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<SEC-DOCUMENT>0001095981-10-000015.txt : 20100915
<SEC-HEADER>0001095981-10-000015.hdr.sgml : 20100915
<ACCEPTANCE-DATETIME>20100714132903
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001095981-10-000015
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100714

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CYTORI THERAPEUTICS, INC.
		CENTRAL INDEX KEY:			0001095981
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				330827593
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		3020 CALLAN ROAD
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92121
		BUSINESS PHONE:		8584580900

	MAIL ADDRESS:	
		STREET 1:		3020 CALLAN ROAD
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92121

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MACROPORE INC
		DATE OF NAME CHANGE:	20010320
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<div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Re:</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cytori Therapeutics, Inc.</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form 10-K for the fiscal year ended December 31, 2009</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed March 12, 2010</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">File No. 000-32501</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dear Ms. Soehner:</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This letter responds to the letter of the staff (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Staff</font>&#8221;) of the Securities and Exchange Commission (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Commission</font>&#8221;), dated June 29, 2010, to Mark Saad, Chief Financial Officer of Cytori Therapeutics, Inc. (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Company</font>&#8221;) regarding the Form 10-K for the fiscal year ended December 31, 2009, filed by the Company on March 12, 2010 (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Form 10-K</font>&#8221;), which incorporates by reference the Company&#8217;s proxy statement, filed by the Company on April 30, 2010 (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Proxy
 Statement</font>&#8221;).</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This letter sets forth the comments of the Staff in the comment letter and, following each comment, sets forth the Company&#8217;s response.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Item 10.&#160;&#160;Directors, Executive Officers and Corporate Governance, page 83</font></font></div>

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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We refer to your disclosure under &#8220;Board of Directors Leadership Structure&#8221; on page&#160;9 of the proxy statement that you have incorporated by reference to your Form 10-K.&#160;&#160;In future filings, please revise to indicate why you have determined that your leadership structure is appropriate given your specific characteristics or circumstances.&#160;&#160;See Regulation S-K Item&#160;407(h).&#160;&#160;For example, it is unclear from your current disclosure why it currently is appropriate to separate the roles of your chief executive officer and chairman of the board, and what circumstances might require you to combine the two positions.</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Response</font>:&#160;&#160;Pursuant to the Staff&#8217;s comment, the Company will undertake in future filings to further enhance its disclosure as follows:</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our bylaws and governance principles provide the Board of Directors with the flexibility to combine or separate the positions of Chairman and Chief Executive Officer<font style="DISPLAY: inline; FONT-WEIGHT: bold; BORDER-BOTTOM: 1pt double; TEXT-DECORATION: underline"> <font color="navy" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">in the future</font></font>.&#160;&#160;&#160;Historically, these positions have been separate.&#160;&#160;Our Board believes that the separation of these </font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">positions strengthens the independence of our Board and allows us to have a Chairman focused on the leadership of the Board while allowing our Chief Executive Officer to focus more of his time and energy on managing our operations<font style="DISPLAY: inline; FONT-WEIGHT: bold; BORDER-BOTTOM: 1pt double; TEXT-DECORATION: underline">.&#160;<font color="navy" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;The Board currently believes this structure works well to meet the leadership needs of the Board and of the company.&#160;&#160;Christopher Calhoun, our Chief Executive Officer, has deep industry expertise and is able to devote substantial time to the company, and Ronald D. Henriksen, our Chairman, who has over forty&#160;years of experience in life sciences, is able to devote greater focus on longer term and strategic matter
s, and to provide related leadership to the Board.&#160;&#160;As a result, we do not currently intend to combine these positions; however, a change in this leadership structure could be made if the Board of Directors determined it was in the best long-term interests of stockholders based on a departure of either our Chief Executive Officer or Chairman.&#160;&#160;For example, if the two roles were to be combined, we believe that the independence of the majority of our directors, and the three fully independent Board committees, would provide effective oversight of our management and the company</font></font><font color="navy" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></font></div>

