May 7, 2019
Wayne Anderson
President
Sylios Corp
501 1st Ave N., Suite 901
St. Petersburg, FL 33701
Re: Sylios Corp
Registration Statement on Form S-1
Filed April 11, 2019
File No. 333-230824
Dear Mr. Anderson:
We have reviewed your 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.
Registration Statement on Form S-1 filed April 11, 2019
Cover Page
1. We note you disclose that your common stock is quoted on the OTC Pink
Sheets. Please
revise here, and make corresponding changes elsewhere in the prospectus,
to disclose a
fixed price at which shares will be sold until your shares are listed on
a national securities
exchange or quoted on the OTC Bulletin Board, OTCQX or OTCQB, at which
time they
may be sold at prevailing market prices or in privately negotiated
transactions. Refer to
Item 501(b)(3) of Regulation S-K.
Description of Business, page 4
2. Please quantify your current equity investment in each of The Greater
Cannabis Company,
Inc. and AMDAQ Corp. In this regard, we note that the Notes F and P to
your
Wayne Anderson
FirstName LastNameWayne Anderson
Sylios Corp
Comapany NameSylios Corp
May 7, 2019
May 7, 2019 Page 2
Page 2
FirstName LastName
Consolidated Statements Statements indicate that you reduced your
19.9% interest in The
Greater Cannabis Company on January 9, 2019 by transferring 4,750,000
of your
5,378,476 shares and that you have a 9.1% investment in AMDAQ Corp. In
addition, we
note you disclose on page 53 that you intend to identify additional
direct investments in
private companies within the cannabis and blockchain sectors. Please
provide us with
analysis as to whether you are or will be an investment company under
the Investment
Company Act of 1940.
3. Please revise your disclosure here and elsewhere to clarify your
current business activities
and how you intend to generate revenue from your current and any
anticipated business
activities. For example, your disclosure here indicates that all of
your assets consist of US
Natural Gas Corp KY's royalty interests in wells classified as
shut-in, but your disclosure
on page 10 states that you produce oil sold to Sunoco, Inc. or Barrett
Oil Purchasing, Inc.
Please also clarify whether you have any natural gas assets or
operations following the
sale of your assets to Bayport International Holdings, Inc. on July
31, 2014 and how E3
Petroleum Corp acts as a "bonding entity."
4. To the extent you are not engaged or are engaged to only a limited
extent in a particular
line of business, please eliminate any misleading inference to such
business and
operations. In this regard, we note you disclose that your operations
are currently divided
amongst your three wholly-owned subsidiaries that focus on oil and gas
activities, but you
include substantial disclosure regarding the two entities you spun-off
during the fiscal
year ended 2017, including that the $500,000 in capital you will need
to fund your
operations through December 31, 2019 will be used primarily to assist
AMDAQ in its
business plan to go public.
Selling Shareholders, page 37
5. Please identify the natural person or persons with direct or indirect
voting or investment
power over the shares being registered for resale by Armada Investment
Fund, LLC,
Darling Capital, LLC and the Valvasone Trust. See Item 507 of
Regulation S-K. For
additional guidance, refer to Question 140.02 of Regulation S-K
Compliance and
Disclosure Interpretations.
Description of Securities, page 42
6. Please discuss the disparate rights that certain of your preferred
shareholders have as
compared to common shareholders. We note that Mr. Anderson owns all
100 shares of
your Series D Preferred Stock and Note L to your Consolidated
Financial Statements
states that the total aggregate issued shares of Series D Preferred
Stock shall have voting
rights equal to four times the sum of (i) the total number of shares
of common stock issued
and outstanding, plus (ii) the total number of shares of Series A,
Series B and Series C
Preferred Stock. Please include a related risk factor discussing the
influence that Mr.
Anderson may have and any related conflicts of interest.
Wayne Anderson
FirstName LastNameWayne Anderson
Sylios Corp
Comapany NameSylios Corp
May 7, 2019
May 7, 2019 Page 3
Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operation
Results of Operations, page 57
7. Please describe the specific nature of the consulting fees that
generated $3,000 in revenue
for your fiscal year ended December 31, 2018.
Liquidity and Capital Resources, page 58
8. Please describe the terms of your principal indebtedness including the
maturity and
interest rate of your outstanding promissory notes. In this regard, we
note that Exhibits
10.17 and 10.18 indicate that on June 8, 2018, you entered into two
renewal notes with
SLMI Energy Holdings, LLC in the amount of $790,000 and $120,000,
respectively.
Directors, Executive Officers, Promotors, and Control Persons, page 60
9. Please ensure that you disclose all of Mr. Anderson's business
experience during the past
five years. In this regard, we note that Mr. Anderson has served as
the principal executive
officer, principal financial officer and chairman for The Greater
Cannabis Company, Inc.
and serves as a director. We also note that Mr. Anderson is AMDAQ
Corp's president and
chairman. See Item 401(e) of Regulation S-K.
Certain Relationships and Related Transactions, page 62
10. Please disclose all transactions in which the amount involved exceeds
1% of the average
of your total assets at fiscal year-end for the last two completed
fiscal years as required by
Item 404(d)(1) of Regulation S-K. For example, we note that you issued
a secured
promissory note dated October 6, 2018 to your chief executive officer
and an unsecured
promissory note dated September 15, 2017 to Around the Clock Partners
LP, an entity
controlled by your chief executive officer.
Report of Independent Registered Public Accounting Firm, page F-1
11. Please obtain and file a revised audit report from your independent
accountant that
complies with PCAOB Auditing Standard 3101.
General
12. Your registration statement fee table and prospectus cover page
indicate that 4,387,500
shares of the common stock you are registering are issued and
outstanding and held by the
selling shareholders whereas your Selling Shareholders disclosure
indicates that
3,000,000 of such shares are issuable upon conversion of the
convertible notes sold
to Armada Investment Fund, LLC and 750,000 of such shares are issuable
upon conversions of your Series D Preferred Stock. Please advise or
revise. In addition,
please have counsel revise its legal opinion to opine that the shares
of common stock that
are currently issued and outstanding and are being offered by the
selling stockholders
"are," and not "will be," legally issued, fully paid, and
non-assessable. Refer to Section
Wayne Anderson
Sylios Corp
May 7, 2019
Page 4
II.B.2.h of Staff Legal Bulletin No. 19.
13. We note you disclose that you are an emerging growth company. However, it
does not
appear that you qualify as an emerging growth company, as defined in
Section 101(d) of
the Jumpstart Our Business Startups Act, because it appears that the
first sale of your
common equity securities pursuant to an effective registration statement
occurred before
December 8, 2011. Please revise your registration statement accordingly,
or provide us
with your analysis as to why you believe you qualify as an emerging
growth company.
Refer to Questions 2 and 24 of the Generally Applicable Questions on
Title I of the
Jumpstart Our Business Startups Act.
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 Joseph Klinko, Staff Accountant, at (202) 551-3824 or
Ethan Horowitz,
Accounting Branch Chief, at (202) 551-3311 if you have questions regarding
comments on the
financial statements and related matters. Please contact Anuja A. Majmudar,
Attorney-Advisor,
at (202) 551-3844 or, in her absence, Karina Dorin, Attorney-Advisor, at (202)
551-3763, with
any other questions.
Sincerely,
FirstName LastNameWayne Anderson
Division of
Corporation Finance
Comapany NameSylios Corp
Office of Natural
Resources
May 7, 2019 Page 4
cc: John E. Lux, Esq.
FirstName LastName