November 1, 2018
Dean Petkanas
Chief Executive Officer
TYG Solutions Corp.
3805 Old Easton Road
Doylestown, PA 18902
Re: TYG Solutions Corp.
Registration Statement on Form S-1
Filed October 5, 2018
File No. 333-227736
Dear Mr. Petkanas:
We have reviewed your registration statement 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 this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-1 filed October 5, 2018
Coverpage
1. Please revise the third paragraph to identify the specific OTC market
that quotes your
common stock presently. In this regard, your disclosure should indicate,
if true, that your
stock is quoted on the OTC Pink Market. Also, revise the first paragraph
to clarify what
constitutes an "active trading market."
Dean Petkanas
FirstName LastNameDean Petkanas
TYG Solutions Corp.
Comapany 1, 2018
November NameTYG Solutions Corp.
November 1, 2018 Page 2
Page 2
FirstName LastName
Prospectus Summary
Our Business, page 1
2. We note your disclosure in the second paragraph that the business
operations of TYYG
shall "continue uninterrupted." Please revise your disclosure to
clarify whether you will
continue to develop iPhone and Android smartphone apps for companies.
3. With reference to page F-2 and F-10, please revise to highlight that
on October 2, 2018
your auditor issued a "going concern" opinion and explain the reasons
cited as
raising substantial doubt about your ability to continue as a going
concern.
4. We note your disclosure in the second paragraph of this section that
as a result of the
Share Exchange on July 25, 2018, Kannalife became a wholly-owned
subsidiary of
TYYG. However, we also note that in the Form 8-K filed July 25, 2018,
you state that as
a result of the Share Exchange, Kannalife became a 99.7% owned
subsidiary of TYYG,
and that for a period of 120 days after the initial closing, unless
extended in the sole
discretion of TYYG, TYYG may issue, on the same terms and conditions
as those
contained in the Share Exchange Agreement, additional shares of the
common stock of
TYYG to Kannalife Stockholders that did not participate in the Initial
Closing. Please
confirm whether Kannalife is now a wholly-owned subsidiary of TYYG,
and if not, revise
your disclosure to disclose the percentage of Kannalife shares owned
by TYYG and the
terms under which TYYG may issue additional shares.
5. Please revise your disclosure in this section to include a brief
description of your lead
product candidates, the indications you plan to target with each
product candidate and
your plans for their development.
6. We refer to the sixth paragraph which highlights your 6,630,507 patent
license. We note
that your disclosures on pages 34 and 56 indicate that the patent
expires in April 2019 in
all jurisdictions and that you do not intend to commence any clinical
trials until the second
half of 2019. Accordingly, please tell us why you believe that this
license is one of the
most significant aspects of your offering such that it should be
highlighted in the
Summary. Refer to the Instruction to Regulation S-K, Item 503(a). To
the extent that you
retain Summary disclosure concerning the license, please ensure that
your presentation
concerning the license is balanced. Also, please revise other sections
of the prospectus to
provide context to discussion of this license and to any claims that a
particular product
candidate is "patent protected."
7. We note that you list your website as www.tygsolutionscorp.com. To the
extent your
website has changed due to the Share Exchange, please update your
disclosure.
8. Revise your Summary disclosure to explain briefly all scientific and
industry terms so that
people who are unfamiliar with your business can understand these
terms. For instance,
and without limitation, we note your use of the terms "phyto-medical",
"new chemical
entities" and "anti-pruritic."
Dean Petkanas
FirstName LastNameDean Petkanas
TYG Solutions Corp.
Comapany 1, 2018
November NameTYG Solutions Corp.
November 1, 2018 Page 3
Page 3
FirstName LastName
9. Revise the Summary to highlight briefly the risk factor disclosed on
page 9 concerning
controlled substance laws and regulations.
10. With reference to your disclosure in the second bullet point in the
fourth paragraph, please
tell us why you highlight this research in the Summary. In this
regard, we note that your
disclosure on page 56, which identifies your key development programs,
suggests that you
do not have plans in the near term to conduct clinical trials on any
topical solutions,
ointments or creams.
