July 19, 2019
Stavros G. Vizirgianakis
President and Chief Executive Officer
Misonix, Inc.
1938 New Highway
Farmingdale, New York 11735
Re: New Misonix, Inc.
Amendment No. 1 to Registration Statement on Form S-4
Filed July 5, 2019
File No. 333-231797
Dear Mr. Vizirgianakis:
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 June 26,
2019 letter.
Amendment No. 1 to Registration Statement on Form S-4
What indemnification obligations..., page 9
1. If the breach of some representations and warranties would trigger the
indemnification
obligation even if losses are less than the $1,000,000 that you disclose
here, please revise
your disclosure to clarify.
Description of the Support Agreements, page 21
2. Please expand your response to prior comment 3 to tell us with
specificity who signed the
support agreements, and show us how the percentages disclosed in this
section are
reconcilable to the beneficial ownership disclosure on pages 163-166.
Stavros G. Vizirgianakis
FirstName LastNameStavros G. Vizirgianakis
Misonix, Inc.
Comapany NameMisonix, Inc.
July 19, 2019
July 19, 2019 Page 2
Page 2
FirstName LastName
Risk Factors, page 30
3. We note your response to prior comment 2. Please add a risk factor to
address the
potential personal liability of the Solsys members, and the extent to
which this liability
differs from the liability they currently have for Solsys' liabilities
as members of Solsys.
New Misonix may not be able to effectively protect its intellectual property
rights, page 44
4. We note your response to prior comment 6. Please tell us where you
have disclosed when
the patents related to the business of Misonix expire, and tell us the
significance of the
patents that expire in the near future.
Background of the Transactions, page 71
5. We note your response to prior comment 10; however, from your revised
disclosure, it
remains unclear how the amount of 5,954,543 shares was determined to
be the amount for
the offer. Please revise as appropriate.
6. We note your response to prior comment 12. It is unclear from your
response why none
of the presentations or materials provided by Canaccord on January 8,
2019, January 14,
2019, January 26, 2019, March 27, 2019 or April 3, 2019, the May 2,
2019 "advice and
assistance" of Canaccord, the presentation to the Misonix board
provided by J.P. Morgan
on March 5, 2019, J.P. Morgan's financial analysis mentioned on page
81, or the analyses
mentioned on page 74 are a report, opinion or appraisal relating to
the transaction as
contemplated by Form S-4 Item 4(b). Please revise your response to
clarify the basis for
your conclusions regarding the applicability of that Item, citing
authority on which you
rely, or provide the disclosure required by the Item.
Negative Factors, page 88
7. We note your revisions in response to prior comment 13. However, we
continue to note
your reference to the cost savings, synergies and other benefits that
possibly could be
obtained as a result of the transactions. Please provide more detailed
disclosure about the
cost savings, synergies and other benefits that could be achieved as a
result of the
transactions, particularly in light of the transaction structure.
Miscellaneous, page 100
8. Please address that part of prior comment 16 relating to the fees for
the services
mentioned in the second paragraph of this section.
Certain Unaudited Prospective Financial Information Regarding Misonix and
Solsys, page 100
9. We note your response to the second bullet point of prior comment 18;
however, it
remains unclear how the disclaimer of any association with the
information is consistent
with your disclosure on page 101 that J.P. Morgan reviewed information
and that
Stavros G. Vizirgianakis
FirstName LastNameStavros G. Vizirgianakis
Misonix, Inc.
Comapany NameMisonix, Inc.
July 19, 2019
July 19, 2019 Page 3
Page 3
FirstName LastName
Canaccord assisted with the preparation. It is also unclear how your
disclosure on
page 101 that J.P. Morgan reviewed information is consistent with your
disclosure on
page 102 that J.P. Morgan did not examine the information. Please
revise as appropriate,
and provide us your analysis of whether the consent of the entities
must be filed with your
registration statement.
Selected Unaudited Prospective Financial Information, page 103
10. Regarding your response to prior comment 20:
Please clarify the last paragraph on page 74 with the substance of
the penultimate
sentence of your response, as appropriate.
Address that part of the comment related to the key cash flow items
mentioned in what
is now the first paragraph on page 95. Also disclose the
projections through 2029
mentioned on page 98.
Clarify where you provide the revised projections regarding cash
flow and cash needs,
and the projections that facilitate a more direct comparison of
fiscal years mentioned
in the last paragraph on page 77 and the first full paragraph on
page 78.
Material U.S. Federal Income Tax Consequences of the Mergers, page 108
11. We note your responses to prior comments 22 and 23, and the
uncertainty regarding the
tax consequences referenced in your disclosure. For example, your
disclosure on page
109 regarding what consequences are intended rather than what the
consequences are, and
your disclosure on page 111 regarding what the consequences "should"
be or what is "not
expected." We may have further comments after you file exhibits 8.1
and 8.2. For
guidance, please see Staff Legal Bulletin No. 19 (October 14, 2011)
Sections III.C.1 and 4
available on the Commission's website.
