SecProbe.io

CORRESP
1
filename1.htm

April
9, 2024

United
States Securities and Exchange Commission

Division
of Corporation Finance

100
F Street, N.E.

Washington,
DC 20549

  Re:
  Kindly MD, Inc.

  Amendment No. 7 to Registration Statement on Form S-1 Filed
March 12, 2024

  File No. 333-274606

Ladies
and Gentlemen:

We
are in receipt of your letter dated March 22, 2024. We have prepared the below response to your comments and have also amended the Registration
Statement on Form S-1 for Kindly MD, Inc. (“Kindly” or the “Company”), as indicated.

Amendment
No. 7 to Registration Statement on Form S-1 filed March 12, 2024 Recent

Developments

Bridge
Financings, page 6

1. We
                                            note the disclosure that from December 2023 to January 2024, you issued convertible promissory
                                            notes in the aggregate principal amount of $444,444 to certain investors. Please revise to
                                            disclose the investors and the material terms of the related Securities Purchase Agreements,
                                            including the convertible feature and pricing terms.

RESPONSE:
The disclosure on page 6 has been updated to include the investors and the material terms of the related Securities Purchase Agreements,
including the convertible feature and pricing terms.

2. Please
                                            provide us with a detailed analysis as to why the proposed secondary offering is not an indirect
                                            primary offering on your behalf and thus appropriate to characterize the transaction as a
                                            valid secondary offering under Securities Act Rule 415(a)(1)(i). For example, we note your
                                            new disclosure regarding the issuance of convertible promissory notes from December 2023
                                            to January 2024. Elsewhere, you note that these convertible notes will convert into shares
                                            of common stock at the assumed initial public offering price of $5.50 per share. Given that
                                            the investment in the promissory notes appeared to be made with a view towards the resale
                                            of the underlying common stock following the Company’s initial public offering, it
                                            appears the resale of these shares of common stock could be deemed an indirect primary offering
                                            being conducted by or on behalf of the Issuer.

Explain
why the selling securityholders should not be deemed to be underwriters, or revise your prospects to include a statement that
the selling securityholders are deemed underwriters and fix a price at which the resale shares will sell for the duration of the
offering. For guidance, please refer to Securities Act Rules Compliance and Disclosure Interpretations Question 612.09. Last, please
tell us whether the sales by the selling securityholders are needed to meet Nasdaq listing requirements.

RESPONSE:
The Company acknowledges the Staff’s comment and respectfully submits that the proposed resale of the shares of the Company’s
common stock by the bridge lenders/selling securityholders (the “Selling Securityholders”) as contemplated
in the Registration Statement is not an indirect primary offering and is appropriately characterized as a secondary offering under Rule
415(a)(1)(i) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

In
further consideration of this comment, we have reviewed Compliance and Disclosure Interpretation Question 612.09 (“C&DI 612.09”),
which provides guidance regarding Rule 415:

“It
is important to identify whether a purported secondary offering is really a primary offering, i.e., the selling securityholders
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…

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 securityholders have held the shares, the
circumstances under which the 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.”

We
have reviewed the guidance in C&DI 612.09, including the six enumerated factors contained therein, and offer the following discussion
for the Staff’s consideration.

Background

Between
December 28, 2023 and January 24, 2024, through bona fide private placements with five separate individual accredited investors (collectively,
the “Selling Securityholders”), the Company issued five separate Original Issuance Discount Promissory Notes (the
“Notes”) with principal aggregate amounts totaling $444,444 to the Selling Securityholders (the “Private Placement”).
In connection with the issuance of the Notes, the Company entered separate securities purchase agreements with each of the Selling
Securityholders (the “Securities Purchase Agreements”), which includes the registration rights for a total of 80,808
shares of common stock to be issued to the Selling Securityholders on the date of the pricing of the Company’s IPO. The
Private Placement was effected in reliance upon the exemption from the registration requirements of the Securities Act by virtue of Section
4(a)(2) thereof and Rule 506 of Regulation D thereunder.

The
Private Placement was conducted pursuant to the Securities Purchase Agreement in which, among other things, each Selling Securityholder
made customary investment and private placement representations to the Company, including that it (i) was an “accredited investor”
as defined in Rule 501 under the Securities Act, (ii) had such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment in the Note, and (iii) was able to bear the economic risks of the investment.

Factor
1: How Long the Selling Stockholders Have Held the Securities

While
the presumption is that the longer securities are held, the less likely it is that a selling securityholder is acting as a conduit
for a primary offering, such a factor is not determinative, and the Commission has in fact specifically recognized that a short holding
period does not by itself negate valid investment intent. The Staff regularly permits issuers to register privately issued shares for
resale promptly following, or even prior to, the closing of a private placement transaction.

Four
of the Selling Securityholders initially purchased the Notes on December 28, 2023, with one investor purchasing a note on January 24,
2024 pursuant to the Securities Purchase Agreements. Therefore, as of the date of this letter, most of the Selling Securityholders will
have held the Notes and the shares issuable upon the IPO related to the Note (the “Shares”) for over three months, with one
holding a Note for more than two months. The issuances were made in a bona fide private placement exempt from registration under Section
4(2) of the Securities Act, and the Selling Securityholders acquired the securities for their own investment purposes. The Selling
Securityholders have been subject to the full economic and market risks of their entire investment since the date of the acquisition
of the shares. In addition, The Selling Securityholders acquired the shares with no assurance that the Company would ever go public
or that the shares could be ever be sold in a liquid market. This holding period for the Notes and the Shares demonstrates
that the Selling Securityholders acquired the securities for investment, do not have intent to distribute the Shares on behalf of the
Company and are not acting as an underwriter. Additionally, the Selling Shareholders have agreed to lock up their shares for an additional ninety days following
the pricing of the IPO.

