SecProbe.io

CORRESP
1
filename1.htm

E: Lou@bevilacquapllc.com

T: 202.869.0888 (ext. 100)

W: bevilacquapllc.com

July 10, 2024

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Technology

100 F Street, N.E.

Washington, D.C. 20549

    Attn:
    Aliya Ishmukhamedova

    Matthew Derby

    Re:
    Asset Entities Inc.

    Amendment No. 1 to Registration Statement on Form S-1

    Filed June 20, 2024

    File No. 333-280020

Ladies and Gentlemen:

On behalf of our client, Asset Entities Inc. (the
“Company”), we hereby submit the response thereof to the comment of the staff (the “Staff”) of the U.S. Securities
and Exchange Commission (the “SEC”) set forth in the Staff’s letter, dated July 3, 2024, providing such comment on the
Company’s Amendment No. 1 to Registration Statement on Form S-1 (the “Registration Statement”). Concurrently with the
filing of this letter, we have filed an amendment on Form S-1/A to the Registration Statement to reflect a one-for-five (1-for-5) reverse
stock split of each of the Company’s authorized and issued and outstanding shares of Class A Common Stock, $0.0001 par value per
share, and the Company’s authorized and issued and outstanding shares of Class B Common Stock, $0.0001 par value per share (the
“Class B Common Stock”), which became effective as of 5:00 p.m. Eastern Time on July 1, 2024 (the “Reverse Stock Split”).
Where noted, the share and per share information in this letter have been adjusted to give effect to the one-Reverse Stock Split.

For the convenience of the Staff, the Staff’s
comment is included and is followed by the response of the Company. Unless the context indicates otherwise, references in this letter
to “we,” “us,” and “our” refer to the Company.

Amendment No. 1 to Registration Statement on
Form S-1

General

 1. We note your response to prior comment 1 and the reduction in the size of the offering relative to
the number of shares outstanding and the addition of a reverse stock split feature when any Series A preferred shares are outstanding.
Please provide us with a detailed legal analysis regarding why this should not be considered a primary offering with Ionic Ventures LLC
(“Ionic”) acting as an underwriter. As part of your analysis, consider the length of time the shares have been held by Ionic,
the ongoing nature of the Securities Purchase Agreement and sale of Series A preferred stock to Ionic, the business of Ionic Ventures,
the circumstances under which Ionic acquired or will acquire the Series A preferred shares, and when viewed in light of all the facts
and circumstances, whether Ionic is acting as a conduit for Asset Entities. Refer to Securities Act Rules Compliance and Disclosure Interpretations
612.09.

Response:
For the reasons set forth below, the Company respectfully submits that the offering contemplated by the Registration Statement is a valid
secondary offering by or on behalf of Ionic Ventures, LLC, a California limited liability company (“Ionic”), of shares of
Class B Common Stock that may be registered for resale on a continuous basis pursuant to Rule 415(a)(1)(i) of the Securities Act of 1933,
as amended (the “Securities Act”).

1050 Connecticut Ave., NW, Suite 500

Washington, DC 20036

PG. 2

As requested in
the Staff’s comment, the Company analyzed, among other factors, the guidance set forth in Securities Act Rules Compliance and Disclosure
Interpretations, Question 612.09 (“Interpretation 612.09”), which identifies six factors to be considered in determining whether
a purported secondary offering is really a primary offering. Interpretation 612.19 states:

It is important to identify whether a purported
secondary offering is really a primary offering, i.e., the selling shareholders are actually underwriters selling on behalf of an issuer.
Underwriter status may involve additional disclosure, including an acknowledgment of the seller’s prospectus delivery requirements.
In an offering involving Rule 415 or Form S-3, if the offering is deemed to be on behalf of the issuer, the Rule and Form in some cases
will be unavailable (e.g., because of the Form S-3 “public float” test for a primary offering, or because Rule 415(a)(1)(i)
is available for secondary offerings, but primary offerings must meet the requirements of one of the other subsections of Rule 415). The
question of whether an offering styled a secondary one is really on behalf of the issuer is a difficult factual one, not merely a question
of who receives the proceeds. Consideration should be given to how long the selling shareholders have held the shares, the circumstances
under which they received them, their relationship to the issuer, the amount of shares involved, whether the sellers are in the business
of underwriting securities, and finally, whether under all the circumstances it appears that the seller is acting as a conduit for the
issuer.

