Mail Stop 6010 September 29,
2005
Isaac Cohen
President and Chief Executive Officer
Bionovo, Inc.
2200 Powell Street
Suite 675
Emeryville, California 94608
Re: Bionovo, Inc.
Registration Statement on Form SB-2/A
Filed September 16, 2005
File Number 333-126399
Dear Mr. Cohen:
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.
Risk Factors, p. 4
"If our competitors develop...," p. 7
1. We note that on page 7, you use the terms "HER2-positive
patients"
and "HER2-negative patients" but we could not find any explanation
or
definition of these terms. Please provide a brief explanation of
the
terms the first time they are used in the registration statement.
"Our common stock may be considered a `penny stock`...," p. 12
2. In the header to this risk factor, you say that you "may be
considered" a penny stock. In the body of the risk factor, you
state
that your stock, "may be designated as a penny stock." If your
stock
currently meets the definition of a penny stock, you should say
that
your stock is a penny stock in both the heading and in the text.
"Provisions of our certificate...,"p. 13
3. Please identify and briefly explain the operation of the
charter
or bylaw provisions and provisions of Delaware law to which they
are
subject that may have the anti-takeover effect described in the
risk
factor.
Management`s Discussion and Analysis or Plan of Operations, page
21
Stock-Based Compensation, page 24
4. Refer to your response to comment 21. Please revise your
discussion here to include much of the information that you
provided
supplementally to us regarding management`s determination of the
fair
value to use in making these estimations for the issuance prior to
when you had a trading price.
Business, p.31
Collaboration, p. 36
5. In your description of the licensing agreement with UBC, you
should discuss the licensing fee you received, if it is material.
Please note that even if you are seeking confidential treatment
for
this information, you are required to provide the disclosure if
the
payment is material. Please include this information or provide
us
with an analysis explaining why the information is not necessary,
given the size of the payment relative to the company`s total
revenues.
6. In addition, you have not described any agreements whereby you
came to possess the technology you are now licensing to UBC.
Please
disclose how the company came to possess the intellectual property
and describe the material terms of any related agreements. Please
also file any material agreements as exhibits.
In addition, for any other intellectual property that you have
obtained that is material to the company, you should describe the
agreement that granted you the intellectual property and provide
the
material terms of the underlying agreements. You should also file
those agreements as exhibits to the registration statement.
Financial Statements
Statements of Stockholders` Deficit, page F-5
7. Refer to your response to comment 33. Please explain to us how
the restated amounts presented here reflect the 37.8 million
shares
included in your description of this transaction in the third
paragraph of page 13. Further explain to us how the structure
described on page 13 is reflected in the financial information
provided in the interim information provided on page F-23.
8. Please explain and reconcile the differences between the Common
Stock and Additional Paid-In Capital amounts presented here and in
your balance sheet.
Notes to Financial Statements
9. Refer to your response to comment 40. Please revise these
notes
to disclose the number of shares excluded from your earnings per
share calculation as their affect would have been anti-dilutive.
Include any other information that would be useful to an investor
in
understanding your computation. Refer to paragraph 40(c) of SFAS
128.
(1) Business and Summary of Significant Accounting Policies, page
F-
7
10. Refer to your response to comment 36. In accordance with
paragraphs 11-12 of SFAS 142, it appears that this asset should be
amortized. Please refer to paragraph 12 which discusses the
amortization method of intangible assets. Please revise your
accounting policy to comply with this view or provide any specific
literature that supports your treatment.
Condensed Consolidated Financial Statements at June 30, 2005
Statements of Stockholders` Deficit, page F-23
11. Refer to your response to comment 33. We note here and in
your
December 31, 2004 financial statements that it appears that you
pushed the entire capital structure back over the years presented.
Please note that the recapitalization should be pushed back and
restated in a manner similar to a reverse acquisition, so the 4
million shares retained by the previous owners of the public
company
would not be outstanding for all periods presented. Please revise
your presentation to reflect this treatment.
(1) Business and Summary of Significant Accounting Policies, page
F-
25
Formation and Business of the Company, page F-25
12. Please revise your discussion of the recapitalization to
appropriately characterize it as such instead of the current
characterization as a reverse merger. In addition, please provide
a
more detailed discussion related to this transaction.
(5) Warrant Liability, page F-31
13. It appears that you are trying to rely on the exception of
paragraph 18 related to settlement of these warrants with
registered
shares. It is not clear how you meet all of the requirements of
that
exception. Please provide to us you analysis of why this
exception
applies in particular related to any ongoing obligations related
to
these registered shares. Also clarify the fair value assigned to
these warrants at issuance.
As appropriate, please amend your filing 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 file your cover letter on
EDGAR under the form type label CORRESP. Please understand that we
may have additional comments after reviewing your amendment and
responses to our comments.
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 Ibolya Ignat at (202) 551-3656 or James
Atkinson at (202) 551-3674 if you have questions regarding
comments
on the financial statements and related matters. Please contact
Zafar
Hasan at (202) 551-3653 or me at (202) 551-3715 with any other
questions.
Sincerely,
Jeffrey Riedler
Assistant Director
cc: Robert Cohen
Greenberg Traurig LLP
200 Park Avenue - 15th Floor
New York, NY 10166
F: 212-801-6400
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