Directors and Officers of New Misonix, page 113
12. We note your response to prior comment 26; however, clause (i) in this
section indicates
that all Misonix directors will become New Misonix directors. Please
reconcile that
disclosure with clause (ii) in this section.
Consideration in the Solsys Merger, page 114
13. Regarding your response to prior comment 27:
Please clarify the effect of the transactions on warrants.
Reconcile your disclosure here regarding the the allocation of
consideration based on
the price of Misonix stock during the 10 days prior to the third
day prior to closing
with your disclosure on page 90 that the shares issued for the
Series F profit interest
awards is based on the price of Misonix stock as of the closing
date.
Stavros G. Vizirgianakis
Misonix, Inc.
July 19, 2019
Page 4
We note your disclosure that consents will be due at least 5
business days prior to
closing. Please disclose the anticipated time period between the
date consents are due
and closing, rather than merely the minimum time period.
Please expand your response regarding partnership liabilities
being based on each unit
holder's basis to clarify whether the amount of liabilities
attributable to each unit
within a class will differ. It is unclear how investors can
evaluate the consideration
and the risk on page 32 if you do not disclose the amount of such
liabilities allocated
to each unit.
Revise your disclosure in the second bullet point regarding
"percentage interest" to
clarify how the percentage is calculated. For example, do you mean
percentage of the
number of all outstanding units?
Tell us how you determined the range and intervals to present in
the table on page 116,
and what consideration you gave to presenting columns in the table
to reflect the price
at which each class would receive no consideration.
Clarify whether the Series F profits interest awards mentioned in
the table on page 116
differ from the Series F preferred units mentioned on page 76.
From page A-5, it
appears that there may be profits interests that differ from the
Series F units.
Certain Representations and Warranties, page 116
14. We note your response to prior comment 24 and your disclosure that
assertions were made
solely for purposes of the contract. However, to the extent these
representations and
warranties are included in your disclosure, please revise to remove
any potential
implication that the referenced information does not constitute public
disclosure under the
federal securities laws.
Description of the Lock-Up Agreement, page 130
15. We note your response to prior comment 28. Please disclose the number
of New Misonix
shares that will be locked-up. Include shares held by investors who
will sign lock-up
agreements and investors who will be subject to the lock-up due to the
number of shares
they will receive as mentioned on page 125; disclose any material
differences between
those lock-up provisions.
Unaudited Pro Forma Condensed Consolidated Combined Statement of Operations,
page 135
16. We note that in response to comment 35, you corrected the "Pro Forma
Adjusted" column
FirstName LastNameStavros G. Vizirgianakis
to reduce interest expense for the elimination of Solsys' financing exit
fees. However,
Comapany NameMisonix, Inc.
please revise the "Pro Forma Adjustments" column to show $643,322 as the
corrected net
amount of adjustments (j) and (n).
July 19, 2019 Page 4
FirstName LastName
Stavros G. Vizirgianakis
FirstName LastNameStavros G. Vizirgianakis
Misonix, Inc.
Comapany NameMisonix, Inc.
July 19, 2019
July 19, 2019 Page 5
Page 5
FirstName LastName
Business of Solsys, page 141
17. Please expand your response to prior comment 36 to address all
studies, publications and
data mentioned in this section. We note for example the market
research mentioned on
page 146. Also:
Clarify what you mean by "key opinion leaders" on page 144, and the
compensation
Solsys pays those key opinion leaders.
Clarify the purpose of the names that you mention in connection with
studies, as at the
beginning of each bullet point on pages 144 and 145. Include in
your response the
basis for your conclusion that consent of the named persons need
not be filed with
your registration statement.
Dependence of LifeNet, page 147
18. We note your response to prior comment 37. Please specify in this
section the date which
is the "sixth anniversary of the effective date of the agreement."
Also, given your
reference to "certain net sales" and a "threshold amount" of net
sales, it is unclear how
investors can determine the significance and risks of these
provisions; please clarify as
appropriate.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Solsys
Results of Operations, page 153
19. We note that in response to prior comment 38 you quantified combined
unit sales volume
of TheraSkin and this amount is equal to total sales of TheraSkin by
Solsys and
LifeNet. Please revise the filing to clarify what combined unit sales
volume represents
and explain its relationship to total sales of TheraSkin.
20. Please address that part of prior comment 39 seeking a description of
known trends related
to contractual prices, shipping and handling costs, or otherwise as
required by Regulation
S-K Item 303.
Liquidity and Capital Resources, page 155
21. Please expand your response to prior comment 41 to address how the
obligation affects
your disclosure in this section regarding your liquidity and capital
resources, like on page
157.
Summary Compensation Table, page 160
22. Please expand your response to prior comment 43 to clarify how the
Notes
you cite provide the disclosure required by Regulation S-K Item 402.
Stavros G. Vizirgianakis
FirstName LastNameStavros G. Vizirgianakis
Misonix, Inc.
Comapany NameMisonix, Inc.
