United States securities and exchange commission logo
March 12, 2021
Jon Paul Richardson
Chief Executive Officer
Exodus Movement, Inc.
15418 Weir Street, #333
Omaha, NE 68137
Re: Exodus Movement,
Inc.
Offering Statement
on Form 1-A
Filed February 26,
2021
File No. 024-11468
Dear Mr. Richardson:
We have reviewed your offering 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 offering 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 offering statement and
the information you
provide in response to these comments, we may have additional comments.
Offering Statement on Form 1-A
General
1. You state that you
expect Common Stock Tokens to be available within nine months of
qualification of this
offering statement. Please provide us with your legal analysis as to
why the issuance of
Common Stock Tokens does not represent the issuance of a security
different from the
uncertificated Class A common stock. In your response, please provide
a detailed explanation
of why a single class of securities may be held in different forms
with different rights
and privileges under applicable state law. In this regard, comparing
the Tokens to stock
certificates appears inappropriate given that stock certificates are the
security, rather than a
representation, and a security cannot be simultaneously held in both
book-entry and
certificated form. We also note your response to comment 6, in which you
state "[t]he Common
Stock Tokens should not be confused or conflated with the actual
shares of Class A
common stock."
Jon Paul Richardson
FirstName LastNameJon
Exodus Movement, Inc. Paul Richardson
Comapany
March NameExodus Movement, Inc.
12, 2021
March2 12, 2021 Page 2
Page
FirstName LastName
Cover Page
2. Refer to your response to comment 2. Please clarify here and in your
offering summary
section, if true, that if the offering is terminated or if a
subscription is rejected for any
reason, the company will return the amount and form of payment that
was made on the
original date of payment.
Capitalization, page 59
3. It appears that you reflect the gross proceeds in your pro forma as
adjusted additional
paid-in capital, total stockholder's equity and total capitalization.
Please revise your table
to present only the net proceeds of your offering.
Plan of Distribution
Common Stock Tokens, page 111
4. Please disclose the process for exchanging or converting Class A
common stock into
Common Stock Tokens when the tokens become available. Please also
disclose any
differences in holding Class A common stock versus Common Stock
Tokens, including
any differences in the rights of ownership such as voting or
dividends.
How to purchase shares of our Class A common stock in this offering, page 112
5. Refer to your response to comment 31 of our October 16, 2020 letter.
Please disclose here
and in the Offering Summary: (i) how you will calculate the value of
the Bitcoin, Ether or
USDC used to purchase Class A common stock in this offering; (ii) how
and when you
will communicate this valuation and the number of shares of Class A
common stock to the
investors; and (iii) whether the investor will be able to withdraw the
subscription based
upon how you value the digital assets used for payment of the Class A
common stock.
6. Please disclose the arbitration and waiver of jury trial provisions in
section 14 of the
subscription agreement, revise the subscription agreement to specify
whether or not these
provisions apply to actions arising under the Securities Act or
Exchange Act, and add a
risk factor describing the attendant risks
Peer to peer transactions, page 114
7. We note your response to comment 8. Please describe what actions the
Transfer Agent
takes if it discovers an inconsistency in its daily reconciliation
process between its book
entry records and the blockchain, and describe the process by which a
holder of Class A
common stock can request that the Transfer Agent review the holder's
transactions as well
as the Transfer Agent's ability to correct discrepancies between its
records and the
blockchain.
Trading shares of Exodus Class A common stock following the closing of this
offering, page 114
8. Please provide your analysis regarding whether having an ancillary
recordkeeping
Jon Paul Richardson
Exodus Movement, Inc.
March 12, 2021
Page 3
mechanism on a blockchain for security tokens that is independent from
the records
maintained by the transfer agent presents any legal or other risks to
investors, market
participants or the national clearance and settlement system and
whether it is inconsistent
with the Exchange Act, including Exchange Act Section
17A(a)(2)(A)(ii), which directs
the Commission to facilitate the establishment of linked or
coordinated facilities for
clearance and settlement of securities transactions.
Transfers of Class A common stock without Common Stock Tokens, page 116
9. Please describe what happens to the Common Stock Tokens in a situation
where the
Token holder sells Class A common stock without transferring the
Token. For example,
clarify whether the seller retains the Token or the buyer is issued a
new Token. Please
also discuss the role of the transfer agent, if any, in this
situation.
We will consider qualifying your offering statement at your request. If
a participant in
your offering is required to clear its compensation arrangements with FINRA,
please have
FINRA advise us that it has no objections to the compensation arrangements
prior to
qualification.
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. We also remind you that, following qualification of your
Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a
Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered
by the report.
You may contact Mark Brunhofer at 202-551-3638 or Bonnie Baynes at
202-551-4924 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Sonia Bednarowski at 202-551-3666 or J. Nolan McWilliams at
202-551-3217 with any
other questions.
FirstName LastNameJon Paul Richardson Sincerely,
Comapany NameExodus Movement, Inc.
Division of
Corporation Finance
March 12, 2021 Page 3 Office of
Finance
FirstName LastName