Mail Stop 0511
February 25, 2005
C. Patrick Machado
Senior Vice President and Chief Financial Officer
Orion Acquisition Corp. II
501 Second Street, Suite 211
San Francisco, California 94107
RE: Orion Acquisition Corp. II
Registration Statement on Form SB-2
File No. 333-122431
Filed: January 31, 2005
Dear Mr. Machado:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review 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.
General
1. We note that the registration statement covers the resale of
substantially all of the Orion Acquisition Corp. II`s outstanding
securities, i.e., 16,056,115 shares of 18,006,141 shares that will
be
outstanding after the offering. Your offering, therefore, appears
to
be an "at the market" primary offering of equity securities by or
on
behalf of the registrant under Rule 415(a)(4) of Regulation C.
Because you do not qualify to conduct a primary offering "at the
market," please revise the terms of your offering to provide that
all
offers and sales will be made at a disclosed fixed price for the
duration of the offering, resales will be made on a prompt and
continuous basis, and the selling shareholders will be identified
as
underwriters. Revise your disclosure throughout the prospectus
accordingly.
2. With respect to the shares of common stock offered by the
company
to the holders of outstanding common stock purchase warrants,
advise
us supplementally about the disclosure appearing on page 15 that
states, "the principal purpose of the offering of the shares of
common stock issuable upon the exercise of outstanding warrants is
to
enable us to issue such shares of common stock in compliance with
applicable securities laws." Clarify what you mean by "applicable
securities laws." We remind you that it is the position of the
staff
that the securities underlying securities that were sold privately
must also be sold privately pursuant to the same exemption from
registration. They are part of the same transaction. Only the
resales of the underlying securities may be registered by this
registration statement and the exercise or conversion transaction
between the Selling Shareholders and the Company remains private,
subject to the limitations of available exemptions. Please advise
us
supplementally whether you have identified, as selling
shareholders,
the individuals who currently hold the outstanding common stock
purchase warrants.
3. If Medivation hosts an internet website, please disclose its
internet address.
4. The information under "About this Prospectus" and "Explanatory
Note" should be placed in the inside back cover page of the
prospectus, or elsewhere other than between the cover page and the
summary. The summary should immediately follow the prospectus
cover
or the table of contents.
Summary
5. Please explain "value-enhancing milestone events".
6. State the full corporate names of Medivation and merger sub.
7. State that prior to the merger, Orion was a "blank check" as
the
term is defined in Rule 405 of Regulation C of the Securities Act.
8. As the registrant`s predecessor, the full background and
development of the business of Medivation is required to be
discussed
- -- as a summary hereunder and fully in the Business section.
Indicate that Medivation has had no revenues to date.
9. The estimated expenses of the offering to be paid by the
company
on behalf of the selling shareholders should be indicated.
Risk Factors
10. In the introductory paragraph, clarify that you disclose all
"material" risks here.
11. Revise your risk factor subheadings to ensure that your
subheadings clearly reflect the material risk disclosed in the
narrative. For example, the subheading for the third risk factor
merely reads "We may be unable to identify and acquire additional
product candidates." Similarly, the subheading for the fourth
risk
factor reads "We currently own patent rights to only two
products."
Please revise your subheadings, as appropriate, so that they
adequately describe the specific risk or consequence that results
or
may result from the stated fact. To assist you in this regard, we
refer you to "A Plain English Handbook - How to Create Clear SEC
Disclosure Documents," issued by the Office of Investor Education
and
Assistance, which is available on our website at www.sec.gov, and
the
updated version of Staff Legal Bulletin No. 7, dated June 7, 1999.
12. To the extent possible, avoid the generic conclusion you make
in
some of your risk factors that the risk discussed would have a
material adverse or negative affect on your business, results of
operations or financial condition. Instead, replace this language
with specific disclosure of how your business, results of
operations
or financial condition would be affected.
13. The first, second and fourth risk factors on page 11 appear
duplicative. Please combine them.
14. The second risk factor on page 13 is common to every small
business, to most other businesses and to the stock market in
general
most of the time. It should be deleted.
