we are required to pay patent filing, maintenance and other related patent fees as well as royalties on future sales of products that contain AZX100.  These obligations will end on the expiration of the last patent.  The license is supported by patents that expire from 2022 to 2024.

As part of the February 27, 2006 AzERx transaction we also acquired a non-exclusive license from Washington University for transduction domain carrier patents which form part of AZX100.  Under the license, we are required to pay license maintenance payments and royalties on future sales of products that contain the licensed technology.  These obligations will end on the expiration of the last covered patent.

Capstone Therapeutics is a registered United States domestic trademark of Capstone Therapeutics Corp.

                                               ----------------------------------------

It is well known that intellectual property obligations continue to the expiration of the intellectual property right. Furthermore, we purchased the University of Texas patent rights and neither AzTE nor Washington University has the right to terminate our licenses. Accordingly, we believe that discussion of the termination provisions is not material to the understanding of our business. We believe our disclosures are adequate, as we do list the critical expiration dates for our patent protection and correspondingly, the expected intellectual property contract obligation periods. We specifically state in the first two paragraphs that the obligations will end on the expiration of the last patent.

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● Fax 602-926-2641●www.capstonethx.com

SEC Correspondence

October 28, 2011

Page 4 of 4

The Company acknowledges that:

·

The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

·

Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

·

The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please contact me if we can be of further assistance.

Sincerely,

/s/   Les M. Taeger

Les M. Taeger

Senior Vice President and Chief Financial Officer

Capstone Therapeutics Corp

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● Fax 602-926-2641●www.capstonethx.com

October 21, 2011
 Via E-mail

John M. Holliman, III Executive Chairman Capstone Therapeutics Corp. 1275 West Washington Street, Suite 101 Tempe, AZ  85281
Re: Capstone Therapeutics Corp.
 Form 10-K
Filed March 29, 2011 File No. 001-33560

Dear Mr. Holliman:
 We have reviewed your filing and have the following comment.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe our comment applies to your facts a nd circumstances, please tell us why in your
response.
 After reviewing the information you provide in  response to our comment, we may have
additional comments.
Item 1.  Business

Patents, Licenses and Proprietary Rights, page 6

1. Please revise your disclosure to expand your discussion of your agreements with
University of Texas and Arizona State Univer sity to describe for each the termination
provisions of the agreements and the royalty rates due on sales of future products and all
other material payments made or required to be made pursuant to the terms of each
agreement.  Further, please file a copy  of the license agreement with Washington
University that you have assumed and revise  your disclosure to expand your discussion
of your agreement with Washington University  to include the term ination provisions of
the agreement and the license maintenance paym ents made to date and payable annually
and the royalty rate.  Alternatively, please pr ovide us with a detailed analysis which
supports your conclusion that your business is  not substantially dependent on this license
agreement.

John M. Holliman, III Capstone Therapeutics Corp. October 21, 2011 Page 2

 We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 In responding to our comments, please provi de a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

Please contact Karen Ubell, Staff Attorne y, at (202) 551-3873, Jennifer Riegel, Special
Counsel, at (202) 551-3575 or me at ( 202) 551-3715 with any other questions.

Sincerely,
   /s/ Jennifer Riegel for
Jeffrey Riedler
Assistant Director

June 17, 2011

Via E-mail
John M. Holliman, III
Executive Chairman
Capstone Therapeutics Corp.
1275 West Washington Street, Suite 101 Tempe, AZ 85281

Re: Capstone Therapeutics Corp.
Item 4.01 Form 8-K   Filed June 10, 2011
  File No. 001-33560

Dear Mr. Holliman:
 We have completed our review of your f iling.  We remind you that our comments or
changes to disclosure in res ponse to our comments do not for eclose the Commission from taking
any action with respect to the company or th e filing and the company may not assert staff
comments as a defense in any proceeding ini tiated by the Commission or any person under the
federal securities laws of the United States.  We urge all pers ons who are responsible for the
accuracy and adequacy of the disclosure in the fi ling to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,
  /s/ Joel Parker
        J o e l  P a r k e r          A c c o u n t i n g  B r a n c h  C h i e f

CORRESP
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    corresp_061611.htm

June 16, 2011

Joel Parker

Accounting Branch Chief

United States Securities and Exchange Commission

100 First Street, N.E.

Washington, DC 20549

Re:

Capstone Therapeutics Corp.

Item 4.01 Form 8-K

Filed on June 10, 2011

File No. 001-33560

Your letter dated June 14, 2011.

Mr. Parker:

Following is our response to your letter dated June 14, 2011. We have included your specific comment prior to our response to facilitate your review.

Item 4.01

1. Please revise the last paragraph to specify the subsequent interim period as the interim

period through the date of engagement which was June 10, 2011. Your current disclosure

only goes through June 6, 2011.

