Correspondence 0001493152-24-037202 from Venu Holding Corp (VENU)
Venu Holding Corp
Date: Sept. 19, 2024 · CIK: 0001770501 · Accession: 0001493152-24-037202
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-281271
Letter
VIA EDGAR United States Securities and Exchange Commission Division of Corporation Finance Office of Trade & Services Re: Notes Live, Inc. Amendment No. 1 to Registration Statement on Form S-1 Filed August 6, 2024 File No. 333-281271
Dear Attorney Kim:
This response letter (this “Response”) is submitted on behalf of Venu Holding Corporation, formerly known as Notes Live, Inc. (“Venu” or the “Company”), in response to the comments the Company received from the staff of the Division of Corporate Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”) in a letter addressed to Mr. Roth, dated September 3, 2024 (the “Comment Letter”), with respect to the Company’s Amendment No. 1 to Registration Statement on Form S-1 (the “Registration Statement”), filed with the SEC on August 6, 2024. The Company is concurrently submitting a first amendment to the Registration Statement (“Amendment No. 1”), which reflects the changes discussed in this Response that the Company made to address the Staff’s comments and other updates.
For reference purposes, each of the Staff’s numbered comments from the Comment Letter is set forth in bold text below, followed by the Company’s response to each comment. All capitalized terms used but not defined in this Response have the meanings ascribed to them in Amendment No. 1.
The responses below are based on information provided to Dykema Gossett PLLC by the Company.
California | Illinois | Michigan | Minnesota | Texas | Washington, D.C. | Wisconsin
United States Securities and Exchange Commission
September 19, 2024
Page 2
Registration Statement on Form S-1 filed August 6, 2024
Cover Page
1. Disclose whether the initial public offering is contingent upon final approval of your listing on NYSE American LLC.
Response: The initial public offering is contingent upon final approval of the Company’s listing of its common stock on NYSE American LLC. The Company added this disclosure on the cover page of Amendment No. 1.
2. Revise to briefly acknowledge your multi-class capital structure on the cover pages of the initial public offering and resale prospectuses and to provide a more thorough description of your capital structure, including the different authorized classes of common stock, in the prospectus summary, risk factors, and capitalization sections. Address any disparate voting, conversion, and other material rights of the classes, and include risk factor disclosure that future issuances of Class A Common Stock, which we understand to have 250 votes per share, may be dilutive to low-vote shareholders. With respect to the conversion features of your classes of common stock, describe the circumstances or events in which the conversion of high-vote or no-vote shares is mandatory or optional, and any resulting impact on low-vote shareholders.
Response: Effective September 6, 2024, the Company amended and restated its Articles of Incorporation to, among other things, cause any and all outstanding shares of its Class A Voting Common Stock, Class C Voting Common Stock, and Class D Voting Common Stock to be converted on a one-for-one basis into “Common Stock.” Under the Amended and Restated Articles of Incorporation, the authorized classes of common stock now consist solely of “Common Stock” and “Class B Non-Voting Common Stock.” Each share of “Common Stock” entitles the holder to one vote per share, and shares of “Class B Non-Voting Common Stock” do not entitle the holder to voting rights. Except for the difference with respect to voting rights, the rights of “Common Stock” and “Class B Non-Voting Common Stock” are identical. The Company included the disclosure regarding its authorized classes of common stock under its Amended and Restated Articles of Incorporation throughout Amendment No. 1.
United States Securities and Exchange Commission
September 19, 2024
Page 3
3. We note your statement at page 27 that the holdings of your directors, officers, and principal shareholders will create “significant concentration of share ownership.” Please briefly discuss such ownership concentration on the initial public offering and resale prospectus cover pages, identifying the applicable directors, officers, and principal shareholders here and in the related risk factor and quantifying the percentage of voting power they will control. State whether such persons may act in concert to control or significantly influence matters requiring shareholder approval. Include comparable disclosure in the prospectus summary.
Response: Additional disclosure regarding this ownership concentration has been added on the initial public offering and resale prospectus cover pages, in the prospectus summary on page 10, and in the risk factor noted in the Staff’s comment on page 27 of Amendment No. 1.