Forward-Looking Statements
15. Please remove the term "will" from the list of forward-looking
statements.
Management`s Discussion and Analysis
16. Please expand Management`s Discussion and Analysis to discuss
the
reverse merger with Medivation and the common stock offering on
December 17, 2004, and the related effects on the financial
statements.
17. Please disclose the estimated costs associated with each
milestone referenced in the fifth paragraph and disclose whether
you
currently have the cash required to fund each the activities
associated with each milestone.
18. For each significant source of funding, please name each
source,
disclose the principal terms of each source and file the agreement
as
an exhibit to the registration statement if not filed presently.
19. We do not see the sale of "debt securities" any place in the
past
financings of this company or the predecessor. Please clarify.
20. The December 2004 private placement of 7,741,935 common shares
should be fully discussed.
Business
21. Please specifically disclose the factual basis for and the
context of all your beliefs, understandings, estimates, and
opinions.
This particularly pertains to your disclosure of all projections,
statistics and assertions. Unless you can substantiate, on a
reasonable basis, all of the projections, statistics and
assertions
that you cite, please remove them. To the extent you rely on
industry analyses, please disclose whether the source is publicly
available. If the source is not available for no or nominal
charge,
then the company must adopt the information as the company`s own
or
provide a consent for its` use. Also, supplementally provide the
staff with copies of all sources utilized for your disclosure of
statistics. Some examples include the following. This is not an
exhaustive list.
a. all disclosure referencing studies or reports in the "published
literature;"
b. the disclosure in the two paragraphs of "The Alzheimer`s
Disease
Opportunity" subsection citing information from the Alzheimer`s
Association and Scientific American;
c. the disclosure in the second sentence of the first paragraph of
the "FDA-Approved Therapeutics and Purported Mechanisms of Action"
subsection;
d. the disclosure in the "Combination Therapy" section citing
information from the Journal of the American Medical Association;
e. much of the disclosure contained in the first paragraph of the
"Market Size" subsection;
f. the information in the "Preclinical Data" subsection discussing
the results of preclinical experiments performed at the Institute
of
Physiologically Active Compounds;
g. the information in the "Anti-Aging Indications" subsection
discussing the results of the experiment performed at the
Institute
of Physiologically Active Compounds;
h. the information discussing the results of the experiments using
NT0904;
22. Disclose whether the results of pilot open-label clinical
study
performed at the Moscow Center for Gerontology are published
results.
Also, further describe how the company intends to utilize the
results
of the clinical study.
23. Please file the preferred partnership letter agreement with
the
Institute of Physiologically Active Compounds as a material
exhibit.
Manufacturing
24. We note that you have entered two agreements with a U.S.
contract
laboratories to manufacturer bulk Dimebon drug substance and
finished
Dimebon tablets. Please disclose the material terms, financial
and
otherwise, of these agreements and file the agreements as material
exhibits. Also, name the manufacturers pursuant to Item
101(b)(5).
Management
25. Please disclose Mr. DiGiandomenico`s affiliation with Vitacube
Systems Holdings, Inc.
26. Indicate the nature of the business of ProDuct Health, Inc. in
the information for C. Patrick Machado.
27. The alignment of the salary information in the summary
compensation table should be corrected.
28. The second footnote to the table states that the company did
not
compensate officer and directors during 2002, 2003 or 2004.
Please
reconcile with the tabular information.
Certain Relationships and Related Transactions
29. Define "the financing".
30. We do not understand the information for Brock Capital Group.
The value of the services performed is not stated, the dates of
the
services are not stated and the relationship between Brock and the
registrant at the time of the services is not stated.
31. The parties to the registration rights agreements and the
voting
agreements should be named.
Voting Agreements
32. We note reference to the voting agreements as they pertain to
the
election to the board of directors of Messrs. Gorlin and Hung, one
nominee acting as the representative of the individuals who held
shares of common stock of Medivation immediately prior to the
effective time of the merger, and two nominees acting as
representatives of MDB Capital Group. Disclose whether these
individuals have been so nominated and provide required disclosure
pursuant to Item 401 of Regulation S-B.