Our Response:

We engaged Moss Adams LLP as our new independent registered public accountant on June 10, 2011. We acknowledge that the period of time required to be covered by the disclosures in Regulation S-K Item 304(a)(2) ends on the date the new auditor is engaged (in our case, June 10, 2011) rather than the date on which the prior auditor is terminated (in our case, June 6, 2011).  In our Form 8-K filing, we inadvertently referred to the date on which we terminated our prior auditor as the date through which we had not engaged in the types of consultation with our newly engaged auditor that are reportable pursuant to Item 304(a)(2).  In this regard, however, we call the staff’s attention to the language of Regulation S-K Item 304(a)(2) which requires the indicated disclosures only where the registrant has consulted with the newly engaged accountant regarding the matters specified.  No disclosure is necessary if there were no such consultations.  The staff has confirmed this reading of the regulation in the context of the terminated auditor in Question 111.02 in the Regulation S-K Compliance and Disclosure Interpretations.    Accordingly, we believe our disclosure was accurate and not misleading and no Form 8-K amendment is necessary to change the stated date.

However, we confirm to the staff supplementally that during our two most recent fiscal years and during the subsequent interim period from January 1, 2011 through June 10, 2011, neither the Company nor anyone acting on its behalf consulted with Moss Adams LLP regarding any of the matters or events set forth in Item 304(a)(2) of Regulation S-K.

The Company acknowledges that:

·

The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

·

Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

·

The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please contact me if we can be of further assistance.

Sincerely,

/s/   Les M. Taeger

Les M. Taeger

Senior Vice President and Chief Financial Officer

Capstone Therapeutics Corp.

1275 West Washington Street, Suite 101 ● Tempe, AZ  85281 ● Office 602-286-5520 ● Fax 602-926-2641●www.capstonethx.com

June 14, 2011

Via E-mail
John M. Holliman, III
Executive Chairman
Capstone Therapeutics Corp.
1275 West Washington Street, Suite 101 Tempe, AZ 85281

Re: Capstone Therapeutics Corp.
Item 4.01 Form 8-K   Filed June 10, 2011
  File No. 001-33560

Dear Mr. Holliman:
 We have reviewed your filing and have the fo llowing comment.  In our comment, we ask
you to provide us with information so we may better understa nd your disclosure.
 Please respond to this letter within te n business days by providing the requested
information, or by advising us when you will provide the requested response.   If you do not believe our comment applies to your facts and ci rcumstances or do not believe an amendment is
appropriate, please tell us why in your response.  Please furnish us a letter on EDGAR under the
form type label CORRESP that keys  your response to our comment.
 After reviewing any amendment to your filing and the information you provide in
response to this comment, we may have additional comments.

Item 4.01

1. Please revise the last paragraph to specify the subsequent interim period as the interim
period through the date of engagement whic h was June 10, 2011.  Your current disclosure
only goes through June 6, 2011.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 In responding to our comment, please provide a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

John M. Holliman, III
Capstone Therapeutics Corp.
June 14, 2011
Page 2

  staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

You may contact Vanessa Robe rtson, Staff Accountant, at (202) 551-3649 if you have
any questions regarding the comment.  In this re gard, do not hesitate to contact me, at (202) 551-
3651.
Sincerely,
  /s/ Joel Parker
        J o e l  P a r k e r          A c c o u n t i n g  B r a n c h  C h i e f

Via Facsimile and U.S. Mail
Mail Stop 4720

         September 21, 2009

Les M. Taeger
Senior Vice President and Chief Financial Officer
OrthoLogic Corp.
1275 West Washington Street, Suite 101
Tempe, AZ 85281

Re: OrthoLogic Corp.
 Form 10-K for Fiscal Year Ended December 31, 2008
 File Number:  001-33560

Dear Mr. Taeger,

We have completed our review of your Fo rm 10-K and related filings and have no
further comments at this time.       Sincerely,

     Carlton E. Tartar Accounting Branch Chief

CORRESP
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    corresp.htm

    September
16, 2009

    Jim B.
Rosenberg

    Senior
Assistant Chief Accountant

    United
States Securities and Exchange Commission

    100 F.
Street, N.E.

    Washington,
DC 20549

              Re:

              OrthoLogic
      Corp.

    Form 10-K
for the fiscal year ended December 31, 2008

    Filed on
March 13, 2009

    Form 10-Q
for the fiscal quarter ended June 30, 2009

    Filed on
August 12, 2009

    File No.
001-33560

    Your
letter dated September 8, 2009

    Following
is our response to your letter dated September 8, 2009.  We have
included your specific questions prior to our response to facilitate your
review.

    Form 10-K for the fiscal
year ended December 31, 2008

    Financial
Statements

    Report of
Independent Registered Public Accounting Firm, page F-l

                1.

                Please
      amend your filing to include the report of the auditors referred to by
      Ernst & Young that covers the period from inception through December
      31, 2005, which complies with Rule 2-02 of Regulation S-X. Refer to Rule
      2-05 of Regulation S-X.

    Our
Response:

    We concur
with your observation and will file an amended Form 10-K by or before September
30, 2009.  Our independent registered public accounting firm has
performed audit procedures to enable them to eliminate their reference to other
auditors and will reflect that change in their report included within the
amended Form 10-K.

