United States securities and exchange commission logo
November 3, 2023
Melker Nilsson
Chief Executive Officer
Capstone Dental Pubco, Inc.
154 Middlesex Turnpike
Burlington, MA 01803
Re: Capstone Dental
Pubco, Inc.
Amendment No. 2 to
Registration Statement on Form S-4
Filed October 26,
2023
File No. 333-274297
Dear Melker Nilsson:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies 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 this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our October 20, 2023
letter.
Amendment No. 3 to Registration Statement on Form S-4
Cover Page
1. Please revise the cover
page of your prospectus to clearly disclose the number of
securities being
registered on this registration statement. See Item 501(b) of Regulation S-
K.
Discounted Cash Flow Analysis, page 132
2. Please refer to our
prior comment 6.
We see as part of
your revised disclosure, you indicate that the yearly revenue
assumptions
provided by Keystone were independently verified by Check-Cap
through Check-Cap
s own due diligence, which was performed on the Israeli
operations of
Keystone, as well as through part of the legal and financial due
diligence performed
by Check-Cap s advisors. Please tell us how and to what extent
Melker Nilsson
Capstone Dental Pubco, Inc.
November 3, 2023
Page 2
Check-Cap independently verified information related to
Australia that was
provided by Keystone.
If Keystone does not have any specific market potential reports
for Israel and
Australia as standalone countries, tell us your basis for the
assumption that with its
Implant and Bio product lines, Nexus products and
customer-centric approach,
Keystone will be able to grow sales and revenues in these
regions.
We do not see where you have explained what "an analysis of the
competitive
landscape entails, the significant material assumptions
underlying revenue
projections and the limitations specific to this analysis.
We see your disclosure that if the company is unable to
maintain any of its current
regulatory approvals or obtain such new regulatory approvals,
that may have an
impact on Keystone s projections, although each such case would
need to be assessed
to determine what (if any) impact it has on the plan and the
impact on the projections
if it is not obtained. Revise to explain each specific regulatory
approval assumed in
making the projections and the specific impact if those approvals
are not obtained.
Lastly, we see your revised disclosure that 'the financial
projections include assumed
capital expenditures (including fit-out for new space and
equipment to meet the
expected increased demand in each location) for Keystone s
Israel, Irvine and
Australia facilities to be expended over the course of the plan.'
Revise to disclose the
expected amounts of capital expenditures and tell us how those
are included in your
projections.
3. Please refer to our prior comment 7 and tell us where your revised
disclosure clarifies
which elements of the projections were provided by Keystone and which
were prepared
by Check-Cap. In this regard, you state at the bottom of page 134 that
the following
assumptions indicate the changes that the Check-Cap board made to the
projections
provided by Keystone and list several bullet points which appear to be
general in nature,
i.e. 'revenue projections were modified on the basis that comparable
companies grow at a
rapid pace in the first 6-7 years'. Revise your disclosures to
specifically explain how the
projections were changed by the Check-Cap board.
4. We see your response to our prior comment 13. Your disclosure does not
address how you
considered all of the uncertainties regarding your projections in your
conclusion that you
can reasonably provide projections for the next ten years. Please
advise.
5. Please refer to our prior comment 16. Please tell us if any companies
of like size and stage
were considered by Variance and if not, why not.
6. We note your disclosure in footnote 1 that "projected R&D amounts are
subject to the
FirstName LastNameMelker Nilsson
limitations in attracting, hiring and retaining members of our R&D
department." Revise
Comapany NameCapstone
to disclose Dental
the specific Pubco, Inc.
assumption related to any potential growth in
your research
& development
November 3, 2023 Pagedepartment.
2
FirstName LastName
Melker Nilsson
FirstName LastNameMelker
Capstone Dental Pubco, Inc. Nilsson
Comapany 3,
November NameCapstone
2023 Dental Pubco, Inc.
November
Page 3 3, 2023 Page 3
FirstName LastName
7. We note the disclosure that "Projections based on historical average
revenues per direct
sales representative are helpful in a genuinely mature business
model." Revise to define
your use of the term "genuinely mature business model" and clarify
this is a belief of
management.
Exhibits
8. We note your updated Exhibit Index in response to comment 19. We
further note that
certain exhibits with schedules and similar attachments omitted
pursuant to Item 601(a)(5)
of Regulation S-K are distribution agreements that are not discussed
elsewhere in the
registration statement. Please revise to describe the material terms
of these distribution
agreements, to include the covered products, within your registration
statement.
Please contact Julie Sherman at 202-551-3640 or Terence O'Brien at
202-551-3355 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Benjamin Richie at 202-551-7857 or Lauren Nguyen at 202-551-3642 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Industrial Applications and
Services
cc: Mark Rosenstein