33. Clarify the percentage of shares involved in the voting
agreement(s).
Principal and Selling Stockholders
34. Please disclose if any of the selling shareholders are broker-
dealers or affiliates of broker-dealers.
35. For all 5% stockholders listed that are not natural persons,
please identify the natural persons with voting or investment
control.
36. Clearly indicate the percentage of outstanding shares covered
by
the voting agreements.
37. Addresses for non-employee 5% record holders should be
indicated.
38. Revise your principal /selling stockholder table so that all
information provided via footnote corresponds to information
presented in the table. For example, there are 17 footnotes yet
the
table only lists 15 footnotes.
39. Revise your principal/selling stockholder table to remove all
references to 5% stockholders and/or selling shareholders as
"Affiliates of . . . ." For example, we refer you to references
to
"Affiliates of Marxe, Austin and Greenhouse, David," "Affiliates
of
ProMed Partners," "Affiliates of Walker Smith Capital," and
"Affiliates of Bailey, Gregory." Please clearly identify the
record
holder in your tabular presentation and provide footnote treatment
for any information relating to the existence of an "affiliate"
relationship, i.e., the beneficial owner of the shares is required
to
be disclosed.
Market For Common Stock and Related Matters
40. Please correct the obvious error in the number of common stock
record holders.
Plan of Distribution
41. The "pledgees, donees, transferees and or other successors-
in-
interest mentioned in the first paragraph must be identified in
accordance with the disclosure requirements of Item 507 of
Regulation
S-B in the prospectus, or by amendment to the prospectus, prior to
any sales by such persons.
Statements of Operations
42. Please explain to us supplementally why the calculation of
weighted average common shares outstanding assumes the conversion
of
the Series B convertible preferred stock. Since conversion is
contingent upon the approval of an increase in authorized common
shares, it does not appear appropriate to assume conversion.
Revise
the financial statements accordingly, and revise Note 3(l) to
explain
the presentation of loss per share, and the effect of the
recapitalization on the calculation.
43. Disclose the nature and amount of the major components of
general
and administrative expenses in a note or state them separately on
the
statement of operations for the periods presented.
Statements of Cash Flows
44. On the statement of cash flows, please separately disclose
cash
paid for interest in connection with the convertible notes.
Note 6- Stockholder`s Equity
45. Please review paragraphs 48 and 362 of SFAS 123, Accounting
for
Stock-Based Compensation, and revise the company`s stock plan
footnote disclosures to comply with the requirements therein.
General Comments
46. Provide a current consent in any amendment and ensure that the
financial statements are updated as required by Item 310(g) of
Regulation S-B.
Part II - Information Not Required in Prospectus
Recent Sales of Unregistered Securities
47. For each sale of unregistered securities, please disclose the
facts relied upon to make the exemption(s) from registration
available. In the case of sales relying on the exemption
contained
in section 4(2), please address, among the other requirements of
4(2), the financial sophistication of the purchasers. Also,
please
disclose the basis for reliance upon the exemption contained in
section 3(a)(9). See Item 701(d) of Regulation S-B.
48. The required information during the past three years for
Medivation, the predecessor, should be included.
49. Name the "accredited investors" in the December 2004
financing.
Exhibits
50. We note the legality opinion remains to be filed. Please file
with your next amendment.
51. Executed individual agreements for exhibits 9.1 through
10.3(c)
should be filed. A Form is not sufficient.
Closing Comments
As appropriate, please amend your registration 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
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that 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 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 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.
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.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate 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 advance of the requested
effective date.
You may contact Brian Bhandari at (202) 824 5696 if you have
questions regarding comments on the financial statements and
related
matters. Questions on other
disclosure issues may be directed to Jay Ingram at (202) 942-2791,
or
to Don Rinehart, who supervised the review of your filing, at
(202)
942-4622.
Sincerely,
John Reynolds
Assistant Director
Office of Emerging Growth Companies
cc. Michael W. Hall, Esq.
650-463-2600 by facsimile
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Orion Acquisition Corp. II
February 25, 2005
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