Mail Stop 4561
February 26,
2018
Giro DiBiase
Chief Executive Officer
IIOT-OXYS, Inc.
705 Cambridge Street
Cambridge, MA 02141
Re: IIOT-OXYS, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed January 30, 2018
File No. 333-222311
Dear Mr. DiBiase:
We have reviewed your amended registration 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 amending your registration statement
and providing the
requested information. 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 registration statement and the
information you
provide in response to these comments, we may have additional comments.
Prospectus Summary, page 1
1. You state that from January 1, 2009 until July 28, 2017, you had no
operations and were
a shell company. We note that you have nominal operations and, as of
nine months ended
September 30, 2017, you had no revenues and your asset consists mostly
of cash and cash
equivalents. Accordingly, you appear to continue to be a shell company
as defined in
Securities Act Rule 405.
a. Please disclose on the cover page that you are a shell company
and add a risk
factor that highlights the consequences of your shell company
status. Discuss the
prohibition on the use of Form S-8 by shell companies, enhanced
reporting
requirements imposed on shell companies, and the conditions
that must be
satisfied before restricted and control securities may be
resold in reliance on Rule
144. Also, describe the potential impact on your ability to
attract additional capital
through subsequent unregistered offerings
Giro DiBiase
IIOT-OXYS, Inc.
February 26, 2018
Page 2
b. In addition, your selling shareholders have recently received the
shares being
offered for resale and these shares appear to represent almost
all of your
outstanding shares held by non-affiliates. In light of this, it
appears that your
selling shareholders are underwriters. See SEC Release 33-8869
(2007). Under
the Release, Rule 144 is not available for the resale of
securities initially issued by
shell companies. This is because shareholders who receive shares
from a shell
company are considered underwriters with respect to their resales
until the
company is no longer a shell company and adequate information
(Form 10
information) has been available to the market for a period of
twelve months.
Until the company satisfies these conditions, the selling
shareholders will be
deemed to be underwriters. Because the offering is deemed to be
an indirect
primary offering by the company through the selling shareholders,
the offering
price of the shares being sold must be fixed for the duration of
the offering.
Accordingly, please revise your disclosure in the prospectus
cover page,
prospectus summary, plan of distribution and elsewhere throughout
the prospectus
as applicable. Also include the undertaking required by Item
512(a)(6) of
Regulation S-K.
Risk Factors, page 3
2. We note your disclosure on page 15 regarding your ability to continue as
a going concern
as well as the losses from operations of $332,770 for the nine months
ended September
30, 2017 you have incurred. Please revise your disclosure to include
related material
risks.
3. You state on page 19 that two of your customers are large automotive
companies, and the
third major customer is a state government, and that, to date, these
customers have
generated $39,800 of revenue. Please revise to provide material risks
related to your
dependence on a few major customers or tell us why this information is
not material.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
13
4. We refer to your disclosure in the "current operations" section starting
on page 19. Please
revise your disclosure here or in the business section to describe your
plan of operation
for the remainder of the fiscal year. Provide details of your specific
plan of operation,
including detailed milestones, the anticipated time frame for beginning
and completing
each milestone, categories of expenditures and the expected sources of
such funding.
Please explain how the company intends to meet each of the milestones if
it cannot
receive funding.
5. You state on page 19 that you have customers in the automotive sector as
well as the civil
infrastructure sector, and, to date, these customers have generated
$39,800 of revenue.
Giro DiBiase
IIOT-OXYS, Inc.
February 26, 2018
Page 3
We note your disclosure here that you have not generated any revenues
for the periods
reported. Please revise to reconcile your disclosure, or advise. To the
extent you have
generated revenues, please revise to provide a more robust discussion of
your results of
operations including the drivers behind the significant changes in
individual income and
expense line items. Refer to Item 303(a)(3) of Regulation S-K and SEC
Interpretive
Release 33-8350.
Liquidity and Capital Resources, page 15
6. Please revise to disclose the minimum number of months that you will be
able to conduct
your planned operations using currently available capital resources.
Refer to Item
303(a)(1) and (2) of Regulation S-K and Section IV of Interpretive
Release 33-8350 for
additional guidance.
Business and Properties
Overview, page 18
7. You state on page 21 that you are in the process of licensing patents
from MIT, but as of
the date of this filing, you have no definitive license agreements. You
also state on page
20 that, at the present time, OXYS has negotiated a technology licensing
option
agreement with MIT, which was executed on May 17, 2017 and on November
27, 2017,
OXYS announced that it had exercised an option to license intellectual
property from
MIT. Please revise to describe the material terms of the license option
agreement with
MIT and file the agreement as an exhibit to the registration statement.