Prospectus Summary, page 2
4. Please disclose in the prospectus summary that substantial doubt has been raised about your ability to continue as a going concern and discuss the accumulated deficit and net losses leading to such determination, as well as “Notes Live’s management’s plan” that you believe has alleviated such doubt. Acknowledge the anticipated operating loss for fiscal 2024 disclosed at page 12.
Response: The Company updated the prospectus summary on page 9 of Amendment No. 1 to include additional disclosure regarding the Company’s ability to continue as a going concern, including the points addressed in the Staff’s comment. The Company believes that cash on hand, anticipated improved profitability in 2024 from its operation of restaurants and venues in Colorado Springs, Colorado and Gainesville, Georgia, the opening of Ford Amphitheater in August 2024, as well as the proceeds from this offering and additional capital raising and debt financing in 2024 will allow the Company to continue its business operations for the next 12 months.
5. Please identify which “new restaurant concept” associated with your “first outdoor amphitheater” is expected to open in August 2024, or revise accordingly. In this regard, we note that the tabular disclosure of expected openings at page 42 shows that Roth’s Seafood & Chophouse and Notes Hospitality Collection are “expected to open in early 2025.”
Response: The Company revised its disclosure on page 2 of Amendment No. 1 to clarify that the “new restaurant concept” associated with its first outdoor amphitheater is Roth’s Seafood & Chophouse, which is anticipated to open in May 2025.
United States Securities and Exchange Commission
September 19, 2024
Page 4
Risk Factors
General Risks Related to Notes Live, page 12
6. Please add a risk factor highlighting risks associated with Notes Live’s use of a third party to operate Ford Amphitheater and expected use of third parties to operate certain other planned amphitheaters, such as sharing of profits, lack of control over restrictions on “owning, operating, or developing a competing venue within a defined radius,” indemnification or liability provisions in the related operating agreement(s), and any other material risks.
Response: The Company added the following risk factor on page 18 of Amendment No. 1 to discuss the risks associated with using a third-party operator to operate certain of the Company’s venues and amphitheaters: “Venu’s reliance on third-party operators to manage and operate Ford Amphitheater and future amphitheater locations exposes Venu to risks, including profit sharing, limited operational control, non-compete restrictions, indemnification obligations, and potential disruptions from the termination or renewal of operating agreements.”
Note Live’s debt obligations may adversely affect cash flow and impose restrictions..., page 13
7. Please update this risk factor to disclose outstanding indebtedness as of a more recent date, as it appears that the outstanding debt figure as of March 31, 2024 does not reflect that the full amount of the $10 million convertible promissory note issued to KWO, LLC has been drawn, per disclosure at page 49.
Response: In Amendment No. 1, the Company updated the applicable risk factor on page 13 to disclose the Company’s outstanding indebtedness as of a more recent date - September 19, 2024.
The price and availability of food, ingredients, retail merchandise, transportation..., page 22
8. We note your disclosure here that you are subject to “the general risks of inflation,” and at page 46 you primarily attribute higher food and beverage costs and labor costs in fiscal 2023 to “increased raw ingredient and food costs due to inflation” and “inflationary pressures,” respectively. You also state at page 48 that inflation “impacted our business throughout 2022 and 2023 and...has continued to impact our business during 2024.” Please update this risk factor if recent inflationary pressures have materially impacted your operations. Identify the types of inflationary pressures you are facing and how your business has been affected.
Response: The Company revised the applicable risk factor on page 22 of Amendment No. 1 to address how recent inflationary pressures have materially impacted the Company’s operations, addressing both the types of inflationary pressures the Company is facing and how its business has been affected.
United States Securities and Exchange Commission
September 19, 2024
Page 5
Risks Related to Ownership of Our Common Stock, page 28
9. Please add or supplement a risk factor to discuss potential impacts to purchasers in the offering of the additional dilution sources identified at pages 11 and 37 of the prospectus, such as the 1,000,000 shares of Class C Common Stock issuable upon conversion of a convertible promissory note, as amended to provide for the issuance of Class D Common Stock instead, and 3,936,583 shares of Class B Non-Voting Common Stock issuable upon exercise of warrants, which you disclose will be exchangeable for Class D Common Stock.
Response: The Company supplemented the following risk factor on page 30 of Amendment No. 1 to address the potential impacts to purchasers in the offering of the additional dilution sources noted in the Staff’s comment: “If you purchase our Common Stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.”