    Form 10-Q for the fiscal
quarter ended June 30, 2009

    Item 4 -
Controls and Procedures, page 14

              2.

              Your
      disclosure includes a partial definition of disclosure controls and
      procedures rather than the complete definition of disclosure controls and
      procedures contained in Exchange Act Rule l3a-15(e). Specifically, confirm
      to us that your officers concluded that your disclosure controls and
      procedures are also effective to ensure that information required to be
      disclosed in the reports that you file or submit under the Exchange Act is
      accumulated and communicated to your management, including your chief
      executive officer and chief financial officer, to allow timely decisions
      regarding required disclosure, and that you will include this complete
      definition in future filings.

    1275 West Washington Street●Tempe, AZ 85281●Tel
602-286-5414●Fax 602-926-2641●ltaeger@olgc.com

    Our
Response:

    We
specifically confirm to you that our officers concluded that our disclosure
controls and procedures are also effective to ensure that information required
to be disclosed in the reports that we file or submit under the Exchange Act is
accumulated and communicated to our management, including our chief executive
officer and chief financial officer, to allow timely decisions regarding
required disclosure.

    We will
include a complete definition in future filings.

    The
Company acknowledges that:

              ·

              The
      Company is responsible for the adequacy and accuracy of the disclosure in
      the filings;

              ·

              Staff
      comments or changes to disclosure in response to staff comments do not
      foreclose the Commission from taking any action with respect to the
      filings; and

              ·

              The
      Company may not assert staff comments as a defense in any proceeding
      initiated by the Commission or any person under the federal securities
      laws of the United States.

    Please
contact me if we can be of further assistance.

    Sincerely,

    /s/ Les M.
Taeger

    Les M.
Taeger

    Senior
Vice President and Chief Financial Officer

    OrthoLogic
Corp.

    1275 West
Washington Street●Tempe, AZ 85281●Tel 602-286-5414●Fax
602-926-2641●ltaeger@olgc.com

Via Facsimile and U.S. Mail
Mail Stop 4720

         September 8, 2009

Les M. Taeger
Senior Vice President and Chief Financial Officer
OrthoLogic Corp.
1275 West Washington Street, Suite 101
Tempe, AZ 85281

Re: OrthoLogic Corp.
 Form 10-K for Fiscal Year Ended December 31, 2008
Form 10-Q for the Fiscal Quarter Ended June 30, 2009
 File Number:  001-33560

Dear Mr. Taeger:

We have reviewed your filings and have the following comments.  We have
limited our review to your fi nancial statements and relate d disclosures and do not intend
to expand our review to other portions of  your document.  We think you should amend
your Form 10-K in response to comment one.  If you disagree, we will consider your
explanation as to why our comment is inappl icable or a revision is unnecessary.  Please
be as detailed as necessary in your explan ation.  In comment two, we ask you to provide
us information and to revise your disclosure  beginning with your next Form 10-Q.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filings.  We look forward to working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for the Fiscal Year Ended December 31, 2008

Financial Statements
Report of Independent Registered Public Accounting Firm, page F-1
 1. Please amend your filing to include the repor t of the auditors referred to by Ernst
& Young that covers the period fr om inception through December 31, 2005,
which complies with Rule 2-02 of Regulation S-X.  Refer to Rule 2-05 of Regulation S-X.

Les M. Taeger
OrthoLogic Corp.
September 8, 2009
Page 2

Form 10-Q for the Fiscal Quarter Ended June 30, 2009
Item 4 – Controls and Procedures, page 14

2. Your disclosure includes a partial definiti on of disclosure controls and procedures
rather than the complete definition of  disclosure controls and procedures
contained in Exchange Act Rule 13a-15(e).  Specificall y, confirm to us that your
officers concluded that your di sclosure controls and pro cedures are also effective
to ensure that information required to be disclosed in the repo rts that you file or
submit under the Exchange Act is acc umulated and communicated to your
management, including your chief executive officer and chief financial officer, to
allow timely decisions regarding required disclosure, and that you will include this complete definition in future filings.

* * * *

 Please amend your Form 10-K and respond to these comments within 10 business
days or tell when you will provide us with a response.  Please furnis h a cover letter with
your amendment that keys your responses to our  comments.  Detailed cover letters greatly
facilitate our review.  Please furnish your  letter on EDGAR under the form type label
CORRESP.  Please understand th at we may have additional comments after reviewing your
amendment and responses to our comments.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filings to be certain that  the filings include all information required
under the Securities Exchange Act of 1934 and that they have provided all information
investors require for an informed invest ment decision.  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.

 In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:

• the company is responsible for the adequacy and accuracy of the disclosure in
the filings;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking a ny action with respect to the filings;
and
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any pers on under the federal s ecurities laws of
the United States.

 In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.

Les M. Taeger
OrthoLogic Corp.
September 8, 2009
Page 3
 Please contact Staci Shannon, Staff Acc ountant, at (202) 551-3374 or Carlton
Tartar, Accounting Branch Chie f, at (202) 551-3387 if you ha ve any questions regarding
these comments.  In this regard, do not hesitate to contact me, at (202) 551-3679.

