Paula Winner Barnett, Esq.
17967 Boris Drive, Encino, CA 91316
tel (818) 776-9881
fax (818) 743-7491
pwbarnett@sbcglobal.net
May 2, 2005
VIA FACSIMILE
Tom Jones, Esq.
Division of Corporate Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0306
Re: Calypte Biomedical Corporation ("Calypte"); Amendment No. 3 to Form SB-2
on Form S-3; Registration No. 333-124344
Dear Mr. Jones:
Pursuant to our telephone conversation on Thursday, April 28, 2005, this
letter and the attached two tables are furnished to you as supplemental
information concerning Calypte's pending Amendment to Registration Statement (as
defined below). One table ("Table 1") includes all shares of Calypte's common
stock (the "Common Stock") previously registered for resale since January 2004
under Registration Statements on Form SB-2, Nos. 333-119646, 333-116491 and
333-117439 (the "SB-2 Registration Statements") and all shares of Common Stock
registrable under Calypte's pending Amendment to Registration Statement. The
second table ("Table 2") includes, in addition to certain shares of Common Stock
registrable under Calypte's pending Amendment to Registration Statement, shares
of Common Stock that are potentially registrable in the future and which Calypte
may register in a separate registration statement at a later date. The
potentially registrable shares are included on Table 2 to assist your
understanding of the various financings Calypte has entered into during the last
year. As I indicated, none of the potentially registrable shares listed on Table
2 have been issued and a number of them will only be issued if such issuance is
approved by Calypte's stockholders.
On Tuesday, April 27, 2005, Calypte filed a Form S-3 with the Securities
and Exchange Commission (the "Commission"), entitled Amendment No. 3 to Form
SB-2 on Form S-3, Registration Statement No. 333-119646 (the "Amendment to
Registration Statement"). The purpose of the Amendment to Registration Statement
was to file, pursuant to Rule 429 of the Securities Act of 1933, as amended (the
"Securities Act"), a single prospectus to combine and update the SB-2
Registration Statements in order to maintain their effectiveness as required
under Section 10(a) of the Securities Act. The combined and updated prospectus
was intended to be filed as a post-effective amendment to the latest
registration statement, No. 333-119646, under Rule 429(a) and to act as a
post-effective amendment to the combined SB-2 Registration Statements to update
information contained therein under Rule 429(b). The Amendment to Registration
Statement was mistakenly assigned a new registration number, Registration
Statement No. 333-124344, apparently because the agent Calypte used to file the
Amendment to Registration Statement in the EDGAR system submitted it as a new
Form S-3, rather than as a post-effective amendment to Calypte's Form SB-2,
Registration Statement Number 333-119646.
Tom Jones, Esq.
May 2, 2005
Page 2
On May 28, 2004 and July 9, 2004, Calypte sold shares of Common Stock
("Shares") and warrants to purchase Shares (the "Warrants") in two separate,
unrelated private placements (the "2004 PIPEs"). Calypte registered for resale
the Shares and the Shares underlying the Warrants on Registration Statement No.
333-116491, which became effective on July 8, 2004, and Registration Statement
No. 333-117439, which became effective on July 28, 2004. The investors in the
May and July 2004 PIPEs (the "2004 PIPE Investors") have certain anti-dilution
rights (the "Anti-Dilution Rights"), as set forth in the 2004 PIPEs transaction
documents. The Anti-Dilution Rights, when triggered by a subsequent issuance of
Common Stock under certain conditions, are:
(1) the right to receive additional Shares (the "Additional Shares");
(2) the right to purchase additional Shares under the Warrants (the
"Additional Warrant Shares"); and
(3) the adjustment of the exercise price of all of the Warrant Shares.
Calypte did not register for resale on Registration Statement Nos.
333-116491 and 333-117439 any Shares or Shares underlying the Warrants
potentially registrable in connection with a potential triggering of the
Anti-Dilution Rights. Only the Shares and Shares underlying the Warrants
initially issued were registered for resale. To date, no Warrant Shares have
been issued, as none of the Warrants have been exercised.
On April 4, 2005, Calypte raised $8,000,000 in a private placement to five
institutional investors of convertible notes (the "April 2005 Financing"), which
triggered the Anti-Dilution Rights. In order to comply with the rules of the
American Stock Exchange (the "AMEX"), Calypte will not issue any Shares or
Warrant Shares in connection with the Anti-Dilution Rights without first
obtaining stockholder approval of their issuance. Due to timing considerations
resulting from Calypte's needs for additional working capital, Calypte had to
obtain the funding provided by the April 2005 Financing before seeking
stockholder approval of any issuances in connection with the Anti-Dilution
Rights. The 2004 PIPE Investors agreed to Calypte's consummation of the April
2005 Financing prior to seeking stockholder approval of issuances and exercise
price adjustments in connection with the Anti-Dilution Rights issuable as a
consequence of the April 2005 Financing. In order to obtain that agreement of
the 2004 PIPE Investors, Calypte agreed to enter into a new agreement with the
2004 PIPE Investors to revise the Anti-Dilution Rights pursuant to the terms of
an Amendment to Securities Purchase Agreement dated April 4, 2005 (the
"Amendment").
