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United States securities and exchange commission logo
December 23, 2022
Richard Seet
Chief Executive Officer
Tesseract Collective, Inc.
45 Rockefeller Plaza, 20 th Floor
New York, NY 10111
Re:Tesseract Collective, Inc.
Amendment No. 2 to Draft Offering Statement on Form 1-A
Submitted December 7, 2022
CIK: 0001934924
Dear Richard Seet:
            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.  Unless we note otherwise, our
references to prior comments are to comments in our November 9, 2022 letter.
Amended Draft Offering Statement submitted December 7, 2022
General
1.We note your response to comment 3.  Please note that we continue to review your
response and may have additional comments.
Risk Factors, page 17
2.To the extent material, please 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 how your business is perceived by customers, counterparties, and regulators,
and whether there is a material impact on your operations or financial condition.
3.Please describe any material risks to your business from the possibility of regulatory

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 Comapany NameTesseract Collective, Inc.
 December 23, 2022 Page 2
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Tesseract Collective, Inc.
December 23, 2022
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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.
4.Please describe any material risks you face related to the assertion of jurisdiction by U.S.
and foreign regulators and other government entities over crypto assets and crypto asset
markets.
5.Please describe any material risks related to safeguarding your, your affiliates’, or your
customers’ 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.
6. To the extent material, please 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 to address those gaps.
7.Please describe any material financing, liquidity, or other risks you face related to the
impact that the current crypto asset market disruption has had, directly or indirectly, on
the value of the crypto assets you use as collateral or the value of your crypto assets used
by others as collateral.
8.To the extent material, please describe any of the following risks due to disruptions in the
crypto asset markets:

•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.
Management's Discussion and Analysis of Financial Condition and Results of Operations, page
53
9.We note your response to prior comment 8 regarding your purchase of NFTs and your
disclosure on page 53 that you do not intend to buy already created NFTs.  We also note
on page 59 that one of the two classes of NFTs you plan to create is derived from the
physical Icons created in partnership with renowned third-party collaborators
("Collaborators" or CODA NFTs), and page 76 discloses that for the CODAs, the digital
artwork is created by the Collaborator and then the digital file is forwarded to you.  Please
revised to disclose if your costs for these CODA NFTs will be accounted for differently
than your digital rendition NFTs.
10.We note your response to prior comment 8 regarding CODA NFTs including third-party
collaborators, and the disclosures on pages F-20 and F-21 that CODA NFT rights transfer
to you upon receipt of the original digital image, and you do not expect to have

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 December 23, 2022 Page 3
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Tesseract Collective, Inc.
December 23, 2022
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obligations after primary sale.  Please revise to specifically disclose your consideration of
the third-party collaborator's role and responsibilities when determining your custody and
control before primary sale for your CODA NFTs.
License Agreement with SOGEX, page 53
11.We note your disclosure regarding your SOGEX license entered into in January 2022, and
that under that agreement, you agreed to pay royalties to SOGEX including: (i) a 50%
royalty based on net profits from NFTs sold without Collaborators, and (ii) 33% of net
profits from NFTs sold or marketed by Collaborators. In addition, the minimum royalty
payments under this agreement are (a) $150,000 payable upon execution of the License
Agreement, (b) $400,000 payable in two installments on March 31, 2023 and
September 30, 2023, and (c) $450,000 payable in two installments on March 31, 2024 and
September 30, 2024.  Please revise to provide the following disclosures:
•Revise to clarify why a prepaid asset exists at June 30, 2022 for the first minimum
royalty when it appears on page 53 that it was due at January 2022 license execution
but not paid until February 2022 (page F-10).
•Revise to clarify how minimum royalty payments are amortized over the three-year
license life, when payments are due sporadically over that life, and $138,889 of the
$150,000 paid in February was already amortized as of June 30, 2022.
•Revise to clarify why minimum royalty payments are included in costs of sales when
not predicated upon the sale of an NFT.
•Revise your disclosures throughout the filing to consistently disclose the specific
terms of the sales-based royalties that you agreed to pay without Collaborators and
also marketed by Collaborators, as disclosed on page 53 of your MD&A.
•Revise to disclose your accounting for each of these types of royalties: sales-based
type and minimum payment type, and further disaggregate any differences between
the sales-based with and without Collaborators.
Cost of Sales, page 54
12.We note that your cost of sales disclosure states that fees consist of "royalties based on
NFT sales and fixed fees," while your general and administrative expenses disclosure
states that fees consist of "excess royalties based on NFT sales and minimum royalty
commitments."  Please revise as follows:
•Revise to disclosure in detail how "excess royalties" are defined and accounted for in
your transactions.
•Revise to disclose the nature of and specific accounting for the "fixed fees" related to
these royalties and why appropriately included in cost of sales.
•Revise to consistently provide disclosure throughout the filing
See related comment for general and administrative expense.

