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July 12, 2019
Rajiv Shukla
Chief Executive Officer
Constellation Alpha Capital Corp.
Emerald View, Suite 400
2054 Vista Parkway
West Palm Beach, FL 33411
Re: Constellation Alpha Capital Corp.
Registration Statement on Form S-4
Filed June 18, 2019
File No. 333-232181
Dear Mr. Shukla:
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
Cover Page
1. We note the registration table includes registration of the common stock
to be issued to
equity holders of the Constellation equity holders in the domestication
transaction. Please
revise the prospectus cover page to include a discussion of all shares
being offered
pursuant to this registration statement. See Item 501(b)(2) of
Regulation S-K.
Selected Historical Financial Data of Constellation, page 30
2. Please update this information to include income statement and balance
sheet data for the
fiscal year ended March 31, 2019. We also note you disclose that the
information for the
period from July 31, 2015 (inception) to March 31, 2016 and for the year
ended March 31,
Rajiv Shukla
FirstName LastNameRajiv Shukla
Constellation Alpha Capital Corp.
Comapany NameConstellation Alpha Capital Corp.
July 12, 2019
July 12, 2019 Page 2
Page 2
FirstName LastName
2016 is derived from audited financial statements included elsewhere
in the filing,
however these financial statements do not appear to be included.
Please revise to
eliminate this inconsistency.
Comparative Historical and Unaudited Pro Forma Earnings and Book Value Per
Share Data,
page 31
3. We note that your calculation of DermTech's historical book value per
share as of March
31, 2019 and December 31, 2018 assumes conversion of DermTech's
preferred shares.
Please tell us how your calculation is consistent with your
presentation of DermTech's
historical net loss per share and in compliance with Item 3(f)(1) of
Form S-4.
The Business Combination
Background of the Business Combination, page 95
4. Please disclose whether DermTech was a company that received one of
the initial non-
binding letters of intent. If not, please disclose how the
negotiations with DermTech
commenced.
5. We note the disclosure that you entered into a share purchase
agreement with Medall
Healthcare Private Limited on August 2, 2018 which terminated
automatically on
December 3, 2018. Please further describe why the agreement with
Medall was not
consummated.
6. Please describe the revised valuation and cash condition to closing
that was discussed in
the February 13, 2019 between Dr. Dobak and Constellation. Also,
please further
describe the discussions between February 13, 2019 and March 5, 2019
regarding the new
capital and valuation structure. Additionally, please describe the
agreement reached
between March 9, 2019 and March 13, 2019.
7. Please discuss in greater detail the role of Cowen and Company in the
negotiations of the
business combination. Please also disclose the relationship of Cowen
to Constellation.
Material U.S. Federal Income Tax Consequences of the Business Combination, page
106
8. Please revise this section to clearly state that the disclosure in the
tax consequences
section is the opinion of the named counsel and clearly articulate the
opinion of counsel.
For guidance, see Staff Legal Bulletin No. 19.II.B.
Lock-Up Agreement, page 129
9. Please clarify the certain shareholders that will be subject to the
lock-up agreement.
Material U.S. Federal Income Tax Consequences of the Domestication, page 134
10. Please revise this section to clearly state that the disclosure in the
tax consequences
section is the opinion of the named counsel and clearly articulate the
opinion of counsel.
Rajiv Shukla
FirstName LastNameRajiv Shukla
Constellation Alpha Capital Corp.
Comapany NameConstellation Alpha Capital Corp.
July 12, 2019
July 12, 2019 Page 3
Page 3
FirstName LastName
For guidance, see Staff Legal Bulletin No. 19.II.B. In addition, we
note the statement that
US shareholders "should not" recognize taxable gain or loss as a
result of the
domestication. Please explain why you cannot give a "will" opinion and
describe the
degree of uncertainty. For guidance, see Staff Legal Bulletin No.
19.II.C.4.
DermTech Business, page 157
11. Please disclose the total number of employees, in addition to the
number of full time
employees, as required by Item 101(h)(4)(xii) of Regulation S-K.
12. We note that contract research accounts for more than half of your
revenues. Please
provide a discussion of this part of your business, as required by
Item 101(h)(4)(i) of
Regulation S-K
DermTech Management's Discussion and Analysis of Financial Condition and
Results of
Operations, page 194
13. The Management's Discussion and Analysis section is one of the most
critical aspects of
your disclosure. As such, we request that you revise this section to
provide a more
detailed executive overview to discuss the events, trends, and
uncertainties that
management views as most critical to your future revenues, financial
position, liquidity,
plan of operations, and results of operations, to the extent known and
foreseeable. To
assist you in this regard, please refer to the Commission Guidance
Regarding
Management's Discussion and Analysis of Financial Condition and
Results of Operations,
Release Nos. 33-8350 (December 19, 2003) at
http://www.sec.gov/rules/interp/33-
8350.htm.
Management Following the Business Combination, page 211
14. Please disclose for each director, the specific experience,
qualifications, attributes or skills
that led to the conclusion that the person should serve as a director
of the company in light
of the company's business and structure. See Item 401(e)(1) of
Regulation S-K.
