SecProbe.io

Mail Room 4561
July 19, 2018

George Syllantavos
Co-Chief Executive Officer
Stellar Acquisition III Inc.
c/o Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105

Re: Stellar Acquisition III Inc.
Amendment No. 1 to Registration Statement on Form S -4
Filed June 11, 2018
  File No. 333-224227

Dear Mr. Syllantavos :

We have reviewed your  amended  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 comm ents 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.   Unless we note
otherwise, our references to prior comments are to comments in our May 14, 2018 letter.

General

1. The current balance in your trust account does not meet the minimum cash asset level
condition set forth in the  Merger Agreement.  Please disclose the current status of any
additional financing or modifications to the Merger Agreement that will allow the
business combination to proceed.

Frequently Used Terms, page 1

2. Please define Token Generation Event and Phun Coin.

George Syllantavos
Stellar Acquisition III Inc.
July 19, 2018
Page 2

 Questions and Answers for all Stellar Shareholders and Phunware Stockholders

Q: What will Phunware’s stockholders receive in return for the acquisition of  Phunware by
Stellar?...,  page 18

3. We note your response to prior comment 7 and your revised d isclosure that the parties are
reviewing whether any amendment or waiver is required under the Merger Agreement to
cure any ambiguity.  To the extent the Merger Agreement is amended, please revise your
disclosure to also summarize the amendment.  Additiona lly, please clarify how you
intend to determine that the token generation event or the launch of PhunCoin will not
affect the merger consideration.  For instance, please clarify whether you intend to
segregate the funds received from the rights offering an d token generation event.   If you
or Phunware are accepting digital assets with or in lieu of fiat currency , please tell us how
you will assess your progress towards the $100 million requirement given the ongoing
fluctuation in the digital asset valuations .

Risk Factors, page 40

4. You state on page 190 that PhunCoin will be a digital asset built and transacted on top of
an existing blockchain technology, which you do not intend to create.  Please provide a
risk factor regarding your reliance on another blockchain network.  For example, disclose
the risks and consequences to the company if such network ceases to function, slows
down in functionality, or  the possible impact  of any fork on PhunCoin .

5. If Re gulation A is available to you in connection with th e distribution of  PhunCoin  to
consumers in exchange for their agreements to provide certain benefits to the company,
including, but not be limited to, enriching their personal data with additional information
and participating in marketing campaigns that w ill assist you to deliver increased value to
customers , please consider providing  risk factors related t o your business model, such as
risks of privacy data breach and cybersecurity attacks.   Please advise how you will value
such data for purposes of calcu lating the ability to use Reg ulation  A for that distribution .
Alternatively, consider revising your disclosure to make clear that you intend to distribute
PhunCoin pursuant to an offering either registered or eligible for an exemption from
registration un der the Securities Act.

Stellar Proposal 1: The Redomestication Proposal

Comparison of Shareholder Rights Before and After the Redomestication, page 110

6. We note your response to prior comment 13.  Please clarify whether a derivative lawsuit
under the Delaware law, but alleging violations of the Securities Exchange Act of 1934 ,
would be restricted to Delaware Chancery Court, or whether such claims may be heard in
either Delaware Chancery Court or federal district courts.

George Syllantavos
Stellar Acquisition III Inc.
July 19, 2018
Page 3

 Stellar Proposal 2: The Stellar Business Combination Proposal

Background of the Business Combination, page 117

7. We note your response to prior comment 15.  Please expand your discussion to provide
substantive details of the negotiations between the management and advisors of Stellar
and Phunware, including whether either party initially offered a differing amount of
merger consideration as well as when material aspects of the merger agreement, such as
the proposed token -generating event and minimum $40 million cash and cash equivalent
balance for Stellar, were negotiated.

Projections, page 118

8. We note your response to prior comment 15 regarding Phunware’s non -GAAP revenue
projections through 2020.  Please provide more detail with respect to how these
projections were determined, as th ey represent significant growth factors of 126% in
2018, 39% in 2019, and 38% in 2020.  Additionally, please clarify the assumptions,
trends, business developments and actual experience that led Phunware’s management to
support the projected growth factors  disclosed.  Further, please clarify in your prospectus,
as noted in your response letter, that the Phunware revenue projections were presented on
a consistent basis with Phunware’s historical GAAP revenue or disclose any material
differences.