Based on the Company’s consideration
of the totality of the facts and circumstances of the transaction and each of the factors enumerated in Interpretation 612.09, the Company
believes that the shares of Class B Common Stock that the Company is proposing to register for resale by Ionic (the “Shares”)
are eligible for registration on a delayed or continuous basis pursuant to Rule 415(a)(1)(i) of the Securities Act.

Factor 1: How long Ionic
has held the securities.

The Company notes that there is no mandatory
holding period for the registration for resale on a continuous basis of securities issuable upon conversion of convertible securities
issued in a private-investment, public-equity transaction (“PIPE”) transaction. As noted by the Staff in Securities Act Sections
Compliance and Disclosure Interpretations, Question 139.11 (“Interpretation 139.11”), a valid secondary offering may occur
immediately following the closing of a private placement. Interpretation 139.11 provides in relevant part as follows:

In a PIPE transaction, a company will be permitted
to register the resale of securities prior to their issuance if the company has completed a Section 4(2)-exempt sale of the securities
(or in the case of convertible securities, of the convertible security itself) to the investor, and the investor is at market risk at
the time of filing of the resale registration statement. The investor must be irrevocably bound to purchase a set number of securities
for a set purchase price that is not based on market price or a fluctuating ratio, either at the time of effectiveness of the resale registration
statement or at any subsequent date. When a company attempts to register for resale shares of common stock underlying unissued, convertible
securities, the PIPE analysis applies to the convertible security, not to the underlying common stock. There can be no conditions to closing
that are within an investor’s control or that an investor can cause not to be satisfied. For example, closing conditions in capital
formation transactions relating to the market price of the company’s securities or the investor’s satisfactory completion
of its due diligence on the company are unacceptable conditions. The closing of the private placement of the unissued securities must
occur within a short time after the effectiveness of the resale registration statement.

PG. 3

The Company believes this concept conforms
to the custom and practices in many PIPE transactions. In many PIPE transactions, a registration statement is required to be filed shortly
post-closing and declared effective shortly after filing. The Company is not aware that the Staff has taken a position that the period
of time elapsing between a closing and effectiveness of a registration statement has raised concerns about whether the offering is a valid
secondary offering, and the Company believes such a position would be inconsistent with Interpretation 139.11 set forth above, which allows
inclusion of the securities sold after a registration statement is filed if the registration statement is not yet effective. If inclusion
for resale of the securities sold after a registration statement is filed if the registration statement is not yet effective is allowed
in a secondary offering, then, a fortiori, inclusion of the securities sold before a registration statement is filed, regardless of the
holding period, may be allowed.

The Shares being registered for resale
will be issuable upon conversion of a variable amount of the 165 shares (the “Series A Shares” and together with the Shares,
the “Securities”) of Series A Convertible Preferred Stock, $0.0001 par value per share (the “Series A Preferred Stock”),
all of which were issued to Ionic in a private placement on May 24, 2024 (the “May 2024 Private Placement”). The issuance
was made in a bona fide private placement exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated
thereunder. Ionic paid the full purchase price for the Series A Shares in cash upon acquisition, such purchase price was set and not based
on a fluctuating market price or ratio, and Ionic has been subject to the full economic and market risks of its entire investment since
the date of the acquisition of the Series A Shares. Ionic acquired the Series A Shares with no assurance that a liquid market would be
available in which the Shares could be sold.

The discussion above supports the conclusion
that the offering pursuant to the Registration Statement is a valid secondary offering.

Factor 2: The circumstances under
which Ionic received the securities.

The Series A Shares were issued to Ionic
in the May 2024 Private Placement, an arm’s-length private placement transaction, pursuant to an exemption from registration under
Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder. The May 2024 Private Placement was conducted pursuant to
the Securities Purchase Agreement, dated as of May 24, 2024, between the Company and Ionic
(as amended, the “Securities Purchase Agreement”), as amended by the First Amendment
to Securities Purchase Agreement, dated as of June 13, 2024 (the “Securities Purchase Agreement
Amendment”). Ionic was introduced to the Company by, solicited to make an investment with the Company by, and worked with
Boustead Securities, LLC (“Boustead”), a registered broker-dealer and member firm of the Financial Industry Regulatory Authority,
Inc. (“FINRA”), acting on behalf of the Company pursuant to the Company’s engagement letter agreement with Boustead,
dated November 29, 2021 (the “Boustead Engagement Letter”). As provided by the Boustead Engagement Letter, Boustead has exclusive
rights to act as the Company’s financial advisor and placement agent with respect to any financing transaction, including the May
2024 Private Placement.

