SEC Comment Letter for INX Ltd (CIK 0001725882) — Feb 6, 2020
INX Ltd (CIK 0001725882)
Date: Feb. 6, 2020 · CIK: 0001725882 · Accession: 0000000000-20-001180
AI Filing Summary & Sentiment
File numbers found in text: 333-233363
Letter
Mail Stop 4631 February 6, 2020 Shy Datika President INX Limited Unit 1.02, 1st Floor 6 Bayside Road Gibraltar, GX11 1AA
Re: INX Limited Amendment No. 6 to Registration Statement on Form F -1 Filed January 17, 2020 File No. 333-233363
Dear Mr. Datika :
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 comments 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 t o comments in our January 10, 20 20 letter .
Prospectus Summary
Industry Overview
Background & Current Market
Markets for Blockchain Assets and ICOs , page 4
1. We note your revision regarding the continued downward trend for ICOs in 2019. Please update footnote 4 here and footnote 12 on page 54 to support the $3.2 billion estimate. In this regard, we note that information on the CoinSchedule website suggests th at ICOs raised only $1.4 billion in 2019.
Shy Datika INX Limited February 6, 2020 Page 2
Use of Proceeds, page 39
2. Revise this section and the table to disclose net proceeds based on your minimum offering amount ( i.e. gross proceeds of $5 million) . Clearly state your assumptions with respect to pot ential payments to A -Labs . Further, it is not clear that you have or will have at the time of the offering the cash on hand necessary to cover offering expenses. Please clarify that if you only raise the minimum gross proceeds of $5 million, the aggregat e expenses of the offering will exceed the proceeds raised, resulting in a net negative amount.
Dilution, page 43
3. We note your revision in response to comment 7. Please correct and explain to us your calculation of the total consideration and average price per INX Token for the commitments to issue 1,348,929 INX Tokens. Your prospectus should also disclose the consi deration paid by, and the calculation for number of tokens to be issued to, Mr. Alelov, Mr. Benish, Mr. Rafeli and Mr. Trister. Please further revise your dilution table to include the 4,559,821 INX Tokens that will be issuable upon exercise of options six months following the effective date of your registration statement , as well as the 14,000 INX Tokens issuable per month upon the exercise of options six months following the effective date of your registration statement , or disclose your basis for exclud ing these tokens and quantify the additional dilutive impact to new investors if such tokens are issued. In this regard we note that the options will be exercisable during your maximum offering period at an average price that is materially less than the a verage price of your other commitments to issue INX Tokens included in the table.
Certain Relationships and Related Party Transactions
Agreements with Other Interested Parties, page 90
4. We note you deleted disclosure related to A -Labs’ “Second SAFE” on pages 90 -91 and II-2, as well as this previously executed agreement dated August 30, 2019 from your Exhibit Index, whereas other references on pages 90 and 91 continue to refer to A -Labs’ “Second SAFE.” Please revise to clarify this apparent discrepancy and, if the Second SAFEs issued to either A -Labs and Michepro Holding Limited were canceled or similar, as it appears, disclose all material facts related to such transactions.
Technical Features of the INX Token, page 99
5. We note your response to comment 1 0. Please revise the disclosure on page 100 to briefly summarize TokenSoft’s role in reviewing and responding to questions from Quantstamp during the audit of the INX Token smart contract, as well as in designing your token issuance platform to be used in this offering, including the scope of such design responsibilities. Please also correct the hyperlink in your exhibit index .
Shy Datika INX Limited February 6, 2020 Page 3
You may contact Lory Empie, Staff Accountant, at (202) 551 -3714 or Stephen Kim, Assistant Chief Accountant, at (202) 551 -3291 if you have questions regarding comments on the financial statements and related matters. Please contact Christopher Dunham, Staff Attorney, at (202) 551 -3783 or, in his absence, Pamela A. Long at (202) 551 -3765 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Finance
Show Raw Text
Mail Stop 4631 February 6, 2020 Shy Datika President INX Limited Unit 1.02, 1st Floor 6 Bayside Road Gibraltar, GX11 1AA Re: INX Limited Amendment No. 6 to Registration Statement on Form F -1 Filed January 17, 2020 File No. 333-233363 Dear Mr. Datika : 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 comments 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 t o comments in our January 10, 20 20 letter . Prospectus Summary Industry Overview Background & Current Market Markets for Blockchain Assets and ICOs , page 4 1. We note your revision regarding the continued downward trend for ICOs in 2019. Please update footnote 4 here and footnote 12 on page 54 to support the $3.2 billion estimate. In this regard, we note that information on the CoinSchedule website suggests th at ICOs raised only $1.4 billion in 2019. Shy Datika INX Limited February 6, 2020 Page 2 Use of Proceeds, page 39 2. Revise this section and the table to disclose net proceeds based on your minimum offering amount ( i.e. gross proceeds of $5 million) . Clearly state your assumptions with respect to pot ential payments to A -Labs . Further, it is not clear that you have or will have at the time of the offering the cash on hand necessary to cover offering expenses. Please clarify that if you only raise the minimum gross proceeds of $5 million, the aggregat e expenses of the offering will exceed the proceeds raised, resulting in a net negative amount. Dilution, page 43 3. We note your revision in response to comment 7. Please correct and explain to us your calculation of the total consideration and average price per INX Token for the commitments to issue 1,348,929 INX Tokens. Your prospectus should also disclose the consi deration paid by, and the calculation for number of tokens to be issued to, Mr. Alelov, Mr. Benish, Mr. Rafeli and Mr. Trister. Please further revise your dilution table to include the 4,559,821 INX Tokens that will be issuable upon exercise of options six months following the effective date of your registration statement , as well as the 14,000 INX Tokens issuable per month upon the exercise of options six months following the effective date of your registration statement , or disclose your basis for exclud ing these tokens and quantify the additional dilutive impact to new investors if such tokens are issued. In this regard we note that the options will be exercisable during your maximum offering period at an average price that is materially less than the a verage price of your other commitments to issue INX Tokens included in the table. Certain Relationships and Related Party Transactions Agreements with Other Interested Parties, page 90 4. We note you deleted disclosure related to A -Labs’ “Second SAFE” on pages 90 -91 and II-2, as well as this previously executed agreement dated August 30, 2019 from your Exhibit Index, whereas other references on pages 90 and 91 continue to refer to A -Labs’ “Second SAFE.” Please revise to clarify this apparent discrepancy and, if the Second SAFEs issued to either A -Labs and Michepro Holding Limited were canceled or similar, as it appears, disclose all material facts related to such transactions. Technical Features of the INX Token, page 99 5. We note your response to comment 1 0. Please revise the disclosure on page 100 to briefly summarize TokenSoft’s role in reviewing and responding to questions from Quantstamp during the audit of the INX Token smart contract, as well as in designing your token issuance platform to be used in this offering, including the scope of such design responsibilities. Please also correct the hyperlink in your exhibit index . Shy Datika INX Limited February 6, 2020 Page 3 You may contact Lory Empie, Staff Accountant, at (202) 551 -3714 or Stephen Kim, Assistant Chief Accountant, at (202) 551 -3291 if you have questions regarding comments on the financial statements and related matters. Please contact Christopher Dunham, Staff Attorney, at (202) 551 -3783 or, in his absence, Pamela A. Long at (202) 551 -3765 with any other questions. Sincerely, Division of Corporation Finance Office of Finance