Tom Jones, Esq.
May 2, 2005
Page 3
Under the terms of the 2004 PIPEs, as a result of the April 2005
Financing, the 2004 PIPE Investors would have been entitled to receive the
following pursuant to the Anti-Dilution Rights:
(1) 6,742,500 Additional Shares;
(2) 1,193,501 Additional Warrant Shares at an exercise price of $0.45
per share; and
(3) An adjustment of the exercise price of the initial 10,741,500 Shares
purchasable pursuant to the Warrants from $0.50 to $0.45 per share.
Under the terms of the Amendment, the 2004 PIPE Investors are entitled to
receive, if approved by the stockholders:
(1) 7,079,625 Additional Shares;
(2) 1,253,177 Additional Warrant Shares, at an exercise price of $0.325
per share; and
(3) An adjustment of the exercise price of the initial 10,741,500 Shares
purchasable pursuant to the Warrants from $0.50 to $0.45 per share.
Calypte intends to register the Additional Shares and the Shares
underlying the Additional Warrant Shares issuable under the Amendment on the
same registration statement it may file with the Commission to register Shares
in connection with the April 2005 Financing.
I trust that this letter and the attached tables demonstrate that Calypte
has complied with all applicable rules and regulations of the Commission in
connection with the filing of the Amendment to Registration Statement. As I
emphasized in my discussion with you, Calypte must respectfully request the
Commission's staff prompt review of the Amendment to Registration Statement so
that Calypte can thereby fulfill its obligations to the selling security holders
to maintain the effectiveness of its registration statements and limit the
burden of the penalties Calypte will incur if the effectiveness of the Amendment
to Registration Statement is delayed.
Calypte's executive officers and I are available to discuss with you any
questions or comments you may have in regard to this letter and the tables.
Very truly yours,
/s/ Paula Winner Barnett
Paula Winner Barnett
cc: Mr. J. Richard George
Mr. Richard Brounstein
TABLE 1
Calypte Biomedical Corporation
Summary of Shares Registered in 2004 SB-2's and
Carried forward in April 2005 S-3
Shares
Sold or carried
Shares registered for resale in SB-2s Eligible forward
----------------------------------------------------- for resale in S-3
8-Jul-04 28-Jul-04 29-Dec-04 under ------------
Selling Security Holder 333-116491 333-117439 333-119646 Total Section 144 333-124344
----------------------------------------------- ----------------------------------------------------- ------------ ------------
Shares for transactions preceding May 2004 PIPE
Stonestreet Limited Partnership 321,954 321,954 321,954 -
SDS Capital International Ltd. 1,266,600 1,266,600 1,266,600 -
Compass Strategic Corporation 1,500,000 1,500,000 1,500,000 -
Mercator Momentum Fund, L.P. 704,474 704,474 604,474 100,000
Mercator Focus Fund, L.P. 3,100,801 3,100,801 - 3,100,801
Gamma Opportunity Capital Partners, LP 349,358 349,358 349,358 -
Goldplate Investment Partners 418,796 418,796 418,796 -
Khalid B. Ahmed, M.D. Pension Plan 84,602 84,602 84,602 -
Roger Suyama 33,841 33,841 33,841 -
Logisticorp, Inc. 213,903 213,903 - 213,903
Southwest Resource Preservation Inc. 427,807 427,807 - 427,807
Ace Global Ltd. 153,846 153,846 153,846 -