In
the Securities Purchase Agreement, Ionic made certain representations to the Company, including that (i) Ionic
was an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated thereunder; (ii) Ionic was acquiring the
Series A Shares and, upon conversion of the Series A Shares, will acquire the Shares issuable upon conversion thereof, in each case, for
its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of
applicable securities laws, except pursuant to sales registered or exempted under the Securities Act; (iii) Ionic understood that the
Series A Shares were offered and sold to it and the Shares are being offered to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company was relying in part upon the truth and accuracy of,
and Ionic’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Ionic set forth
therein in order to determine the availability of such exemptions and the eligibility of Ionic to acquire the Securities; and (iv) Ionic
had sought such accounting, legal and tax advice as it had considered necessary to make an informed investment decision with respect to
its acquisition of the Securities. The Company is neither aware of any evidence that would indicate that these representations were false
nor aware of any evidence that Ionic has any plan to act in concert with a third party to effect a distribution of the Shares. Moreover,
pursuant to the Securities Purchase Agreement, Ionic agreed that the Securities may only be disposed of in compliance with state and federal
securities laws.

PG. 4

Pursuant to the Securities Purchase
Agreement, the Company was required to enter into the Registration Rights Agreement, dated as of
May 24, 2024, between the Company and Ionic (the “Registration Rights Agreement”). The Registration Statement is being
filed by the Company to comply with its obligations under the Registration Rights Agreement. The Company did not enter into the Registration
Rights Agreement for the purposes of conducting an indirect primary offering. The Company did not and will not pay commissions or fees
to Ionic and will not receive proceeds from the resale of the Shares by Ionic.

In addition, the Company is not aware
of any evidence that would indicate that a distribution would occur if the Registration Statement is declared effective. Under the SEC’s
rules, a “distribution” requires special selling efforts. Rule 100(b) of Regulation M defines a “distribution”
as “an offering of securities, whether or not subject to registration under the Securities Act, that is distinguished from ordinary
trading transactions by the magnitude of the offering and the presence of special selling efforts and selling methods.” The Company
is not aware of any evidence that would indicate that any special selling efforts or selling methods (such as road shows or other actions
to condition the market for the Company’s Common Stock, $0.0001 par value per share (“common stock”)), by or on behalf
of Ionic that have occurred or will occur if the Registration Statement is declared effective.

Further, Ionic is not acting on the
Company’s behalf with respect to the registration of the Shares for resale under the Registration Statement and, other than Ionic’s
registration rights, the Company has no contractual or other relationship with Ionic that would govern either (a) the timing, nature,
and amount of resales of the Shares; or (b) whether the Shares are ever resold under the Registration Statement. The existence of registration
rights is not, in and of themselves, evidence of an intent on the part of Ionic to sell its Shares, much less to sell or distribute the
securities on behalf of the Company. The Company also notes that there are many reasons, other than to effect an immediate resale, why
investors may prefer securities to be registered, which may include that an issuer’s decision to not register its shares may limit
the market value of investors’ shares due to their restricted status and prevent investors from taking advantage of market opportunities
or from liquidating their investments if, for example, the investors’ convictions in their original investment decision had waned.

Additionally, Ionic is also at market
risk with respect to purchase of the Series A Shares. As discussed in Interpretation 139.11, whether a private placement has been completed,
and the investor is at market risk, in a PIPE transaction involving convertible securities (such as the May 2024 Private Placement as
to the Series A Shares), is determined by reference to the purchase of the convertible security, rather than by reference to the underlying
security. Interpretation 139.11 specifically addressed the purchase of convertible securities that converted into common stock at a price
“based on the company’s common stock trading price at the time of conversion,” and the registration for resale of the
shares underlying the convertible securities. Therefore, the conversion of the Series A Shares at the Alternat