United States securities and exchange commission logo
March 15, 2022
Maria Zannes
Chief Executive Officer
bioAffinity Technologies, Inc.
22211 W Interstate 10
Suite 1206
San Antonio, Texas 78257
Re: bioAffinity
Technologies, Inc.
Draft Registration
Statement on Form S-1
Submitted February
14, 2022
CIK No. 0001712762
Dear Ms. Zannes:
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 Submitted February 14, 2022
Cover Page
1. We note your disclosure
that your officers and directors will control 70% of the voting
power of your common
stock. Please disclose this on your prospectus cover and in your
prospectus summary.
Prospectus Summary
Overview, page 1
2. We note your disclosure
that you intend to "seek approval by the FDA for the nationwide
launch of the CyPath
Lung product as a lung cancer diagnostic." Please revise this section
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bioAffinity Technologies, Inc.
March 15, 2022
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and your Business section to prominently clarify whether you are
seeking FDA approval
of your product as a medical device and specify which FDA approval
path you will
pursue. Clearly state what stage of the FDA approval process you are
at currently and
your expected timeframe for approval. Provide comparable disclosure
for your statement
that you "will launch CyPath Lung as a CE-marked in vitro diagnostic
test in the
European Union."
3. Explain the difference between "a limited market launch of CyPath Lung
as an LDT under
the Clinical Laboratory Improvement Amendments program administered by
the Centers
for Medicare and Medicaid Services and guidelines issued by the
College of American
Pathologists" and the "the nationwide launch of the CyPath Lung
product as a lung cancer
diagnostic" upon FDA approval that you will seek in Phase 3 of your
commercialization
strategy, including how the FDA approval will impact your business.
4. We note the following statements throughout this section and your
Business section:
"CyPath Lung is a well-balanced, accurate test, with both high
specificity and
sensitivity;"
"CyPath Lung is accurate;"
"We developed an automated platform that utilized machine
learning to produce
high-throughput, user-friendly and accurate analysis of flow
cytometric sample data;"
and
"The Company has developed a proprietary platform technology
for in vitro
diagnostics, the first of which is a highly accurate, noninvasive
test for early detection
of lung cancer."
As you indicate you are in the process of seeking "FDA approval" for
CyPath Lung, and
efficacy determinations are solely within the FDA's authority and they
continue to be
evaluated throughout all phases of clinical trials, please remove
these and any similar
references in your prospectus. You may present objective data
resulting from your pre-
clinical trials or studies without including conclusions related to
efficacy.
5. We note that you refer to CyPath Lung as a "product" and you refer to
your other
technologies in development as "product candidates." Given CyPath Lung
has not been
approved by the FDA, please tell us why it is appropriate to refer to
it as a "product" in
this context.
6. Please ensure that where you present data from your clinical trials,
here and throughout
FirstName LastNameMaria Zannes
your filing, you include a balanced description of each clinical trial,
including the number
Comapany NamebioAffinity
of participants Technologies,
in the trial, Inc.trial and number of follow
ups, and specify the test
length of the
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7. We note your statement that "CyPath Lung has the potential to
dramatically increase
overall diagnostic accuracy of lung cancer." Please specify what you
mean by
"dramatically" increase diagnostic accuracy.
8. Your prospectus summary should provide a balanced discussion of your
business.
Therefore, please amend your prospectus summary to include disclosure,
as you do on
page 46, discussing that, since your inception in 2014, you have
generated no revenue
from product sales and have funded your operations principally through
private sales of
your equity or debt securities. Please also discuss your working
capital deficit.
Business Strategies, page 8
9. Please revise the discussion here and in your Business section to
explain in greater detail
your plans for obtaining coverage and reimbursement for CyPath Lung as
a lung cancer
diagnostic in the U.S., and the EU. Please also specify the timeframe
in which you intend
to complete each phase of your commercialization plan.
The Offering, page 10
10. We note your disclosure regarding the voting rights of your Series A
Preferred Stock and
that so long as 30% of the Series A Preferred Stock shares remain
outstanding, the holders
of your Series A Preferred Stock, will be entitled to elect one
director of the Company.
Please clarify whether the Series A Preferred Stock will convert into
common stock in
connection with the IPO and whether the director designation right
will continue after
your IPO. Please make similar clarifications in your Description of
Capital Stock on page
87 when describing your Series A Preferred Stock and on page 76 where
you state that
Mr. Rubin serves as the director elected by the holders of your Series
A Preferred
Stock. Finally, to the extent the director designation right will
continue after your IPO,
describe the same on your prospectus cover page.
Underwriters' Compensation, page 10
11. We note your disclosure that "the underwriters will receive an
underwriting discount equal
to nine percent (9.0%) (subject to reduction) of the offering price of
the shares in the
Offering." Please briefly describe the circumstances under which the
discount is "subject
to reduction." Please also briefly describe the "certain liabilities"
for which you will
reimburse the underwriters.
Use of Proceeds, page 42
12. We note your disclosure that you intend to use the proceeds from this
offering for working
capital and for general corporate purposes, which may include product
development. To
the extent you plan to use a material portion of the proceeds to fund
the development of
CyPath Lung, please specify how far in the clinical development for
each phase you plan
to reach with the proceeds from this offering.
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Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
47
13. To the extent material, please revise this section to quantify and
describe the impact of the
COVID-19 pandemic on your business. Please make conforming updates to
your risk
factor on page 32.
