SecProbe.io

United States securities and exchange commission logo
February 9, 2023
Todd Sanders
Chief Executive Officer
Spirits Capital Corporation
100 Bayview Circle, Suite 4100
Newport Beach, CA 92660
Re:Spirits Capital Corporation
Amendment No. 2 to
Draft Offering Statement on Form 1-A
Submitted January 10, 2023
CIK No. 0001881767
Dear Todd Sanders:
            We have reviewed your amended draft offering 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 providing the requested information and either submitting
an amended draft offering statement or publicly filing your offering statement on EDGAR.  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 draft offering statement or filed offering statement and the information you provide in
response to these comments, we may have additional comments.
Amendment No. 2 to Draft Offering Statement on Form 1-A
General
1.Refer to your response to comment 31.  Please expand the disclosure in your Business
section to give a materially complete picture of the operations and planned operations of
your subsidiaries so that investors in your common stock understand how the company
intends to earn revenue from its operations.  While material disclosure regarding the
issuance of securities by those businesses is important to investors, you should also
describe the other material aspects of those businesses.
2.Refer to your response to comment 2.  Your disclosure on page 6 that you were "planning
to operate as a platform administrator for security tokens in the spirits industry but [have]
decided . . .  not to continue with the plan until it is either dissolved or reintroduced with a

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revised business plan"  appears to be inconsistent with your response letter which states
that you "do not plan to transition back to offering any financial instruments related to the
cryptocurrency space."  Please revise your offering statement accordingly or advise.  To
the extent that you may reintroduce your plan to issue security tokens and operate a
platform for the security tokens, please revise to disclose the factors you will consider
regarding the reintroduction of your plan.
3.We note your disclosure on page F-11 that states that your Cask Investment Deeds are
"secured by blockchain technology and a Security Agreement."  Please clearly disclose
the blockchain technology you have created or intend to create, what functions it will
enable, and, to the extent that it is not fully developed, the current stage of development
and the estimated time line of when your blockchain technology will be fully developed.
Also clarify what you mean by "secured by."
4.Refer to your response to comment 3.  Please revise your disclosure to discuss how you
will ensure that the offers, sales and transfers of the Cask Investment Deeds will comply
with the federal securities laws, including the specific exemption from registration upon
which you intend to rely.  In this regard, we note that your response letter appears
to indicate that you will rely on Section 4(a)(2) of the Securities Act and Rule 506(b) of
Regulation D.  To the extent that you intend to rely on Section 4(a)(2) and Rule 506(b),
please tell us why you believe that your plan to advertise the offering of the Cask
Investment Deeds through television ads, print ads, social media, digital videos, news
letters and influencers is consistent with Section 4(a)(2) and Rule 506(b).
5.Refer to your response to comment 5.  To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds or reintroduce the plan to
issue security tokens and operate a platform for the security tokens, please provide
disclosure of any significant market developments material to understanding or assessing
your business, financial conditions and results of operations.
6.To the extent that you intend to reintroduce your plan to offer security tokens and operate
a platform for the security tokens in the future, please revise your offering statement to
address comments 2, 12, 13, 14 to 21, 26 and 27 of our letter dated December 23, 2022 so
that investors understand your business plans and the risks associated with such plans.
Risk Factors, page 10
7.Refer to your response to comment 7.  To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds and to the extent that you may
reintroduce your plan to issue security tokens and operate a platform for the security
tokens, discuss any reputational harm you may face in light of the recent disruption in the
crypto asset markets.  For example, discuss how market conditions have affected or could
affect how your business is perceived by potential investors, counterparties, and
regulators, and whether there is or could be a material impact on your operations or
financial condition.

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8.Refer to your response to comment 9.  To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds and to the extent that you may
reintroduce your plan to issue security tokens and operate a platform for the security
tokens, describe any material risks related to safeguarding your, your affiliates’, or your
investors’ crypto assets.  Describe any material risks to your business and financial
condition if your policies and procedures surrounding the safeguarding of crypto assets,
conflicts of interest, or comingling of assets are not effective.
9.Refer to your response to comment 8.  To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds and to the extent that you may
reintroduce your plan to issue security tokens and operate a platform for the security
tokens, describe any material risks to your business from the possibility of regulatory
developments related to crypto assets and crypto asset markets. Identify material pending
crypto legislation or regulation and describe any material effects it may have on your
business, financial condition, and results of operations.
10.Refer to your response to comment 10.  To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds and to the extent that you may
reintroduce your plan to issue security tokens and operate a platform for the security
tokens, to the extent material, describe any gaps your board or management have
identified with respect to risk management processes and policies in light of current crypto
asset market conditions as well as any changes they have made or would have to make to
address those gaps.
11.Refer to your response to comment 11. To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds and to the extent that you may
reintroduce your plan to issue security tokens and operate a platform for the security
tokens, to the extent material, describe any of the following risks due to disruptions in the
crypto asset markets:
•Risk from depreciation in your stock price.
•Risk of loss of customer demand for your products and services.
•Financing risk, including equity and debt financing.
•Risk of increased losses or impairments in your investments or other assets.
•Risks of legal proceedings and government investigations, pending or known to be
threatened, in the United States or in other jurisdictions against you or your affiliates.
•Risks from price declines or price volatility of crypto assets.
Business, page 23
12.Refer to your response to comment 25.  We note that you had agreements with third-party
contractors or organizations in connection with your plans to operate an Ethereum based
token platform and Securitized Tokens monitoring program.  To the extent that any of
these agreements have not yet been terminated, please disclose the material terms of the
agreements, including the term and termination provisions.
13.Refer to your response to comment 28.  To the extent that you intend to use blockchain

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technology in connection with your Cask Investment Deeds and to the extent that you may
reintroduce your plan to issue security tokens and operate a platform for the security
tokens, to the extent material, discuss how the bankruptcies of certain crypto asset market
participants and the downstream effects of those bankruptcies have impacted or may
impact your business, financial condition, and counterparties, either directly or indirectly.
14.Refer to your response to comment 29.  To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds or may reintroduce the plan to
issue security tokens and operate a platform for the security tokens, if material to an
understanding of your business, describe any direct or indirect exposures to other
counterparties, customers, custodians, or other participants in crypto asset markets known
to:
•Have filed for bankruptcy, been decreed insolvent or bankrupt, made any assignment
for the benefit of creditors, or have had a receiver appointed for them.
•Have experienced excessive redemptions or suspended redemptions or withdrawals
of crypto assets.
•Have the crypto assets of their customers unaccounted for.
•Have experienced material corporate compliance failures.
15.In this section, describe in material detail what you mean by the statement on page 20
that your "plan of operations is to create a financial technology platform that enables the
Company’s subsidiary, SG to serve as the sponsor and to facilitate alternative investments
in the spirits industry," clarifying whether this will be a revenue generating activity, and if
so, how it will generate revenues.
16.Refer to your response to comment 30.  To the extent that you intend to use blockchain
technology in connection with your Cask Investment Deeds or may reintroduce the plan to
issue security tokens and operate a platform for the security tokens, if material to an
understanding of your business, discuss any steps you take to safeguard your customers’
crypto assets and describe any policies and procedures that are in place to prevent self-
dealing and other potential conflicts of interest.  Describe any policies and procedures you
have regarding the commingling of assets, including customer assets, your assets, and
those of affiliates or others.  Identify what material changes, if any, have been made to
your processes in light of the current crypto asset market disruption.
            Please contact Sonia Bednarowski at 202-551-3666 or John Dana Brown at 202-551-
3859 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Crypto Assets