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United States securities and exchange commission logo
May 10, 2022
Samuel P. Wertheimer
Chief Executive Officer
Brookline Capital Acquisition Corp.
280 Park Avenue, Suite 43W
New York, NY 10017
Re: Brookline Capital
Acquisition Corp.
Registration
Statement on Form S-4
Filed April 11,
2022
File No. 333-264222
Dear Dr. Wertheimer:
We have reviewed your 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed April 11, 2022
Cover Page
1. Please disclose if BCAC
s sponsor, directors, officers or their affiliates will participate in
the PIPE financing.
2. Please disclose on the
cover page the expected ownership percentages of the combined
company of BCAC public
stockholders, the Sponsor, Apexigen current equity owners and
the PIPE Investors.
Questions and Answers
Q: WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT COMPLETED?, page 7
3. We note your disclosure
here that your Existing Charter provides that BCAC must
Samuel P. Wertheimer
FirstName LastNameSamuel
AcquisitionP.Corp.
Wertheimer
Brookline Capital
Comapany
May NameBrookline Capital Acquisition Corp.
10, 2022
May 10,
Page 2 2022 Page 2
FirstName LastName
complete its initial business combination within 15 months from the
closing of the IPO, or
such later date if extended. Please revise your disclosure here to
clarify the specific date
by which you must complete the business combination.
WILL BCAC OBTAIN NEW FINANCING IN CONNECTION WITH THE BUSINESS
COMBINATION, page 8
4. Please revise to disclose in this section the pricing formula for
sales of shares under the
Lincoln Park equity line agreement, as discussed on page 273.
Q: WHAT EQUITY STAKE WILL CURRENT BCAC PUBLIC STOCKHOLDERS, THE
SPONSOR, THE REPRESENTATIVE, FORMER APEXIGEN EQUITYHOLDERS..., page 9
5. Please revise to disclose all possible sources and extent of dilution
that shareholders who
elect not to redeem their shares may experience in connection with the
business
combination. Provide disclosure of the impact of each significant
source of
dilution, including warrants retained by redeeming shareholders, at
each of the redemption
levels detailed in your sensitivity analysis, including any needed
assumptions.
Additionally, please discuss here that the Business Combination
Agreement does not
provide for any minimum cash condition, as referenced on page 41.
Q: WHO IS APEXIGEN?, page 11
6. We note your statements on page 11 and elsewhere that sotigalimab is
potentially "best-
in-class" and "first-in-class" CD40 agonist antibody. Such terms
suggest that your product
candidates are effective and likely to be approved as a new
therapeutics for oncology.
Given the early stage of development, it is not appropriate to suggest
that your platform
and the product candidates are likely to be effective or receive
regulatory approval. Please
delete these references throughout your registration statement. If
your use of the term was
intended to convey your belief that the product is based on a novel
technology or
approach, you may discuss how your technology differs from technology
used by
competitors. Statements such as these should be accompanied by
cautionary language that
the statements are not intended to give any indication your product
candidate has been
proven effective or that it will receive regulatory approval.
7. We note your statement that sotigalimab is a "CD40 agonist antibody,
with unique epitope
specificity and Fc receptor engagement for optimal therapeutic effect
and safety" and
similar statements about your other product candidates, including your
disclosure that
"APX601 shows potent anti-tumor activity" and APX801's "effective
killing of tumor
cells." Please revise this disclosure and similar references
throughout your prospectus that
imply that your product candidates are safe or effective as such
determinations are made
solely by the FDA or comparable foreign regulators. Additionally,
please disclose in this
section that Apexigen had an accumulated deficit of $144.7 million as
of December 31,
2021, as referenced on page 225.
Samuel P. Wertheimer
FirstName LastNameSamuel
AcquisitionP.Corp.
Wertheimer
Brookline Capital
Comapany
May NameBrookline Capital Acquisition Corp.
10, 2022
May 10,
Page 3 2022 Page 3
FirstName LastName
8. Please revise to refrain from referring to your out-licensed
arrangements as your
"pipeline," here and throughout your registration statement, as it
appears you do not
control the development of these programs and your assets should be
clearly described
apart from the potential financial benefits from your out-license
agreements.
