November 8, 2019
William Yap
Chief Financial Officer
8i Enterprises Acquisition Corp.
6 Eu Tong Sen Street
#08-13 The Central
Singapore 059817
Richard Byworth
Chief Executive Officer
Digital Innovative Limited
35/F Two International
Finance Street, Central
Hong Kong
Re: Digital Innovative Ltd
Registration Statement on Form F-4
Filed October 10, 2019
File No. 333-234147
Dear Mr. Yap:
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 F-4 filed October 10, 2019
Comparative Per Share Information, page 27
1. Please tell us why you did not provide the historical and equivalent pro
forma per share
data related to Diginex Limited required by Item 3(f) of Form F-4.
William Yap
FirstName LastNameWilliam Yap
8i Enterprises Acquisition Corp.
Comapany 8, 2019 Enterprises Acquisition Corp.
November Name8i
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Risk Factors
Diginex's business lines may require regulatory licenses and qualifications
that Diginex does not
currently have . . ., page 30
2. Please revise your risk factors about the material legal and
regulatory risks relating to your
plan to offer services related to digital assets and distributed
ledger technology to address:
How you plan to comply with the laws and regulations in the specific
jurisdictions in
which you plan to operate; and
Management's specific knowledge of, and experience in complying
with, these
regulatory regimes.
Risks Related to the Capital Markets Business, page 48
3. Please tell us what consideration you have given to whether you may be
required to
register as a broker-dealer under Section 15(b) of the Exchange Act if
your services
include finding U.S. investors for an offering of digital assets that
are securities.
4. We note your Capital Markets business will advise, issue and
distribute offerings of
Digital Assets from its clients to investors. Please discuss the
specific legal and regulatory
risks associated with advising, issuing and distributing offerings of
Digital Assets in
applicable jurisdictions.
Risks Related to the Exchange Business, page 49
5. Given your disclosure here about the need for regulatory approval for
your exchanges,
please tell us the basis for your statements elsewhere that the
Exchanges are "expected to
be fully launched and licensed in multiple jurisdictions in the first
quarter of 2020."
Please also revise to specify the jurisdictions in which you intend to
operate initially, as
your reference to "multiple" seems inaccurate in light of your
disclosure on page 123
stating that you are working on licenses in Jersey and Singapore.
Proposal No. 2 - The Share Exchange Proposal, page 86
6. Revise to present the assumptions that underlie the revised financial
projections on page
105, considering your financial advisor indicated that these
projections were dependent
upon the operability of several aspects of the business, including the
Exchange and
Digivault.
7. Revise your disclosure on page 103 to disclose whether, if at all, the
Board considered that
the public company valuations reflected much larger EV and EBITDA
amounts,
consistent with the larger scope and development of their operations,
than those forecasted
for the solutions and advisory business, and therefore are not
comparable for purposes of
concluding that the consideration "is a reasonable price to pay."
Business of Diginex, page 108
8. We note that certain of your business lines and the technology they
rely upon are in
William Yap
8i Enterprises Acquisition Corp.
November 8, 2019
Page 3
various stages of development. For example, you disclose that Diginex
is currently
working to launch the Exchange Business and Digivault. Please revise
to clarify the
current state of development of each business line and the specific
timeline and milestones
that must be met in order to develop each of your business lines and
related technology,
including the expected costs to be incurred.
9. Please revise your disclosure to clearly state where your various
business lines are
currently operating and intend to operate in the near term. If you do
not intend to
operate in the United States, please state as much. In doing so,
please also provide us with
your analysis as to how your offshore operations will be conducted in
a manner to ensure
that U.S. laws do not apply and/or U.S. persons cannot access your
operations.
Alternatively, confirm that your operations will be conducted in
compliance with U.S. law
and disclose the status of compliance with U.S. law with respect to
each business line.
10. Please tell us whether you plan to acquire and hold digital assets
that are or may be
securities for investment. If so, please address the risk that you may
become subject to
registration under the Investment Company Act and explain how that
would impact your
operations.
11. We note your reference to "Fiat and Stablecoin payments
infrastructure" on page 116 and
to "fiat and Digital Asset payments" on page 128. Please disclose
whether you accept, or
plan to accept, payment for your services in the form of digital
assets, and if so, whether
you intend to hold the digital assets for investment or convert them
into fiat currency after
receipt.
History, page 108
12. You state here that the Solutions Business, Capital Markets Business,
Asset Management
Business and Trading Business have all generated revenue, however,
your Operating
Results indicates that your revenue is derived primarily from your
Solutions Business. If
revenues from business lines other than your Solutions Business are
immaterial, please
revise to state as much.
The Trading Business, page 127
13. Please revise to enhance your disclosure about the bond instrument
that will convert into a
Digital Security to describe the Digital Security in greater detail
and the conversion
feature. Also, explain how this provides "a track record of returns
(and optionality if asset
management licenses are secured to create a separate fund
structure...)."
The Capital Markets Business, page 129
FirstName LastNameWilliam Yap
14. You mention that you are working on a Digital Security offering on page
130. Clarify
Comapany Name8ithis offering AcquisitionitCorp.
your role in Enterprises and where is being conducted, as well as the
laws implicated
November 8, 2019 Pageyour compliance with such laws.
and the status of 3
FirstName LastName
William Yap
FirstName LastNameWilliam Yap
8i Enterprises Acquisition Corp.
Comapany 8, 2019 Enterprises Acquisition Corp.
