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November 27, 2019
Timothy P. Noyes
President and Chief Executive Officer
Proteon Therapeutics, Inc.
200 West Street
Waltham, MA 02451
Re: Proteon Therapeutics, Inc.
Registration Statement on Form S-4
Filed November 7, 2019
File No. 333-234549
Dear Mr. Noyes:
We have limited our review of your registration statement to those
issues we have
addressed in our 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.
Form S-4 Filed November 7, 2019
Exclusive Forum, page 259
1. We note that Article Eleven of your charter provides that the Court of
Chancery of the
State of Delaware shall be the sole and exclusive forum for any
derivative action or
proceeding brought on Proteon's behalf. Please revise your disclosure on
page 259 to
identify the Court of Chancery as the exclusive forum and disclose
whether this provision
applies to actions arising under the Securities Act or Exchange Act. In
that regard, we note
that Section 27 of the Exchange Act creates exclusive federal
jurisdiction over all suits
brought to enforce any duty or liability created by the Exchange Act or
the rules and
regulations thereunder, and Section 22 of the Securities Act creates
concurrent jurisdiction
for federal and state courts over all suits brought to enforce any duty
or liability created by
the Securities Act or the rules and regulations thereunder. If the
provision applies to
Timothy P. Noyes
FirstName LastNameTimothy P. Noyes
Proteon Therapeutics, Inc.
Comapany 27, 2019
November NameProteon Therapeutics, Inc.
Page 2
November 27, 2019 Page 2
FirstName LastName
Securities Act claims, please also revise your prospectus to state
that there is uncertainty
as to whether a court would enforce such provision and that investors
cannot waive
compliance with the federal securities laws and the rules and
regulations thereunder.
Pro Forma Condensed Statement of Operations - for the Year Ended Deember 31,
2018
Pro Forma Condensed Statement of Operations - for the Nine Months Ended
September 30,
2019, page PF-4
2. Revise to disclose how you determined the pro forma adjustments to
weighted average
common shares outstanding in Notes C and DD.
3. Explain to us your basis for the adjustment to general and
administrative expenses in Note
CC and how this complies with the guidance in Rule 11-02(6) of
Regulation S-X.
I. Business Combination
Accounting for the Merger, page PF-7
4. You state on page 2 that immediately after the Merger and closing of
the Private
Placement, the holders of former ArTara capital stock are expected to
hold approximately
28.67% of the Proteon capital stock on a fully diluted basis and that
the investors in the
Private Placement will hold approximately 60.93%. Please provide us
with your analysis
of how you determined that the transaction qualifies as a reverse
merger with ArTara
being the accounting acquirer and how you considered the concurrent
private placement
issued after the Effective Time discussed on page PF-6. Refer to ASC
805-10-55-10. In
this respect, please address the following:
Clarify in the filing what you mean on page 242 by "the terms of
Proteon's (and, after
the effectiveness of the Merger, the combined company's) Class
III, Class I and Class
II directors will expire upon the election and qualification of
successor directors at
the annual meetings of stockholders to be held in 2020, 2021, and
2022,
respectively". Specifically clarify if the existing Proteon
directors will be on the
board until their terms expire alongside the new management and
directors listed on
page 242.
Provide us the composition of the Investors in the Private Placement
and the
affiliation, if any, to Proteon and ArTara. Tell us what
percentage ownership the lead
Investor will have in the company after the merger and Private
Placement.
Tell us what role the Investors in the Private Placement will have
in the combined
company either on the board or elsewhere after the Private
Placement and what
rights, including voting rights after the automatic conversion to
common stock, the
Investors will have following the transaction. In this respect,
we note on page 18 that
the Investors have the right to nominate directors to the Proteon
Board and non-
voting board observers and on page 87 certain investors have the
ability to control or
significantly influence certain matters submitted to the combined
company's
stockholders for approval.
Clarify how many directors the Investors may nominate.
Timothy P. Noyes
FirstName LastNameTimothy P. Noyes
Proteon Therapeutics, Inc.
Comapany 27, 2019
November NameProteon Therapeutics, Inc.
November 27, 2019 Page 3
Page 3
FirstName LastName
Tell us if the Investors have the ability to elect the board or
vote for other major
decisions based on their majority ownership or other rights after
automatic
conversion to common stock.
III. Pro forma Adjustments, page PF-8
5. Please disclose the nature of the $6,299,000 cash payment in Note 6,
who this is being
paid to and explain to us where this is discussed in the filing.
6. Please revise to clarify how you determined the amounts included in
the purchase price
allocation in Note 7. Explain to us how the market capitalization of
Proteon in Note 7
considers the guidance in ASC 805-40-30-2 which indicates that the
"acquisition-date fair
value of the consideration transferred by the accounting acquirer for
its interest in the
accounting acquiree is based on the number of equity interests the
legal subsidiary would
have had to issue to give the owners of the legal parent the same
percentage equity interest
in the combined entity that results from the reverse acquisition".
Explain the basis for
recording goodwill in this transaction.
7. Revise Note 7 to disclose what the $3,050,000 cash included in the
purchase price
allocation represents and clarify where this is discussed in the
filing. In addition,
separately disclose goodwill and any specific intangible assets
acquired.
Pro Forma Combined Earnings Per Share, page PF-11
8. Revise to disclose how you determined the adjustments to ArTara
weighted average
shares outstanding due to Exchange Ratio and adjustments to Proteon
weighted average
shares due to Proteon Reverse Split Ratio for the year ended December
31, 2018 and nine
months ended September 30, 2019.
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.
Timothy P. Noyes
Proteon Therapeutics, Inc.
November 27, 2019
Page 4
You may contact Jeanne Bennett at (202) 551-3606 or Mary Mast at (202)
551-3613 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Joseph McCann at (202) 551-6262 or Mary Beth Breslin, Legal Branch
Chief, at (202)
551-3625 with any other questions.
Sincerely,
FirstName LastNameTimothy P. Noyes
Division of
Corporation Finance
Comapany NameProteon Therapeutics, Inc.
Office of Life
Sciences
November 27, 2019 Page 4
cc: Julio Vega
FirstName LastName