Piter Korompis 461,538 461,538 461,538 -
Net Capital Partners, Inc. 1,637,998 1,637,998 1,637,998 -
Langdale Profits Limited 769,231 769,231 769,231 -
Synergyworks, Ltd. 1,538,462 1,538,462 1,538,462 -
Marr Technologies BV (1) 34,015,151 34,015,151 33,515,151 500,000
Top Calibre Enterprise Limited 775,000 775,000 - 775,000
David Miller 6,250 6,250 6,250 -
Antonella Popoff 6,250 6,250 6,250 -
Jack W. Reich 6,250 6,250 6,250 -
Rona Taylor 6,250 6,250 6,250 -
Ernesto Cardenas 100,000 100,000 100,000 -
CEOCast, Inc. 400,000 400,000 400,000 -
European Equity Group 100,000 100,000 100,000 -
New York University 525,000 525,000 525,000 -
Platinum Partners Value Arbitrage Fund 675,625 675,625 675,625 -
Alfonso Saavedra 100,000 100,000 100,000 -
Vintage Filings 46,875 46,875 46,875 -
John M. Ennis 26,131 26,131 26,131 -
Paul R. Smith 3,056 3,056 3,056 -
Kyle Ryan 458 458 458 -
Michael Schmidt 458 458 458 -
Joseph M. Staebler 458 458 458 -
Magic Johnson Foundation 200,000 200,000 133,333 66,667
Pointe Investments, Ltd. 500,000 500,000 500,000 -
Craig Enenstein 100,000 100,000 - 100,000
Michael Rovens 100,000 100,000 100,000 -
Adaltis, Inc. 212,127 212,127 - 212,127
Merchant Intercapital 150,000 150,000 - 150,000
May 2004 PIPE
Investors
SF Capital Partners LP 13,500,000 13,500,000 - 13,500,000
Marr Technologies BV (1) 10,125,000 10,125,000 - 10,125,000
Proximity Fund LP 1,687,500 1,687,500 1,250,000 437,500
Proximity Partners LP 1,687,500 1,687,500 1,250,000 437,500
MTB Small Cap Growth Fund 1,687,500 1,687,500 - 1,687,500
MTB Multi Cap Growth Fund 1,687,500 1,687,500 - 1,687,500
Bridges & PIPES LLC 1,012,500 1,012,500 750,000 262,500
------------ ------------ ------------ ------------
31,387,500 31,387,500 3,250,000 28,137,500
Fees
Duncan Capital LLC (2) 30,000 30,000 - 30,000
Capstone Investments 600,000 600,000 - 600,000
July 2004 PIPE
Investors
Sunrise Equity Partners, L.P. 3,187,500 3,187,500 1,875,000 1,312,500
Amnon Mandelbaum 340,000 340,000 200,000 140,000
David I Goodfriend 34,000 34,000 20,000 14,000
TCMP3 Partners 637,500 637,500 375,000 262,500
United Capital Partners, LLC 2,125,000 2,125,000 - 2,125,000
------------ ------------ ------------ ------------
6,324,000 6,324,000 2,470,000 3,854,000
Fees
Duncan Capital LLC (2) 148,800 148,800 - 148,800
Ani Biotech Oy 1,172,205 1,172,205 - 1,172,205
----------------------------------------------------- ------------ ------------
Total Shares Registered 83,056,050 6,472,800 1,172,205 90,701,055 51,112,245 39,588,810
===================================================== ============ ============
(1) Sum of Marr Technologies BV 44,140,151 - - 44,140,151 33,515,151 10,625,000
(2) Sum of Duncan Capital 30,000 148,800 - 178,800 - 178,800
(3) Shares transferred by Mercator Focus Fund to The Vechery Family Trust in a transaction not involving the Company;
shares registered in S-3 on behalf of The Vechery Family Trust. The Company was advised that no consideration was
exchanged between the parties in connection with the transfer.
(4) Warrant assigned by Proximity Partners LP to Proximity Fund LP in a transaction not involving the Company; shares
underlying the warrant registered in S-3 on behalf of Proximity Fund LP. The Company was advised that no
consideration was exchanged between the parties in connection with the assignment.