Future sales of substantial amounts of shares of our Class D Common Stock by existing shareholders..., page 30
10. Please expand this risk factor to reflect that this registration statement seeks to facilitate the resale of a substantial number of shares into the public market by the selling stockholders identified in the alternate resale prospectus and address any potential impacts to the market price of the Class D Common Stock. Disclose the percentage of the initial public offering shares that the resale shares constitute, and explain, if true, that some or all of the selling stockholders acquired their shares at and/or may exercise warrants to acquire shares at a lower price than the offering price of the Class D Common Stock sold in the IPO and thus may accept a lower price for the resale shares. Provide examples of the prices at which the selling stockholders acquired their shares and the exercise price of warrants.
Response: The Company expanded the applicable risk factor on page 30 of Amendment No. 1. In many cases, the selling stockholders acquired their shares at the same offering price of the common stock offered in this offering. However, with respect to those selling stockholders that acquired their shares at a lower price than the offering price of the common stock sold in this offering, the Company provided examples of the prices at which selling stockholders acquired their shares as requested by the Staff.
United States Securities and Exchange Commission
September 19, 2024
Page 6
Use of Proceeds, page 36
11. Please revise to more specifically identify the principal purposes for which the net proceeds of the offering are intended to be used and the approximate amount to be used for each such purpose. If some or all of the proceeds are to be used for one or more of the Sunset Amphitheater(s) or other ongoing restaurant/venue projects you describe elsewhere, as implied by the reference to “open[ing] new restaurants and music and entertainment venues in certain metropolitan areas,” disclose as much and, if a material amount of other funds are necessary to complete such project(s), state the amount of such other funds and the sources thereof. Refer to Item 504 of Regulation S-K.
Response: The Company revised the “Use of Proceeds” section on page 36 of Amendment No. 1 to more specifically identify
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CORRESP
1
filename1.htm
Dykema Gossett PLLC
111 E. Kilbourn Ave.
Suite 1050
Milwaukee, WI 53202
www.dykema.com
Tel: 414-488-7300
Peter F. Waltz
Direct Dial: (414) 488-7321
Direct Fax: (866) 637-2804
Email: PWaltz@dykema.com
September
19, 2024
VIA
EDGAR
United
States Securities and Exchange Commission
Division
of Corporation Finance
Office
of Trade & Services
100
F Street, N.E.
Washington
DC, 20549
Attn:
Stephen Kim, Staff Attorney
Re:
Notes Live, Inc.
Amendment No. 1 to Registration Statement on Form
S-1
Filed August 6, 2024
File No. 333-281271
Dear
Attorney Kim:
This
response letter (this “Response”) is submitted on behalf of Venu Holding Corporation, formerly known as Notes Live,
Inc. (“Venu” or the “Company”), in response to the comments the Company received from the staff
of the Division of Corporate Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”)
in a letter addressed to Mr. Roth, dated September 3, 2024 (the “Comment Letter”), with respect to the Company’s
Amendment No. 1 to Registration Statement on Form S-1 (the “Registration Statement”), filed with the SEC on August
6, 2024. The Company is concurrently submitting a first amendment to the Registration Statement (“Amendment No. 1”),
which reflects the changes discussed in this Response that the Company made to address the Staff’s comments and other updates.
For
reference purposes, each of the Staff’s numbered comments from the Comment Letter is set forth in bold text below, followed by
the Company’s response to each comment. All capitalized terms used but not defined in this Response have the meanings ascribed
to them in Amendment No. 1.
The
responses below are based on information provided to Dykema Gossett PLLC by the Company.
California
| Illinois | Michigan | Minnesota | Texas | Washington, D.C. | Wisconsin
United States Securities and Exchange Commission
September 19, 2024
Page 2
Registration
Statement on Form S-1 filed August 6, 2024
Cover
Page
1. Disclose
whether the initial public offering is contingent upon final approval of your listing on
NYSE American LLC.