November Name8i
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November 8, 2019 Page 4
FirstName LastName
Selected Historical Combined and Consolidated Financial and Operating Data of
Diginex
Limited, page 140
15. Please tell us your consideration of disclosing the number of shares
as adjusted to reflect
changes in capital and dividends declared per share. Refer to Item
3.A.2. of Form 20-F.
This comment also applies to the Summary Financial Information on page
26.
Operating and Financial Review of Diginex
B. Liquidity and Capital Resources, page 151
16. Please disclose information regarding the company's material
commitments for capital
expenditures as of the end of the latest financial year and any
subsequent interim period
and an indication of the general purpose of such commitments and the
anticipated sources
of funds needed to fulfill such commitments. Refer to Item 14(g)(1) of
Form F-4 and Item
5(B)(3) of Form 20-F.
Contractual Obligations, page 154
17. Please disclose scheduled interest payments in your table of payments
due by period. To
the extent that interest rates are variable and unknown, you may use
your judgment to
determine whether or not to include estimates of future interest
payments. Regardless of
whether you decide to include or exclude estimated interest payments
in the table, you
should include a footnote to the table that provides appropriate
disclosures.
Unaudited Pro Forma Combined Financial Information, page 166
18. Please revise your disclosure to clarify how you combined the periods
of Diginex to arrive
at the unaudited twelve months ended June 30, 2019. Refer to Rule
11-02(c)(3) of
Regulation S-X. Your disclosure that historical unaudited financial
statements of Diginex
for the twelve months ended June 30, 2019 are included does not
satisfy this requirement.
Pro Forma Combined Statement of Financial Position, page 168
19. Please revise the face of the statement to disclose the number of
ordinary shares issued
and outstanding on a pro forma basis.
Pro Forma Adjustments to the Unaudited Combined Statement of Financial
Position, page 169
20. Please make it transparent to the readers how you are calculating the
adjustments. In this
regard with reference to notes (5), (7), (8), and (11) please revise
to add additional details
to disclose how you calculated the adjustments.
Pro Forma Combined Statement of Profit or Loss, page 170
21. Please revise to include the historical basic and diluted per share
data based on continuing
operations and weighted average shares used in the calculation related
to Diginex.
William Yap
FirstName LastNameWilliam Yap
8i Enterprises Acquisition Corp.
Comapany 8, 2019 Enterprises Acquisition Corp.
November Name8i
November 8, 2019 Page 5
Page 5
FirstName LastName
Pro Forma Adjustments to the Unaudited Combined Statement of Profit or Loss,
page 171
22. Please revise to add additional details to disclose how you calculated
the adjustment in
note (3).
8i Enterprises Acquisition Corp Financial Statements
Note 3. Initial Public Offering, page F-14
23. Please revise to include the missing reference to the date of 8i
Enterprises Acquisition
Corp.'s IPO.
Note 7. Shareholders' Equity
Private Warrants, page F-17
24. Please tell us your consideration of the guidance in ASC 815-40-25-7
through 9 related to
the clause in your private warrants that allows the holders to
exercise the private warrants
for cash and how you concluded the private warrants should be
classified in equity.
Diginex Limited Financial Statements
2.6 Summary of Significant Accounting Policies
Associates, page F-33
25. Please tell us your consideration of the guidance in IAS 28 related to
your policy to
initially recognize amounts at fair value instead of cost.
Digital Assets, page F-38
26. Please disclose how you account for the differences in the spot price
used to record the
receipt of the digital assets and the price for which the assets are
exchanged or sold.
Note 10 Earnings (Loss) Per Share, page F-52
27. Please tell us your consideration of disclosing instruments that could
potentially dilute
basic earnings per share in the future, but were not included in the
calculation of diluted
earnings per share because they are antidilutive for the periods
presented. Refer to IAS
33.70(c).
Note 20 Equity Method Investment -DHPC, page F-61
28. Please provide us with your significance test in Rule 1-02(w) of
Regulation S-X and your
consideration of the guidance in Rule 3-09 of Regulation S-X related
to presenting the
financial statements of DHPC.
Note 21 Share Capital, page F-64
29. We note your disclosure you repurchased your own shares for total
consideration of
$6,619,463. Please tell us who you purchased these shares from,
disclose the names and
William Yap
8i Enterprises Acquisition Corp.
November 8, 2019
Page 6
number of shares of the equity investment used to partially settle the
purchase price, and
when these equity investments used for settlement were acquired.
Note 28 Acquisitions, page F-73
30. Please disclose how you obtained control of Bletchley Park Asset
Management Jersey
Limited. In this regard we note you did not issue any consideration
for the acquisition.
Refer to IFRS 3.B64(d). Also, please disclose a description of the
reasons why the
transaction resulted in a gain. Refer to IFRS 3.B64(n). Finally,
please tell us your
consideration of the disclosures in IFRS 3.B64(q) related to both
acquisitions.
General
31. We note your definition of "Digital Securities" refers to securities
issued in tokenized
form using distributed ledger technology. Revise to disclose how you
will determine
whether a particular digital asset is a security or not, especially
for purposes of your
Exchanges, OTC Trading Platform and the assets you intend to trade or
hold.
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 Tony Watson at 202-551-3318 or Donna Di Silvio at
202-551-3202 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jacqueline Kaufman at 202-551-3797 or Mara Ransom at 202-551-3264 with
any other
questions.
FirstName LastNameWilliam Yap Sincerely,
Comapany Name8i Enterprises Acquisition Corp.
Division of
Corporation Finance
November 8, 2019 Page 6 Office of Trade
& Services
FirstName LastName