        S i n c e r e l y ,

        J i m  B .  R o s e n b e r g
Senior Assistant Chief
Accountant

CORRESP
1
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corresp

[ORTHOLOGIC CORP. LETTERHEAD]

      October 26, 2006

Gregory S. Belliston

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

    Re:

    OrthoLogic Corp.

    Registration Statement on Form S-3, File No. 333-137754, as amended

    (the “Registration Statement”)

Dear Mr. Belliston:

          Pursuant to Section 8(a) of the Securities Act of 1933, as amended, and Rule 461 promulgated
thereunder, OrthoLogic Corp. (the “Company”) respectfully requests that the effective date of the
Registration Statement be accelerated so that it will become effective on Monday, October 30, 2006,
or as soon thereafter as practicable.

          In connection with our request and pursuant to your letter to us dated October 6, 2006, the
Company hereby acknowledges that:

          • should the United States Securities and Exchange Commission (the “Commission”) or the
staff, acting 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 disclosure in the filing; and

          • the Company may not assert staff comments and the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.

    Sincerely,

    /s/ Les M. Taeger

    Les M. Taeger

    Chief Financial Officer

Via Facsimile and U.S. Mail Mail Stop 6010                                                                                                 October 12, 2006
  Mr. Les M. Taeger Senior Vice President and Chief Financial Officer Orthologic Corp. 1275 W. Washington Street Tempe, AZ  85281
Re: Orthologic Corp.
 Form 10-K for the year ended December 31, 2005
Filed on March 13, 2006
 Form 10-Q for the interim period ended June 30, 2006
File No. 000-21214

Dear Mr. Taeger:
  We have completed our review of your  Form 10-K and 10-Q and have no further
comments at this time.

        S i n c e r e l y ,            K e v i n  W o o d y          B r a n c h  C h i e f

Mail Stop 6010

        October 6, 2006

John M. Holliman, III
Executive Chairman
OrthoLogic Corp.
1275 West Washington Street
Tempe, Arizona 85281

 Re: OrthoLogic Corp.
  Registration Statement on Form S-3
  Filed October 3, 2006
  File No. 333-137754

Dear Mr. Holliman:

 We have limited our review of your filing to those issues we have addressed in
our comments.  Where indicated, we think you should revise your document in response
to these comments.  If you disagree, we w ill consider your explanation as to why our
comment is inapplicable or a revision is unneces sary.  Please be as detailed as necessary
in your explanation.  In some of our comme nts, we may ask you to provide us with
information so we may better understand your  disclosure.  After reviewing this
information, we may raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

General

1. We note you have filed a confidential treatment request.  Comments regarding the confidential treatment request , if any, will be sent under separate cover.  All
comments will need to be resolved prior to effectiveness.

2. All comments on the ongoing accounting review of your 2005 Form 10-K will need to be resolved prior to effectiveness.

John M. Holliman, III
OrthoLogic Corp. October 6, 2006 Page 2

The Offering, page 4

3. Although the Class B, C, and D Warrants have been issued, it appears they will not become exercisable until certain milest ones occur.  It is the staff’s position
that to register the resale  of common stock underlying wa rrants, the warrants must
be exercisable within one year.  Therefor e, in your response le tter, please tell us
what the milestones are, and provide an analysis as to how you currently expect
that the milestones will be accomplished w ithin one year.  Alternatively, if you do
not believe the milestones will occur w ithin one year, you should file a pre-
effective amendment to remove the sh ares underlying the Class B, C, and D
Warrants from the registration statement.

* * *

 As appropriate, please amend your regist ration statement in response to these
comments.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your amendmen t and responses to our comments.

 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 all in formation required under
the Securities Act of 1933 and that they have  provided all information investors require
for an informed investment decision.  Since the company and its management are in possession of all facts relating to a company’ s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

 Notwithstanding our comments, in the ev ent the company requests acceleration of
the effective date of the pending registration statement, it should furnish a letter, at the time of such request, acknowledging that:

• should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose th e 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 disclosure in the filing; and

• the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

John M. Holliman, III
OrthoLogic Corp. October 6, 2006 Page 3

 In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to our comments on your filing.

 We will consider a written request for acceleration of the effective date of the registration statement as conf irmation of the fact that t hose requesting acceleration are
aware of their respective re sponsibilities under the S ecurities Act of 1933 and the
Securities Exchange Act of 1934 as they rela te to the proposed public offering of the
securities specified in the above registration statement.  We will act  on the request and,
pursuant to delegated authority, grant acce leration of the effective date.

 We direct your attention to Rules 460 and 461 regarding requesting acceleration
of a registration statement.  Please allow ad equate time after the filing of any amendment
for further review before submitting a request for acceleration.  Please provide this request at least two business days in a dvance of the requested effective date.

 Please contact Greg Belliston at (202 ) 551-3861 or me at (202) 551-3715 with
any questions.

