Published on January 22, 2009
NEOGENOMICS,
INC.
12701
Commonwealth Drive, Suite 9
Fort
Myers, Florida 33913
January
22, 2009
VIA
EDGAR
United
States Securities and Exchange Commission
100 F.
Street, N.E.
Mail Stop
3561
Washington,
DC 20549
Attention:
John Reynolds, Assistant Director
Jim Lopez, Legal Branch
Chief
Edwin Kim
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Re:
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NeoGenomics,
Inc.
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Registration
Statement on Form S-1 (the “Form
S-1”)
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File
No. 333-155784
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Filed
November 28, 2008
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Ladies
and Gentlemen:
NeoGenomics,
Inc. (the “Company”) confirms
receipt of the letter dated December 30, 2008 from the staff (the “Staff”) of the
Securities and Exchange Commission (the “Commission”) with
respect to the above-referenced filing. We are responding to the
Staff’s comments as set forth below. The Staff’s comments are set
forth below in bold, followed by the Company’s response. The Company
is filing pre-effective Amendment No. 1 (“Amendment No. 1”) to
the above referenced Form S-1 with this response letter. All page
numbers in the responses below refer to Amendment No. 1.
Registration Statement on
Form S-1
General
COMMENT
#1:
We
note that you are registering the resale of up to seven million shares of common
stock, three million of which relate to the Fusion Capital
transaction. Given the size of the shares to be registered pursuant
to the Fusion Capital transaction relative to the number of shares outstanding
held by non-affiliates, the nature of the offering, and the total amount of
shares being sold by selling shareholders, we view the transaction to be a
primary offering that can only proceed on an at-the-market basis under
Rule 415(a)(4) if the company is eligible to conduct a primary offering on
Form S-3. Please revise accordingly.
January
22, 2009
Page 2
RESPONSE:
The Company acknowledges the Staff’s
position that if the total number of shares being registered exceeds one-third
of the issuer’s outstanding common stock held by non-affiliates prior to the
transaction, the Staff may view the proposed offering as a primary offering as
opposed to a secondary offering. In light of such position, the
Company and the selling stockholders have agreed that the Company will reduce
the total number of shares being registered to equal less than one-third of the
total number of shares held by non-affiliates of the Company on November 5,
2008, which is the date that the Company entered into the Common Stock Purchase
Agreement (the “Agreement”) with
Fusion Capital Fund II, LLC (“Fusion
Capital”). As of November 5, 2008, prior to entering into the
Agreement, the Company had 31,712,546 shares of common stock, par value $0.001
per share (the “Common
Stock”), outstanding. Of these shares, non-affiliates held
19,625,987 shares. The Company has accordingly reduced the total
number of shares being registered to 6,500,000.
The Company believes that the proposed
registration of the shares subject to the Agreement on behalf of Fusion Capital
is consistent with the guidance provided by the Commission in March 2001,
regarding the registration of private equity lines. Specifically, the
Company advises the Staff that consistent with such guidance the Company
“completed” the private transaction with respect to the securities it is
registering on behalf of Fusion Capital prior to the filing of the Form S-1, the
Company is registering such securities on a Form S-1 Registration Statement
(which is the form of registration statement that the Company is eligible to use
for a primary offering) and Fusion Capital is identified in the prospectus as an
underwriter and a selling stockholder.
COMMENT
#2:
Also,
we note that you are registering the sale of over three million shares on behalf
of, among others, your acting principal financial officer, Mr. Steven
Jones, and what appears to be your largest shareholder, an entity described on
page 15 as a controlling shareholder and whose general partner is
controlled by Mr. Jones. Given the size of the selling
shareholder offering and the proposed sales by what appear to be controlling
shareholders and affiliates, please advise the staff of the company’s basis for
determining that the transaction is appropriately characterized as a transaction
that is eligible to be made on a shelf basis under
Rule 415(a)(1)(i).
RESPONSE:
The Company respectfully advises the
Staff that Telephone Interpretation 29 of Section D of the Manual of Publicly
Available Telephone Interpretations provides that in determining whether a
transaction is appropriately characterized as a transaction that is
eligible to be made on a shelf basis under Rule 415(a)(1)(i) “[c]onsideration
should be given to how long the selling stockholders have held their shares, the
circumstances under which they received them, their relationship to the issuer,
the amount of shares involved, whether the sellers are in the business of
underwriting securities, and finally, whether under all the circumstances it
appears that the seller is acting as a conduit for the issuer.”
