United States securities and exchange commission logo
February 4, 2021
Adam Berk
Chief Executive Officer
Stem Holdings, Inc.
2201 NW Corporate Blvd., Suite 205
Boca Raton, FL 33431
Re: Stem Holdings, Inc.
Amendment No. 1 to
Registration Statement on Form S-1
Filed January 19,
2021
File No. 333-251897
Dear Mr. Berk:
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
January 14, 2021 letter.
Amendment No. 1 to Registration Statement on Form S-1
Cover Page
1. We note your response
to prior comment 1 and your disclosure on page 52 that you are
registering a primary
offering of units, consisting of one share of common stock and one
warrant to purchase one
share of common stock, to be sold at a fixed price per unit. If you
plan to offer units,
please revise the registration fee table to identify the units as securities
in the offering and the
prospectus cover page to list the units, the components of the units
and the purchase price
of the units at the top of the cover page. Please also revise the
Description of
Securities to be Registered section to provide a description of the units and
the warrants you are
registering. Please also clarify on the cover page, elsewhere in the
prospectus and in the
opinion whether the fixed price per unit is $0.43 or $0.53. Please
Adam Berk
Stem Holdings, Inc.
February 4, 2021
Page 2
delete the language on the cover page that the selling stockholders
will pay any
underwriting discounts, commissions or agent s commissions related
to the sale of their
shares of common stock if you are not registering a secondary
offering. Finally, please
have counsel revise the Exhibit 5.1 opinion to opine that the warrants
will be binding
obligations of the company in accordance with Section II.B.1.f of
Staff Legal Bulletin No.
19 and that the units will be binding obligations of the company in
accordance with
Section II.B.1.h of Staff Legal Bulletin No. 19.
2. Revise the cover page to disclose the $50,000 minimum investment
referenced in the
subscription agreement, update the January 31, 2021 termination date
for the offering, and
remove the reference to Rule 424(b)(3).
General
3. We note that Section 13 of the Common Stock Purchase Warrant filed as
Exhibit
4.1 limits legal action under the agreement to the state courts of
Florida or the federal
courts located in the state and county of Palm Beach and Section 7(j)
of the Subscription
Agreement limits legal action under the agreement to the federal and
state courts of the
State of Florida located in the City of Boca Raton, Palm Beach County.
Please disclose
whether these provisions apply to actions arising under the Securities
Act or Exchange
Act. If so, please also state that there is uncertainty as to whether
a court would enforce
such provisions. If these provisions apply to Securities Act claims,
please also state that
investors cannot waive compliance with the federal securities laws and
the rules and
regulations thereunder. In that regard, we note that Section 22 of the
Securities Act creates
concurrent jurisdiction for federal and state courts over all suits
brought to enforce any
duty or liability created by the Securities Act or the rules and
regulations thereunder. If
these provisions do not apply to actions arising under the Securities
Act or Exchange Act,
please also ensure that the exclusive forum provisions in the Common
Stock Purchase
Warrant and the Subscription Agreement state this clearly, or tell us
how you will inform
investors in future filings that the provisions do not apply to any
actions arising under the
Securities Act or Exchange Act.
4. We note that Section 13 of the Common Stock Purchase Warrant filed as
Exhibit 4.1
contains a jury trial waiver. Please revise your prospectus to:
Describe the jury trial waiver, including how it will impact your
investors;
Describe any questions as to enforceability under federal and state
law;
Clarify whether the provision applies to claims under the federal
securities laws and
whether it applies to claims other than in connection with this
offering;
To the extent the provision applies to federal securities law
claims, please revise the
disclosure to state that by agreeing to the provision, investors will
not be deemed to have
waived the company s compliance with the federal securities laws and
the rules and
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regulations thereunder; and
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that purchasers interests in a secondary transaction
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February 2021 Page 2
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Adam Berk
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5. We refer to the subscription agreement filed as Ex. 10.1. Please
remove the waivers
contained in the second paragraph of the agreement and in Section
1(a), or explain to us
how they are consistent with Section 14 of the Securities Act.
Please contact Ada D. Sarmento at 202-551-3798 or Joe McCann at
202-551-6262 with
any questions
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Robert L. B. Diener, Esq.