View:
United States securities and exchange commission logo
May 23, 2021
Suying Liu
Chief Executive Officer
Mountain Crest Acquisition Corp II
311 West 43rd Street
12th Floor
New York, NY 10036
Re: Mountain Crest
Acquisition Corp II
Registration
Statement on Form S-4
Filed April 23,
2021
File No. 333-255493
Dear Dr. Liu:
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 23, 2021
Better Therapeutics, Inc., page 16
1. Please revise the
second paragraph under the heading to clarify that none of the company's
products are FDA
approved. Similarly, revise your statement in the third paragraph that
you "expect" FDA
authorization of BT-001 in late 2022. In this regard, you should not
suggest or imply that
the product will be approved by FDA. Please revise your disclosure
here and any similar
statements throughout the prospectus accordingly.
2. Please revise here to
clarify the disease treatment claim for which you seek FDA
approval. In this
regard, we note that your disclosure on page 16 indicates that
your prescription
digital therapeutics are designed to promote "changes in neural
Suying Liu
Mountain Crest Acquisition Corp II
May 23, 2021
Page 2
pathways of the brain" so that "lasting changes in behavior" can
become possible;
however, your diabetes studies and trials, as discussed in your
Business section, do not
appear to: (i) measure or assess neural pathway changes or (ii) assess
behavioral changes
beyond limited durations (i.e., three to six months).
3. We note your disclosure in this section and elsewhere throughout your
registration
statement that you are currently enrolling patients in a "pivotal"
trial for BT-001 for the
treatment of patients with type 2 diabetes. Please revise the
disclosure to make it clear that
even if you receive positive data from this trial, the U.S. Food and
Drug Administration
(FDA) or other regulators may require you to conduct additional trial
or not agree with
your trial design.
4. We note your disclosure here that you have "conducted primary market
research
establishing the potential for widespread reimbursement coverage of
our lead product
candidate by representative payer groups." However, we note your risk
factor disclosure
on pages 60 and 61 indicates that CMS is the principal decision-maker
with respect to
reimbursements and that there is "significant uncertainty related to
the insurance coverage
and reimbursement of newly approved products". Accordingly, please
revise your
disclosure on page 16 to provide additional support and context or
remove the claim.
Also, expand your disclosure on page 174-175 to explain how CMS
factors into your
efforts to achieve reimbursement coverage.
The Board of Directors' Reasons for Approval of the Business Combination, page
21
5. Please revise to further explain and clarify the Board's belief that
BTX has a first mover
advantage. For instance, the disclosure should clarify that the "early
studies" are distinct
from clinical trials. Also the "demonstrating clinical benefit" claim
should be
explained given that BTX has not yet conducted clinical trials and has
not received FDA
approval for any of it products. With reference to your disclosures on
page 41 and 164,
please tell us, and revise as applicable to discuss, whether/how the
Board considered
BTX's intellectual property position when assessing BTX's competitive
positioning.
Clear development path for the company's lead candidate. , page 23
6. Please clarify what you mean when you state there is a "[c]lear
development path for the
company s lead candidate" and that "Better Therapeutics has aligned
with the regulators
on the pivotal clinical trial design."
Ownership of the Post-Business Combination Company After the Closing, page 24
7. We note your disclosure in the table at the top of page 25 showing "100%
redemption (or
FirstName LastNameSuying Liu
$0 in trust)." However, we note your disclosure elsewhere that the
maximum redemption
Comapany NameMountain
amount Crest Acquisition
requires a minimum Corp
trust account II
balance of $5,000,001, after
giving effect to the
May 23,payments
2021 Pageto redeeming
2 stockholders. Please revise or advise.
FirstName LastName
Suying Liu
FirstName LastNameSuying Liu II
Mountain Crest Acquisition Corp
Comapany
May NameMountain Crest Acquisition Corp II
23, 2021
May 23,
Page 3 2021 Page 3
FirstName LastName
Risks Related to the Combined Entity and the Business Combination
The Combined Entity's amended and restated certificate of incorporation will
provide that the
Court of Chancery of the State of Delaware..., page 76
8. We note your disclosure here that the Combined Entity's amended and
restated certificate
of incorporation will contain various exclusive forum provisions.