Risk Factors
KLS-13023 will be subject to controlled substance laws..., page 9
11. Please add risk factor discussion of federal law relating to cannabis,
including the status of
cannabis under federal law and any material risks or uncertainties
that exist following the
rescission of the August 29, 2013 memorandum by James Cole, Deputy
Attorney
General.
We plan to seek orphan drug status for KLS-13023..., page 12
12. Your disclosure on page 37 indicates that in June 2016, you filed for
Orphan Drug
Designation with the Office of Orphan Products Development for the use
of CBD to treat
a sub-set of hepatic encephalopathy and received an initial abeyance
letter in November
2016. Please address the abeyance letter in the risk factor or advise.
Selling Stockholders, page 28
13. Given the nature and size of the transaction being registered, tell us
your basis for
determining that the transaction is appropriately characterized as a
resale offering. In your
response, please address the factors listed in Compliance and
Disclosure
Interpretation, Securities Act Rules, Question 612.09. With reference
to the disclosure on
page F-39, please identify for us the certain stockholders who
surrendered their 2,030,000
shares to the company in connection with the closing of the stock
purchase agreement.
14. Please revise to disclose when you issued the convertible promissory
notes to Cross
& Company and the material terms of the promissory notes, including
the principal
balance, interest rate, maturity and conversion rate.
Business, page 32
15. Please revise your Business discussion to provide overviews of your
two drug candidates
(KLS-13019 and KLS-13023). As a means to provide context to the
more-detailed
subsections of the Business discussion that follow, these overviews
should identify and
discuss briefly the intellectual property, target indications,
pre-clinical research, and third-
party relationships applicable to developing each drug candidate.
Also, discuss the plans,
timelines and costs associated with developing these drugs, including
a discussion of your
plans for completing pre-clinical development and conducting clinical
trials for specific
Dean Petkanas
FirstName LastNameDean Petkanas
TYG Solutions Corp.
Comapany 1, 2018
November NameTYG Solutions Corp.
November 1, 2018 Page 4
Page 4
FirstName LastName
indications.
16. Please substantially revise your disclosure in this section to define
any scientific terms and
abbreviations at first use. Specifically, your disclosure on pages
41-45 contains several
scientific terms that are undefined, numbers with no context and
graphics that are not
sufficiently described.
17. Throughout this section you indicate that CBD and KLS-13019 are
effective. For
example:
On page 38 "Cannabidiol (CBD) is a non-psychoactive component of
Cannabis sativa
is effective in both treating CIPN and relieving opiate
dependence."
On page 41 "Although cannabidiol is effective in models of HE,..."
On page 42 "CBD is effective in two animal models of HE..."
On page 44 "KLS-13019, which has improved vitro efficacy, safety,
and oral
bioavailability."
Please remove all statements that indicate that unapproved drugs are
effective, as efficacy
is assessed throughout all stages of clinical trials and the
determinations are within the
sole authority of the FDA or comparable foreign regulatory entity. You
may describe the
data you have collected during preclinical trials and any observations
that support
continued development efforts.
18. Your Business section does not contain discussion of the effect of
existing or probable
governmental regulation on your business. Accordingly, please revise
to discuss the
regulation of drug discovery and commercialization in the US and
Australia. Also revise
to discuss US and Australian regulation of cannabinoid products.
National Institutes of Health Office of Technology Transfer ("NIH-OTT")
Patent 6,630,507,
page 34
19. Please disclose the material terms of the license agreement(s) for the
'507 Patent with the
NIH, including:
each party's rights and obligations;
duration of agreement and royalty term;
termination provisions; and
payment provisions, including up-front payments, aggregate milestone
payments and
royalty range.
We note that some terms of the 2012 license are provided on page F-14,
but to the extent
not disclosed, please revise your disclosure to include this
information. In addition, please
file the license agreement(s) as an exhibit to the registration
statement, or tell us why this
is not required. See Item 601(b)(10) of Regulation S-K.