        S i n c e r e l y ,

        J e f f r e y  P .  R i e d l e r
        A s s i s t a n t  D i r e c t o r

cc:  Steven P. Emerick, Esq.
 Quarles & Brady Streich Lang, LLP
 One Renaissance Square, Two North Central Avenue
 Phoenix, Arizona 85004

Via Facsimile and U.S. Mail Mail Stop 6010                                                                                                 August 22, 2006
   Mr. Les M. Taeger Senior Vice President and Chief Financial Officer Orthologic Corp. 1275 W. Washington Street Tempe, AZ  85281
Re: Orthologic Corp.
 Form 10-K for the year ended December 31, 2005
Filed on March 13, 2006
 Form 10-Q for the interim period ended June 30, 2006
File No. 000-21214

Dear Mr. Taeger:

We have limited our review of your filing to those issues we have addressed in
our comments.  In some of our comments we ask you to provide us with information so we may better understand your disclosure.  After reviewing this information, we may
raise additional comments.  Where indicate d, we think you should revise your documents
in response to these comments.  If you disagr ee, we will consider your explanation as to
why our comment is inapplicable or a revi sion is unnecessary. Please be as detailed as
necessary in your explanation.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Mr. Les M. Taeger
Orthologic Corp. August 22, 2006 Page 2
 Form 10-K for the year ended December 31, 2005

 Management’s Discussion and Analysis of  Financial Conditions and Results of
Operations
 Liquidity and Capital Resources, page 32

1. Please revise your disclosure to expand disc ussions of your financial obligations for
2006 and 2007 as they relate to the contract ual obligations table.  You disclose
accrued clinical expenses of  $544,000, additional commitment due to clinical sites of
$988,000, and contracts to consultants and ot her contractual obligation, however the
sum of these amounts are a fraction of the “total liabilities” caption disclosed for 2006
and 2007 in your table.  Additionally, revise  your contractual obligations table to
comply with the format prescribed in  Item 303(a)(5) of Regulation S-K.

Financial Statements
 Notes to Financial Statements

 Summary of Significan t Accounting Policies

 D. Excess Space Reserve, page F-7

2. Please tell us why you have accrued a lia bility for excess space reserve and the
accounting literature management re lied upon to record this accrual.

Note 14. Subsequent Events, page F-19
 Sale of Shares of Company Stock, Issuance of  Warrants and Entry in to Master Services
Agreement, page F-20
3. Please tell us and disclose the significan t terms of your agreement with Quintiles
specifically the milestones that must be ach ieved in order for the stock warrants to
vest.

Form 10-Q for the interim period ended June 30, 2006
 Item 1. Financial Statements

 Notes to Unaudited Condensed Financial Statements

 C. Sale of Shares of Company Stock, I ssuance of Warrants and Entry into Master
Services Agreement, page 13

Mr. Les M. Taeger
Orthologic Corp. August 22, 2006 Page 3
 4. Please provide to us your analysis unde r EITF 00-19 of how you accounted for the
warrants issued to PharmaBio Development ( dba NovaQuest).  It appears that you are
required to issue registered sh ares to settle the contract and the number of shares that
must potentially be issued to settle the c ontract is infinite because at the time the
warrants were issued the stock price wa s unknown.  Based on this information, it
would appear that the warrants should have b een initially recorded as a liability with
changes in the fair market value recorded  through earnings in accordance with EITF
00-19.

Please amend your Form 10-K for the year ended December 31, 2005 and respond
to these comments within 10 business days of the date of this letter or tell us when you
will provide us with a response.  You may wish  to provide us with marked copies of the
amendment to expedite our review.  Please furnish a cover letter with your amendment
that keys your responses to our comment s and provides any requested information.
Detailed cover letters greatly facilitate our review.  Please file the letter on EDGAR under the form type label CORRESP.  Please understand that we may have additional
comments after reviewing your amendmen t and responses to our comments.
  We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing include all information required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  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.
  In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:  ‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;
 ‚ staff comments or changes to disclosure in response to staff comments in the filings
reviewed by the staff do not foreclose th e Commission from taking any action with
respect to the filing; and
 ‚ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

In addition, please be advised that the Di vision of Enforcement has access to all
information you provide to the staff of the Divi sion of Corporation Finance in our review
of your filing or in response to our comments on your filing.

Mr. Les M. Taeger
Orthologic Corp. August 22, 2006 Page 4
 You may contact Christine Allen, Staff Accountant, at (202) 551-3652  or Kevin
Woody, Branch Chief at (202) 551-3629  if you have questions regarding the comments.
In this regard, do not hesitate to contact me, at (202) 551-3679.
        S i n c e r e l y ,            J i m  B .  R o s e n b e r g
Senior Assistant Chief Accountant

CORRESP
1
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corresp

CONFIDENTIAL

August 30, 2006

Jim B. Rosenberg

Senior Assistant Chief Accountant

United States Securities and Exchange Commission

100 First Street, N.E.

Washington, DC 20549

    Re:

    OrthoLogic Corp.