Satisfaction of 80% Test, page 120

9. Your responses to prior comments 17 and 20 indicate that your board’s evaluation of the
fairness of the $301 million merger consideration was based, in part, on a 15 -50%
blockchain technology premium based on your “inter nal analysis.”  Please describe this
“internal analysis,” including how you derived the 15 -50% premium range as well as the
determination to apply the 15% value to Phunware.

Information About Phunware

PhunCoin, page 189

10. On page 190, you state that you i ntend to distribute PhunCoin in an offering qualified
under Reg ulation  A.  It is not clear to us how you can rely on the Regulation A
exemption when you have already offered or sold the rights, warrants and possibly the
PhunCoin under another exemption fro m registration.

In reviewing your disclosures, it appears to us that you or Phunware are engaged in two
or three offerings in addition to the merger that is the subject of this registration
statement.  In this regard, it appears that Phunware has privately offered warrants to

George Syllantavos
Stellar Acquisition III Inc.
July 19, 2018
Page 4

 purchase Series F preferred stock and a future right to receive PhunCoin.  In addition, it
appears that you , or Phunware , have issued in a 506(c) offering rights to receive
PhunCoin.  In order for us to better understand your ongoing offerings,  please provide us
with supplemental copies of your agreement(s) with the holders of the warrants and
rights , such as  documents relating to the Series F preferred stock financing (warrants and
rights) and the 506(c) rights offering.

11. Please describe for us the material terms of both the warrants and rights issued as part of
your Series F preferred stock financing  and the 506(c) offering .  With regard to  the
warrants and  the rights  in each of your offerings , please tell us :

 the length of  the exercise period of each security ,
 the amount of PhunCoin that will be issued for each right and by what entity  (we note
disclosure that a Phunware subsidiary will issue PhunCoin),
 the total amount of PhunCoin  that will be issued pursuant to the Series F rights,
 the transferability of the rights,
 the actions  Series F preferred stockholders and other right s holders need to take to
exercise the rights to  acquire the PhunCoin,  including  any exercise price  and payment
of any exercise price ,
 any other consideration the Series F hold ers or other right holders may receive on
account of the  rights beyond the receipt of PhunCoin , and
 the exemption from registration, if any, that will be used to  issue the PhunCo in on the
exercise  of the rights .

12. Please disclose whether the rights issued to Series F to acquire PhunCoin have the same
terms as the rights being issued pursuant to the proposed Rule 506(c) rights offering for
PhunCoin.

13. Please clarify whether there are any registration rights agreements related to the
PhunCoin underlying the rights for PhunCoin for either your Series F preferred stock
financing or the rights to be sold in the proposed Rule 506(c) private offering.   Please  tell
us what exemption  from registration the issuer of PhunCoin will be eligible to rely upon
for the issuance  of the PhunCoin pursuant to the rights agreements and the Series F
Preferred Stock.

14. Please expand your description of the Reg ulation A offerin g that you plan to commence
approximately one year after the Rule 506(c) private rights offering has closed  and
explain what transactions are being registered .  In this regard, please clarify whether the
Regulation  A offering is solely for additional primary issuances unrelated to the rights
underlying the Series F preferred stock financing and the rights to be sold in the proposed
Rule 506(c) private offering .  If you intend on registering the PhunCoin underlying the
rights being offered and sold in the private offering in reliance on Rule 506(c), please
explain , supplementally,  your basis for qualifying  securities that are subject to an ongoing

George Syllantavos
Stellar Acquisition III Inc.
July 19, 2018
Page 5

 offering pursuant to the rights or that, depending on the structure of the rights, ma y
already have been sold in such private offering .  Please also explain why you believe that
a subsequent PhunCoin offering would be eligible under Regulation A given that the
exemption  is not available to existing reporting companies.

15. Please describe  the terms of PhunCoin  and explain how it could be and will be used in
Phunware’s platform.   Please explain whether you intend to list the PhunCoin  for trading
on a national securities exchange or regulated alternative trading system under the federal
securities laws.   If yes, please clearly disclose that no such exchanges or alternative
trading systems currently exist.

Our Offerings, page 1 91

16. Revise to clearly state that the Cryptonetworking offering is not currently available for
customers and clarify what Phunware intends to do to make this available as indicated in
your response to prior comment 22.

