Correspondence 0001829126-23-005234 from RoyaltyTraders LLC (CIK 0001855626)
RoyaltyTraders LLC (CIK 0001855626)
Date: Aug. 9, 2023 · CIK: 0001855626 · Accession: 0001829126-23-005234
AI Filing Summary & Sentiment
File numbers found in text: 024-11532
Referenced dates: August 2, 2023
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CORRESP
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filename1.htm
Ms.
Jan Woo, Legal Branch Chief
Office
of Technology
Division
of Corporation Finance
US
Securities and Exchange Commission
Washington,
D.C. 20549
August
9, 2023
Re: RoyaltyTraders
LLC
Offering Statement on Form 1-A
Post-Qualification
Amendment No. 7
Filed July 19, 2023
File No. 024-11532
Dear
Ms. Woo:
We
acknowledge receipt of the comments in the letter dated August 2, 2023 from the staff of the Division of Corporation Finance (the “Staff”)
regarding the post-qualification amendment to the offering statement of RoyaltyTraders LLC (the “Company”), which we have
set out below, together with our responses.
Plan
of Distribution and Selling Securityholders
NFT
Perk, page 22
1. We
note your response to prior comment 2, as well as your related responses. While we do not
have any further comments at this time regarding your responses, please confirm your understanding
that our decision not to issue additional comments should not be interpreted to mean that
we either agree or disagree with your responses, including any
conclusions you have made, positions you have taken and practices you have engaged in or may engage in with respect to this matter, including
in regards to any NFTs or other crypto assets that you may develop or mint in the future or that you may support or facilitate the minting
or trading of in the future.
In
regards to prior comment 2, the Company understands that the Staff has neither agrees nor disagreed with the Company’s response.
2. We
note that Section 3(a) of the agreement with OneOf, Inc. contemplates the minting of a set
number of NFTs for each asset that can be transferred to users who have chosen to claim a
free NFT from the OneOf platform. Please tell us whether NFTs produced in excess of the amounts
claimed by investors will remain as property of RoyaltyTraders LLC.
The
Company notes that the previous disclosure provides that “unclaimed NFT’s will remain at OneOf in an escrow account tied
to the email of the buyer.” The NFTs will never become the property of RoyaltyTraders as a result of not being claimed by users.
The Company has amended its disclosure to provide additional language to clarify that aspect of the NFTs.
Use
of Proceeds to the Issuer, page 24
3. Disclosure
that assumes the maximum number of shares being offered will be sold is generally not appropriate
in the context of a best efforts offering that does not have a minimum component. Please
revise your disclosure to include tabular disclosure that assumes the sale of 25%, 50% and
100% of the royalty share units you are offering.
The
Company has amended its disclosure to disclose anticipated use of proceeds from the best efforts offering at the 25%, 50%, and 100% funding
levels.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations Emerging Growth Company, page 60
4. We
note your response to prior comment 6. In light of the fact that you are not an emerging
growth company and have no plans to become one, please remove all references to your status
as an emerging growth company from the offering statement and briefly summarize your reporting
obligations as a Tier 2 Regulation A issuer.
The
Company has amended its disclosure to improve the clarity of the language regarding emerging growth companies, and to be consistent with
established practice for Regulation A to preserve the ability to make an election in the future regarding emerging growth company status
and to inform investors about the nature of that election. See, for example, https://www.sec.gov/Archives/edgar/data/1981516/000149315223023331/partiiandiii.htm,
https://www.sec.gov/Archives/edgar/data/1981602/000110465923079019/tm2320311d1_partiiandiii.htm,
and https://www.sec.gov/Archives/edgar/data/1897152/000121390023042103/ea178996-1a_nextthingtech.htm.
Issuances
of Equity, page 63
5. Your
revised disclosure in response to prior comment 7 indicates that upon certain company transactions
each Simple Agreement for Future Equity (SAFE) holder will receive a cash payment as if the
SAFE had converted into Conversion Units. Your disclosure on page F-14 implies that the SAFEs
convert into Conversion Units both upon a future equity offering or under certain company
transactions. Please revise your disclosures, here or in the financial statement note, for
consistency. Also, revise Note 8 to clarify what is meant by “next equity financing”
and “company transaction” as per your revised disclosures here.
2
The
Company has amended the language included in the financial statement notes.
Thank
you again for the opportunity to respond to your questions to the Offering Statement of RoyaltyTraders LLC. If you have additional questions
or comments, please contact me at andrew@crowdchecklaw.com.
Sincerely,
/s/
Andrew Stephenson
Andrew
Stephenson
PartnerCrowdCheck
Law LLP
cc:
Sean
Peace
Alexander
Guiva
Managers
RoyaltyTraders
LLC
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