Form 10-K for the year ended December 31, 2005

Filed on March 13, 2006

Form 10-Q for the interim period ended June 30, 2006

File No. 000-21214

Your letter dated 8-22-2006

Following is our response to your letter dated August 22, 2006. We have included your specific
questions prior to our response to facilitate your review.

Form 10-K for the year ended December 31, 2005

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

Liquidity and Capital Resources, page 32

1. Please revise your disclosure to expand discussions of your financial obligations for 2006 and
2007 as they relate to the contractual obligations table. You disclose accrued clinical expenses of
$544,000, additional commitment due to clinical sites of $988,000, and contracts to consultants and
other contractual obligations, however, the sum of these amounts are a fraction of the “total
liabilities” caption disclosed for 2006 and 2007 in your table. Additionally, revise your
contractual obligations table to comply with the format prescribed in Item 303(a)(5) of Regulation
S-K.

 Our Response:

Per your request, we have reformatted the contractual information.

1275
West Washington Street • Tempe, AZ 85281 • Tel 602-286-5414
• Fax 602-926-2641 • ltaeger@olgc.com

    Less Than

    1 to 3

    3 to 5

    Total

    1 Year

    Years

    Years

    Operating Leases

    $
    2,283,000

    $
    1,150,000

    $
    1,133,000

    Total Liabilities per Balance Sheet at 12/31/05

    4,165,000

    3,982,000

    183,000

    Clinical Obligations

    988,000

    988,000

    Sponsored Research Obligation -Consulting

    700,000

    475,000

    225,000

    Consulting Contracts

    209,000

    120,000

    87,000

    2,000

    Open Purchase Orders for Supplies

    23,000

    23,000

    $
    8,368,000

    $
    6,738,000

    $
    1,628,000

    $
    2,000

We chose to disclose the information required by Item 303(a)(5) of regulation S-K in an annual
format and with the captions shown below as we believe the tabular disclosure does not present as
accurate of a presentation of the maturities of our contractual obligations. Specifically, the 1 to
3 year column hides the fact that all but a fraction of our obligations fall due in the second
year, and as such does not give the intended clarity of the liquidity impact timing. The disclosure
in the financial statements is believed to be sufficient as Operating Leases, and Total Liabilities
were explained in detail in either the Balance Sheet or Notes to the financial statements. The
other items are not material, given total assets of $88,343,000 at 12/31/05, but were also
disclosed.

As Filed:

The following table sets forth all known commitments as of December 31, 2005 and the year
in which these commitments become due or are expected to be settled (in thousands):

    Year

    Operating leases (1) (2)

    Total Liabilities (2) (3)

    Total

    2006

    $
    1,150

    $
    5,588

    $
    6,738

    2007

    $
    1,133

    $
    437

    $
    1,570

    2008

    29

    29

    2009

    29

    29

    2010

    2

    2

    Total

    $
    2,283

    $
    6,085

    $
    8,368

    (1)

    A lease commitment of $2.2 million refers to our real property leases in Tempe, Arizona
and Galveston, Texas. In Tempe, we occupy approximately 20% of the building.
Approximately 45% of the Tempe facility is subleased through December 2007.

    (2)

    Total liabilities include the accrued clinical expenses of $544,000 for services that
have been provided to the patients. An additional commitment of $988,000 will be due to
clinical sites for the completion of the trials, assuming the patients currently enrolled
complete the trial protocol, and is reflected in the total liabilities for fiscal year
2006. Total liabilities include contracts for consultants and other contractual
obligations of

1275
West Washington Street • Tempe, AZ 85281 • Tel 602-286-5414
• Fax 602-926-2641 • ltaeger@olgc.com

    approximately $618,000, $254,000, $29,000, $29,000 and $2,000 for years
2006, 2007, 2008, 2009 and 2010, respectively.

    (3)

    We anticipate paying all our liabilities with our cash resources.

We believe our filing adequately discloses the required information and do not believe any benefit
would be obtained or additional clarity would be achieved by amendment of our December 31, 2005
10-K to recast the information in tabular form, and respectfully suggest that no amendment of the
10-K is necessary in this regard. We will adopt the suggested Item 303(a)(5) of S-K format in
future filings.

Financial Statement

Notes to Financial Statements

Summary of Significant Accounting Policies

D. Excess Space Reserve, page F-7

    2.

    Please tell us why you have accrued a liability for excess space reserve and the accounting literature management relied upon to record this accrual.

Our Response:

The excess space reserve was recorded as a cost to exit an activity, our Continuous Passive Motion
(CPM) business, in 2002. As a result of the sale of the CPM business, approximately 70,000 square
foot of the existing 98,000 square foot office space occupied by the CPM business became vacant.
The Company was able to sublet a portion of this vacant space. The reserve represents lessee losses
associated with an operating lease agreement that has been accrued in the event that the lessee no
longer benefits from the use of the property subject to the operating lease. This is consistent
with guidance provided by FASB 146 Par. 16 and FASB Technical Bulletin 79 Par. 15, and is adjusted
quarterly to reflect changes in reserve assumptions, in accordance with the fair value measurement
requirements of SFAS 146. The original amount recorded in 2002 was $400,000.

