Health-Right Discoveries, Inc.
18851 NE29th Avenue,Suite 700
Aventura, FL33180
October 30, 2015
Via EDGAR
Securities and Exchange Commission
Division of Corporation Finance
100 “F” Street, N.E.
Washington, D.C. 20549-3629
Attention: | Ms. Suzanne Hayes | |
Joseph McCann, Esq. | ||
Eric Envall, Esq. |
Re: | Health-Right Discoveries, Inc. (the “Company”) | |
Registration Statement on Form S-1 | ||
Filed September 9, 2015 | ||
File No. 333-206839 (the “Registration Statement”) |
Ladies and Gentlemen:
In response to the Staff’s letter of October 6, 2015, the Company hereby files Amendment No. 1 to the Registration Statement.
The following sets forth the Company’s response to the comments set forth in the Staff’s letter. For your convenience, the response to each comment follows the comment itself.
General
1. Please revise toidentify clearlyandconsistentlythroughoutthe registration statement whichmarketand, ifapplicable,markettier,you intendtoquoteyour securities. Inthis regard, we notethatyour coverpage indicates thatyour securities will quote ontheOTC Markets, “ora comparable exchange” andyourdisclosure onpage 12 indicatesthatthe securitieswill quote on the OTC Bulletin Board.Refer to Rule 415(a) (4).
Response:In response to the Staff’s comment, the disclosure throughout the registration statement has been revised to consistently identify the market and market tier(s) on which the Company plans to quote its securities (OTCQX or OTCQB) operated by the OTC Markets Group.
2. Itappears thatyou qualifyas an “emerginggrowth company” as defined inthe Jumpstart Our Business StartupsAct. If so, please disclose that fact inyour filing.
Response:The disclosure requested by the Staff with respect to the Company qualifying as an “emerging growth company” as defined in the Jobs Act has been added to the cover page of the prospectus.
Cover
3. Please include the page number whereyour Risk Factor section begins. Refer to Item 501(b) (5)ofRegulationS-K.
Response:The change requested by the Staff has been made to the cover page of the prospectus.
Overview, page 2
4. Based onyour disclosures on pages 1 and 2, itappears thatyou have not conducted any clinical trials to date. Accordingly, please reviseyourdisclosures on page 1 to prominently highlight,iftrue,thatyou have not conducted anyclinical trials.Inthe Business sectionplease revise to discusswhereyou stand “inthe process ofmoving forward with clinical trials.”
Response:The disclosure in the Overview portion of the Prospectus Summary and the Business section has been expanded to provide the additional disclosure requested by the Staff.
5. With a view to disclosure, please explainto ushowthe“marketing results” fromyour “initial-testmarketing” provide support foryourstatements on pages 1, 18, 19 and elsewhereconcerningthe therapeutic benefits derived fromuse of theH-Plex Defense product andyour“formulationplatform.” Please clearlystateyour basesfor these and all product efficacy claims inthe registration statement.
Response:The disclosure in the indicated sections of the prospectus has been revised and expanded to address the issues identified by the Staff.
SellingShareholders, page 3
6. Please revise to disclosewhenthe 950,000 share gift,the 153,156 share transfer, and 1,350,000 share private placementoccurred.
Response:The additional disclosure requested by the Staff has been added to the “Selling Shareholders” subsection of the Prospectus Summary,
Wecurrentlyrely on our President…,page 6
7. Asyour President isyour onlyemployee, please removethe qualification “to a certain degree” fromthis risk factor.
Response:The qualification has been removed from the risk factor in response to the Staff’s comment.
You mayhave limited access to information…,page 10
8. Please revise to clarify whetheryou,if possible,intend to exerciseyourdiscretion and suspendyourreportingobligations.
Response:A more expansive risk factor with respect to the Company’s reporting obligations under the Securities Exchange Act of 1934 and the impact of its reporting as a result of its classification as an “emerging growth company” under the Jobs Act has been added in place of the prior risk factor.
SellingShareholders, page 11
9. Please revise toidentify the naturalperson orpersonswith votingand/or dispositive controlover the securities.
Response:The Selling Shareholders table has been revised in response to the Staff’s comment.