Q: DO ANY OF BCAC'S DIRECTORS OR OFFICERS HAVE INTERESTS IN THE
BUSINESS COMBINATION THAT MAY DIFFER FROM OR BE..., page 18
9. We note your disclosure that "BCAC s directors and officers, and
their affiliates are
entitled to reimbursement of out-of-pocket expenses." Please update
your disclosure to
quantify the aggregate out-of-pocket expenses that are entitled to
reimbursement.
Summary, page 24
10. Please highlight the material risks to public warrant holders,
including those arising from
differences between private and public warrants. Clarify whether
recent common stock
trading prices exceed the threshold that would allow the company to
redeem public
warrants. Clearly explain the steps, if any, the company will take to
notify all
shareholders, including beneficial owners, regarding when the warrants
become eligible
for redemption.
BCAC Conflicts of Interest, page 27
11. We note your charter waived the corporate opportunities doctrine.
Please address this
potential conflict of interest and whether it impacted your search for
an acquisition target.
Summary Risk Factors, page 34
12. We note your disclosure that "[t]he Public Stockholders will
experience immediate
dilution as a consequence of the issuance of the Combined Company
common stock as
consideration in the Business Combination and due to future issuances
pursuant to the
2022 Equity Incentive Plan and the 2022 Employee Stock Purchase Plan."
Please revise
your disclosure here to discuss other sources of dilution in
connection with the Business
Combination, including the 150,000 shares of the Combined Company
common stock that
will be issued to Lincoln Park associated with the financing
arrangement upon the
Closing. Please also discuss here and in the related risk factor on
page 96 risks associated
with potential dilution under the equity line agreement with Lincoln
Park.
Summary of Historical Financial Information of BCAC , page 38
13. Please include a balance for common stock subject to possible
redemption in your balance
sheet data here to be consistent with your balance sheet at F-3.
Samuel P. Wertheimer
FirstName LastNameSamuel
AcquisitionP.Corp.
Wertheimer
Brookline Capital
Comapany
May NameBrookline Capital Acquisition Corp.
10, 2022
May 10,
Page 4 2022 Page 4
FirstName LastName
Risks Related to the Business Combination, page 95
14. Quantify the value of warrants, based on recent trading prices, that
may be retained by
redeeming stockholders assuming maximum redemptions and identify any
material
resulting risks.
Adjustment (C), page 123
15. Please expand your disclosures to identify the nature of the
transaction costs incurred and
the related entity reporting these costs. Separately identify and
quantify those costs that
are specific incremental costs to the transaction and explain why
those costs are reflected
as an offset to equity rather than within the pro forma statement of
operations. In this
regard, we note only Apexigen's specific incremental costs that result
from the
transaction may be reflected in equity. Other costs incurred by
Apexigen and all
transaction costs incurred by BCAC, as the accounting acquiree, must
be reflected in your
pro forma statement of operations. See Rule 11-02(a)(6)(i)(B) and
address the need to
revise your adjustments accordingly.
Note 3. Loss Per Share, page 125
16. Please provide the underlying computation that resulted in the
18,083,364 shares to be
issued to the Former Apexigen equityholders. In doing so, ensure you
quantify
each component of the denominator used in the calculation of the
exchange ratio. Also, in
light of the fact that, based on its defined terms, the exchange ratio
is subject to change,
please tell us what consideration was given to providing a sensitivity
analysis of how a
change in the exchange ratio could impact your pro forma share and per
share information.
17. Please expand your disclosures to reference the terms of the Business
Combination
Agreement that results in a 460,000 reduction in Sponsor and
Representative shares under
the maximum redemption scenario.
Comparative Share Information, page 126
18. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
sensitivity analysis
that also includes interim redemption levels.
Security Ownership of Certain Beneficial Owners and Management of BCAC and the
Combined
Company, page 184
19. Please also disclose the sponsor and its affiliates total potential
ownership interest in the
post-initial business combination company, assuming exercise and
conversion of all
securities.
Samuel P. Wertheimer
FirstName LastNameSamuel
AcquisitionP.Corp.
Wertheimer
Brookline Capital
Comapany
May NameBrookline Capital Acquisition Corp.
