United States securities and exchange commission logo
May 4, 2020
Bradley Yourist
Chief Executive Officer
Grapefruit USA, Inc.
10866 Wilshire Boulevard, Suite 225
Los Angeles, CA 90024
Re: Grapefruit USA,
Inc.
Amendment No. 2 to
Registration Statement on Form S-1
Filed April 22,
2020
File No. 333-232828
Dear Mr. Yourist:
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
February 12, 2020 letter.
Amendment No. 2 to Registration Statement on Form S-1
General
1. We note your response
to prior comment 1. Please revise your prospectus to set a fixed
price at which the
Selling Security Holder will offer and sell their shares until your shares
are quoted on the
OTCBB, OTCQX, OTCQB or listed on a national securities exchange
and thereafter at the
prevailing market prices or privately negotiated prices.
The Auctus Financing, page 5
2. We note you disclose
that you received advances on the third tranche of the Auctus
financing. Please
discuss the material terms and conditions to such advances and file any
related agreements.
Bradley Yourist
FirstName USA, Inc.
Grapefruit LastNameBradley Yourist
Comapany NameGrapefruit USA, Inc.
May 4, 2020
May 4, 2020 Page 2
Page 2
FirstName LastName
Marketing and Sales, page 8
3. It is unclear why you have removed disclosure regarding the online
digital platform you
maintain for customers to purchase your products. Please advise or
revise to disclose the
website for and products currently offered on the platform and how you
ensure that the
distribution of your products is limited to the state of California.
Prospectus Summary
Available Information, page 11
4. Please revise to include the web address of your current business.
Risk Factors
Marijuana and Cannabinoids and CBD with more than 0.3% THC are illegal under
federal law,
page 16
5. We note your disclosure that the products you buy are THC free. Please
clarify here and
in your discussion of Controlled Substance Regulation on page 10
whether the products
you currently and intend to manufacture and distribute contain more
than 0.3% THC
content and are therefore subject to the Controlled Substances Act of
1970. In this regard,
we note that you manufacture marijuana cigarettes, Sugar Stoned
gummies, Rick Simpson
Oil and distributed Honey THC oil, cannabis flowers and trim.
Certain Relationships and Related Transactions, and Director Independence, page
58
6. For each transaction, please ensure you disclose the name of the
related person and the
basis on which such person is a related person. Refer to Item 404(d)
of Regulation S-K.
Financial Statements for the Years Ended December 31, 2019 and 2018, page F-1
7. It appears that there have been certain changes to the financial
statements presented in
your filing since the prior amendment. Please identify any changes
made to your financial
statements and explain why they were made.
Exhibits
8. We note your response to prior comment 7 and re-issue the comment.
Please also file
your notes payable referred to in Notes 4 and 6 to your consolidated
financial statements
and convertible notes comprising $314,000 that are currently in
default referred to in Note
5 to your consolidated financial statements or tell us why you are not
required to do so.
Refer to Item 601(b)(10) of Regulation S-K.
Bradley Yourist
Grapefruit USA, Inc.
May 4, 2020
Page 3
You may contact Diane Fritz, Staff Accountant, at (202) 551-3331 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-Adviser,
at (202) 551-3844 or, in her absence, Karina Dorin, Attorney-Adviser, at (202)
551-3763 with
any other questions.
Sincerely,
FirstName LastNameBradley Yourist
Division of
Corporation Finance
Comapany NameGrapefruit USA, Inc.
Office of Energy &
Transportation
May 4, 2020 Page 3
cc: Joseph Lucosky
FirstName LastName