Published on January 26, 2010
Via
EDGAR
January
26, 2010
Mr.
Jeffrey P. Riedler
Assistant
Director
Division
of Corporation Finance - Mail Stop 4720
United
States Securities and Exchange Commission
Washington,
D.C. 20549
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Re:
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Novelos
Therapeutics, Inc.
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Registration Statement on Form
S-1
Filed September 15, 2009, Amended
December 7, 2009
File Number 333-161922
Dear Mr.
Riedler:
This
letter constitutes supplemental correspondence on behalf of Novelos
Therapeutics, Inc., a Delaware corporation (the “Company”), related to the
above-referenced filing (the “Registration Statement”), and filed together
herewith the Company’s Amendment No. 2 to the Registration Statement (the
“Amendment”).
The
purpose of this letter is to respond to the comments contained in your letter
dated December 29, 2009 addressed to Mr. Harry Palmin, Chief Executive Officer
of the Company concerning Amendment No. 1 to our Registration Statement on Form
S-1, Registration No. 333-161922, filed December 7, 2009 (the “December Comment
Letter”). Set forth below are our responses, on behalf of the
Company, to the December Comment Letter. For your convenience, we have repeated
the Staff’s comment below in bold face type. Except as otherwise indicated, all
statements contained herein concerning factual matters relating to the Company
are based on information provided to us by the Company.
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1.
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We
note your response to our prior comment 1 relating to the treatment of
your transaction as a primary offering. However, given the
nature and size of the offering—in particular, the fact that the shares
you are registering total more than 120% of the shares held by
non-affiliates—the offering appears to be a primary
offering. Therefore, unless you revise the nature and/or size
of this offering, you will need to do the
following:
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·
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file a
registration statement for the “resale” offering at the time of each
conversion of preferred stock or exercise of warrants because you are not
eligible to conduct the offering on a delayed or continuous basis under
Rule 415(a)(1)(x);
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·
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register
the transaction on the form you are eligible to use to register the
transaction as a primary
offering;
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·
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identify
the selling shareholders as underwriters in the registration statement;
and
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·
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include the
price at which the underwriters will sell the
securities.
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The
Company maintains its position that the proposed offering is not a primary
offering, is rather a secondary offering for the account of the selling
stockholders named in the Registration Statement and is, therefore, eligible to
be conducted on a continuous basis pursuant to Rule
415(a)(1)(i). However, in light of the Staff’s position to the
contrary as set forth in its comment letter dated October 8, 2009, as reiterated
in the December Comment Letter, the Company is amending the Registration
Statement to reduce the number of shares of common stock being registered for
resale thereunder from 58,745,592 to 19,000,000, all of which shares are
issuable upon conversion of the Series E preferred stock of the
Company.
As
indicated on page 6 of the Prospectus included in the Registration Statement, as
of January 18, 2010, there were 71,391,957 shares of the Company’s common stock
outstanding, of which the Company believes 14,377,482 are held by directors,
officers and other affiliates of the Company. Given the reduced size
of the offering in relation to the Company’s outstanding common stock held by
non-affiliates, the Company believes that the offering size now supports a
conclusion by the Staff that the offering constitutes a secondary offering
eligible to be conducted on a continuous basis pursuant to Rule 415(a)(1)(i),
consistent with the Staff’s prior positions in that regard.
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2.
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We
note your response to our prior comments 4 and 5; however, it appears that
you have not provided the information requested by the fourth sub-bullet
point in each comment, namely: the combined market price of the
total number of shares underlying the Series E Preferred Stock or
warrants, calculated by using the market price per share on the date of
the sale of the Series E Preferred Stock and the total possible shares
underlying the Series E Preferred Stock or warrants. Please
provide this information for the securities underlying both the Series E
Preferred Stock and the warrants. Also, please revise your
registration statement to include the completed
tables.
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The
following table shows the combined market price of the total number of shares
underlying the Series E preferred stock as of the date of sale of the Series E
preferred stock, as well as the total number of shares underlying the Series E
preferred stock. The Company has included this table on page 46 of
the Prospectus contained in the Registration Statement.
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Date of Issuance
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Shares of Common
Stock Issuable Upon
Conversion of Series
E Preferred Stock
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Market Price
per share (2)
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Aggregate Market
Value of
Underlying
Common Stock
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Aggregate Premium
to Market Price on
Date of Issuance (3)
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April
11, 2008 (1)
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31,807,655 | $ | 0.57 | $ | 18,130,363 | $ | 2,544,612 | |||||||||
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February
11, 2009
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17,841,791 | 0.48 | 8,564,060 | 3,033,104 | ||||||||||||
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Totals
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49,649,446 | $ | 26,694,423 | $ | 5,577,716 | |||||||||||
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(1)
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Includes
shares of common stock that were initially issuable upon conversion of
Series B preferred stock sold on May 2, 2007. The conversion price per
share on those shares was reduced to $0.65 from $1.00 in connection with
the financing that was completed on April 11,
2008.
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(2)
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Represents
the market price on the last trading day before execution of the related
securities purchase agreement.
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(3)
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Based
on a conversion price of $0.65 per
share.
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The
following table shows the combined market price of the total number of shares
initially being offered under the Registration Statement that were issuable upon
exercise of warrants as of the date of sale of the warrants, as well as the
total number of shares underlying the warrants. The Company has
included this table on page 47 of the Prospectus contained in the Registration
Statement. However, please note that the Company is no longer seeking
to register any of these shares under the Registration Statement.
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Date of Issuance
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Shares of Common
Stock Issuable Upon
Exercise of
Warrants
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Market Price
per share (2)
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Aggregate Market
Value of
Underlying
Common Stock
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Aggregate Premium
to Market Price on
Date of Issuance (3)
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April
11, 2008 (1)
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11,865,381 | $ | 0.57 | $ | 6,763,267 | $ | 949,230 | |||||||||
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February
11, 2009
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9,230,769 | 0.48 | 4,430,769 | 1,569,231 | ||||||||||||
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Totals
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21,096,150 | $ | 11,194,036 | $ | 2,518,461 | |||||||||||
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(1)
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Includes
warrants to purchase common stock that were initially issued on May 2,
2007. The exercise price per share was reduced to $0.65 from $1.25 in
connection with the financing that was completed on April 11,
2008.
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(2)
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Represents
the market price on the last trading day before execution of the related
securities purchase agreement.
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(3)
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Based
on a conversion price of $0.65 per
share.
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3.
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Please
confirm that the substance of your response to our prior comment 6,
including all dollar amounts in the provided table, is disclosed in the
registration statement.
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The
Company has included the substance of its response in the Staff’s prior comment
6 on page 49 of the Registration Statement.
The
Company believes that Amendment No. 2 is responsive to the remaining comments on
the Registration Statement and would like the Staff to similarly conclude, so
that the registration statement can be declared effective as soon as
practicable. Should the Staff have any additional comments or
questions concerning this filing, please contact the undersigned, Paul Bork, at
(617) 832-1113 or, in my absence, Matthew Eckert at (617) 832-3057.
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Very
truly yours,
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/s/
Paul Bork
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Paul
Bork
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cc:
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Mr.
Harry Palmin
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Ms. Laura Crotty
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