United States securities and exchange commission logo
January 6, 2023
Carlos Moreira
Chief Executive Officer
SEALSQ Corp
Avenue Louis-Casa 58
1216 Cointrin, Switzerland
Re: SEALSQ Corp
Draft Registration
Statement on Form F-1
Submitted December
9, 2022
CIK No. 0001951222
Dear Carlos Moreira:
We have reviewed your draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-1 submitted December 9, 2022
Cover Page
1. Disclose whether your
spin-off distribution is contingent upon final approval of your
NASDAQ listing on your
cover page.
Market Data, page 3
2. We note that the
prospectus includes market data based on information from third-party
sources. Please tell us
if you commissioned any of the industry or other data that you
reference in the
prospectus and, if so, file consents of such third parties pursuant to Rule
436 of the Securities
Act as exhibits to your registration statement or advise.
Carlos Moreira
SEALSQ Corp
January 6, 2023
Page 2
3. We note your disclosure that you obtained some of the market and
industry data included
in the registration statement from publicly available information and
industry
publications and that you have not independently verified data this
information. This
statement appears to imply a disclaimer of responsibility for this
information in the
registration statement. Please either revise this section to remove
such implication or
specifically state that you are liable for all information in the
registration statement.
Prospectus Summary, page 10
4. Please revise your summary to present an objective description of the
challenges and/or
weakness of your business and operations. For example, you highlight
your growth
strategies and competitive strengths without equally prominent
disclosure regarding your
weaknesses.
Risk Factors, page 29
5. Please disclose whether you are subject to material cybersecurity
risks in your supply
chain based on third-party products, software, or services used in
your products, services,
or business and how a cybersecurity incident in your supply chain
could impact your
business. Discuss the measures you have taken to mitigate these risks.
Please revise to
also describe the extent and nature of the role of the company's board
of directors in
overseeing cybersecurity risks, including in connection with your
supply
chain/suppliers/service providers.
6. If material, please include a risk factor discussing if recent
inflationary pressures have
materially impacted your operations and identify the principal factors
contributing to the
inflationary pressures the company has experienced and clarify the
resulting impacts to
the company. Also identify actions planned or taken, if any, to
mitigate inflationary
pressures.
Our supply chain depends on third-party suppliers..., page 35
7. We note your disclosure that your supply chain depends on third-party
suppliers. If
material, please revise to include a description of the material terms
of your agreements
with those suppliers.
We derive a significant amount of our revenues..., page 46
8. We note that for the year ended December 31, 2021, your ten largest
customers accounted
FirstName LastNameCarlos Moreira
for 83% of your revenue. To the extent your business is materially
dependent on a
Comapany NameSEALSQ
customer, Corp
please revise to disclose the material terms of any agreements
you have with
such customer.
January 6, 2023 Page 2
FirstName LastName
Carlos Moreira
FirstName LastNameCarlos Moreira
SEALSQ Corp
Comapany
January NameSEALSQ Corp
6, 2023
January
Page 3 6, 2023 Page 3
FirstName LastName
The dual class structure of our shares features..., page 47
9. We note your disclosure that certain provisions of your Amended and
Restated Memorandum and Articles of Association are novel or otherwise
not common
among other corporations. Please revise to provide a more detailed
discussion of these
provisions or provide a cross-reference to a more detailed discussion.
Capitalization, page 50
10. Please consider removing the Capitalization Table as you are effecting
a Spin-off
Distribution and are not raising capital from this transaction or
explain to us why you
believe its presentation is necessary.
Unaudited Pro Forma Condensed Combined Financial Information, page 51
11. We note the pro forma financial information has been presented to
illustrate the
combination of SEALSQ and the Semiconductor Group as a reverse
acquisition that
qualifies as a recapitalization. As both entities are controlled by
WiseKey International
Holdings, please revise your pro forma introductory paragraph and the
notes to the pro
forma financial statements to describe the recapitalization as a
transaction between entities
under common control and revise your presentation accordingly.
12. You disclose that the pro forma financial information give effect to
transaction accounting
adjustments that reflect the entries that are (i) directly
attributable to the combination and
(ii) factually supportable. Please revise the disclosures and, if
applicable, the related pro
forma adjustments to comply with the updated guidance in Article
11-02(a)(6) of
Regulation S- X and Section II.D of SEC Release 33-10786.
13. Please remove all unaudited pro forma balance sheets other the most
recent interim period
ended on June 30, 2022.
14. Please revise your unaudited pro forma financial statements to include
a column for
SEALSQ from date of inception to June 30, 2022.
15. Your pro forma earnings per share does not appear to reflect the
Consideration Shares
issued by SEALSQ. Please revise to reflect those shares in your
weighted average number
of shares used in your pro forma earnings per shares calculation, or
explain why you do
you believe such revision should be made. In this regard, please also
disclose how you
determined the weighted average number of shares used in your
calculation.
Carlos Moreira
FirstName LastNameCarlos Moreira
SEALSQ Corp
Comapany
January NameSEALSQ Corp
6, 2023
January
Page 4 6, 2023 Page 4
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
60
16. We note your $44 million backlog of customer orders. Please discuss
whether supply
chain disruptions materially affect your outlook or business goals.
Specify whether these
challenges have materially impacted your results of operations or
capital resources and
quantify, to the extent possible, how your sales, profits, and/or
liquidity have been
impacted. Discuss known trends or uncertainties resulting from
mitigation efforts
undertaken, if any. Explain whether any mitigation efforts introduce
new material risks,
including those related to product quality, reliability, or regulatory
approval of products.
17. We note your disclosure on page 69 that you have undertaken several
initiatives to
increase revenue, including entering into new strategic partnerships.