However, we note your
disclosure on page 117 where you state that the proposed certificate
of incorporation for
the Combined Entity will not have a choice of forum provision and it
appears that the
choice of forum provision will be in your amended and restated bylaws
of the Combined
Entity. Please revise your disclosure or otherwise advise.
Net Loss Per Share, page 93
9. Please revise the table to separately disclose the number of shares
that the BTX SAFEs are
expected to be converted into.
10. Please also state here how many rights are currently outstanding, and
whether you have
included them in the calculation of the basic weighted average shares
outstanding here.
Certain Unaudited BTX Prospective Financial Information, page 100
11. Please revise to disclose the material assumptions supporting the
large projected revenue
increases in 2026 and 2027.
Interests of MCAD's Directors and Officers and Others in the Business
Combination, page 105
12. We note disclosure here and elsewhere, including in your risk factors,
regarding conflicts
of interest in circumstances where the founder shares become worthless
without an initial
business combination. Please disclose in quantitative and qualitative
terms how economic
incentives could result in substantial misalignment of interests where
an initial business
combination does occur. For example, since your sponsor acquired a 20%
stake for
approximately $0.017 per share and the merger consideration is based
on a deemed price
per share of $10.00 a share, the insiders could make a substantial
profit after the initial
business combination even if public investors experience substantial
losses. Please revise
here and your risk factors accordingly.
Sources and Uses for the Business Combination, page 106
13. We note your table appears to disclose that cash consideration will be
paid to BTX
Equityholders. However, elsewhere your disclosure states that "Merger
Consideration" is
"15,000,000 shares of MCAD s common stock, par value $0.0001 per
share
( MCAD Common Stock ), subject to adjustment." Please update this
apparent
inconsistency or otherwise advise.
Suying Liu
FirstName LastNameSuying Liu II
Mountain Crest Acquisition Corp
Comapany
May NameMountain Crest Acquisition Corp II
23, 2021
May 23,
Page 4 2021 Page 4
FirstName LastName
Certain Material U.S. Federal Income Tax Consequences of Exercising Redemption
Rights, page
109
14. Please have counsel provide an opinion concerning the consequences to
U.S. holders of
exercising their redemption rights. For additional guidance concerning
assumptions and
opinions subject to uncertainty, refer to Staff Legal Bulletin No. 19.
Conflicts of Interest, page 140
15. Please revise to clarify and quantify Chardan's financial interests in
consummating the
merger. With reference to the disclosure on page F-7, please be sure
to address deferred
underwriting compensation, financial advisory fees and any other value
that Chardan is
eligible to receive if the merger is consummated. Also, revise the
Background of the
Merger section to clarify MCAD reason(s) for engaging Chardan after
the term sheet with
BTX had been executed. In this regard, we do not see any additional
references in the
Background section concerning Chardan's provision of advisory
services.
Information About BTX, page 149
16. Please revise the Business section to explain the company's plan for
the SPAC merger and
PIPE funds. In this regard, please discuss your plans for funding your
lead candidate(s);
building your sales, marketing and distribution infrastructure; and
obtaining
reimbursement coverage.
BTX's Solution, page 150
17. We note your disclosure here that your pilot study of BTX's BT-001
"resulted in clinically
meaningful improvement in glycemic control" and similar statements
throughout the
document, including, as example only, your references to "[BT-001's]
strong efficacy
signal," "BT-001 demonstrating clinical benefit" and "BTX demonstrated
comparable
efficacy in lowering A1c to orally administered medications with fewer
side
effects." Safety and efficacy are determinations that are solely
within the authority of the
U.S. Food and Drug Administration (FDA) or similar foreign regulators.
You may present
clinical trial end points and objective data resulting from trials
without concluding
efficacy. Please revise these and similar statements here and
throughout the document.
18. Please expand your disclosure on page 151 and/or 155 to clarify how
your PDT product
candidates will be used "under the guidance of a physician."