Note 14. Subsequent Events, page F-19

Sale of Shares of Company Stock, Issuance of Warrants and Entry into Master Services Agreement,
page F-20

    3.

    Please tell us and disclose the significant terms of your agreement with Quintiles specifically the milestones that must be achieved in order for the stock warrants to

vest.

Our Response:

1275
West Washington Street • Tempe, AZ 85281 • Tel 602-286-5414
• Fax 602-926-2641 • ltaeger@olgc.com

The documents for the Quintiles transaction were filed on Form 8-K on March 3, 2006, Exhibits 4.1,
4.2, 4.3, and 4.4, and on Form S-3 filed on April 13, 2006, Exhibits 10.1, 10.2, and 10.3. The
documents for the Milestone B, C and D warrants were not filed as they contained confidential
information and a Confidential Treatment Request was filed on March 2, 2006 and approval was received on April 28, 2006 (CF#18042 — File 0-21214). The significant terms as shown in Note C to
the Company’s form 10-Q for the interim period ended June 30, 2006 are as follows:

     On February 24, 2006 the Company entered into agreements with PharmaBio Development Inc.,
(dba NovaQuest), an affiliate of Quintiles, Inc., and Quintiles, Inc. (hereafter “Quintiles”),
which provided for the purchase of $2,000,000 of the Company’s common stock, with the number of
shares (359,279) determined by the 15-day average closing stock price prior to February 24, 2006
($5.56). The transaction was completed (closed) on February 27, 2006. Additionally, at the election
of the Company, Quintiles will purchase $1,500,000 of the Company’s common stock on June 30, 2006,
(Second Closing) with the number of shares determined by the 15-day average closing stock price
prior to June 30, 2006, and will purchase $1,500,000 of the Company’s common stock on September 29,
2006, with the number of shares determined by the 15-day average closing stock price prior to
September 29, 2006 (Third Closing). Each stock purchase will include the issuance of fully vested
warrants, exercisable for a ten-year period from the date of issuance, for an amount of shares
equal to 13% of the shares purchased and with the exercise price set at 115% of the share price of
each respective share purchase. (For the February 27, 2006 investment, warrants to purchase 46,706
shares at $6.39 were issued).

     Summary of the February 27, 2006 stock sale transaction:

    Capital stock and additional paid-in capital

    $
    1,913,000

    Accrued transaction costs

    87,000

    Cash proceeds

    $
    2,000,000

     Accrued transaction costs represent direct costs of the transaction (legal and accounting
fees) and are treated as reduction of additional paid-in capital.

     On July 3, 2006, the Company closed the transaction contemplated by the agreements on the
Second Closing Date. Pursuant to the agreements, on July 3, 2006, the Company issued a total of
903,252 shares of its common stock to NovaQuest for a purchase price of $1,500,000 and issued a
fully vested warrant to purchase 117,423 shares of the Company’s common stock at $1.91 a share.

     As part of the transaction, the Company and Quintiles also entered into a Master Services
Agreement whereby Quintiles agreed to become the Company’s exclusive contract research organization
service provider for the Company’s Chrysalin Product Platform and to provide certain other
technical assistance. The Company anticipates entering into a variety of contracts over the
five-year term of the agreement as determined by the development and clinical progress of its
Chrysalin products. In return for this agreement, the Company has granted Quintiles the right of
first negotiation to promote Chrysalin with a specialty sales force under a fee-for-service or
risk-based structure. Additionally, the Company has granted Quintiles warrants to purchase up to
240,000 shares of the Company’s common stock, with the exercise price set at 115% of the Second
Closing stock price ($1.91). The shares will be exercisable for a ten-year period from February
27, 2006 and the warrants will vest based on the achievement of certain milestones (milestone
warrants).

     The total cost of the milestone warrants will be charged to expense over the period of
performance. The costs will be determined based on the fair market value of the milestone warrants

1275
West Washington Street • Tempe, AZ 85281 • Tel 602-286-5414
• Fax 602-926-2641 • ltaeger@olgc.com

determined by using the Black-Scholes model, revalued at each Company reporting date until fully
vested. The fair market value of the milestone warrants using the Black-Scholes model, 70%
volatility, 0% dividend yield, expected term of 9.7 years, and 4.8% interest rate was $306,000 at
June 30, 2006. No costs were charged to expense at June 30, 2006 as it is not yet probable that any milestone
warrants will vest.

     The milestones that must be achieved are included in the Confidential Treatment Request
which was filed on March 2, 2006 and approved on April 28, 2006 (CF#18042 — File 0-21214).

Form 10-Q for the interim period ended June 30, 2006

Item 1. Financial Statements

Notes to Unaudited Condensed Financial Statements

C. Sale of Shares of Company Stock, Issuance of Warrants and Entry into Master Services
Agreement, page 13

    4.