10. We noteyour disclosure that “none of the sellingshareholdershas had a material relationship with [you]otherthan asa shareholder atanytimewithinthe pastthreeyears orhas ever been on or[y]ourofficers or directors.”Pleaserevisethis sentence based on the positionsthat Messrs. Pande andHopkins serve.
Response:The disclosure noted by the Staff has been corrected in response to the Staff’s comment.
11. Given the nature and size of your offering, please tell us why the selling stockholders should notbe identified as underwriters andtell usyourbasisfor determiningthat the transactionisappropriately characterized as a transactionthatis eligible to bemadeon a shelfbasisunder Rule 415(a)(1)(i).Inresponding, please considertheguidance provided in theDivision’s ComplianceDisclosure Interpretation,SecuritiesAct Rules, Question 612.09 available at:http://www.sec.gov/divisions/corpfin/guidance/securitiesactrules- interps.htm.
Response:We respectfully call the attention of the Staff to the fact that to address the Staff’s concerns, the Company has reduced the number of shares it intends to register for resale under the registration statement,pro rataby 50%,
Further, as disclosed in the registration statement, (a) 675,000 of the shares registered thereby were acquired by the seven holders thereof in private placements conducted by the Company from December 2011 to September 2012; (b) 875,000 of the shares registered thereby were acquired by the holders thereof for legal and other business services rendered to the Company; (c) 475,000 of the shares registered thereby were acquired by the holders thereof by gift from David Hopkins, one of the Company’s founders, in October and December 2013 and not in contemplation of this offering; and (d) 76,578 shares registered thereby were acquired by an accounting firm from Mr. Hopkins in March 2015 in payment of services rendered by such firm to Mr. Hopkins. None of such selling shareholders beneficially owns more than 5% of the Company’s issued and outstanding shares of common stock and all of such shareholders will continue to be shareholders of the Company after the offering contemplated by the registration statement is consummated. None of such selling shareholders is an affiliate of the Company and based on our investigation, there are neither any relationships among such selling shareholders nor are any of such selling shareholders engaged in the buying and selling of securities.
The remaining 3,257,574 shares covered by the registration statement consist primarily of shares issued upon incorporation in 2011 to our founders, James Pande, David Hopkins, and Michael Fabiano and in the case of Messrs. Pande and Hopkins, certain shares issued subsequently for services rendered to the Company and not in contemplation of the offering. Mr. Pande is a director and 10% or greater shareholder of the Company, Mr. Hopkins is a director, executive officer and 10% or greater shareholder of the Company and Mr. Fabiano, while a founder, is no longer an officer or director of the company and is a greater than 5% but less than 10% shareholder. Based on the foregoing, as well as significant amount of time the shares proposed to be registered have been held by the respective shareholders, the Company believes that the proposed offering is not a primary offering and may be registered on Form S-1.
Proposed Business, page 15
Overview, page 15
12. Please supplementally provide us support foryourdisclosures indicatingthat cannabidiol (“CBD”)is a “legaldietary supplement” and is “approvedfor usein allfifty states.”With respecttoyourdisclosureinthefirst riskfactoron page6, please tell uswhetherFDA deems cannabidiol toGenerally RecognizedasSafe(“GRAS”).
Response:The disclosure in the Overview has been revised to give effect to recent FDA pronouncements regarding the classification of CBD. The risk factor in question has been revised in response to the Staff’s comment.
Viral Marketplace, page 18
13. Please reviseyourdisclosureinthissectiontoprovide thefollowing additional information aboutthe trial:
• | The dates ofthemarketingtrial; | |
• | The geographic scope ofthe testing andthe product distributionmethod(s); | |
• | The number ofcustomers who purchased the product;and | |
• | The number ofcustomers and/orpercentage of customers who did not reorder the product. |
Response:The referenced section of Business has been expanded to provide the additional disclosure requested by the Staff.
