September 24, 2018
David Fong
Chief Financial Officer
Imaging Diagnostic Systems, Inc.
1291-B NW 65th Place
Fort Lauderdale, FL 33309
Re: Imaging Diagnostic Systems, Inc.
Registration Statement on Form 10
Filed August 28, 2018
File No. 000-26028
Dear Mr. Fong:
We have reviewed your filing and have the following comments. In some of
our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response and any amendment you may file in response
to these
comments, we may have additional comments.
Form 10 Filed August 28, 2018
General Information, page 1
1. We note your disclosure regarding your failure to timely file reports
required by the
Exchange Act. Please advise whether you remained subject to the reporting
requirements
of Exchange Act Section 15(d), and tell us when you intend to file the
required reports.
Also, if your history regarding filing periodic reports presents a
material risk that you will
not timely file required reports, please add appropriate risk factor
disclosure.
2. Please revise to disclose any currently planned financing arrangements
with your majority
shareholder.
David Fong
FirstName LastNameDavid Fong
Imaging Diagnostic Systems, Inc.
Comapany 24, 2018
September NameImaging Diagnostic Systems, Inc.
September 24, 2018 Page 2
Page 2
FirstName LastName
Historical Overview, page 2
3. Please provide the basis for your belief that you are a few months
away from obtaining
CFDA approval in China.
4. Please identify the international markets where you have obtained
regulatory approval.
Breast Cancer, page 2
5. Please tell us the basis for your belief on page 4 that you will
achieve significant market
penetration in China given you have not yet received regulatory
approval for your product
in China.
CTLM, page 7
6. We note your disclosure on page 8 regarding your Physician Console and
Physician
Workstation. Please revise to discuss the method by which you offer
the Physician
Workstation and whether its operation requires the customer to also
use your CTLM
product. If you have made sales of your software product, ensure your
registration
statement addresses the impact of those sales on your results of
operations. Also, revise to
discuss any regulatory clearances or approvals you must obtain before
marketing your
Physician Workstation.
Government Regulation and Approvals, page 10
7. Please revise your discussion of your PMA application to address: (1)
what the FDA's
PMA process entails as it relates to approving your product for U.S.
marketing, (2) what
types of trials or data you will have to provide the FDA, including
endpoints of your
trials, and (3) what indication you intend to seek from the FDA. In an
appropriate section
of your document, ensure you discuss the estimated costs and
milestones related to the
intended regulatory approvals you disclose.
Historical Clinical Collaboration Sites, page 13
8. Given your disclosure that almost all of the disclosed programs were
suspended, please
tell us why disclosure regarding those past collaborations is included
in the registration
statement. It is unclear why it is appropriate to list previous
relationships and programs if
they are inapplicable to your current work on a new version of your
product, as disclosed
on page 9. If you choose to include this disclosure, please revise to
clearly explain each
party's role in the disclosed programs and the programs' importance to
your current
business operations.
David Fong
FirstName LastNameDavid Fong
Imaging Diagnostic Systems, Inc.
Comapany 24, 2018
September NameImaging Diagnostic Systems, Inc.
September 24, 2018 Page 3
Page 3
FirstName LastName
Domestic Sales and Marketing, page 13
9. We note your disclosure on page 14 that data from your clinical trials
will impact the
market size for your product. Please revise to clarify the meaning of
this statement and
whether the data from your current trials will be used to further your
PMA application.
International Sales and Foreign Regulation, page 14
10. We note your disclosure on page 15 that you expect your manufacturer's
application for
marketing clearance in China will be approved before the end of 2018.
Please tell us your
basis for this statement and whether any additional clearances or
approvals are required
before sales in China may commence. Ensure your disclosure discusses
material hurdles
that remain before you begin generating revenue from sales in that
jurisdiction.
Competition, page 16
11. Please tell us whether there is more recent information concerning
your competitive
landscape that should be disclosed in this section. For example, tell
us whether (1) your
approach of using "continuous wave laser optical technology" is
unique, (2) the entities
mentioned at the top of page 17 have developed competitive devices and
(3) the entity
mentioned in the last paragraph of this section has developed a device
that will
compete with your product.
Patents, page 17
12. Please revise to describe the potential impact to your business
relating to your patent
policy shift towards trade secrets and confidential procedures. Add
risk factor disclosure
as appropriate.
Intellectual Property, page 17
13. Please clarify your disclosure in the first paragraph on page 18. In
this regard, it is unclear
whether you believe you will require additional patents to adequately
protect
your technology in the geographies you intend to sell your product.
Add risk factor
disclosure as appropriate.
14. Reconcile your disclosure in the table on page 17 suggesting you own 6
U.S. patents with
your disclosure on page 21 that you own 3 U.S. patents. If you do not
own some of these
patents, please clarify your interest in them.
Sales and Cost of Sales, page 30
15. Please revise to more fully discuss the royalty agreement mentioned
here, and clarify
whether this is the agreement discussed on page 10. In an appropriate
section of your
document, you should disclose (1) the parties to this agreement, (2)
the rights and
obligations of the parties, (3) the scope of the agreement, including
geographic and
David Fong
Imaging Diagnostic Systems, Inc.
September 24, 2018
Page 4
technological, and (4) the history of this agreement, including
explaining how the
agreement entered into in 2006 did not provide income until 2018 after it
was "re-
established." Also please file this agreement as an exhibit or advise.
Related Transactions, page 35
16. Please revise to disclose all information required by Regulation S-K Item
404. For
example, we note that the disclosure here does not address transactions
disclosed on pages
F-12 and F-14, which appear to involve parties disclosed in this section.
Preferred Stock, page 39
17. Please revise to clarify the rights and preferences of your outstanding
Series L stock,
including any provisions impacting voting or liquidation rights. Also,
revise to discuss
how you are satisfying the annual dividend on this stock.
Financial Statements
Note 17. Subsequent Events, page F-22
18. Please revise the financial statements to retrospectively apply the
reverse stock split
affected in July 2018. Refer to SAB Topic 4-C.
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.
You may contact Jeanne Bennett at 202-551-3606 or Gary Todd, Senior
Accountant, at
202-551-3605 if you have questions regarding comments on the financial
statements and related
matters. Please contact Caleb French at 202-551-6947 or Heather Percival,
Senior Attorney, at
202-551-3498 with any other questions.
Sincerely,
FirstName LastNameDavid Fong
Division of
Corporation Finance
Comapany NameImaging Diagnostic Systems, Inc.
Office of
Electronics and Machinery
September 24, 2018 Page 4
cc: Robert B. Macaulay, Esq.
FirstName LastName