Response:
The initial public offering is contingent upon final approval of the Company’s listing of its common stock on NYSE American
LLC. The Company added this disclosure on the cover page of Amendment No. 1.
2. Revise
to briefly acknowledge your multi-class capital structure on the cover pages of the initial
public offering and resale prospectuses and to provide a more thorough description of your
capital structure, including the different authorized classes of common stock, in the prospectus
summary, risk factors, and capitalization sections. Address any disparate voting, conversion,
and other material rights of the classes, and include risk factor disclosure that future
issuances of Class A Common Stock, which we understand to have 250 votes per share, may be
dilutive to low-vote shareholders. With respect to the conversion features of your classes
of common stock, describe the circumstances or events in which the conversion of high-vote
or no-vote shares is mandatory or optional, and any resulting impact on low-vote shareholders.
Response:
Effective September 6, 2024, the Company amended and restated its Articles of Incorporation to, among other things, cause any and all
outstanding shares of its Class A Voting Common Stock, Class C Voting Common Stock, and Class D Voting Common Stock to be converted on
a one-for-one basis into “Common Stock.” Under the Amended and Restated Articles of Incorporation, the authorized classes
of common stock now consist solely of “Common Stock” and “Class B Non-Voting Common Stock.” Each share of “Common
Stock” entitles the holder to one vote per share, and shares of “Class B Non-Voting Common Stock” do not entitle the
holder to voting rights. Except for the difference with respect to voting rights, the rights of “Common Stock” and “Class
B Non-Voting Common Stock” are identical. The Company included the disclosure regarding its authorized classes of common stock
under its Amended and Restated Articles of Incorporation throughout Amendment No. 1.
United States Securities and Exchange Commission
September 19, 2024
Page 3
3. We
note your statement at page 27 that the holdings of your directors, officers, and principal
shareholders will create “significant concentration of share ownership.” Please
briefly discuss such ownership concentration on the initial public offering and resale prospectus
cover pages, identifying the applicable directors, officers, and principal shareholders here
and in the related risk factor and quantifying the percentage of voting power they will control.
State whether such persons may act in concert to control or significantly influence matters
requiring shareholder approval. Include comparable disclosure in the prospectus summary.
Response:
Additional disclosure regarding this ownership concentration has been added on the initial public offering and resale prospectus cover
pages, in the prospectus summary on page 10, and in the risk factor noted in the Staff’s comment on page 27 of Amendment No. 1.
Prospectus
Summary, page 2
4. Please
disclose in the prospectus summary that substantial doubt has been raised about your ability
to continue as a going concern and discuss the accumulated deficit and net losses leading
to such determination, as well as “Notes Live’s management’s plan”
that you believe has alleviated such doubt. Acknowledge the anticipated operating loss for
fiscal 2024 disclosed at page 12.
Response:
The Company updated the prospectus summary on page 9 of Amendment No. 1 to include additional disclosure regarding the Company’s
ability to continue as a going concern, including the points addressed in the Staff’s comment. The Company believes that cash on
hand, anticipated improved profitability in 2024 from its operation of restaurants and venues in Colorado Springs, Colorado and Gainesville,
Georgia, the opening of Ford Amphitheater in August 2024, as well as the proceeds from this offering and additional capital raising and
debt financing in 2024 will allow the Company to continue its business operations for the next 12 months.
5. Please
identify which “new restaurant concept” associated with your “first outdoor
amphitheater” is expected to open in August 2024, or revise accordingly. In this regard,
we note that the tabular disclosure of expected openings at page 42 shows that Roth’s
Seafood & Chophouse and Notes Hospitality Collection are “expected to open in early
2025.”
Response:
The Company revised its disclosure on page 2 of Amendment No. 1 to clarify that the “new restaurant concept” associated with
its first outdoor amphitheater is Roth’s Seafood & Chophouse, which is anticipated to open in May 2025.
United States Securities and Exchange Commission
September 19, 2024
Page 4
Risk
Factors
General Risks Related to Notes Live, page 12
6. Please
add a risk factor highlighting risks associated with Notes Live’s use of a third party
to operate Ford Amphitheater and expected use of third parties to operate certain other planned
amphitheaters, such as sharing of profits, lack of control over restrictions on “owning,
operating, or developing a competing venue within a defined radius,” indemnification
or liability provisions in the related operating agreement(s), and any other material risks.
Response:
The Company added the following risk factor on page 18 of Amendment No. 1 to discuss the risks associated with using a third-party operator
to operate certain of the Company’s venues and amphitheaters: “Venu’s reliance on third-party operators to manage and
operate Ford Amphitheater and future amphitheater locations exposes Venu to risks, including profit sharing, limited operational control,
non-compete restrictions, indemnification obligations, and potential disruptions from the termination or renewal of operating agreements.”