The CompromisedImmuneSystem, page 16
14. Please revise toidentify the research thatestimatesthat stress contributes to asmuchas 80% of allmajor illnesses.
Response:The language questioned by the Staff has been deleted in response to the comment.
OTC MonographDrug Business, page 17
15. Please revise to explain the “existingprogress” thatyou havemadetodateand explain each significant step thatyou willneedtotake tocommercialize the pipeline product. IdentifytheFDA approvedmonograph drugyou discuss and explainthe nature of the testingyouhave performed.Identifyand explain the “certainregulatorymatters” thatyouwould need to address prior tocommercialization.
Response:The disclosure in this section has been revised to give effect to the Staff’s comments.
Prescription Nutritional/Medical Foodsmarket,page 17
16. Please revise to clarify whether “prescriptionnutritionals” and “medicalfoods” aresynonymous or whethertheyareseparately classified andregulated. Revise thefinal sentence onpage 17 to clarify whetheryou havecommenced clinical trials.State the different prescription nutritionals.”
Response:Revised and additional disclosure has been furnished in this section in response to the comments raised by the Staff.
Natural Market, page 18
17. Please revise the final sentence underthe headingto clarifywhyyou expectthesefigures torise.
Response:The sentence has been removed in response to the Staff’s comment.
JointPain/Arthritis Marketplace, page 18
18. Please identifythe “toporthopedic surgeon” and clarify howhe or she helpedyouto “utilize” theformulation platform.Inthis regard,please clarifywhat role the surgeon had in developingthis application.
Response:The additional disclosure and clarification requested by the Staff has been made.
Gastrointestinal Marketplace, page18
19. Please revise to discuss the natureand scope ofthe “anecdotal testing” thatyou reference.Explain whetherthe testingis partof a clinicaltrial. Also, explainthe basisforyour belief that the application can bemodifiedto help patients address post-surgery prescription constipation. Inthisregard, clarifywhetheryou tested anyofthese patients.
Response:The disclosure referenced by the Staff has been revised and expanded to provide the additional and revised information requested.
Research and Development, page 19
20. Please provide us supplementally with support for each ofthefive immune system benefits thatyou cite in the second sentence underthe heading.
Response:Additional disclosure has been made to the section entitled “What is the Nutritional Rationale Behind our Methodology?” (the five benefits appear in that section of the prospectus and not in “Research and Development” as noted by the Staff). By hard copy of this letter, we are furnishing the Staff with our cited Research Compendium to support our conclusions.
Sales and Marketing, page 19
21. Please clarifyhowyouare currently selling andmanufacturingyourproducts forsaleto the general public.
Response:The disclosure in the Sales and Marketing section of the prospectus has been clarified to address the Staff’s comment.
GovernmentRegulation, page 19
22. Please disclose the basisfor the disclosures on pages 2 and 15 thattheH-Plex Defense productthatyou have sold commerciallyis a “dietary supplement.”Be sure to discuss relevant sections of theFederal Food,Drug andCosmeticAct,includingwithout limitation sections 201(g)(1) and 201(p), aswell as applicable FDA guidance,inyour response.
Response:The Government Regulation section of the prospectus has been significantly revised and expanded to provide the disclosure requested by the Staff.
23. We noteyour disclosure on page 19 that “new drug approvals”are not required foryour planned products. Foreach pipeline productthatyouidentify on pages 18 and 19, please explain why a newdrugapprovalwould not berequired.
Response:The explanations requested by the staff have been added to the Government Regulation section of the prospectus.
24. Please revise to discuss lawsand regulations pertainingtomarketing andlabeling of dietary supplements,including ones pertainingtostructure andfunction.
Response:The discussion of marketing and labeling requirements has been added to the applicable subsection under “Government Regulation” in response to the Staff’s comment.
If you have any further questions or comments, kindly contact the undersigned at (305) 705-32427 or our counsel, Dale S. Bergman, Esq. of Gutierrez Bergman Boulris, P.L.L.C. (786) 888-1744.
Very truly yours, | ||
HEALTH-RIGHT DISCOVERIES, INC. | ||
By: | /s/ David Hopkins | |
David Hopkins, President |
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