In
the Securities Purchase Agreement, the Company has covenanted to file a registration statement covering the resale of the shares of common
stock underlying the Note. The Company has added the Shares to its Registration Statement to perform such obligation under the Securities
Purchase Agreement. The Company respectfully submits to the Staff that the registration of the shares of common stock for resale as contemplated
in the Registration Statement is consistent with other financing transactions, such as a typical “PIPE” transaction, where
an issuer is required to file a resale registration statement shortly after closing. As discussed above, the Selling Securityholders
have held the Notes for more than three or two months as of the date of this letter. Like other investors in a typical PIPE or IPO transaction,
the Selling Securityholders were immediately at market risk once the Notes and the Shares underlying the Note were acquired on
December 28, 2023 and January 24, 2024, respectively.

Factor
2: Circumstances under which the Selling Securityholders Acquired the Shares

As
described above, the Selling Securityholders acquired the shares of common stock in the Private Placement, which was a bona fide private
placement transaction conducted pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act.

The
Securities Purchase Agreement contained, among other things, customary investment and private placement representations of the Selling
Securityholders to the Company. In addition, the Selling Securityholders have not entered into any underwriting relationships or arrangements
with the Company, have not received any commission or other payment from the Company in connection with the resale of any of its
securities, and the Company will receive no proceeds from the resale of the shares of common stock, if any, by the Selling Securityholders.
These circumstances are quite distinct from those involving a primary offering by or on behalf of the Company.

Furthermore,
Rule 100 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” (emphasis added). The Company is not aware of any evidence that would suggest that
any such special selling efforts or selling methods (such as investor presentations or road shows) by or on behalf of the Selling Securityholders
that have or are currently intended to take place if the Registration Statement is declared effective.

The
Company further notes that registration is not equivalent to a current intent to distribute. If registration did equate with such a distribution
intent, then no private placement transaction could ever occur because the mere fact of subsequent registration would presumably negate
an investor’s prior representation of investment intent, which would in turn destroy any private placement exemption. In addition,
the Securities Purchase Agreement with each investor provided that the investor agreed that, without the prior written consent of the
Company, the investor shall not, during the period ending 90 days after the pricing of the initial public offering: (1) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any of such securities or
(2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership or such
securities.

Factor
3: The Selling Securityholders’ Relationship to the Company

Based
upon information supplied to the Company by the Selling Securityholders, the Selling Securityholders are private individual accredited
investors that purchased the securities for their own accounts and not with a view to resale or distribution. The Company does not have
an underwriting relationship with the Selling Securityholders or any contractual, legal or other relationship that would control the
timing, nature or amount of resales of the shares of common stock following the effectiveness of the Registration Statement or even whether,
or if, any shares of common stock may be resold under the Registration Statement. To the Company’s knowledge,
at no time have the Selling Securityholders been affiliated with or acted as securities broker-dealers or representatives thereof. Further,
as noted above, the Selling Securityholders each represented to the Company that they were acquiring the securities for their own accounts
and not with a view to resale or distribution.

The
registration rights granted to the Selling Securityholders under the Securities Purchase Agreement entered into in connection with the
Private Placement are customary and are not indicative of any desire of the Selling Securityholders to sell or distribute the shares
of common stock on behalf of the Company, or at all. The Selling Securityholders negotiated for such customary registration rights for
a variety of business reasons and the registration rights were not granted by the Company for the purpose of conducting an indirect primary
offering. In addition, the Selling Securityholders would be responsible for paying any broker-dealer fees or underwriting discounts or
commissions directly to any broker-dealers they engage to assist in selling any shares of common stock.

To
the extent the Selling Securityholders sell the shares of common stock, the Selling Securityholders will retain all proceeds from such
sales and the Company will not receive any of the proceeds from any resale of the Shares.

Factor
4: The Amount of Shares Involved

The
Selling Stockholders are registering for resale 80,808 shares of Common stock they have the right to acquire pursuant to the Notes, out
of the 1,712,057 total shares being registered in the Secondary Offering. Such shares represent only 4.71% of the total shares being
registered in the Company’s Secondary Offering and 1.35% of the Company’s common shares after the Offering on a fully-diluted
basis. We note that the Staff has permitted offerings to be characterized as secondary offerings in cases where a significantly larger
percentage of a company’s outstanding securities was registered for resale.

Factor
5: Whether the Selling Securityholders are in the Business of Underwriting Securities

As
noted above, based upon information supplied to the Company by the Selling Securityholders, the Selling Securityholders are each individual
accredited investors. To the Company’s knowledge, the Selling Securityholders are not, nor have they ever been, in the business
of underwriting securities. Additionally, the issuance of shares of common stock covered by the Registration Statement to be issued to
the Selling Securityholders related to the issuance of the Note was neither conditioned on the prior effectiveness of the Registration
Statement nor otherwise conditioned on the Selling Securityholders’ ability to resell the shares of common stock.

In
prior no-action letters, the Staff has noted that determination of “underwriter” status depends on all of the facts and circumstances
surrounding a particular transaction. The Staff also has stated that institutional investors generally should not be deemed to be underwriters
with regard to the acquisition of large amounts of securities, provided such securities are acquired in the ordinary