15th
Floor,
Oliver Street Tower
125
High
Street
Boston,
MA 02110-2736
617.204..5100
Fax
617.204.5150
Steven
R.
London
direct
dial: +1 617.204.5107
direct
fax: +1 617.204.5150
londons@pepperlaw.com
August
13, 2008
VIA
EDGAR
United
States Securities and Exchange Commission
Division
of Corporation Finance
100
F.
Street, NE
Washington,
D.C. 20549-6010
Attn:
Mr.
Russell Mancusso
|
Re:
|
Pressure
BioSciences, Inc.
Preliminary
Proxy Statement on Schedule 14A
Filed
July 22, 2008
File
No. 000-21615
|
Dear
Mr.
Mancuso:
On
behalf
of Pressure BioSciences, Inc. (the “Company”),
we
are responding to comments by the staff of the Securities and Exchange
Commission (the “Commission”)
contained in your letter dated August 6, 2008, relating to the Company’s
Preliminary Proxy Statement on Schedule 14A filed July 22, 2008. The Company
has
simultaneously filed with the Commission an amended Preliminary Proxy Statement
on Schedule 14A (the “Amended
Proxy Statement”).
In
addition, a courtesy copy of the Amended Proxy Statement, marked to show the
changes from the initial filing, was sent via overnight courier to the attention
of Geoffrey Kruczek, Esq.
| 1. |
When
you file an amendment, please include the Schedule l4A cover
page.
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Company
Response
As
requested, the Company has included the Schedule 14A cover page with its Amended
Proxy Statement.
Information
on Nominee and Other Directors, page 5.
| 2. |
Please
reconcile your disclosures here and on page 1 regarding the year
in which
Mr. Schumacher’s term will expire if he is elected to your board of
directors.
|
Company
Response
As
requested, the Company has corrected the disclosure to indicate that if elected,
Mr. Schumacher’s term will expire in 2011. See page 5 of the Amended Proxy
Statement.
Proposal
No. 3: Authorization of Capital Raising Transactions, page
24.
| 3. |
From
the title of this proposal, it appears that you are seeking authorization
of all of the terms of transactions. However, from the description
of the
proposal on page 1 and the proxy card, it appears that you are seeking
only authorization of the issuance of common stock. Please revise
for
clarity, and provide all required disclosure about each security
that
shareholders are being asked to authorize for issuance.
|
Company
Response
The
Company has revised the title of this proposal to clarify that the Company
is
seeking only authorization of the sale, issuance or potential issuance of common
stock (or securities exercisable for or convertible into Common Stock) in
accordance with Nasdaq Marketplace Rule 4350(i)(1)(D).
| 4. |
Please
clarify what you mean by an “effective price.” Include in your expanded
disclosure information regarding whether the securities must be issued
for
cash, and if not, the nature of the possible
consideration.
|
Company
Response
The
Company has deleted the term “effective” in the Amended Proxy Statement and has
added a statement that the securities will be issued for cash in capital raising
transactions.
| 5. |
From
your disclosure, it appears that the purpose of the capital-raising
transactions for which you seek authorization is “to finance the
Company.” Please
expand to clarify the reasons for the proposed issuances. For example,
explain:
|
| |
·
|
why
your current capital resources and operating cash flows are inadequate
to
fund your planned operations;
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·
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how
the contemplated transactions will remedy these inadequacies and
to what
uses you intend to put the proceeds of the
issuances;
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·
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what
financing alternatives your board considered in reaching its conclusion
that a share issuance was “advisable and in the best interests of the
Company”; and
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·
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what
will occur should your shareholders not authorize the proposed
capital-raising transactions. For example, will you be unable to
proceed
with your business plan or pay your bills as they come due?