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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We note from your disclosure under &#8220;Criteria for Board Membership&#8221; on page&#160;11 of your proxy that your governance and nominating committee seeks candidates for the board &#8220;with a broad diversity of experience, skills, professions, and backgrounds.&#8221;&#160;&#160;In future filings, please describe how this policy is implemented, as well as how the committee assesses the effectiveness of its policy as required by Regulation S-K Item&#160;407(c)(2)(vi).</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Response</font>:&#160;&#160;Pursuant to the Staff&#8217;s comment, the Company will undertake in future filings to further enhance its disclosure as follows:</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Criteria for Board Membership</font>.&#160;&#160;In selecting candidates for appointment or re-election to the Board, the Governance and Nominating Committee seeks candidates with a broad diversity of experience, skills, professions, and backgrounds.&#160;&#160;The criteria include the candidate&#8217;s integrity, business acumen, commitment, reputation among our various constituencies and communities, ability to make independent analytical inquiries, understanding of the Company&#8217;s business environment, and willingness to devote adequate time to Board duties.&#160;&#160;There are no other pre-established qualifications, qualities or skills at this time that any particular Director nominee must possess and nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law.&
#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; BORDER-BOTTOM: 1pt double; TEXT-DECORATION: underline"><font color="navy" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Governance and Nominating Committee does not assign specific weights to particular criteria, nor has it adopted a particular policy.&#160;&#160;Rather, the Board of Directors believes that the backgrounds and qualifications of the directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board of Directors to fulfill its responsibilities.&#160;&#160;The goal of the Governance and Nominating Committee is to assemble a Board of Directors that brings to our company a variety of skills derived from high quality businesses and professional experience.</font> </font>The Committee seeks to insure that at least a majority of the directors are independent under NASDAQ rules, and that members of the Company&#8217;s Audit Committee meet the financial literacy and so
phistication requirements under the NASDAQ rules, and at least one of them qualifies as an &#8220;audit committee financial expert&#8221; under the rules of the SEC.</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Response</font>:&#160;&#160;Supplementally, we advise the Staff of the process the Company undertook to reach the conclusion that disclosure is not necessary under Regulation S-K Item 402(s).&#160;&#160;The Company&#8217;s Compensation Committee undertook a review of the Company&#8217;s compensation policies and practices for senior management, including its named executive officers.&#160;&#160;Based on that review, along with input from the Company&#8217;s Audit Committee and the Company&#8217;s management, the Compensation Committee determined that there were no known potential risks arising from the Company&#8217;s compensation polices or practices that are reasonably likely to have a material adverse effect on the Company.&#160;&#160;As a result, the Compensation Committee determined that further risk analysis was unnecessary.&#160;&#1
60;The Compensation Committee took note of the fact that the Company has rather straightforward compensation practices consisting of base salary, annual incentive bonus payments based on the Company&#8217;s and the employees objectives, and longer term incentives in the form of stock options which vest over multiple years. The Compensation Committee also noted that no inappropriate risk-taking behavior had been detected within any area of the senior management group during fiscal year 2009.</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Response</font>:&#160;&#160;The Company engaged in two related party transactions during the year ended December 31, 2009 which were not included in the &#8220;Related Person Transactions&#8221; section of the Proxy Statement.&#160;&#160;The Company did not include these transactions in the Proxy Statement because the Company believes such disclosures were not necessary given these transactions were disclosed in the Form 10-K.&#160;&#160;Pursuant to the Staff&#8217;s comment, the Company will undertake in future filings to further enhance its disclosure as follows:</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font color="navy" style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font color="navy" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font color="navy" style="DISPLAY: inline; FONT-SIZE: 10pt; BORDER-BOTTOM: 1pt double; FONT-FAMILY: Times New Roman; TEXT-DECORATION: underline">During first quarter of 2009, we sold StemSource</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top; BORDER-BOTTOM: 1pt double; TEXT-DECORATION: underline">&#174;</font><font color="navy" style="DISPLAY: inline; FONT-SIZE: 10pt; BORDER-BOTTOM: 1pt double; FONT-FAMILY: Times New Roman; TEXT-DECORATION: underline"> Cell Bank in Japan through our distribution partner, Green Hospital Supply, Inc. for $600,000. The sale was completed pursuant to our Master Cell Banking and Cryopreservation Agreement, effective August 13, 2007, with Green Hospital Supply, Inc.&#160;&#160;A
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<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font color="navy" style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font color="navy" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font color="navy" style="DISPLAY: inline; FONT-SIZE: 10pt; BORDER-BOTTOM: 1pt double; FONT-FAMILY: Times New Roman; TEXT-DECORATION: underline">During the fiscal year ended December 31, 2009, we incurred approximately $242,000 in royalty costs in connection with our sales of our Celution</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top; BORDER-BOTTOM: 1pt double; TEXT-DECORATION: underline">&#174;</font><font color="navy" style="DISPLAY: inline; FONT-SIZE: 10pt; BORDER-BOTTOM: 1pt double; FONT-FAMILY: Times New Roman; TEXT-DECORATION: underline"> 800/CRS System products to the European and Asia-Pacific reconstructive surgery market, pursuant to our License and Royalty Agreement with the Olympus Corporation
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<div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It appears that you have not filed all related person agreements as exhibits as required by Item&#160;601 of Regulation S-K.&#160;&#160;For example and without limitation, it does not appear that you have not filed the February&#160;23, 2006 agreement in which you granted Olympus Corporation certain rights.&#160;&#160;Please file all such agreements, and list in your response all exhibits that will be filed.</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It should be noted that the enhanced disclosure provided above is subject to change based on any changes to the Company which would no longer make such disclosure accurate in future filings.&#160;&#160;In addition, the Company acknowledges the following:</font></div>

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