Note
Live’s debt obligations may adversely affect cash flow and impose restrictions..., page 13
7. Please
update this risk factor to disclose outstanding indebtedness as of a more recent date, as
it appears that the outstanding debt figure as of March 31, 2024 does not reflect that the
full amount of the $10 million convertible promissory note issued to KWO, LLC has been drawn,
per disclosure at page 49.
Response:
In Amendment No. 1, the Company updated the applicable risk factor on page 13 to disclose the Company’s outstanding indebtedness
as of a more recent date - September 19, 2024.
The
price and availability of food, ingredients, retail merchandise, transportation..., page 22
8. We
note your disclosure here that you are subject to “the general risks of inflation,”
and at page 46 you primarily attribute higher food and beverage costs and labor costs in
fiscal 2023 to “increased raw ingredient and food costs due to inflation” and
“inflationary pressures,” respectively. You also state at page 48 that inflation
“impacted our business throughout 2022 and 2023 and...has continued to impact our business
during 2024.” Please update this risk factor if recent inflationary pressures have
materially impacted your operations. Identify the types of inflationary pressures you are
facing and how your business has been affected.
Response:
The Company revised the applicable risk factor on page 22 of Amendment No. 1 to address how recent inflationary pressures have
materially impacted the Company’s operations, addressing both the types of inflationary pressures the Company is facing and
how its business has been affected.
United States Securities and Exchange Commission
September 19, 2024
Page 5
Risks
Related to Ownership of Our Common Stock, page 28
9. Please
add or supplement a risk factor to discuss potential impacts to purchasers in the offering
of the additional dilution sources identified at pages 11 and 37 of the prospectus, such
as the 1,000,000 shares of Class C Common Stock issuable upon conversion of a convertible
promissory note, as amended to provide for the issuance of Class D Common Stock instead,
and 3,936,583 shares of Class B Non-Voting Common Stock issuable upon exercise of warrants,
which you disclose will be exchangeable for Class D Common Stock.
Response:
The Company supplemented the following risk factor on page 30 of Amendment No. 1 to address the potential impacts to purchasers in the
offering of the additional dilution sources noted in the Staff’s comment: “If you purchase our Common Stock in this offering,
you will incur immediate and substantial dilution in the book value of your shares.”
Future
sales of substantial amounts of shares of our Class D Common Stock by existing shareholders..., page 30
10. Please
expand this risk factor to reflect that this registration statement seeks to facilitate the
resale of a substantial number of shares into the public market by the selling stockholders
identified in the alternate resale prospectus and address any potential impacts to the market
price of the Class D Common Stock. Disclose the percentage of the initial public offering
shares that the resale shares constitute, and explain, if true, that some or all of the selling
stockholders acquired their shares at and/or may exercise warrants to acquire shares at a
lower price than the offering price of the Class D Common Stock sold in the IPO and thus
may accept a lower price for the resale shares. Provide examples of the prices at which the
selling stockholders acquired their shares and the exercise price of warrants.
Response:
The Company expanded the applicable risk factor on page 30 of Amendment No. 1. In many cases, the selling stockholders acquired
their shares at the same offering price of the common stock offered in this offering. However, with respect to those
selling stockholders that acquired their shares at a lower price than the offering price of the common stock sold in this
offering, the Company provided examples of the prices at which selling stockholders acquired their shares as requested by
the Staff.
United States Securities and Exchange Commission
September 19, 2024
Page 6
Use
of Proceeds, page 36
11. Please
revise to more specifically identify the principal purposes for which the net proceeds of
the offering are intended to be used and the approximate amount to be used for each such
purpose. If some or all of the proceeds are to be used for one or more of the Sunset Amphitheater(s)
or other ongoing restaurant/venue projects you describe elsewhere, as implied by the reference
to “open[ing] new restaurants and music and entertainment venues in certain metropolitan
areas,” disclose as much and, if a material amount of other funds are necessary to
complete such project(s), state the amount of such other funds and the sources thereof. Refer
to Item 504 of Regulation S-K.
Response:
The Company revised the “Use of Proceeds” section on page 36 of Amendment No. 1 to more specifically identify