July 19, 2019
July 19, 2019 Page 6
Page 6
FirstName LastName
Security Ownership of Certain Beneficial Owners and Management of Solsys, page
165
23. Regarding your response to prior comment 44:
Please identify the natural persons who serve as members on the
investment
committee for each of 1315 Capital Solsys and SV-Solsys Inc. Also,
if the individuals
identified in the table beneficially own shares held in the name of
entities as
determined by applicable rules, that beneficial ownership should be
included in the
table, regardless of whether beneficial ownership is disclaimed.
Clarify how you have provided the information required by Regulation
S-K Item
403 for each applicable class of equity securities. We note that
your first paragraph in
this section limits the disclosure to voting securities; however,
Regulation S-K Item
403(b) is not limited to voting securities.
Management of New Misonix, page 168
24. Please expand your response to prior comment 45 to clarify how you
addressed
Regulation S-K Item 407(a) as it applies to committees.
Classified Board; Election and Removal of Directors; Filling Directors, page
173
25. Please clarify how your response response to prior comment 47
addresses the 66 2/3 vote
for removal mentioned Section VI.5 of Annex B. Also ensure your
disclosure regarding
removal of directors on page 187 is consistent in this regard.
Comparison of Shareholder Rights, page 174
26. Please expand your response to prior comment 49 to clarify how you
determined that the
proxy card separately presents each provision required to be presented
separately. In this
regard, (1) it is unclear how you considered provisions like the
increase in authorized
shares and Article VIII.2 of Annex B to the proxy statement, and (2)
the proxy card filed
as exhibit 99.1 does not appear to present each relevant provision
separately. Also, clarify
in your disclosure how you will proceed if shareholders approve fewer
than all proposed
provisions.
Incorporation of Certain Documents by Reference, page 200
27. We note from the disclosure under "Submission of Consents" on page 68
that Solsys has
reserved the right to extend the final date for receipt of written
consents beyond a date that
has yet to be determined, and from the disclosure under "Executing
Consents; Revocation
of Consents" on page 68 that the holders of Solsys' voting units may
change or revoke
their consents at any time prior to a date that has yet to be
determined. Please expand
your response to prior comment 50 to tell us why you should not
incorporate by reference
the filings made by Misonix prior to the date on which the
contemplated transactions are
consummated. Address in your response (1) how you will ensure that you
will
incorporate by reference the appropriate filings of Misonix on or
prior to any extension of
Stavros G. Vizirgianakis
Misonix, Inc.
July 19, 2019
Page 7
the final date for receipt of written consents and on or prior to the
date that consents may
be revoked, and (2) how the disclosed time for termination of forward
of incorporation by
reference is consistent with the Form S-4 required duration of forward
incorporation by
reference. Also, as requested by prior comment 50, please revise the
reference to the
Form 8-K filed on "January 22, 2019" to reflect its actual filing
date.
28. Please expand your response to prior comment 52 to clarify how the
documents filed
under Rule 425 are incorporated by reference. We note for example the
May 8, 2019
filing that appears to include statements that are not incorporated in
your registration
statement.
Solsys Medical, LLC Financial Statements for the Years Ended December 31, 2018
and
December 31, 2017
Note 1 - Nature of Business and Significant Accounting Policies
Revenue Recognition, page F-9
29. We note from your response to prior comment 53 that under the revised
supply agreement,
Solsys has title to, and liability for, the product while it is in
transit to the customer.
However, it appears that revenue for these sales is recognized when
the product is shipped
to customers by LifeNet. Please explain how you concluded that
revenues under the
revised supply agreement should be recognized at shipment.
Exhibit Index, page II-5
30. Given the last sentence of your response to prior comment 55, it is
unclear whether you
are seeking to comply with current Regulation S-K Item 601(a)(5) or
601(b)(2). If you
are seeking to comply with Item 601(b)(2) and therefore have omitted
provisions or terms
from schedules, annexes or exhibits to an exhibit, please comply with
the marking and
disclosure requirements of current Item 601(b)(2). If you are omitting
schedules or
similar attachments to exhibits in reliance on Item 601(a)(5), please
revise your current
reference to Item 601(b)(2) to clarify. Also, clarify to which
exhibits the footnote to your
exhibit refers; for example, are you referring to exhibit 10.1?
Exhibits
FirstName LastNameStavros G. Vizirgianakis
Comapany NameMisonix, part of prior comment 56 regarding filing the employment
agreements
31. Please address that Inc.
July 19, 2019 Page 7 page 23.
mentioned on
FirstName LastName
Stavros G. Vizirgianakis
FirstName LastNameStavros G. Vizirgianakis
Misonix, Inc.
Comapany NameMisonix, Inc.
July 19, 2019
Page 8
July 19, 2019 Page 8
FirstName LastName
You may contact Eric Atallah at (202) 551-3663 or Lynn Dicker, Senior
Accountant, at
(202) 551-3616 if you have questions regarding comments on the financial
statements and
related matters. Please contact Tim Buchmiller at (202) 551-3635 or Russell
Mancuso, Legal
Branch Chief, at (202) 551-3617 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Electronics
and Machinery
cc: Jonn R. Beeson, Esq.