Employment Arrangements and Potential Payments Upon Termination of Employment
or
Change in Control, page 220
15. We note that this transaction is considered a change in control for
purposes of various
option and RSU agreements. Please revise the discussion in this
section and the interests
of officers, directors and affiliates of DermTech to discuss in
greater detail and quantify to
the extent practicable, the value of the immediate vesting of these
securities.
DermTech Director Compensation, page 221
16. Please revise to include the $30,000 paid to a director for consulting
services, as
referenced in footnote 8 to the financial statements. See Item
402(r)(2)(vii)(F) of
Regulation S-K.
Rajiv Shukla
FirstName LastNameRajiv Shukla
Constellation Alpha Capital Corp.
Comapany NameConstellation Alpha Capital Corp.
July 12, 2019
July 12, 2019 Page 4
Page 4
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Information
Description of the Business Combination, page 224
17. Please revise the introductory paragraph to the pro forma financial
information to disclose
the planned accounting treatment for the merger transaction and the
basis or rationale for
this planned accounting treatment pursuant to the guidance in ASC 805.
Pro Forma Adjustments to the Unaudited Condensed Combined Balance Sheet, page
227
18. You state in footnote 2 that this adjustment assumes that the maximum
number of shares
of 1,187,532 are redeemed into cash by the Constellation shareholders
at a price of
$10.41. Given that less than the maximum number of shares may be
redeemed in
connection with the merger transaction, please tell us how you
considered providing a
sensitivity analysis explaining how the pro forma balance sheet will
be impacted in the
event that less than the maximum number of shares are redeemed.
19. You indicate in footnote 8 that this adjustment reflects the
conversion of DermTech
outstanding common stock into the combined entity's common stock and
assumes that
9,928,285 shares of DermTech common stock will be converted into
12,729,061 shares
of Constellation common stock at a conversion ratio of 1.28. Please
disclose how you
arrived at the 12,729,061 shares to be issued in the business
combination and tell us why
the conversion ratio presented here differs from the 1.16 ratio
disclosed at page 21 of the
prospectus summary. Your disclosure in footnote 4 on page 229 should
be similarly
revised.
Unaudited Pro Forma Condensed Consolidated Statement of Operations and
Comprehensive
Loss, page 228
20. Footnote 4 indicates that you have assumed that the maximum number of
shares subject to
redemption will be redeemed in connection with the merger. Please tell
us how you
considered providing a sensitivity analysis explaining how weighted
average shares
outstanding and your resultant earnings per share will be impacted in
the event that less
than the maximum number of shares are redeemed in connection with the
offering.
21. The disclosure on page 129 under the heading "Forfeiture Agreement"
indicates that
Constellation's sponsor entered into a forfeiture agreement under
which the sponsor has
agreed to forfeit to Constellation an aggregate 2,694,779 shares of
Constellation common
stock immediately prior to consummation of the business combination.
Please explain
why an adjustment for the forfeiture of these shares has not been
reflected in the
computation of the weighted average shares, basic and diluted, to be
outstanding after
completion of the merger as disclosed on page 229.
Rajiv Shukla
FirstName LastNameRajiv Shukla
Constellation Alpha Capital Corp.
Comapany NameConstellation Alpha Capital Corp.
July 12, 2019
July 12, 2019 Page 5
Page 5
FirstName LastName
Rights, page 243
22. Your disclosure on page 243 indicates that there are currently
14,936,250 rights to receive
ordinary shares issued and outstanding and that each holder of a right
will receive one-
tenth of one ordinary share upon consummation of Constellation's
initial business
combination. Please explain why the shares that will be issued for
these rights upon
consummation of the DermTech merger have not been reflected in
adjustments to the pro
forma financial information included on pages 224 through 229 of the
registration
statement.
Principal Stockholders of DermTech, page 250
23. Please disclose the control person(s) for Paulson Investment Company
LLC and RTW
Investments L.P.
Report of Independent Registered Public Accounting Firm, page F-2
24. Please revise to obtain a report of the independent registered public
accounting firm which
indicates that their audits were conducted in accordance with
standards of the PCAOB
rather than just the auditing standards of the PCAOB. Refer to the
guidance in paragraph
.09 of AS3101.
Constellation Alpha Capital Corp. Financial Statements
Notes to Financial Statements
Reconciliation of net loss per ordinary share, page F-58
25. In the reconciliation of net loss per ordinary share, you reflect an
adjustment for the
income attributable to ordinary shares subject to redemption. Please
revise to explain in
further detail how you calculated or determined the amount of this
adjustment for each
period presented.
Exibits, page II-3
26. Please file executed Exhibits 10.24, and 10.29. In addition, please
file Exhibit A to
Exhibit 10.24.
27. Please file the convertible bridge notes and the amendment to these
notes, as referenced
on page 195.
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.
Rajiv Shukla
Constellation Alpha Capital Corp.
July 12, 2019
Page 6
You may contact Linda Cvrkel at 202-551-3813 or Craig Arakawa at
202-551-3650 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Michael Killoy at 202-551-7576 or Pam Howell at 202-551-3357 with any
other
questions.
Sincerely,
FirstName LastNameRajiv Shukla
Division of
Corporation Finance
Comapany NameConstellation Alpha Capital Corp.
Office of Beverages,
Apparel and
July 12, 2019 Page 6 Mining
FirstName LastName