10, 2022
May 10,
Page 5 2022 Page 5
FirstName LastName
Apexigen's Business, page 187
20. We note your disclosure of clinical trials relating to your product
candidates throughout
this section. Please revise to clarify whether each trial was powered
for statistical
significance. In addition, if a trial was powered for statistical
significance please provide
p-values for the results of each trial.
21. We note your statement here that "[y]our APXiMAB platform was used to
enable the
discovery of multiple high-quality protein therapeutic product
candidates." We further
note that it appears that only one of your out-licensed product
candidates to date has been
approved. Please revise your disclosure to eliminate any suggestion
that your APXiMAB
platform will create product candidates that are likely to be
approved. Safety
and efficacy determinations are solely within the authority of the FDA
or
comparable foreign regulators.
Our Wholly Owned Pipeline, page 188
22. We note that APX801 appears in your pipeline table with an
"undisclosed target", and is
not discussed in detail elsewhere in your registration statement.
Please remove this
program from the pipeline table as it appears it is not currently
material to your business.
Alternatively, please tell us why you believe this program is
sufficiently material to
warrant inclusion in the pipeline table. Additionally, please expand
your disclosure
concerning this program on page 198 to identify the target and provide
a more fulsome
discussion of this program.
Our Out-Licensed Programs, page 189
23. Please revise to remove the graphic highlighting the stage of
development of your out-
licensed programs as it appears you do not control the development of
these programs and
as such, their prominence is inappropriate. We will not object to a
narrative discussion
that summarizes your out-licensing of assets generated from your
APXiMAB platform;
however, this discussion should not imply that product candidates
generated by your
platform are likely to be approved.
24. We note your disclosure on pages 201 through 203 outlining your
various license and
collaboration agreements. For each agreement, please expand your
disclosure to describe
all material terms of the agreement including:
any upfront or execution payments received or paid;
quantification of all milestone payments received or paid to date;
and
the duration of the agreement and the royalty term as well as the
termination
provision.
As applicable, with regard to any royalty term, disclose the
anticipated expiry of the last to
expire patent licensed under the agreement and the number of years
following the first
commercial sale.
Samuel P. Wertheimer
FirstName LastNameSamuel
AcquisitionP.Corp.
Wertheimer
Brookline Capital
Comapany
May NameBrookline Capital Acquisition Corp.
10, 2022
May 10,
Page 6 2022 Page 6
FirstName LastName
Sotigalimab (APX005M) Program, page 189
25. We note your statement that you believe "sotiga has the ability to
turn immunologically
cold tumors hot." Please clarify what you mean by this statement.
26. We note your statement here that "[t]he data to date demonstrate that
sotiga is reasonably
well tolerated as a monotherapy and also in combination with other
cancer therapeutics"
and other statements throughout your registration such as your
disclosure on page 195
that, "interim data also indicate that sotiga in combination with
neoadjuvant
chemoradiation for esophageal and GEJ cancers is reasonably well
tolerated." Please
revise your disclosure to discuss whether any serious adverse events
have been observed
that were deemed related to sotiga and the nature of any such events
and the number of
patients who experienced them, consistent with your risk factor
disclosure beginning on
page 49.
Intellectual Property, page 205
27. For each of your patents and patent applications please disclose the
relevant jurisdiction
for each foreign patent. Additionally, we note your disclosure that
patents licensed from
Epitomics related to your APXiMAB platform begin to expire in 2023.
Please expand
your disclosure to discuss whether such expiry is expected to have a
material effect on
your business.
Platform Technology, page 206
28. We note your license agreement with Epitomics obligates you to pay
Epitomics a share of
amounts you receive in consideration of a sublicense. Please update
your disclosure to
clarify which product(s) or product candidate(s) are covered by the
license agreement with
Epitomics.
Apexigen's Management's Discussion and Analysis
Components of Operations
Research and Development, page 227
29. Based on your disclosures on page 228, it appears you may track
research and
development costs by product candidate. If you track such information,
please expand
your disclosures to provide a break down of your research and
development expenses
by product candidate. If you do not track your expenses by product
candidate, disclose
that fact.