|
Company
Response
As
requested, the Company has expanded its disclosure to clarify the reasons for
the proposed issuances, including: (i) the fact that as of June 30, 2008, the
Company had available cash of approximately $2,800,000; (ii) the Company has
experienced operating losses since its inception and expects to continue to
incur operating losses until sales of the Company’s pressure cycling technology
products increase substantially; (iii) the Company believes that, as a result
of
recent cost savings and reductions recently initiated, its current cash
resources are sufficient to fund the Company’s normal operations into mid-2009;
(iv) the Company is seeking additional capital to implement its business
strategy to develop and commercialize its pressure cycling technology and may
need additional capital resources sooner if the Company experiences unforeseen
costs or expenses, unanticipated liabilities or delays in implementing its
business plan, developing its products and achieving commercial sales; (v)
proceeds from any such capital raising transaction would extend the Company’s
available cash resources beyond mid-2009 and will be used for working capital
for the development and commercialization of the Company’s pressure cycling
technology products and services; (vi) that the Board of Directors believes
that
financing with share issuances are advisable and in the best interests of the
Company because of the Company’s current financial situation and level of
revenues, the Company is unable to obtain a credit facility on acceptable terms
if at all; and (vii) if shareholders do not approve the proposal, the Company
may not be able to raise sufficient capital to fund the Company’s operations
beyond mid-2009, and the Company will have to implement substantial additional
cost reductions which will substantially reduce the Company’s commercialization
and development efforts. It is also possible the Company will not be able to
continue its business.
| 6. |
Please
expand to disclose whether you have engaged in any negotiations or
discussions or have any plans, arrangements or contracts regarding
the
securities issuances that are the subject of this proposal. If you
do have
such plans, arrangements or contracts, please provide all disclosure
required in the proxy statement as if shareholders were approving
the
plan, arrangement or contract; see Note A to Schedule 14A.
|
Company
Response
As
requested, the Company has expanded the disclosure to indicate that as of the
date of the proxy statement, other than its recent engagement of Emerging Growth
Equities, Ltd., an investment bank engaged to assist the Company in identifying
potential and suitable investors in a private placement of the Company’s
securities, the Company does not have any specific plans, arrangements or
contracts with any third party, which would contemplate or require the Company
to issue shares of its common stock or securities exercisable or convertible
into shares of common stock in excess of 20% of its outstanding common stock
or
voting power and at a price that would be less than the book or market value
of
the Company’s common stock as of such date. The material terms of the Company’s
engagement of Emerging Growth Equities, Ltd. have been described. The Company
has had numerous discussions with potential investors regarding the Company’s
need for equity capital and the interest of such investors in an investment
in
the Company. None of these discussions have defined any specific terms or
conditions of an investment in the Company.
| 7. |
Please
tell us your intentions for providing your shareholders with information
regarding plans, arrangements or contracts regarding the subject
securities issuances that arise after the date this proxy statement
is
mailed and before the shareholder vote on Proposal No. 3.
|
Company
Response
As
requested, the Company will notify its shareholders with information regarding
any plans, arrangements or contracts regarding the subject securities issuances
that arise after the date the proxy statement is mailed and before the
shareholder vote on Proposal No. 3. A statement to that effect has been
added.
| 8. |
We
note the last sentence of the first paragraph. Given that this proposal
relates to the possible issuance of securities convertible into or
exercisable for common stock in addition to the possible issuance
of
common stock, it is unclear why the three-month time limit applies
only to
issuances of common stock. Please revise to clarify. Also clarify
whether
all conversions and exercises must occur within the three-month
period.
|
Company
Response
As
requested, the Company has clarified its disclosure to indicate that the three
month time limit is a condition imposed by a Nasdaq published interpretation
limiting the scope of shareholder approval that will satisfy Nasdaq Marketplace
Rule 4350(i)(1)(D). In accordance with such Nasdaq Marketplace Rule and Nasdaq
interpretation, the three month limit applies only to the initial issuance
of
shares of common stock or other securities exercisable for or convertible into
common stock and not to the subsequent exercise or conversion of any such other
securities.
