March 24, 2020
Andrew J. Ritter
Chief Executive Officer
Ritter Pharmaceuticals, Inc.
1880 Century Park East, Suite 1000
Los Angeles, CA 90067
Re: Ritter Pharmaceuticals, Inc.
Amendment No. 1 to Registration Statement on Form S-4
Filed March 13, 2020
File No. 333-236235
Dear Mr. Ritter:
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 February 28,
2020 letter.
Amendment No. 1 to Registration Statement on Form S-4
Background of the Transaction, page 93
1. We note your revised disclosure in response to our prior comment 3 and
reissue in part.
Please disclose which members of the Board were consulted to determine
which
candidates would receive an initial draft of the letter of intent.
ALAN (AS1411-GNP), page 170
2. We note your response to our prior comment 14. Please revise the
discussion of the
royalty term for the ULRF agreement to disclose when the last to expire
of the licensed
patents is currently expected to expire. We note your revised disclosure
that the ACT
License Agreement terminates on November 26, 2033, unless earlier
terminated under
Andrew J. Ritter
FirstName LastNameAndrew J. Ritter
Ritter Pharmaceuticals, Inc.
Comapany2020
March 24, NameRitter Pharmaceuticals, Inc.
March 24, 2020 Page 2
Page 2
FirstName LastName
certain circumstances. Please clarify whether the royalty term under
this agreement has
the same duration.
Regulatory Strategy, page 171
3. We note your revised disclosure in response to our prior comment 16
that accelerated
FDA approval is often granted prior to completion of a randomized
Phase 3 trial if a new
drug produces no safety signals of great concern and if a validated
biomarker for patient
selection has been established and is readily available. Please
substantiate this statement.
Intellectual Property, page 173
4. We note that there are several patents which expire during 2020 and
2021. Please disclose
any material consequences to your business, as applicable, if the
patents expire in
accordance with the current expiration dates.
Unaudited Pro Forma Condensed Combined Financial Statements
Notes to the Unaudited Pro Forma Condensed Combined Financial Information
Note 3: Pro forma adjustments, page 214
5. We have reviewed your response to prior comment 22 and your revised
disclosure in
adjustment (e). Please explain to us how you determined that the
Ritter Series Alpha
preferred stock should not be accounted for as a liability under ASC
480, nor classified as
temporary equity.
6. In addition, you refer to a 5% commitment fee in adjustment (e), but
you disclose
162,424,242 common shares on the cover page and 162,340,584 common
shares on page
232 as it relates to the conversion of the Series Alpha preferred
stock. Please revise to
clearly explain how these common share numbers relate to the 5%
equivalent.
7. Please revise adjustment (e) to provide more details of the 1% common
stock warrant.
For example, disclose how and when the warrant strike price will be
determined. Provide
an estimated range of the fair value of the warrant. Disclose whether
there will be a one
time expense for the issuance and the reason it is not necessary to
reflect the expense in
the pro forma statements of operations as it is non-recurring.
8. We have reviewed your response to prior comment 25 and the revised
disclosure in
adjustment (j). Please expand your disclosure, in tabular form, to
quantify the number of
shares that are excluded from pro forma diluted weighted average
number of shares as
their effect would be antidilutive. Also, provide on a separate line
item of your pro forma
weighted average shares table the 1,090,416 shares disclosed in
adjustment (h).
9. We have reviewed your response to prior comment 26 and the revised
disclosure in
adjustment (h). Please clarify your disclosure to indicate that the
amounts will be
recorded as non-employee compensation in the period of the merger, as
indicated in your
response, and that the cost is not reflected in the pro forma
statements of operations as it is
nonrecurring.
Andrew J. Ritter
FirstName LastNameAndrew J. Ritter
Ritter Pharmaceuticals, Inc.
Comapany2020
March 24, NameRitter Pharmaceuticals, Inc.
Page 3
March 24, 2020 Page 3
FirstName LastName
Ritter Series Alpha Preferred Stock, page 216
10. Please disclose the "equity conditions" covenants, as referred to
under Liquidation
Preference.
11. Please revise your disclosure to more clearly describe how the number
of common shares
to be issued will be determined upon conversion of Ritter Series Alpha
preferred stock.
Annual Financial Statements of Qualigen, Inc.
Independent Auditor's Report, page F-36
12. Please have your auditor provide a revised report complying with AS
3101 regarding the
format of audit reports and that confirms that their audit was
performed in compliance
with PCAOB standards.
Notes to Financial Statements
General, page F-42
13. We have reviewed your response to prior comment 34 and the notes to
the financial
statements, but we have not identified any revised disclosure
responsive to the
prior comment. Please revise as necessary and clarify where you have
provided the
entity-wide disclosures required by ASC 280-10-50-40 through 50-42.
1. Organization and Summary of Significant Accounting Policies
Net Product Sales, page F-45
14. We have reviewed your response to prior comment 35 and note that you
simply removed
the references to distributor allowances rather than describing them
as requested. Please
clarify for us the basis for this revision. Confirm if true that you
have not had any
distributor allowances, or revise as previously requested to describe
them.
Research and Licenses, page F-45
15. We have reviewed your response to prior comment 39 and do not note
revised disclosure
responsive to the comment. Please revise your disclosure to address
how you account for
research revenue when there is a possibility of contingent payments
related to
unsuccessful research and development activities, as referred to on
page F-46 of your
prior filing.
5. Equipment held for Lease, net, page F-50
16. We note your response to prior comment 41 and your determination that
none of your
arrangements meet the criteria for classification as a sales-type
lease. Please explain to us
in further detail how you considered ASC 840-10-25-1(c). In this
regard, we note on page
F-44 that your agreements are generally three years and the useful
life of your medical
equipment is three to five years. As part of your response, tell us
the useful life you use
for purposes of ASC 840, and explain to us in further detail how you
determined this
Andrew J. Ritter
Ritter Pharmaceuticals, Inc.
March 24, 2020
Page 4
useful life. Explain to us how your product is used after it is returned
to you in support of
any useful life of greater than three years.
12. Research and License Agreements, page F-54
17. We have reviewed your response to prior comment 45, but do not note any
revised
disclosure responsive to the comment. We reissue the prior comment.
Clarify your
disclosure to more clearly identify the party that is providing the $7.2
million in
future financing and the party that is receiving the financing, and the
amount that has been
provided to date. In addition, revise to clarify why you you became
liable to refund
$500,000 and owe an additional $390,000 to Sekisui, as disclosed in Note
16 on page F-
65.
18. We have reviewed your response to prior comment 43 and we do not note
any revised
disclosure to address your prior reference to a contingent payment. In
this regard, it
appears that there is no more reference to the contingent payment. If
true, confirm to us
that no such contingent payment obligation exists. Please explain to us
details regarding
the contingent payments related to the partnership with Sekisui and also
explain to us the
basis for any disclosure that is provided or not provided in the filing
regarding these
contingent payments.
You may contact Michael Fay at 202-551-3812 or Kevin Vaughn at
202-551-3494 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Ada D. Sarmento at 202-551-3798 or Celeste Murphy at 202-551-3257 with
any other
questions.
Sincerely,
FirstName LastNameAndrew J. Ritter
Division of
Corporation Finance
Comapany NameRitter Pharmaceuticals, Inc.
Office of Life
Sciences
March 24, 2020 Page 4
cc: Wendy Grasso, Esq.
FirstName LastName