October 25, 2018
Alex Mardikian
Chief Executive Officer
OBITX, Inc.
4720 Salisbury Road
Jacksonville, FL 32256
Re: OBITX, Inc.
Amendment No. 6 to Registration Statement on Form S-1
Filed September 19, 2018
File No. 333-222978
Dear Mr. Mardikian:
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. Unless
we note
otherwise, our references to prior comments are to comments in our September
13, 2018 letter.
General
1. We note that altCUBE, Inc., a subsidiary that you founded in June 2018,
"enabl[es]
access to the financial crypto global market" and, according to its
website, "provide[s]
credit and debit card processing for . . . cryptocurrency mining,
trading platforms, and
ICOs." Please briefly describe altCUBE's services and explain how they
fit your
business strategy in the Business section of the prospectus. Clarify
whether altCUBE is a
money transmitter that must comply with FinCEN registration and state
licensing
requirements, and if so, describe the effects of those governmental
regulations on the
business. In this regard, we note your reference to "payment processors"
in the
regulatory discussion on page 43. Refer to Item 101(h)(4) of Regulation
S-K. In the
Management section of the prospectus, disclose that Mr. Mardikian serves
as the chief
executive officer of altCUBE, and identify altCUBE as your subsidiary in
such
disclosure. Refer to Item 401(e) of Regulation S-K. Finally, file a list
of all your
Alex Mardikian
OBITX, Inc.
October 25, 2018
Page 2
subsidiaries as an exhibit to the registration statement pursuant to
Item 601(b)(21) of
Regulation S-K.
2. Your revised disclosure in Note 5 to the unaudited financial statements
on page F-22
suggests that you accepted payment from Render Payment, LLC in the form
of RPM
tokens and did not convert such tokens into fiat currency after receipt
because you
believe you "will make more by holding [them]." Please reconcile this
disclosure with
your balance sheet as of July 31, 2018, which indicates that the payment
from Render
Payment remains outstanding. If you accepted RPM tokens for payment
after July 31,
2018, please revise your subsequent events disclosure in Note 10 and
your disclosure on
pages 45 and 46 that you will continue to monitor the progress of the
RPM tokens
without accepting payment. Finally, advise how this disclosure is
consistent with your
revised disclosure in response to comment 2 of our letter dated August
22, 2018 that it "is
not your intent to hold digital assets for investment[]."
Capitalization, page 37
3. Your Capitalization table does not total appropriately. Please revise or
advise.
Business Strategy, page 40
4. We note you generally refer to the "consulting services" that ICOMethod
provides to
clients that you introduce. Please specifically describe each of the
services that it
provides. Refer to prior comment 1.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations for the Period Ended July 31, 2018, page 49
5. In view of the lack of revenues in the three month period ended July 31,
2018, revise
your MD&A to discuss any related trends, events or uncertainties that
are reasonably
likely to impact future results of operations or financial position. See
Item 303(a)(3) of
Regulation S-K for further guidance.
Executive Compensation, page 51
6. The summary compensation table indicates that you have not paid any
compensation to
Mr. Rosenberg. It appears, however, that you paid Mr. Rosenberg $3,500
per month
since November 1, 2017, for his services as a director pursuant to a
consulting agreement.
Please revise. Disclose the material terms of the consulting agreement
or provide a cross-
reference to such disclosure on page F-23. Refer to Item 402(r) of
Regulation S-K.
Finally, file the consulting agreement as an exhibit to the registration
statement pursuant
to Item 601(b)(10) of Regulation S-K.
Alex Mardikian
OBITX, Inc.
October 25, 2018
Page 3
Security Ownership of Certain Beneficial Owners and Management, page 52
7. We note the disclosure regarding the beneficial ownership of your common
stock does
not account for MCIG's right to convert each share of Series A Preferred
Stock into 50
shares of common stock. Please revise. Refer to Instruction 2 to Item
403 of Regulation
S-K and Rule 13d-3 of the Exchange Act.
Notes to Financial Statements for the interim period ended July 31, 2018
Note 10. Subsequent Events, page F-25
8. Revise to re-number this footnote and the previous footnote Warrants on
page F-24 so
that they are in sequential order.
9. Revise to include discussion of the 10 ATMs purchased in May 2018 in
another footnote,
as this transaction is not a subsequent event as of July 31, 2018.
10. We note you now own 62 ATM machines as compared to the 35 machines you
previously owned. Please revise to disclose when these additional 27 ATM
machines
were purchased and the total price paid for them.
11. Revise to include discussion of your subsidiaries created in May and
June 2018,
respectively, in another footnote as these transactions were not
subsequent events as of
July 31, 2018. Revise to disclose the capitalization and percentage
ownership of these
subsidiaries.
Alex Mardikian
OBITX, Inc.
October 25, 2018
Page 4
You may contact Brittany Ebbertt, Staff Accountant, at (202) 551-3572
or Craig Wilson,
Senior Assistant Chief Accountant, at (202) 551-3226 if you have questions
regarding comments
on the financial statements and related matters. Please contact Bernard Nolan,
Attorney-Adviser,
at (202) 551-6515 or, in his absence, me at (202) 551-3453 with any other
questions. If you
require further assistance, you may contact Barbara C. Jacobs, Assistant
Director, at (202) 551-
3735.
Sincerely,
/s/ Jan Woo
Jan Woo
Legal Branch Chief
Office of
Information
Technologies and
Services
cc: Thomas G. Amon
Law Office of Thomas G. Amon