| 9. |
The
first paragraph on page 25 implies that approval of this proposal
authorizes the Board to determine dividend and interest rates, voting
rights, redemption prices, maturity dates and similar matters. With
a view
toward clarified disclosure, please tell us why the Board does not
currently have this authority.
|
Company
Response
Under
the
Company’s Restated Articles of Organization, as amended, and under Massachusetts
law, the Board of Directors has the authority to determine dividend and interest
rates, voting rights, redemption prices, maturity dates and similar matters
with
respect to newly issued securities. As requested, the Company has amended its
disclosure to clarify that the Board does not need shareholder approval to
determine dividend and interest rates, voting rights, redemption prices,
maturity dates and similar matters and that shareholders are only being asked
to
approve the issuance of securities for purposes of compliance with Nasdaq
Marketplace Rule 4350(i)(1)(D).
| 10. |
In
light of the number of common shares you have outstanding and the
number
of common shares for which you seek authorization to issue, it appears
that the capital-raising transactions mentioned in this proposal
could
result in a change in control. If that is correct, please expand
your
disclosure to state so directly. Also, with a view toward disclosure,
tell
us whether the change-in-control arrangements mentioned on pages
15, 16
and 19 may be triggered by the issuances contemplated by this
proposal.
|
Company
Response
As
a
supplemental matter, the Company does not intend to undertake a transaction
that
could result in a change in control of the Company without obtaining separate
shareholder approval. Nasdaq Marketplace Rule 4350(i)(1)(B) requires shareholder
approval of any issuance of securities having that effect. The Company has
added
this information to this effect in the Amended Proxy Statement.
| 11. |
Please
refer to Release 34-15320 (October 13, 1978) regarding disclosure
of the
anti-takeover effects of your proposal.
|
Company
Response
The
Company has reviewed Release 34-15230. As a supplemental matter, the Company
has
a number of measures in place which may have the effect of discouraging or
preventing a change in control. In the Company’s Amended and Restated Articles
of Organization, as amended, and Amended and Restated Bylaws, as amended, the
Company has authorized shares of so-called “blank check” preferred stock which
the Board of Directors has the authority to issue, a classified Board of
Directors, a fair price provision in the event of a tender offer for the
Company’s outstanding shares of Common Stock, advance notice for shareholder
nominations to the Board of Directors, and limitations on the ability of
stockholders to remove directors. In addition, the Company has in place a
shareholder rights plan. These defenses have been disclosed in previous filings
made by the Company with the Securities and Exchange Commission. Further, the
Company is not seeking approval of any amendment to its Amended and Restated
Articles of Organization, as amended, or Amended and Restated Bylaws, and is
requesting approval of this proposal solely for purposes of complying with
the
Nasdaq Marketplace Rule 4350(i)(1)(D). The Company is not requesting shareholder
approval for increasing or changing the authorized capital stock of the Company,
since the Company currently has sufficient authorized, unissued and unreserved
shares of capital stock to issue if this proposal is approved, and the Company
has disclosed that shareholders will suffer potential dilution and other effects
as a result of issuances of capital stock that may occur if the proposal is
approved. With the Company’s existing anti-takeover measures already in place,
the approval by the Company’s shareholders of this proposal will not have any
material incremental anti-takeover effect. Therefore, the Company believes
that
no additional disclosure of anti-takeover effects of the proposal is relevant
or
material to a shareholder’s voting decision on this proposal.
In
connection with the response to the Staff’s comments, attached is a letter from
the Company with respect to the required acknowledgements.
We
thank
you for your prompt attention to this letter responding to your comments and
look forward to hearing from you at your earliest convenience. Please direct
any
questions concerning this filing to my attention at 617.204.5107.
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Very
truly yours,
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| |
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| |
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Steven
R. London
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cc:
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Geoffrey
Kruczek, Esq.
Richard
T. Schumacher, President and Chief Executive Officer, Pressure
BioSciences, Inc.
Edward
H. Myles, Chief Financial Officer, Pressure BioSciences, Inc.
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