January
22, 2009
Page 3
The
amount of shares involved
The Company is proposing to register
3,082,500 shares on behalf of the selling stockholders (not including those
shares being registered on behalf of Fusion Capital), which represents
approximately 15.7% of the Company’s shares held by non-affiliates.
The
circumstances under which the shareholders received their shares
Aspen Select Healthcare, LP (“Aspen”), acquired the
shares being registered on its behalf in a private placement with the Company on
April 15, 2003 (the “2003 Aspen
Placement”). In connection with the 2003 Aspen Placement,
Aspen represented to the Company that:
the
Common Stock to be received by [Aspen] will be acquired
for investment for [Aspen's] own account, not
as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that [Aspen] has no present intention of
selling, granting any participation in, or
otherwise distributing the same….
Each of Steven C. Jones, Jones Network,
LP, Steven C. Jones Roth IRA, Marvin E. Jaffee and Peter M. Peterson
(collectively, the “Aspen Stockholders”)
acquired the shares being registered on their behalf pursuant to a distribution
from Aspen in September 2007. All of such shares were originally
purchased by Aspen in the 2003 Aspen Placement.
Mrs. Mary S. Dent received the shares
to be registered on her behalf in a spousal transfer from Dr. Michael Dent in
February 2007. Dr. Dent originally acquired the shares in connection
with his founding of the Company’s operating subsidiary and its subsequent
acquisition by the Company in November 2001.
How
long selling stockholders have held their shares
As discussed above, Aspen has held the
shares being registered on its behalf for over five years. The shares
being registered on behalf of the Aspen Stockholders were originally acquired by
Aspen in April 2003 and have been held by the Aspen Stockholders for
approximately 16 months. Mrs. Dent has held the shares being
registered on her behalf for almost two years and such shares were held by her
husband for five years before they were transferred to Mrs. Dent.
January
22, 2009
Page 4
Whether
the sellers are in the business of underwriting securities
To the Company’s knowledge, none of
Aspen, the Aspen Stockholders or Mrs. Dent are in the business of underwriting
securities.
The Company respectfully advises the
Staff that Aspen is a private equity fund established to make investments in the
healthcare industry. Mr. Jones and Mr. Peterson are affiliated with
Aspen. To the Company’s knowledge, these investors are not in the
business of underwriting securities. The Company directs the Staff’s
attention to the aforementioned representation by Aspen that it acquired its
shares in the 2003 Aspen Placement for investment for its own account and not
with a view to the resale or distribution of any part thereof.
In addition, for the Staff’s
information, Dr. Jaffe retired from Johnson & Johnson in 1994 and currently
serves as a consultant and board member to various companies in the
biopharmaceutical and biotechnology industries. As previously noted
above, Mrs. Dent is the spouse of the Company’s founder. The Jones
Network, LP, is a family limited partnership controlled by Mr.
Jones.
Relationship
to the issuer
The Company acknowledges that certain
of the selling stockholders are affiliates of the Company. The
Company respectfully believes that such status does not preclude the Company
from registering shares on such stockholders behalf on a shelf basis under
Rule 415(a)(1)(i).
Telephone Interpretation 20 of Section
H of the Manual of Publicly Available Telephone Interpretations states that
“secondary sales by affiliates may be made under General Instruction I.B.3 to
Form S-3 relating to secondary offerings, even in cases where the affiliate owns
more than 50% of the issuer’s securities, unless the facts clearly indicate that
the affiliate is acting as an underwriter on behalf of the
issuer.” Although the Company is seeking to register selling
stockholder shares on a Registration Statement on Form S-1 as opposed to a Form
S-3, the Company believes that in accordance with the telephone interpretation
the key question is whether an affiliate selling stockholder is acting as an
underwriter.
