June 7, 2019
Dean Petkanas
Chief Executive Officer
Kannalife, Inc.
3805 Old Easton Road
Doylestown, PA 18902
Re: Kannalife, Inc.
Amendment No. 4 to Registration Statement on Form S-1
Filed May 23, 2019
File No. 333-227736
Dear Mr. Petkanas:
We have reviewed your amended 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. Unless
we note
otherwise, our references to prior comments are to comments in our April 25,
2019 letter.
Amendment No. 4 to Registration Statement on Form S-1
Our Business, page 1
1. We note your response to prior comment 1. With respect to the published
articles you
reference on pages 1 and 2, please revise your disclosure to clarify
that the principal
investigators and primary authors of these studies are employed by or
affiliated with your
company. To provide context to the highlighted preclinical test results,
and to balance
your Summary presentation, also revise the third paragraph on page 1 to
explain that
safety and efficacy determinations are within the sole authority of the
FDA, or comparable
foreign regulatory bodies, and that KLS-13019 will require future
clinical testing.
Dean Petkanas
FirstName Inc.
Kannalife, LastNameDean Petkanas
Comapany NameKannalife, Inc.
June 7, 2019
June 7, 2019 Page 2
Page 2
FirstName LastName
2. Please refer to prior comment 2 which asked that you revise the
Business section (i.e.,
pages 42 to 73) to discuss the pre-clinical studies that you
highlighted on page 2 in the
Summary section. Accordingly, please revise to move the newly added
disclosure from
your Summary section to the Business section. In this regard, your
Summary should
provide a brief overview of the key aspects of the offering and not
include detailed,
technical disclosures concerning scientific testing. For guidance,
refer to Item 503(a) of
Regulation S-K.
Management Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources, page 82
3. We note your response to prior comment 7. Please revise the Liquidity
and Capital
Resources section to indicate, if true, that your marketable
securities consist solely of
MJNA common stock. Also, tell us in your response letter whether the
recent loss
impairments to your MJNA holdings constitute a material trend
impacting your funding
plans. If the impairments do constitute such a trend, then please
revise your prospectus
disclosure on page 82 to explain the trend and its impact.
Notes to the Consolidated Financial Statements March 31, 2019 (Unaudited)
Note 12. Marketable Security, page F-36
4. Please refer to your response to comment 8. Provide us support for
your determination of
realized loss on marketable security of $228,039 and unrealized loss
on marketable
security of $101,307 for the quarter ended March 31, 2019 as well as
support for the
corresponding amounts disclosed in Note 14. Subsequent Events. Refer
to ASC 321-10-
50-4.
5. Please revise to clarify your reference to Note 2 in this note as we
are unable to locate
information on the marketable security in Note 2 of the March 31, 2019
interim financial
statements.
General
6. In response to comment 9, to the extent the Company plans to rely on
rule 3a-8, please
expand your legal analysis under rule 3a-8 to explain how the Company
fully meets the
requirements in rule 3a-8(a)(4) (including the definition of "capital
preservation
investment" in rule 3a-8(b)(4)), rule 3a-8(a)(6)(iv), and rule
3a-8(a)(7). Concerning rule
3a-8(a)(4), please explain in detail why the Company's investment in
MJNA stock is a
capital preservation investment, why it presents limited credit risk,
and your analysis as to
the liquidity of MJNA under the rule. See Certain Research and
Development Companies
Investment Company Act Release No. 26077 (June 16, 2003), at 37048-49
[68 FR 37045]
[June 20, 2003]. As to the requirements in rule 3a-8(a)(7), please
specifically discuss how
the Company's investment in MJNA and contemplated liquidation of that
investment
would enhance (June 16, 2003) investor protection, as the board
approved investment
Dean Petkanas
Kannalife, Inc.
June 7, 2019
Page 3
guidelines require. Id. at 37048.
As we continue to consider your analysis of section 3(b)(1), please
include additional
detail as to the Company's assessment of MJNA's liquidity and treatment
as a capital
preservation investment. Furthermore, we note that you state that the
five-factor analysis
satisfies the standards for an order pursuant to section 3(b)(2) of the
1940 Act. To the
extent the Company plans to submit an application for an order pursuant
to section
3(b)(2), please do so according to the applicable provisions of the 1940
Act, including, for
example, rule 0-2 thereunder.
Concerning your risk factor disclosure on investment company status in
the registration
statement, please consider revising that disclosure to include a more
robust discussion of
the Company's reliance on applicable exclusion from investment company
status.
Additionally, please consider reframing the risk factor disclosure in
the context of a plain
English analysis as to investment company status rather than beliefs.
Further, please
consider expanding your disclosure on the specific consequences to the
Company should
it be deemed an investment company.
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 Jeffrey Gabor at (202) 551-2544 or Joseph McCann at (202) 551-6262 with
any other
questions.
Sincerely,
FirstName LastNameDean Petkanas
Division of
Corporation Finance
Comapany NameKannalife, Inc.
Office of
Healthcare & Insurance
June 7, 2019 Page 3
cc: Christopher L. Tinen, Esq.
FirstName LastName