(5) Warrant to purchase 300,000 shares transferred by Capstone Investments to 3 parties in a transaction not involving
the Company. The Company was advised that no consideration was exchanged between the parties in connection with
the transfer. The original 600,000 shares are registered in the S-3 as follows:
Capstone Investments 300,000
The Capozza Family Trust 128,572
Anthony M. Capozza 128,572
Ann L. Capozza 42,856
-------------
600,000
=============
SUMMARY OF SB-2 SELLING STOCKHOLDERS
TABLE 2
Calypte Biomedical Corporation
Analysis of May 2004, July 2004 and April 2005 Shares
PLACEMENTS FOR WHICH REGISTRATION STATEMENT
HAS NOT YET BEEN FILED
------------------------------------------------------------
Shares carried forward Shares potentially issuable
in S-3, 333-124344 under April 2005 Financing(1)
----------------------------------- ------------------------------------------------------------
PIPE Shares 8% Interest Series Series
Shares underlying Convertible on A B
issued Warrants(5) Total Notes Notes(4) Warrants Warrants Total
----------------------------------- ------------------------------------------------------------
May 2004 PIPE
SF Capital Partners LP 10,000,000 3,500,000 13,500,000 13,333,333 2,322,858 13,333,333 6,000,000 34,989,524
Marr Technologies BV 7,500,000 2,625,000 10,125,000 9,333,333 1,626,000 9,333,333 4,200,000 24,492,666
Proximity Fund LP - 875,000 875,000
Proximity Partners LP - - -
MTB Small Cap Growth Fund 1,250,000 437,500 1,687,500
MTB Multi Cap Growth Fund 1,250,000 437,500 1,687,500
Bridges & PIPES LLC - 262,500 262,500
-----------------------------------
20,000,000 8,137,500 28,137,500
-----------------------------------
July 2004 PIPE
Sunrise Equity Partners, L.P. - 1,312,500 1,312,500
Amnon Mandelbaum - 140,000 140,000
David I Goodfriend - 14,000 14,000
TCMP3 Partners - 262,500 262,500
United Capital Partners, LLC 1,250,000 875,000 2,125,000
-----------------------------------
1,250,000 2,604,000 3,854,000
-----------------------------------
21,250,000 10,741,500 31,991,500
===================================
Others in April 2005 Placement
Morningtown Limited 1,500,000 261,321 1,500,000 675,000 3,936,321
Smithfield Fiduciary LLC 1,666,667 290,357 1,666,667 750,000 4,373,691
Iroquois Master Fund Ltd. 833,333 145,179 833,333 375,000 2,186,845
------------------------------------------------------------
26,666,666 4,645,715 26,666,666 12,000,000 69,979,047
===========================================================
PLACEMENTS FOR WHICH REGISTRATION STATEMENT HAS NOT YET BEEN FILED
--------------------------------------------------------------------------------------------
Shares originally
issuable under 2004 PIPEs (2) Shares issuable under the Amendment (3)
----------------------------------- -------------------------------------------------------
Additional
Warrants Total Additional Warrants Warrants Total
Shares @ $0.45 Shares Shares Shares @$0.325 @ $0.325 Shares
----------------------------------- -------------------------------------------------------
May 2004 PIPE
SF Capital Partners LP 2,500,000 388,889 2,888,889 2,500,000 125,000 388,889 19,444 3,033,333
Marr Technologies BV 1,875,000 291,667 2,166,667 1,875,000 93,750 291,667 14,583 2,275,000
Proximity Fund LP 312,500 48,611 361,111 312,500 15,625 48,611 2,431 379,167
Proximity Partners LP 312,500 48,611 361,111 312,500 15,625 48,611 2,431 379,167
MTB Small Cap Growth Fund 312,500 48,611 361,111 312,500 15,625 48,611 2,431 379,167
MTB Multi Cap Growth Fund 312,500 48,611 361,111 312,500 15,625 48,611 2,431 379,167
Bridges & PIPES LLC 187,500 29,167 216,667 187,500 9,375 29,167 1,458 227,500
------------------------------------ -------------------------------------------------------
5,812,500 904,167 6,716,667 5,812,500 290,625 904,167 45,209 7,052,501
July 2004 PIPE
Sunrise Equity Partners, L.P. 468,750 145,833 614,583 468,750 23,438 145,833 7,292 645,313
Amnon Mandelbaum 50,000 15,556 65,556 50,000 2,500 15,556 778 68,834
David I Goodfriend 5,000 1,556 6,556 5,000 250 1,556 78 6,884
TCMP3 Partners 93,750 29,167 122,917 93,750 4,688 29,167 1,458 129,063
United Capital Partners, LLC 312,500 97,222 409,722 312,500 15,625 97,222 4,861 430,208
------------------------------------ -------------------------------------------------------
930,000 289,334 1,219,334 930,000 46,500 289,334 14,467 1,280,301
------------------------------------ -------------------------------------------------------
6,742,500 1,193,501 7,936,001 6,742,500 337,125 1,193,501 59,676 8,332,802
==================================== =======================================================
Others in April 2005 Placement 7,079,625 1,253,177
========== ==========
Morningtown Limited
Smithfield Fiduciary LLC
Iroquois Master Fund Ltd.
(1) Does not include notes and warrants issued to finders.
(2) Number of shares and warrants the 2004 PIPE investors are entitled to
receive under the anti-dilution provisions of the 2004 PIPEs, which were
triggered by the sale of securities in the April 2005 Financing.
(3) Shares and warrants the 2004 PIPE investors will receive, if approved by
stockholders, as consideration for making the issuance of their
anti-dilution shares and warrants subject to stockholder approval.
(4) Assumes Notes are held to maturity and quarterly interest accretes to Note
principal.
(5) Warrants will be repriced from $0.50 per share to $0.45 per share under
the terms of the 2004 PIPEs.