Company Overview
Product Development, page 47
14. Most of the disclosures in this section are a description of your
product which are also
contained in the Prospectus Summary and Business sections. Please
consider revising
MD&A to eliminate this product description and focus the disclosures
on your results of
operations.
Business, page 54
15. Please revise this section to include a discussion of the effect of
existing or probable
governmental regulations on your business, including any government
approvals you
need, such as the Clinical Laboratory Improvement Amendments program
administered
by the Centers for Medicare and Medicaid Services, guidelines issued
by the College of
American Pathologists, FDA approval, and CE-marking approval. Your
disclosure should
include applicable regulations in your targeted markets. Refer to Item
101(h)(4)(viii) and
(ix) of Regulation S-K.
16. We note your disclosure that you have entered into agreements with
Smiths Medical to
provide Smiths Medical s acapella device with CyPath Lung, with GO2
Partners for
kitting, warehousing and distributing patient collection kits, and
that you have licensed
your intellectual property associated with CyPath Lung to Precision
Pathology Services to
offer the test for sale. Please describe the material terms of these
agreements in this
section and file the agreements as exhibits to your registration
statement. Alternatively,
tell us why you are not required to do so. Refer to Item 601(b)(10) of
Regulation S-K.
The Competition for CyPath Lung, page 62
17. We note your disclosure that your 2022 competitive analysis showed
CyPath Lung to be
the most accurate test on the market. Please disclose whether you
conducted head-to-head
trials of CyPath Lung and each of its competitors, and if not, tell us
why this statement is
appropriate.
18. As a related matter, please provide support for your statements about
your competitors
clinical trials.
bioAffinity Technologies' Diagnostic Product Pipeline, page 65
19. Please revise your pipeline chart to include a column for each phase
of the FDA approval
process. In addition, clarify what you mean by "clinical validation."
Make conforming
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edits where you state that Precision Pathology Services has "fully
validated"
CyPath Lung.
Our Employees, page 72
20. Disclose the number of total employees and number of full-time
employees. Refer to Item
101(h)(4)(xii) of Regulation S-K.
Limitations on Director and Officer Liability and Indemnification, page 80
21. Please amend your risk factor disclosure to include a risk factor
describing the limitations
on director and officer liability and indemnification discussed here,
and related risks to
investors. Please also amend your risk factor disclosure to provide a
risk factor discussing
the anti-takeover effects discussed on page 89.
Executive Compensation
Grants of Plan-Based Awards, page 83
22. Please revise this table to include the columns and disclosure
required by Item 402(d) of
Regulation S-K.
Outstanding Equity Awards as of December 31, 2021, page 83
23. Please revise this table to include the stock awards described
elsewhere in your filing.
Refer to Item 404(p) of Regulation S-K.
Director Compensation, page 84
24. We note your disclosure that you issued 50,000 options to each of
Robert Anderson,
Steven Girgenti, Peter Knight, Mohsin Meghji, Gary Rubin, and Maria
Zannes as part of
their director compensation. Please provide the table required by Item
402(r), including
the disclosure required by Item 402(r)(2)(iv) with respect to these
option grants.
Principal Stockholders, page 84
25. Please revise the beneficial ownership table to reflect the impact of
this offering. Refer to
Item 201(b)(2) of Regulation S-K. Please also revise footnote 10 to
the table to identify
the natural persons who hold voting or dispositive control over the
shares beneficially
owned by The Harvey Sandler Revocable Trust.
Certain Relationships and Related Party Transactions, page 86
26. Please revise the notes to your financial statements to disclose the
nature and significant
terms of these related party transactions or explain why you do not
believe this is
required. Refer to the guidance in ASC 850-10-50-1.
27. Please include the disclosure required by Item 404(b) of Regulation
S-K.
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March 15, 2022
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28. In an appropriate place in your filing, please provide an estimate of
the number of shares
into which each note discussed in this section will automatically
convert upon completion
of this offering.
Consolidated Balance Sheet, page F-17
29. Please revise to disclose in the notes to the financial statements the
breakout and other
relevant information for prepaid expenses and other current assets,
and other assets. Make
corresponding revisions to the notes to the interim financial
statements, if material.
Notes to Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
Fair Value of Financial Instruments, page F-24
30. You disclose on page F-27 that you account for the convertible notes
payable at fair
value. Please revise to include all required disclosures under ASC
820-10-50. Make
corresponding changes to the notes to the interim financial
statements.
Note 8. Convertible Preferred Stock and Stockholders' Deficit
Common Stock, page F-29
31. Please revise to disclose the pertinent rights and privileges of
common stock. Refer to
ASC 505-10-50-3.
Note 9. Stock-Based Compensation, page F-29
32. Please revise to disclose the requisite service period and the maximum
contractual term of
the options granted under your equity incentive plan. Refer to ASC
718-10-50-2(a).
General
33. 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
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Securities Act, whether or not you retained, or intend to retain, copies
of those
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communications. Technologies,
Please Inc. member associated with the
review of this filing
contact the staff
March to
15,discuss how 6to submit the materials, if any, to us for our review.
2022 Page
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You may contact Stephen Kim at 202-551-3291 or Theresa Brillant at
202-551-3307 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Taylor Beech at 202-551-4515 or Katherine Bagley at 202-551-2545 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Wilhelm E. Liebmann, Esq.