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Copies to:

Ryan Murr Maggie Wong Goodwin Procter LLP 3 Embarcadero Center, 24th Floor San Francisco, California 94111 Phone: (415) 733-6000

Kyle Guse K. Amar Murugan McDermott Will & Emery LLP 275 Middlefield Road Menlo Park, California 94025 Phone: (650) 815-7400

 

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Approximate Date of Commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions “large accelerated filer,” “accelerated file,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer ¨   Accelerated filer    ¨ Non-accelerated filer  ¨        Smaller reporting company  x

 

CALCULATION OF REGISTRATION FEE

Title of Securities (1)		Proposed Maximum Aggregate Offering Price (2)				Registration Fee
Units, each consisting of one share of common stock, par value $0.001, two Class A Warrants and one Class B Warrant		$	17,250,000			$	1,230
Shares of common stock underlying Units			—				—
Class A Warrants underlying Units			—				—
Class B Warrants underlying Units			—				—
Common Stock underlying Class A Warrants		$	—			$	—
Total		$	17,250,000			$	1,230

(1)

This registration statement and the prospectus therein covers the registration of (A) 3,000,000 Units (and up to 450,000 Units to cover the underwriter’s over-allotment option) with each Unit consisting of (i) one share of the Company’s common stock (ii) two Class A Warrants, each exercisable for one share of the Company’s common stock for a period of 10 days beginning on the sixth trading day after the separation of the securities underlying the Units as described in the prospectus and (iii) one Class B Warrant exercisable for one share of the Company’s common stock for a period of five years beginning on the date one year after the separation of the securities underlying the Units as described in the prospectus, and (B) common stock underlying the Class A Warrants.

(2)	Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended, based on a price of $5.00 per Unit, which is the bottom of the price range on the cover page of the prospectus.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.

 

 

 

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The information contained in this prospectus is not complete and may be changed.  A registration statement relating to  these securities has been filed with the Securities and Exchange Commission and these securities may not be sold until that registration statement becomes effective.  This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted ..

   

 























 

 

The Company expects to bill the Medicare program directly.  Generally, it will be permitted to directly bill the Medicare beneficiary for clinical laboratory tests only when the service is considered not medically necessary and the patient has signed an Advanced Beneficiary Notice, or ABN, reflecting acknowledgment that Medicare is likely to deny payment for the service. In most situations, the Company is required to rely on physicians to obtain an ABN from the patient.  When the Company is not provided an ABN, it is generally unable to recover payment for a service for which Medicare has denied payment for lack of medical necessity.

In billing Medicare, the Company is required to accept the lowest of: its actual charge, the fee schedule amount for the state or local geographical area, or a national limitation amount, as payment in full for covered tests performed on behalf of Medicare beneficiaries.  Payment under the laboratory fee schedule has been limited by Congressional action such as freezes on the otherwise applicable annual Consumer Price Index, or CPI, update to the fee schedule amount.  The CPI update of the laboratory fee schedule for 2010 was minus 1.9%.

The Medicare statute permits CMS to adjust statutorily prescribed fees for some medical services, including clinical laboratory services, if the fees are “grossly excessive.”  Medicare regulations provide that if CMS or a carrier determines that an overall payment adjustment of less than 15% is needed to produce a realistic and equitable payment amount, then the payment amount is not considered “grossly excessive or deficient.” However, if a determination is made that a payment adjustment of 15% or more is justified, CMS could provide an adjustment of 15% or less, but not more than 15%, in any given year. The Company cannot provide any assurance that fees payable by Medicare for clinical laboratory services could not be reduced as a result of the application of this rule or that the government might not assert claims for recoupment of previously paid amounts by retroactively applying these principles.

The payment amounts under the Medicare fee schedules are important not only for reimbursement under Medicare, but also because the schedule is often used as a reference for the payment amounts set by other third-party payors.  For example, state Medicaid programs are prohibited from paying more than the Medicare fee schedule limit for laboratory services furnished to Medicaid recipients, and insurance companies and managed care organizations typically reimburse at a percentage of the Medicare fee schedule.

