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MAIL STOP 3720
February 22, 2006
V. Randy White, Ph.D
Chief Executive Officer
Xenomics, Inc.
420 Lexington Avenue, Suite 1701
New York, New York 10170
Re: Xenomics, Inc.
Amendment No. 3 to Registration Statement on Form SB-2
File No. 333-127071
Filed February 14, 2006
Dear Dr. White:
We have reviewed your amended filing and have the following
comments. Where indicated, we think you should revise your
document
in response to these comments.
Executive Compensation
1. The table should include compensation amounts for the past
three
years. See Instruction to Item 402(b) of Regulation S-B.
Financial Statements
Note 4 - Stockholders` Equity, page F-25
2. We note your response to prior comment nine. Please tell us
why
you believe it was appropriate to record an expense for the fair
value of the warrants at the date of issuance. To the extent that
liability classification is required under EITF 00-19, the
instrument
should be recorded at fair value on the date of issuance. For a
private placement, this typically occurs through the allocation of
a
portion of the proceeds. Generally, it would not be appropriate
to
record an expense at the date of issuance unless the fair value of
the instruments that were required to be classified as derivative
liabilities exceeded the net proceeds received. Please revise the
financial statements accordingly, or tell us why you believe that
no
revisions are required.
3. Please revise the description of the warrant liability on the
balance sheet to clearly indicate that the amount is a liability.
Also, please revise your disclosure in Note 4 to state why the
amount
is recorded as a non-current liability.
4. Please tell us why you believe that the income or expense
relating
to the valuation of the warrants is appropriately classified in
the
cash flow statement as a financing activity, or revise your
disclosures accordingly.
1934 Act Periodic Reports
5. Your response to prior comment 14 did not address the majority
of
the adjustments relating to stock-based compensation expense,
which
were unrelated to the use of quoted market prices as discussed in
your supplemental response. Please tell us the specific factors
that
you considered in determining your disclosure controls and
procedures
were effective despite the restatements related to the Trilogy
warrants and the application of EITF 96-18.
6. You state the restatements and related accounting were
thoroughly
discussed with the accounting firm and "reliance upon the
Independent
Registered Public Accounting Firm" was one of the primary factors
that enabled you to determine that your disclosure controls and
procedures were effective. Please explain the specific nature of
this reliance. Please explain how the discussion of the
restatement
and the related accounting with the accounting firm provided any
basis for originally concluding disclosure controls and procedures
were effective, since the accounting for these transactions
resulted
in material errors to the financial statements.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. Provide us with marked copies of the
amendment to expedite our review. Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested supplemental information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Any questions regarding the accounting comments may be
directed
to Carlton Tartar at (202) 551-3387. Questions on other
disclosure
issues may be directed to William Bennett at (202) 551-3389.
Sincerely,
John Reynolds
Assistant Director
cc: Jeffrey J. Fessler
Fax: 212-930-9725
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V. Randy White, Ph.D
Xenomics, Inc.
February 22, 2006
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