To the extent
material, please disclose the terms of those strategic partnerships
and any
related agreements.
Liquidity and Capital Resources, page 61
18. Update the Liquidity and Capital Resources section in MD&A to disclose
all current
material debt of the company. Additionally, update the material
contracts section on page
94 to disclose the current status of your material contracts,
including your revolving credit
agreement and other debt agreements.
19. We note that the SEALSQ Group holds a credit line with WISeKey that
undertakes to
provide support for its future cash requirements to enable it to meet
its commitments for
the foreseeable future. Please revise to disclose the maximum amount
you can withdraw
from the credit line. If the maximum amount has not been established,
please state as such
in your disclosure.
Business, page 77
20. Please revise the description of your business to further discuss your
cryptography business. Discuss whether your business is or will be
dependent on a
blockchain that you did not develop. If so, please revise to describe
those blockchains and
the risks and challenges related to such reliance; if not, please
describe the risks related to
developing and maintaining your own blockchain, if applicable. Please
also disclose (i)
the material terms and characteristics of your non-fungible tokens
("NFTs") and any other
digital asset that you issue or use, including the process by which
the NFTs and any other
digital assets will be distributed to users and the risks to your
users of holding the digital
assets (e.g., any risks and challenges related to the storage or
custody of the private key(s)
granting access to the digital assets, such as the threat of a
cybersecurity breach).
21. Please revise your business section to provide a discussion of the
sources and availability
of raw materials. Refer to Item 4.B.4 of Form 20-F.
Carlos Moreira
FirstName LastNameCarlos Moreira
SEALSQ Corp
Comapany
January NameSEALSQ Corp
6, 2023
January
Page 5 6, 2023 Page 5
FirstName LastName
Business
Background and Purpose of the Spin-Off Distribution, page 79
22. We note that you engaged an independent third-party to assist with the
valuation services. Revise to disclose the name of the expert and file
a consent as an
exhibit to the registration statement. Refer to Question 233.02 of the
Securities Act Rules
Compliance and Disclosure Interpretations.
23. Please substantially revise this section to describe the independent
valuation report and the
projections included therein. Disclose the material assumptions
underlying the valuation
report and projections in addition to the limitations of the
projections, including, as
applicable, assumptions with respect to general business, economic,
regulatory, market
and financial conditions and other factors. Please revise to describe
such assumptions with
specificity and quantify where practicable. Ensure your revisions
adequately explain (i)
why the basis of the projections is reasonable (ii) the basis of the
projections beyond year
three and (iii) the reasonableness of the assumptions underlying your
projected long-term
growth rates. Please disclose any other information to facilitate
investor understanding of
the basis for, and limitations of, the valuation report and
projections.
Service of Process and Enforcement of Civil Liabilities, page 134
24. We note your disclosure here and on page 2 regarding service of
process and enforcement
of civil liabilities. Please disclose these risks in a separate risk
factor.
Index to Consolidated Financial Statements, page F-1
25. We note audited financial statements of the registrant, SEALSQ Corp
have been omitted.
A foreign private issuer that has been in existence less than a year
must include an audited
balance sheet that is no more than nine months old. If the foreign
private issuer has
commenced operations, audited statements of comprehensive income,
stockholders
equity and cash flows for the period from the date of inception to the
date of the audited
balance sheet also are required. Please provide audited financial
statements of the
registrant.
Exhibits
26. Please file the following agreements or explain why you are not
required to do so:
Employee Share Option Plan;
Debt Remission Agreement; and
Separation Agreements.
Carlos Moreira
FirstName LastNameCarlos Moreira
SEALSQ Corp
Comapany
January NameSEALSQ Corp
6, 2023
January
Page 6 6, 2023 Page 6
FirstName LastName
General
27. Please tell us why WISeKey International Holding AG is not named as a
selling
shareholder and a statutory underwriter under Section 2(a)(11) of the
Securities Act.
Refer to the Commission s guidance in Staff Legal Bulletin No. 4
(CF) dated September
16, 1997.
28. Please disclose whether and how your business segments, products,
lines of service,
projects, or operations are materially impacted by supply chain
disruptions, especially in
light of Russia s invasion of Ukraine or in light of the
effectiveness of the UFLPA. For
example, discuss whether you have or expect to:
suspend the production, purchase, sale or maintenance of certain
items due to a lack
of raw materials, parts, or equipment; inventory shortages;
reduced headcount; or
delayed projects;
experience labor shortages that impact your business;
experience cybersecurity attacks in your supply chain;
experience higher costs due to constrained capacity or increased
commodity prices or
challenges sourcing materials (e.g., nickel, palladium, neon,
cobalt, iron, platinum or
other raw material sourced from Russia, Belarus, or Ukraine or
cotton, polysilicon,
lithium, nickel, manganese, beryllium, copper, gold or other raw
material sourced
from Western China);
experience surges or declines in consumer demand for which you are
unable to
adequately adjust your supply;
be unable to supply products at competitive prices or at all due
to export
restrictions, sanctions, tariffs, trade barriers, or political or
trade tensions among
countries; or
be exposed to supply chain risk in light of Russia s invasion of
Ukraine, the
effectiveness of the UFLPA and/or related geopolitical tension or
have sought to de-
globalize your supply chain.
Explain whether and how you have undertaken efforts to mitigate the
impact and where
possible quantify the impact to your business.
You may contact Eiko Yaoita Pyles at (202) 551-3587 or Jean Yu at (202)
551-3305 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Patrick Fullem at (202) 551-8337 or Evan Ewing at (202) 551-5920 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing
cc: Herman H. Rasp