    Please provide to us your analysis under EITF 00-19 of how you accounted for the warrants issued to PharmaBio Development (dba NovaQuest). It appears that you are
required to issue registered shares to settle the contract and the number of shares that
must potentially be issued to settle the contract is infinite because at the time the
warrants were issued the stock price was unknown. Based on this information, it
would appear that the warrants should have been initially recorded as a liability with
changes in the fair market value recorded through earnings in accordance with EITF 00-19.

Our Response:

Under the “Quintiles” Agreements, described in #3 above, the Class A Warrants are fixed, based on
the actual stock purchases that occur. The 6/30/06 and 9/29/06 additional stock sales are at the
sole election of the Company and the Company has no obligation to sell the stock. No liability is
created from these transactions.

The Milestone Warrants are for services under the Master Services Agreement and will be earned
based on the Milestones, described in #3 above, and the related cost of the Warrants will be
charged to expense over the period of performance ( estimated time to achievement of Milestone).
Under SFAS 123(R) and EITF 96-18 we will determine the fair market value of the Warrants (using the
Black-Scholes method) on each reporting date until performance is complete (warrant is fully earned
and “vested”) and record the appropriate adjustments. As stated in the referenced footnote included
above, the fair market value of the Warrants at June 30, 2006 was $306,000, and as achievement of
the Milestones at June 30, 2006 was not probable, no entry has been made. At June 30, 2006 the cost
of the Milestone Warrants is not expected to be material to our financial position or results of
operations.

1275
West Washington Street • Tempe, AZ 85281 • Tel 602-286-5414
• Fax 602-926-2641 • ltaeger@olgc.com

ETIF 00-19 Paragraph 3 specifically states that “This Issue does not address the accounting for
contracts that are issued (b) to acquire goods or services from nonemployees when performance has not yet occurred.” In the case of the Milestone Warrants’ transaction, service performance had
not occurred. OrthoLogic also has no obligation to issue cash for the services to be provided.
Under the guidance of paragraphs 7 and 8 of EITF 00-19, contracts that do not require net-cash
settlement and that require settlement in shares, are equity instruments.

The Company acknowledges that:

    •

    The Company is responsible for the adequacy and accuracy of the disclosure in the
filings;

    •

    Staff comments or changes to disclosure in response to staff comments in the filings
reviewed by the staff do not foreclose the Commission from taking any action with respect
to the filing; and

    •

    The Company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

Please contact me if we can be of further assistance.

Sincerely,

/s/ Les M. Taeger

Les M. Taeger

Senior Vice President and Chief Financial Officer

OrthoLogic Corp

1275
West Washington Street • Tempe, AZ 85281 • Tel 602-286-5414
• Fax 602-926-2641 • ltaeger@olgc.com

CORRESP
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corresp

August 17, 2005

Song P. Brandon

Division of Corporation Finance

U.S. Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

    Re:

    OrthoLogic Corp.

Registration Statement on Form S-3, File No. 333-127356

Dear Ms. Brandon:

        Pursuant to Section 8(a) of the Securities Act of 1933 and Rule 461 promulgated thereunder, on
behalf of OrthoLogic Corp., we respectfully request that the effective date of the Registration
Statement of OrthoLogic Corp. on Form S-3, File No. 333-127356, as amended, be accelerated so that
it will become effective August 18, 2005 at 10 a.m. or as soon as
practicable thereafter.

Sincerely,

Leezie Kim

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<TEXT>

Mail Stop 6010

							August 12, 2005

James M. Pusey
Chief Executive Officer
OrthoLogic Corp.
1275 West Washington Street
Tempe, Arizona  85281

Re:	OrthoLogic Corp.
	Registration Statement on Form S-3
	File Number 333-127356

Dear Mr. Pusey:

      This is to advise you that we have limited our review of the
above referenced registration statement to only the issues
identified
below.  We will make no further review of this filing.
      We note your disclosure on the cover page of the
registration
statement that states "[i]f a prospectus supplement identifies
selling shareholders, some of the shares of our common stock may
be
offered by those selling shareholders."  Based on our review of
the
disclosure provided in the document, it appears you are
registering a
primary shelf offering and not a secondary offering.  If you
intend
for this registration statement to serve as a secondary offering
document, you should revise your entire registration statement to
include all the information required to be disclosed in a
secondary
offering, including the information required by Items 507 and 508
of
Regulation S-K as well as separately registering the total amount
of
securities to be sold by selling shareholders. Otherwise, please
remove all references to selling shareholders from your
registration
statement.

      *	*	*

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:

* should the Commission or the staff, acting 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 disclosure in the filing; and

* the company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

	We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.

      Please contact Song P. Brandon at (202) 551-3621 or me at
(202)
551-3710 with any questions.

							Sincerely,

							Jeffrey P. Riedler
							Assistant Director

cc:	Steven P. Emerick, Esq.
	Quarles & Brady Streich Lang, LLP
	One Renaissance Square, Two North Central Avenue
	Phoenix, Arizona  85004

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