Current Pre-Clinical Discovery Efforts, page 35
20. Please revise your disclosure throughout the prospectus to clarify
what your development
plans are, as there is inconsistency throughout the prospectus
regarding whether you plan
Dean Petkanas
FirstName LastNameDean Petkanas
TYG Solutions Corp.
Comapany 1, 2018
November NameTYG Solutions Corp.
November 1, 2018 Page 5
Page 5
FirstName LastName
to apply for regulatory approval of CBD and the indications for which
you plan to develop
KLS-13019 and KLS-13023. As one example, we note your disclosure on
page 35 that
there remains one animal toxicity study and one drug interaction study
to complete before
the company can file investigative new drug applications with the FDA,
one for the
clinical evaluation of CBD in HE and one for the clinical evaluation
of KLS-13019 in HE.
Based on your disclosure on page 56, however, it appears that you plan
to develop KLS-
13019 for CIPN and mild traumatic brain injury and KLS-13023 in OHE
and mild
traumatic brain injury.
Kannalife Studies on CBD, page 35
21. Please expand your disclosure to describe the feasibility study that
you are conducting
with Catalent. In addition, we note that you received notice that the
DEA had added drug
code 7360 to Catalent's Schedule 1 registration and that a quota for a
certain quantum of
cannabidiol will be requested immediately. Please revise your
disclosure to explain the
impact this has on your business.
Kannalife CBD Target Drug Candidate - Orphan Drug Potential for HE, page 36
22. We note your disclosure on page 37 that your "current target drug
candidates, both KLS-
CBD and KLS-13019 will be the first of its kind in the current
standard of care." This
statement implies an expectation of regulatory approval and is
inappropriate given the
early stage of development. Please remove or revise this statement.
Kannaway LLC - Product Development and Marketing Agreement, page 37
23. We note your disclosure that the product development and marketing
agreement with
Kannaway LLC was cancelled and became part of the settlement with
Medical Marijuana,
Inc. Given your disclosure on page 4 concerning your reliance on these
securities to fund
your operations, please revise to provide additional information about
the Medical
Marijuana, Inc. settlement, including the reasons for the settlement
and the material terms
of the settlement agreement. Also, please file the settlement as an
exhibit to the
registration statement. See Item 601(b)(10) of Regulation S-K.
Kannalife Strategic Third Party Business Relationships, Licenses and Joint
Ventures, page 37
24. Please revise your discussion to clarify which relationships, licenses
and joint ventures
remain in-force and how they relate to your current operations and
planned clinical trials.
Also, consider whether these agreements and arrangements you describe
are material
contracts within the meaning of Regulation S-K, Item 601(b)(10). To
the extent that any
of the relationships are no longer in-force or significant to your
business, please consider
presenting these arrangements under a separately captioned heading.
Also, revise to
remove the disclaimer in the footnote at the bottom of page 37.
25. Page F-14 under the heading "Royalty Agreements" indicates that the
company executed
Dean Petkanas
FirstName LastNameDean Petkanas
TYG Solutions Corp.
Comapany 1, 2018
November NameTYG Solutions Corp.
November 1, 2018 Page 6
Page 6
FirstName LastName
five exclusive pharmaceutical license agreements with affiliated
persons on December 31,
2014. Please provide disclosure regarding the material terms of the
license agreements and
file each as an exhibit to the registration statement, or tell us why
this is not required. See
Item 601(b)(10) of Regulation S-K.
Primary Targets for Drug Discovery and Market Size, page 40
26. Where you elect to refer to internet addresses, please note your
obligations, including the
filing obligations, as described in footnote 41 and the related text
of Release 33-7856
(April 28, 2000).
Primary Targets for Topical Medicaments and Market Size, page 48
27. Please substantially revise pages 48 to 53 to discuss the significance
of the target
indications you highlight with respect to your business operations.
For example, please
describe any research you have conducted indicating that your product
candidate may be a
potential treatment for the specified indications and why you believe
there is a market for
your product candidates in these indications.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview, page 55
28. We note your reference to ZYN002 on page 56. Please revise your
disclosure to clarify
whether you plan to partner with Zynerba Pharmaceuticals, Inc. for the
delivery of your
drug candidate. Alternatively, given that you plan to deliver your
drug through an oral gel
capsule, please explain the significance of that sentence.
