United States securities and exchange commission logo
August 30, 2021
Albert DaCosta
Chief Executive Officer
Paragon 28, Inc.
14445 Grasslands Drive
Englewood, CO 80112
Re: Paragon 28, Inc.
Draft Registration
Statement on Form S-1
Submitted August 2,
2021
CIK No. 0001531978
Dear Mr. DaCosta:
We have reviewed your draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Market and Industry Data, page i
1. We note your statement
cautioning investors not to place undue reliance on market share
data included in the
prospectus. Such statement may imply an inappropriate disclaimer of
responsibility with
respect to the third party information; therefore, please either remove
the disclaiming
language or clearly state in this section that you are liable for all
information in the
prospectus.
Albert DaCosta
FirstName
Paragon 28,LastNameAlbert DaCosta
Inc.
Comapany
August 30, NameParagon
2021 28, Inc.
August
Page 2 30, 2021 Page 2
FirstName LastName
Overview, page 1
2. We note your disclosure on page 52 that most of your currently
marketed products are
either Class II medical devices cleared by the FDA or Class I medical
devices exempt for
general orthopaedic use. Please revise to include disclosure of the
Class I and II
classifications in the Summary as well, particularly for your flagship
products. Please also
discuss whether any of your products are classified as Class III
medical devices.
3. We refer to your disclosure on pages 44 and 45 that you have obtained
clearance for most
of your products in the United States through the 510(k) clearance
process. Please revise
to explain when you commenced work designing the flagship products
discussed in the
prospectus and when your products received 510(k) clearance. Please
also include a
description of the patient population and indications for key products
for which you have
received FDA 510(k) clearance.
Summary Risk Factors, page 5
4. Please disclose as a principal risk factor the risk of substantial
dilution as discussed on
page 64. Also when discussing the risk of dilution in the risk factors
section, please
discuss the effect that the redeemable convertible preferred stock may
have upon dilution.
Use of Proceeds, page 75
5. To the extent known, please revise to disclose the approximate amount
of proceeds you
intend to allocate toward each of the purposes identified in this
section. We also note your
disclosure on page 20 that you have focused on specific research
programs and products
for target indications due to limited financial resources and in the
Summary that you have
30 products in the development pipeline, the majority of which will be
launched
commercially in the next 24 months. Please confirm whether you intend
to use the
proceeds of the offering towards the development of any specific
programs or products,
and if so, how much you intend to allocate and how far the proceeds
from the offering will
allow you to proceed with such programs, as applicable. Refer to
Instruction 3 to Item
504 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Estimates
Stock-Based Compensation, page 95
6. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features. Please discuss with the staff how to
submit your response.
Albert DaCosta
FirstName
Paragon 28,LastNameAlbert DaCosta
Inc.
Comapany
August 30, NameParagon
2021 28, Inc.
August
Page 3 30, 2021 Page 3
FirstName LastName
Business, page 98
7. Please clarify the meaning of scientific or technical terms the first
time they are used in
the Business section or in close proximity thereto in order to ensure
that lay readers will
understand the disclosure. For example, please briefly explain what
you mean by
calcaneus, arthroplasty, navicular fracture pattern, MTP fusion, TAR
procedure,
cannulated and laser sintering technology.
Our Growth Strategy, page 104
8. We note your disclosure on page 105 that you recently signed a
licensing agreement with
ConforMIS to add patient specific instruments to the company's
portfolio. To the extent
material, please disclose the material terms of the agreement and file
the agreement as an
exhibit. See Item 601(b)(10) of Regulation S-K for guidance.
Our Solutions, page 110
9. We refer to your disclosure on page 127 and elsewhere in the
prospectus that you have
developed a broad set of published studies and that the safety and
clinical performance of
your products are supported by more than 48 published clinical
whitepapers or studies.
Please revise your disclosure in this section and elsewhere to
disclose, if true, whether you
funded or sponsored the clinical studies and if your employees were
involved in both the
studies and publications.