Concentration of Major Customers, page 194

17. We note your responses to prior comments 25 and 29 regarding your agreements and
relationship with Fetch Media.  On pages 197 -198 and 213 -214, you describe a dispute
with Uber, a customer of Fetch Media, for which Uber refuses to pay its invoices to F etch
Media and Fetch Media, in turn, has withheld payment to you.  Please clarify whether
your agreements with Fetch Media permits Fetch Media to withhold such payments if it
in turn has disputes with their respective customers.  Additionally, in light of the
significant amounts of revenue generated through your arrangements with Fox Networks
Group and Fetch Media, Ltd., please disclose the material terms and related obligations
of the master agreement and services legal agreements.

Management’s Discussion  and Analysis of Financial Condition and Results of Operations  of
Phunware

Overview, page 205

18. We note revised disclosures in response to prior comment 25.  Please further revise to
provide clarity and context to the measures.  Disclose as of what date, o r over which
period, the two billion Phunware IDs, one billion MAUDs, and the two trillion of
database events were determined and provide comparable information for each period in
which financial statements are presented.  Explain your reference to “invent ory” as it
relates to the Phunware IDs and clarify how the MAUDs are calculated.  Also, explain to
us how this information drives your data subscription services revenue product line.

George Syllantavos
Stellar Acquisition III Inc.
July 19, 2018
Page 6

 Phunware, Inc. - Notes to Unaudited Condensed Financial Statements

Note 2 Summary of Significant Accounting Policies

Digital Currencies, page F -67

19. You appear to be accounting for digital currencies under the inventory accounting model.
Please analyze for us whether your digital currencies meet the definition of an intangible
asset and the consideration you gave to the application of that accounting to your digital
assets.  Also, tell us what you mean by time of transfer and what alternatives yo u
considered.

Note 6 Commitments and Contingencies

Litigation, page F -70

20. With regards to the cross -complaint filed by Uber Technologies, Inc., you state that you
make no predictions  on the likelihood of defeating such claim.  If there is at least a
reasonable possibility that a loss exceeding amounts already recognized may have been
incurred, please disclose the estimated loss or range of loss (or, if true, state that the
estimate is immaterial in lieu o f providing quantified amounts) , or state that su ch an
estimate cannot be made.  We refer you to ASC 450 -20-50.

Note 7. Preferred Stock, page F -71

21. Tell us how you are accounting for the issuance of Series F convertible preferred stock in
which investors receive a warrant to purchase Series F convertib le preferred stock as well
as a right to the future issuance of a certain amount of PhunCoin, and provide the specific
accounting guidance you relied upon.  At a minimum, please address the following in
your response and revise your financial statement foo tnote disclosures, as appropriate:

 Tell us how you allocate the consideration received among the various instruments
issued.

 Tell us how have accounted for the PhunCoin  rights, citing the relevant accounting
guidance followed , and the specific terms th at impacted your accounting decision .

 Clarify whether you have accepted any payments in the form of digital assets
subsequent to March 31, 2018. If so, describe such transactions and provide us with a
breakdown of your current holdings.

George Syllantavos
Stellar Acquisition III Inc.
July 19, 2018
Page 7

 Note 11.   Subsequent Events, page F -75

22. To the extent you have had material sales pursuant to the Rule 506(c) offering of
PhunCoin Rights, please tell us how you are accounting for such Rights, citing the
relevant accounting guidance followed, and revise your fina ncial statement footnote
disclosures, as appropriate.  Also, tell us whether you accept payment in the form of
digital assets for the purchase of PhunCoin Rights.

Proxy Card, page G -1

23. Please clarify whether the written request for redemption rights, as noted on page 25, may
be given through your proxy card, as the box that provided the “Intention to Exercise
Redemption Rights” has been removed.  If not, please clarify, where applicable, how
public shareholders can provide the necessary written request to  redeem their public
shares of Stellar.

You m ay contact Melissa Kindelan, Staff Accountant,  at (202) 551 -3564 or Kathleen
Collins, Accounting Branch Chief,  at (202) 551 -3499 if you have questions regarding comments
on the financial statements and related matters.  Please contact Edwin Kim, Staff Attorney,  at
(202) 551 -3297 or me at (202) 551 -3673 with any other questions.

Sincerely,

 /s/ Folake A yoola

 Folake Ayoola
Special Counsel
Office of Information Technologies
and Services

cc: Jeffrey W. Rubin
Ellenoff Grossman & Schole LLP