Refer to Item
601(b) of Regulation S-K.
8. You state that OXYS has one joint technology development agreement with
Sigma Labs
Inc., which was executed on June 13, 2017. Please revise to describe the
material terms
of the agreement and file the agreement as an exhibit to the
registration statement. Refer
to Item 601(b) of Regulation S-K.
Competition, page 21
9. You state that there are two principal sources of competition to you,
and the first comes
from large companies such as IBM, GE, Amazon, Google etc. Please revise
to provide
the reasonable basis, or provide us with support, for your statement
that, "[w]e believe
our systems will be more computationally efficient as compared to a
cloud-based solution
which requires more computational resources."
Employees, page 21
10. You state that you have no full or part-time employees, and your CEO,
who is our sole
executive officer, currently devotes 30%-40% of his time to your
business. Please revise
Giro DiBiase
IIOT-OXYS, Inc.
February 26, 2018
Page 4
to disclose the number of hours Mr. DiBiase devotes to your business on
a weekly basis.
Also expand your risk factor on page 3 to highlight the risk relating to
his limited time
commitment and any related conflicts of interest. In this regard, we not
your disclosure
on page 22 that Mr. DiBiase has also served as the Chief Executive
Officer, Interim Chief
Financial Officer, and director of OXYS since its inception on August 4,
2016, and that
since 2016, he has operated as the co-founder and operating member of
Cambridge
Medspace LLC.
11. You state that under the terms of the OXYS SEA, you acquired 100% of the
issued and
outstanding voting shares of OXYS in exchange for 34,687,244 shares of
your common
stock, and your management was changed to persons designated by
management of
OXYS. (emphasis added). Please tell us the people who are your
management. In this
regard, we note your disclosure that you have no full or part-time
employees and your
CEO is your sole executive officer.
Certain Relationships and Related Transactions, page 23
12. You state that one of your principal shareholders entered into a
consulting agreement
with OXYS effective on July 28, 2017 to provide consulting services
during the
transition. Please revise your disclosure to provide the information
required by Item 404
of Regulation S-K.
Selling Stockholders, page 26
13. Please tell us whether or not any of the selling stockholders is a
broker-dealer or an
affiliate of a broker-dealer. If any of the selling stockholders is a
broker-dealer or an
affiliate of a broker-dealer, please revise your disclosure to state
that such seller is an
underwriter or provide an analysis as to why you believe such person is
not acting as a
statutory underwriter.
Item 15. Recent Sales of Unregistered Securities, page II-2
14. We refer to all the consulting agreements and the Share Exchange
Agreement referenced
in this section. Where appropriate, please revise to discuss the
material terms of the
agreements and file each agreement as an exhibit to the registration
statement or tell us
why you believe they are not material. Refer to Item 601(b) of
Regulation S-K.
15. Please tell us whether any of the shares in this section are issued to a
related party as
defined by Item 404 of Regulation S-K. To the extent they are, please
revise your
disclosure in the "certain relationships and related transactions"
section on page 23 to
provide the information required by Item 404 of Regulation S-K.
Giro DiBiase
IIOT-OXYS, Inc.
February 26, 2018
Page 5
Index to Financial Statements, page F-1
16. We note that you have provided financial statements as of September 30,
2017. As you
prepare your amended document, please be aware of the requirements set
forth in Rule 8-
08 of Regulation S-X regarding the age of the financial statements to be
included in your
filing.
Item 16. Exhibits and Financial Statement Schedules, page II-3
17. We note that the consent from your independent registered public
accounting firm has not
been dated. Please ensure that your independent registered public
accounting firm
properly includes the date issued. We refer you to Item 601(b)(23) of
Regulation S-K.
18. If you are not in a position to file your legal opinion with the next
amendment, please
provide a draft copy for our review.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Amanda Kim, Staff Accountant, at (202) 551-3241 or
Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Michael Foland,
Attorney-Advisor, at (202) 551-6711 or me at (202) 551-3735 with any other
questions.
Sincerely,
/s/ Folake Ayoola
Folake Ayoola
Special Counsel,
Office of
Information
Technology and
Services
cc: Ronald Vance
Vance, Higley & Associates, P.C.