The Company’s reimbursement rates will also vary depending on whether it is considered an “in-network,” or participating, provider.  If it enters into a contract with an insurance company, the Company’s reimbursement will be governed by its contractual relationship, and it will typically be reimbursed on a fee-for-service basis at a discount from the patient fee schedule.  If the Company does not have a contract with an insurance company, it will be classified as “out-of-network,” or as a non-participating provider.  In such instances, it would have no contractual right to reimbursement for services.

  

 

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Reimbursement Strategy

Significance of CPT Codes

Reimbursement for medical procedures and laboratory services is based on obtaining a Current Procedural Terminology, or CPT, code from the AMA.  CPT is a listing of descriptive terms and identifying codes for reporting medical services and procedures.  The purpose of CPT is to provide a uniform and accurate description of medical, surgical and diagnostic services, thereby serving as a means for reliable nationwide communication among physicians and other healthcare providers, patients and third parties.

CPT descriptive terms and identifying codes currently serve a wide variety of important functions.  This system of terminology is the most widely accepted medical nomenclature used to report medical procedures and services under public and private health insurance programs.  CPT is also used for administrative management purposes such as claims processing and developing guidelines for medical care review.

Category I CPT Codes

Category I CPT codes describe a procedure or service identified with a five-digit CPT code and descriptor nomenclature.  The inclusion of a descriptor and its associated specific five-digit identifying code number in this category of CPT codes is generally based upon the procedure being consistent with contemporary medical practice and being performed by many physicians in clinical practice in multiple locations.

In developing new and revised regular CPT codes the Advisory Committees and the Editorial Panel require:

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that the service/procedure has received approval from the FDA for the specific use of devices or drugs;

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that the suggested procedure/service is a distinct service performed by many physicians/practitioners across the United States;

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that the clinical efficacy of the service/procedure is well established and documented in U.S. peer review literature;

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that the suggested service/procedure is neither a fragmentation of an existing procedure/service nor currently reportable by one or more existing codes; and

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that the suggested service/procedure is not requested as a means to report extraordinary circumstances related to the performance of a procedure/service already having a specific CPT code.

Category III CPT Codes – Emerging Technology

Category III CPT codes are a temporary set of tracking codes for new and emerging technologies.  These codes are intended to facilitate data collection on and assessment of new services and procedures. The Category III codes are intended for data collection purposes in the FDA approval process or to substantiate widespread usage.  As such, the Category III codes may not conform to the usual CPT code requirements for Category I.  The Panel has established the following criteria for evaluating Category III code requests, any one of which is sufficient for consideration by the Editorial Panel:

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a protocol for a study of procedures being performed;

·

support from the specialties who would use the procedure;

·

availability of U.S. peer-reviewed literature; and

·

descriptions of current United States trials outlining the efficacy of the procedure.

 

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In general, these codes will be assigned a numeric-alpha identifier (eg, 1234T).  These codes will be located in a separate section of CPT, following the "Category II" section.  Introductory language in this code section explains the purpose of the Category III codes.

Since Category III CPT codes are intended to be used for data collection purposes to substantiate widespread usage or in the FDA approval process, they are not intended for services/procedures that are not accepted by the Editorial Panel because the proposal was incomplete, more information is needed, or the Advisory Committee did not support the proposal.

Category III CPT codes are not referred to the AMA / Specialty RVS Update Committee, or RUC, for valuation because no relative value units, or RVUs, will be assigned.  Payment for these services/procedures is based on the policies of payors and local Medicare carriers, although most payers deny coverage for services reported under Category III codes.

 CPT Code for MASCT System NAF Collection Procedure

The NAF collection procedure of the MASCT System does not currently have a procedure-specific Category I CPT code, which is important for reimbursement by Medicare for eligible patients, and which is part of the basis by which insurance companies make reimbursement decisions.  A non-specific Category I CPT code, 19499 (unlisted procedure, breast), can be used initially by physicians and insurance carriers will often pay for such procedures with proper documentation.  Medicare does not typically reimburse for CPT 19499 procedures.

Beginning in the first quarter of 2011, the Company expects to begin the process of obtaining a Category III CPT code with which to collect clinical data to support a Category I CPT code application for the use of NAF collection as an adjunct to mammography.  It is expected it may take 12 months to obtain the Category III CPT code and up to two years to collect data to make an application to the AMA for a Category I CPT code.  The Company expects physicians will be able to use either the non-specific Category I CPT code 19499 with documentation or the MASCT System specific Category III code to obtain reimbursement.