10. We note your reliance of several published studies disclosed on pages
114, 121 and 123
relating to your Gorilla Plating System and PROMO Correction System.
Please revise to
clarify the scope and design of the studies, whether the studies were
powered for statistical
significance, whether any adverse events were observed, and to discuss
the data from the
results to support the conclusions drawn.
11. Please expand your disclosure on page 116 of the bench studies you
conducted to support
your 510(k) submission to the FDA for your screw systems.
12. We refer to your disclosure on page 119 relating to a clinical study
of your Patient
Specific Talus Spacer. Please revise your characterization of the
clinical study to discuss
the data supporting the disclosed conclusions. For example, please
discuss the design and
scope and the primary endpoint, the statistical significance of the
results and whether any
adverse events were observed.
Product Development and Pipeline, page 126
13. We refer to your disclosure on page 126 relating to your collaboration
with the University
of Michigan and Colorado State University. Please expand your
disclosure to include a
brief description of the material terms of such collaborations,
including whether you are
funding any studies and research and if any compensation was involved.
Albert DaCosta
FirstName
Paragon 28,LastNameAlbert DaCosta
Inc.
Comapany
August 30, NameParagon
2021 28, Inc.
August
Page 4 30, 2021 Page 4
FirstName LastName
Intellectual Property, page 128
14. We note your disclosure on pages 128 and 129 relating to your patent
portfolio in the U.S.
and in foreign jurisdictions. Please clarify your disclosure to
identify for each patent
family (including the three in-licensed patents), the scope and
technology of each such
patent family or patent application, the type of patent protection
(such as composition of
matter, use or process), jurisdiction and expiration years. Consider
adding tabular
disclosure in addition to the narrative for ease of use.
15. You disclose on page 128 that your patent portfolio includes three
in-licensed patents. We
also note your disclosure on pages 105 and 168 in the Business section
relating to your
license agreements with ConforMIS and Biedermann Technologies GmbH.
Please
include disclosure in this section identifying the third parties from
whom you license
intellectual property, the scope of such agreements and the technology
and products to
which such patent rights relate.
Manufacturing and Supply, page 129
16. We note your risk factor disclosure on page 25 that for certain
critical components used in
your products, you rely on single source manufacturers and suppliers.
Please expand your
disclosure to discuss your sources, the availability of raw materials
and the names of any
principal suppliers and manufacturers. See Item 101(h)(4)(v) of
Regulation S-K.
Principal Stockholders, page 165
17. In your revised prospectus, please include in the footnotes to your
table to identify the
natural persons who are the beneficial owners of the shares held by
Bird-B, AG and
entities affiliated with MVM.
Certain Relationships and Related Party Transactions
Biedermann License Agreement, page 168
18. We note your disclosure regarding the above referenced agreement.
Please file the
agreement as an exhibit to the registration statement, or provide your
analysis supporting
your conclusion that filing is not required. See Item 601(b)(10) of
Regulation S-K for
guidance.
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
Intangibles, page F-10
19. Please tell us and revise future filings to disclose the nature of the
capitalized patent costs
and the basis for capitalization. Please refer to FASB ASC 350-30-
25-3.
Albert DaCosta
FirstName
Paragon 28,LastNameAlbert DaCosta
Inc.
Comapany
August 30, NameParagon
2021 28, Inc.
August
Page 5 30, 2021 Page 5
FirstName LastName
Revenue Recognition, page F-11
20. You disclose several different types of revenue streams such as sale
of
implants, disposables and surgical instrumentation. Please expand your
revenue
recognition disclosures to provide disaggregated revenue disclosures
pursuant to ASC
606-10-50-5 or tell us and explain in your document why additional
disclosure is not
required. Please refer to the guidance in paragraphs 606-10-55-89
through 55-91.
General
21. Please provide us with supplemental copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications.
You may contact Ibolya Ignat at 202-551-3636 or Lynn Dicker at
202-551-3616 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jane Park at 202-551-7439 or Laura Crotty at 202-551-7614 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Phillip Stoup, Esq.