Background of the Business Combination, page 277
30. We note your disclosure that BCAC entered into over 20 non-disclosure
agreements and
in addition to Apexigen, BCAC delivered non-binding indications of
interest or letters of
intent with respect to 11 other prospective business combination
targets. Please expand
your discussion to describe the extent of due diligence or substantive
negotiations with
Samuel P. Wertheimer
FirstName LastNameSamuel
AcquisitionP.Corp.
Wertheimer
Brookline Capital
Comapany
May NameBrookline Capital Acquisition Corp.
10, 2022
May 10,
Page 7 2022 Page 7
FirstName LastName
other potential targets. As drafted, there is little discussion of the
process by which all
other potential targets were eliminated during this period from
February to November
2021.
31. We note your disclosure on page 283 and elsewhere that "Apexigen s
last financing round
had been completed with a post-money valuation of approximately
$340,000,000, and
[Dr. Wertheimer] pointed out that the current proposed transaction
valuation of
$205,000,000 was at a significant decrease to that amount." Please
revise your disclosure
to clarify the time of the last financing and disclose what conditions
led to the decreased
post-money valuation, including whether or not Apexigen's business was
materially
impacted since the last financing. Your disclosure should make clear
the methodology by
which the BCAC Board arrived at the pre-transaction valuation for
Apexigen of
$205,000,000. Where you reference the comparable companies analysis,
please clarify
how many of such companies had a single lead product candidate in
clinical development.
We also note that the sponsor may forfeit up to 460,000 BCAC founder
shares. Please
disclose if the BCAC Board considered the impact that forfeiture of a
portion of the
founder shares would have on the valuation and quantify the potential
effects of such
forfeiture on the proposed transaction valuation.
Additionally, we note your disclosure on page 290 that, assuming no
redemptions, funds
from the PIPE Investment and from the Trust Account are projected to
provide 10 quarters
of cash runway. Please explain here the assumptions underlying such
projection and risks
to those assumptions.
32. We note your disclosure on page 19 that BCAC will pay Brookline
Capital Markets a fee
of $200,000 to act as "BCAC's financial advisor, investment banker and
consultant in
connection with the Business Combination." Please revise to specify
the services provided
by Brookline Capital Markets in exchange for such fee and disclose its
role in the
negotiations, if any.
Comparable Company Analysis, page 289
33. Please revise to ensure the graphic on page 289 is legible. As
presented, the text is too
small to be legible.
Note 13. Subsequent Events, page F-52
34. Please respond to the following comments with regard to your
subsequent events:
Disclose the date through which subsequent events have been
evaluated and
the nature of this date. Refer to ASC 855-10-50-1;
Disclose further details of your January 23, 2022 stock option
grants, including the
respective exercise prices and expected compensation expense; and
Explain to us how you determined the fair value of the common
stock underlying
these grants, and the reason for the difference, if significant,
between the fair value of
your common stock, after giving effect to the exchange ratio, and
the $10.00 deemed
Samuel P. Wertheimer
Brookline Capital Acquisition Corp.
May 10, 2022
Page 8
value pursuant to the Merger. Please discuss with the staff how to
submit your
response.
Exhibits
35. We note that the form of the Combined Company Bylaws is not listed in
your exhibit
index. Please file the Combined Company Bylaws as an exhibit to the
registration
statement. Refer to Item 601(b)(3) of Regulation S-K.
General
36. We note that page A-44 of the Business Combination Agreement states that
there
are deferred fees owed by you to Ladenburg pursuant to that certain
Underwriting
Agreement, dated January 28, 2021. Please quantify the aggregate fees
payable to
Ladenburg that are contingent of the completion of the Business
Combination or
otherwise advise. Please also clarify if such fees are included or
excluded from the
estimated transaction costs of $9.4 million referenced on page 103.
Please also clarify
whether the 57,500 shares held by the "Representative" referenced on page
25 refers to
Ladenburg or otherwise advise.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Li Xiao at 202-551-4391 or Jeanne Baker at 202-551-3691
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Jason L. Drory at 202-551-8342 or Christine Westbrook at 202-551-5019 with any
other
questions.
Sincerely,
FirstName LastNameSamuel P. Wertheimer
Division of
Corporation Finance
Comapany NameBrookline Capital Acquisition Corp.
Office of Life
Sciences
May 10, 2022 Page 8
cc: Jeffrey C. Selman, Esq.
FirstName LastName