19. Please revise to clarify how many digital prescription therapeutics
have received FDA
approval or clearance to make disease treatment claims. Discuss the
regulatory
pathway these therapeutics have followed and whether they presently
are reimbursed like
they were a drug. Also indicate whether any such approved/cleared
therapeutics have
focused on nutrition or instead focused on other other behaviors
and/or addictions. Revise
the disclosure on page 16, as applicable.
Suying Liu
FirstName LastNameSuying Liu II
Mountain Crest Acquisition Corp
Comapany
May NameMountain Crest Acquisition Corp II
23, 2021
May 23,
Page 5 2021 Page 5
FirstName LastName
Platform Leverage, page 153
20. Please revise your statement that you have "the potential to develop a
portfolio of PDTs
for some of the most prevalent diseases in the U.S. at a fraction of
the time and cost of
traditional therapeutics" and your similar statements on page 154
that, "BTX expects to
rapidly develop and, if approved, commercialize multiple product
candidates" and
"expedited FDA review process" for your product candidates. Clinical
development is
a lengthy process and indications that you will be successful in
developing your product
candidates in a rapid or accelerated manner is speculative.
BTX's Pipeline, page 154
21. Please shorten the length of the shading for the clinical studies that
are not yet completed
in the pipeline table on page 154. For example only, BT-001 needs to
be shortened, given
the disclosure on page 157 indicates the trial is still ongoing and
topline data is not
expected until Q4 2021. In addition, it appears that your length of
shading needs to be
shortened since you have not completed a pilot study for BT-002,
BT-003, BT-004 and
BT-005.
Key Findings of the Pilot Study, page 155
22. Revise to disclose the p values and indicate whether each reported
trial result was
statistically significant. We also note your disclosure in the chart
on page 156 that, "[t]he
FDA approvable endpoint is a reduction in A1c of -0.4% compared to
control after 12
weeks of treatment." Please explain what you specifically mean by this
statement as well
as stating your basis for making this claim, including whether or not
you have had
discussions with FDA.
Pivotal study of BT-001, page 157
23. Please revise to clarify the 3 month and 6 month efficacy endpoints.
In this regard, please
revise to disclose the quantitative reduction at the end of each
period or advise. Also,
disclose the safety endpoints.
24. We note your risk factor disclosure on page 51 where you state that
your pivotal study of
BT-001 is a "virtual clinical trial." Please clarify your disclosure
here to discuss the
specific aspects of your trial that are "virtual."
BTX Payer Research, page 175
25. Please define or explain any technical terms or abbreviations the
first time they are used.
For example only, please define the term "T2D" in your graphic on page
175.
Employment Agreements with BTX's Named Executive Officers, page 183
26. We note that in connection with the Business Combination you have
entered into offer
letters with each of the named executive officers and a new employment
agreement with
Suying Liu
Mountain Crest Acquisition Corp II
May 23, 2021
Page 6
Mr. Appelbaum. Please file the employment agreement and offer letters of
each of your
executive officers as an exhibit to the registration statement. See Item
601(b)(10) of
Regulation S-K. In addition, please revise your disclosure to include the
all material terms
of the agreements, including compensation.
BTX Financial Statements
Note 10. Fair Value Measurements, page F-32
27. Here and at page 205, you referred to assumptions and estimates for the
SAFE valuation.
Please revise to disclose the quantitative information about the
significant unobservable
inputs used in the fair value measure as required ASC 820-10-50-2(bbb).
General
28. Please revise your graphics throughout your registration statement as
applicable to ensure
that the text is legible. For example, the text in your pipeline table
and the text in the
graphic on page 176, including the source, are unclear and difficult to
read.
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 Daniel Gordon at (202)
551-3486 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jason Drory at (202) 551-8342 or Joe McCann at (202) 551-6262 with any
other
questions.
Sincerely,
FirstName LastNameSuying Liu
Division of
Corporation Finance
Comapany NameMountain Crest Acquisition Corp II
Office of Life
Sciences
May 23, 2021 Page 6
cc: Andrei Sirabionian
FirstName LastName