Future Capital Requirements, page 61
29. Please reconcile your disclosures in this section with those your
provide in the third
paragraph on page 4. Also, revise your disclosure to quantify the
funding that you will
need to complete Phase 1 clinical trials for KLS-13019 for patients
with chemotherapy
induced peripheral neuropathy.
30. We note your disclosure on page 61 that existing cash and cash
equivalents and securities
held for sale on the balance sheet will be sufficient to fund
operations and capital
requirements through December 2019. We further note that the balance
sheet presented
on page F-35 indicates that Medical Marijuana, Inc. common stock
represented over 80%
of the total assets on a pro forma basis for the combined company as
of June 30, 2018.
Accordingly, please tell us, and revise as applicable, to indicate
whether your ability to
conduct business operations and conduct clinical trials will depend
upon your ability to
sell Medical Marijuana, Inc. common stock. Discuss, as applicable, any
restrictions on
your ability to dispose of this stock and any risks associated with
having such a significant
portion of your assets in this one penny stock.
Dean Petkanas
FirstName LastNameDean Petkanas
TYG Solutions Corp.
Comapany 1, 2018
November NameTYG Solutions Corp.
November 1, 2018 Page 7
Page 7
FirstName LastName
JOBS Act, page 64
31. We note your disclosure that you are an emerging growth company.
Please update the
cover page to indicate that you are an emerging growth company and
update your
disclosure to clarify when you will cease to be an emerging growth
company.
Directors and Executive Officers, page 66
32. Please discuss the specific experience, qualifications, attributes or
skills of each director
that led to the conclusion that the person should serve as a director.
Refer to Item 401(e)
of Regulation S-K.
33. We note your disclosure that Mr. Kikis designed and helped formulate
Kannactiv a
skincare product line for Kannalife Sciences. Please tell us whether
you are engaged in
additional lines of business outside of pharmaceutical drug
development.
Executive Compensation, page 70
34. Please disclose the material terms of each named executive officer's
employment
agreement, as required by Item 402(o)(1) of Regulation S-K.
Security Ownership of Certain Beneficial Owners..., page 71
35. With respect to each beneficial owner that is a legal entity, please
disclose the natural
person or persons who exercise the sole or shared voting and/or
investment power with
respect to the shares held in the name of that entity. Also, please
revise to clarify whether
the individuals named in the footnotes to this section are the natural
persons who exercise
voting dispositive powers with respect to the shares held in the name
of the relevant legal
entity.
Item 15. Recent Sales of Unregistered Securities, page II-2
36. Please revise your disclosure in this section to provide the aggregate
amount of
consideration received for each transaction. In addition, we note that
in your Form 8-K
filed July 24, 2018, you announced the issuance of 75 shares of TYYG's
Series A
Preferred Stock and 75 shares of TYYG's Series B Preferred Stock.
Please revise your
disclosure to furnish the information required by Item 701 of
Regulation S-K with respect
to all securities you have sold within the past three years which were
not registered under
the Securities Act.
Exhibits
37. Please revise your Exhibit 21.1 to identify the state or other
jurisdiction of incorporation
of each listed subsidiary and the names under which such subsidiaries
do business. See
Item 601(b)(21)(i) of Regulation S-K.
Dean Petkanas
TYG Solutions Corp.
November 1, 2018
Page 8
38. Please file as exhibits the stock purchase and convertible promissory
note agreements
between the company and the selling stockholder.
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.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Paul Cline at 202-551-3851 or Jim Rosenberg at
202-551-3679 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Irene Paik at 202-551-6553 or Joseph McCann at 202-551-6262 with any
other
questions.
Sincerely,
FirstName LastNameDean Petkanas
Division of
Corporation Finance
Comapany NameTYG Solutions Corp.
Office of Healthcare
& Insurance
November 1, 2018 Page 8
cc: Christopher L. Tinen, Esq.
FirstName LastName