[CNS
Letterhead]
September
27, 2010
VIA
EDGAR
Securities
and Exchange Commission
Mail Stop
3561
Washington,
D.C. 20549-3561
Attention: John
Reynolds, Assistant Director
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Re: |
CNS Response, Inc. (the
“Company”)
Amendment
No. 2 to Form S-1 (“Amendment No. 2”)
Filed
September 1, 2010
File
No. 333-164613
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Dear Mr. Reynolds:
As
requested by Mr. Jay Williamson during a telephone conversation on September 20,
2010 with Jonathan Friedman of Stubbs Alderton & Markiles, LLP, the Company
is hereby providing additional information regarding the security interest
granted to SAIL Venture Partners L.P. (“SAIL”) in connection with its issuance
of unconditional guaranties to investors that purchased unsecured promissory
notes from the Company on July 5, 2010 and August 20, 2010. The
Company agrees to replace the existing paragraphs relating to the SAIL
guaranties and security interest on pages 25, 44 and 95 of Amendment No. 2, with
the following paragraph in the final prospectus, to be filed pursuant to Rule
424(b) under the Securities Act of 1933, as amended, following effectiveness of
the related registration statement:
SAIL
Venture Partners L.P. (“SAIL”), of which our director David Jones is a managing
partner, issued unconditional guaranties to each of these investors,
guaranteeing the prompt and complete payment when due of all principal, interest
and other amounts under each Deerwood Note. The obligations under each guaranty
are independent of our obligations under the Deerwood Notes and separate actions
may be brought against the guarantor. We have agreed to indemnify SAIL and grant
to SAIL a security interest in and to all of our existing and future right,
title and interest in our tangible and intangible property, to secure our
obligation to provide indemnity. The final form of indemnification
agreement and accompanying security agreement have not yet been agreed upon. In
addition, on August 20, 2010, we granted SAIL warrants to purchase up to an
aggregate of 100,000 shares of common stock at an exercise price (subject to
customary anti-dilution adjustments) of $0.56 per share.
September
27, 2010
Page
2
In
addition, the Company agrees to add corresponding disclosure about the security
interest to the paragraphs appearing on pages 92 and F-43 of Amendment No.
2.
If you
have any questions, or if we may be of any assistance, please do not hesitate to
contact the undersigned at (949) 420-4400 or Jeffrey Baumel or Roland Chase at
our outside counsel, Sonnenschein Nath & Rosenthal LLP, at (973)
912-7100.
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Very
truly yours, |
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/s/ Paul Buck |
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Paul
Buck |
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Chief
Financial Officer |
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| Cc: |
George
Carpenter
Jeffrey
Baumel
Roland
Chase
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