The Company respectfully submits that
none of Aspen, the Aspen Stockholders or Mrs. Dent are acting as underwriters on
behalf of the Company. First, the Company will not receive any
proceeds from the sale of any shares by such selling
stockholders. Second, as discussed above, each of the selling
stockholders has held the shares being registered on their behalf for an
extended period of time. The shares being registered on behalf of
Mrs. Dent are founder shares that she acquired in a spousal
transfer. The shares being registered on behalf of Aspen and each of
the Aspen Stockholders were originally acquired by Aspen in April 2003, at which
time Aspen represented to the Company that the shares were acquired “for
investment for [Aspen's] own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof.” Finally, as
discussed above, such selling stockholders are not in the business of
underwriting securities.
January
22, 2009
Page 5
Whether
under all the circumstances it appears that the seller is acting as a conduit
for the issuer
Based on the above, the Company
believes that the selling stockholders should not be viewed as conduits of the
Company, nor should the proposed offering be deemed a primary
offering.
Conclusion
Rule 415(a)(1)(i) provides that
securities may be registered for an offering to be made on a continuous or a
delayed basis in the future, provided that the registration statement pertains
to only “[s]ecurities which are to be offered or sold solely by or on behalf of
a person or persons other than the registrant, a subsidiary of the registrant or
a person of which the registrant is a subsidiary.” The shares are not
being registered on behalf of the Company nor any subsidiaries of the
Company. The Company respectfully submits, therefore, that its
registration of 6,500,000 shares on Form S-1 is in compliance with Rule
415(a)(1)(i).
COMMENT
#3:
With
a view to disclosure, advise us of any discount to market or similar provision
for the Fusion Capital shares. In this regard, it is unclear whether
or not dilution caused by the Fusion Capital transaction, as described in the
first risk factor on page 19, would be caused solely by the large number of
shares sold at the market price.
RESPONSE:
The Company respectfully advises the
Staff that there are no discounts to market or similar provisions for the Fusion
Capital shares. The purchase price of the shares will be determined
based upon the market price of the Company’s shares at the time of each
sale. Specifically, under the Agreement for purchases up to $50,000,
the purchase price would be equal to the lesser of: (i) the lowest sale price of
the Company’s common stock on the purchase date; or (ii) the average of the
three lowest closing sale prices of the Company’s common stock during the twelve
consecutive business days prior to the date of a purchase by Fusion
Capital. The price at which the Company’s common stock would be
purchased for purchases in excess of $50,000 will be the lesser of: (i) the
lowest sale price of the Company’s common stock on the purchase date and (ii)
the lowest purchase price (as described above) during the previous seven
business days prior to the purchase date.
In
accordance with the Staff’s comment, the Company has revised the indicated risk
factor to clarify the dilution caused by the Fusion Capital
transaction. Please see page 19 of Amendment No. 1.
January
22, 2009
Page 6
Condensed Consolidated
Balance Sheet, F-1
COMMENT
#4:
Please
revise to include an audited balance sheet for the fiscal year ended December
31, 2006 in accordance with Rule 8-02 of Regulation S-X.
RESPONSE:
The audited balance sheet for the
fiscal year ended December 31, 2006, required by Rule 8-02 of Regulation S-X,
has been included in the Company’s December 31, 2007 financial statements on
page F-11 of Amendment No. 1 and is included in the report of the Company’s
independent registered public accounting firm on page F-10 of Amendment No.
1.
Form 10-KSB, Filed April 14,
2008
COMMENT
#5:
Please
amend your Form 10-KSB for the fiscal year end December 31, 2007 to include the
proper certifications required by Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002. See Items 601(a)(31) and (32) of
Regulation SK.
RESPONSE:
The Company acknowledges the clerical
error in the exhibit index to the Form 10-KSB for the fiscal year ended December
31, 2007 that incorrectly stated that the certifications required by Sections
302 and 906 of the Sarbanes-Oxley Act of 2002 were incorporated by reference to
the Company’s Quarterly Report on Form 10-QSB for the quarter ended March 31,
2007. The Company undertakes to correct such error in future filings
with the Commission.
January
22, 2009
Page 7
We trust that this response
satisfactorily responds to your request. Should you require further information,
please contact our legal counsel Clayton E. Parker, Esq. at (305) 539-3306 or
Mark E. Fleisher, Esq. at (305) 539-3383.
| Very truly yours, | |||
| /s/ Robert P. Gasparini | |||
| Robert P. Gasparini | |||
| President and Chief Science Officer | |||
cc: Clayton
E. Parker, Esq.
Mark E. Fleisher, Esq.