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 Comapany NameTesseract Collective, Inc.
 December 23, 2022 Page 4
 FirstName LastName
Richard Seet
Tesseract Collective, Inc.
December 23, 2022
Page 4
General and Administrative Expenses, page 54
13.We note that under general and administrative expenses, on both pages 54 and 55, your
inclusion of language beginning "We anticipate incurring costs related to NFT creation,
including fees related to...." that seems to be the same as your disclosure under cost of
sales on page 54.  Please revise to remove these disclosures here or tell us why you
believe they are appropriate in both areas and include your authoritative literature to
support the accounting.
Liquidity and Capital Resources, page 56
14.Please revise to provide clear disclosures of the current risks in the 2022 NFT market
related to your liquidity, ability to obtain financing, and any other areas that may be
impacted.
Our Business, page 59
15.Please provide disclosure of any significant crypto asset market developments material to
understanding or assessing your business, financial condition and results of operations, or
share price since your last reporting period, including any material impact from the price
volatility of crypto assets.
16.To the extent material to an understanding of your business, please 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.
17.Refer to your response to comment 9.  Please discuss the need to hold certain crypto assets
to mint, send, or transact on each blockchain you intend to mint NFTs.
Intangible Assets, page F-7
18.We note your accounting policy for intangible assets accounted for under ASC 360 on
page F-7.  Please revise to disclose the kinds of assets to which this relates.
Revenue Recognition, page F-8
19.You disclose that revenue is recognized on a gross basis in accordance with ASC 606.
Please provide us a detailed analysis supporting your revenue recognition policy for the
sale of your digital rendition and CODA NFTs.
1.As it relates to step 1 in ASC 606:

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 Comapany NameTesseract Collective, Inc.
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December 23, 2022
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1.Provide us a sample contract and cross reference your analysis to the specific
provisions of that contract.
2.Identify your customer and explain why this party is your customer. For
example, we note your disclosure on page 77 that you intend to offer your
NFTs solely through prestigious auction houses or through various NFT
marketplaces and not directly to the public.
3.Tell us whether there are any penalties for contract termination by either party
and explain when a contract begins and describe its term for accounting
purposes.
2.As it relates to step 2 in ASC 606, tell us your performance obligation(s) and explain
how each is distinct.
3.As it relates to step 3 in ASC 606:
1.Identify the consideration specified in the contract (including whether you will
accept noncash crypto assets as payment), how the amount of consideration is
determined and explain how you apply the variable consideration constraint in
ASC 606-10-32-11 through 32-13.
2.Explain the payment terms of the contract. Clarify whether the entire NFT fee,
other than resale royalties, will be paid at contract inception.
4.As it relates to step 4 in ASC 606, tell us how you allocate transaction price to
multiple performance obligations, if applicable.
5.As it relates to step 5 in ASC 606, tell us how you determined when to recognize
revenue (i.e. period of time, point in time) and your basis for that determination.
Royalties, page F-9
20.Refer to comment 38 from our August 17, 2022 letter. We note the disclosure of your
royalty accounting related to the SOGEX License Agreement on page F-9.  Please tell us
and revise to disclose the authoritative literature that supports your accounting for each
different type of royalty.
Note 2. Significant Accounting Policies
Digital Assets, page F-20
21.We note your response to prior comment 12 and your disclosure on page 3 that while the
purchaser of a CODA NFT or a Digital Rendition NFT has the same ownership rights, the
royalty sharing for each differs.  As such, please revise to disclose the accounting for the
differences in the royalty sharing of these NFTs, and also disclose the accounting
literature that supports your determination.
22.You disclose that digital artworks are considered to be indefinite-lived intangible assets
under ASC 350 and will be included in current assets if held for sale.  Further, you
disclose that costs related to NFT development and creation are not expected be material
and therefore, will be expensed as incurred. Please provide us with the following
information for your digital rendition and CODA NFTs:

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 December 23, 2022 Page 6
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Tesseract Collective, Inc.
December 23, 2022
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•Provide us with a comprehensive analysis of your accounting for NFTs held for sale.
Include citation to the specific authoritative literature in ASC 350 that you used to
support your accounting.
•Explain what cost basis you intend to use in order to record NFTs held for sale on
your balance sheets, given your intention to expense the related development and
creation costs as incurred.
•Tell us any accounting alternatives you considered and rejected when reaching your
conclusions.
23.You disclose that for Digital Assets traded on an exchange such as Ether, Bitcoin and
Bitcoin Cash, the Company will view a decline in the quoted market price below the cost
to be an impairment indicator. Further, you disclose that the quoted price and observable
prices for Digital Assets will be determined by the Company using a principal market
analysis in accordance with ASC 820.  Please revise your disclosure to specifically:
•Identify the impairment indicators you will use when evaluating your digital rendition
and CODA NFTs held for sale for impairment; and
•Identify what market(s) you will use to value these assets and separately tell us how
you determined these market(s) are the principal or most advantageous market(s) as
stipulated in ASC 820-10-35-5.
Revenue Recognition, page F-21
24.We note your response to prior comment 11 and your revised disclosure on page F-21
regarding your obligations related to the NFTs after the primary sale.  Please revise to
disclose specific details of your custody and control of the NFTs before your sale to the
customer.
Exhibits
25.Please revise to file the following agreements in your next amendment:
•6.1 License Agreement between SOGEX, the Registrant and Sub-Agent, dated as of
January 31, 2022
•6.2 Amendment to License Agreement between SOGEX, the Registrant and Sub-
Agent, dated as of June 20, 2022

 FirstName LastNameRichard Seet
 Comapany NameTesseract Collective, Inc.
 December 23, 2022 Page 7
 FirstName LastName
Richard Seet
Tesseract Collective, Inc.
December 23, 2022
Page 7
            You may contact Bonnie Baynes, Senior Staff Accountant, at (202) 551-4924 or Sharon
Blume, Accounting Branch Chief, at (202) 551-3474 if you have questions regarding comments
on the financial statements and related matters. Please contact Matthew Derby, Staff Attorney, at
(202) 551-3334 or Nolan McWilliams, Acting Legal Branch Chief, at (202) 551-3217 with any
other questions.
Sincerely,
Division of Corporation Finance
Office of Finance
cc:       Janeane Ferrari