SecProbe.io

CORRESP
1
filename1.htm

SEC LETTER TO HOUSE HACK INC.

Issuer Response to Letter dated February 14,
2025

Regarding Offering Statement on Form 1-A filed
February 4, 2025

    SEC Comment:
    Company response (updated language in the Offering Circular and Bond Agreement is underlined):

    We note disclosure on page 54 regarding the arbitration
    and jury trial waiver

    provisions. Please revise here and include risk
    factor disclosure to clearly disclose:

    • enforceability under federal and state
    law;

    • whether these provisions apply to claims
    under the federal securities laws;

    • whether this and other provisions applies
    to purchasers in secondary transactions;

    • clarify that, by agreeing to be subject
    to the arbitration provision or jury trial waiver provision, investors will not be deemed to waive the company's compliance with the federal
    securities laws and the rules and regulations

    promulgated thereunder.

    The Securities Being Offered section of the Offering
    Circular will be revised to describe the mandatory arbitration jury trial waiver provision as follows:

    “Section 7.2 of the Bond Agreement requires
    disputes to be settled via mandatory arbitration, but that does not apply to claims under the U.S. federal and state securities laws.
    Investors who bring disputes under U.S. federal and state securities laws do not waive any rights they have under US federal and state
    securities laws.

    Any disputes not brought under US federal or state
    securities laws but arising under the Bond Agreement shall be resolved through binding arbitration administered by JAMS in accordance
    with its Comprehensive Arbitration Rules & Procedures. Arbitration shall be the mandatory and exclusive means for resolving disputes,
    and the arbitration shall take place virtually or, if agreed upon by all parties, in person in Ventura, California, or at any other location
    mutually agreed upon. The complaining party shall be responsible for any mediation or arbitration fees. Arbitration shall be limited to
    resolving the specific dispute between the Company and the Bondholder. Arbitrators shall be permitted to consider market conditions, economic
    circumstances, and any force majeure events in determining whether the Company is liable for breach of this Agreement. The arbitrator
    shall not have the authority to award punitive damages, attorney's fees, or any remedy beyond actual, documented losses. The parties
    to the Agreement hereby waive their right to a jury trial for claims not brought under US federal and state securities laws.”

    The Company will update Section 7.2 of the Bond Agreement to include
    the following:

    “Notwithstanding the foregoing, this Mandatory Dispute Resolution
    provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or the Securities Act.”

    And

    “THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE
    CLAIMS THROUGH A COURT SOLELY BEFORE A JUDGE. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN ANY
    LITIGATION RELATING TO THIS AGREEMENT, THE BONDS OR THE COMPANY. NOTWITHSTANDING THE FOREGOING, THIS WAIVER OF COURT & JURY RIGHTS
    PROVISION WILL NOT APPLY TO SUITS BROUGHT TO ENFORCE ANY LIABILITY OR DUTY CREATED BY THE EXCHANGE ACT OR THE SECURITIES ACT.”

    Update 12.18 of the Bond Agreement to state the following:

    “Bondholders may not assign or transfer
    their rights or obligations under this Agreement without the prior written consent of the Company, except as permitted under applicable
    securities laws. The prior written consent of the Company will be contingent, among other items, on the Bondholder’s confirmation
    that the assignment or transfer is permitted under the Bond Agreement, that the assignment or transfer is compliant with applicable securities
    laws; and that the assignee or transferee agrees to the terms of the Bond Agreement. The Company may assign its rights and obligations
    hereunder to a successor entity in connection with a merger, acquisition, or reorganization.”

    ·      the potential limited access to information and other imbalances of resources between the company and shareholders, and that these provisions
    can discourage claims or limit shareholders’ ability to bring a claim in a judicial forum that they find favorable;

    The Company will amend the Offering Circular to add the following as
    a risk factor:

    “The Company’s Bond Agreement requires many disputes
    to be settled through mandatory arbitration.

    Section 7.2 of the Bond Agreement requires
    many disputes to be settled through mandatory arbitration. This provision does not apply to claims under U.S. federal securities laws.
    The mandatory arbitration provision could (1) increase the costs for an investor to bring a claim, (2) limit access to information relative
    to litigation, (3) discourage the bringing of claims, and (4) limit investors’ ability to bring a claim in a judicial forum that
    they find favorable. While there is case law supporting the enforceability of such mandatory arbitration provisions, there does appear
    to be a split of authority suggesting that these sorts of provisions are not always enforceable under federal and state law. To the extent
    Section 7.2 is ruled unenforceable, the Company would abide by such ruling.”