United States securities and exchange commission logo
February 7, 2023
Matthew Reid
Chief Executive Officer
APPlife Digital Solutions Inc
50 California St, #1500
San Francisco, CA 94111
Re: APPlife Digital
Solutions Inc
Registration
Statement on Form S-1
Filed January 24,
2023
File No. 333-269389
Dear Matthew Reid:
We have limited our review of your registration statement to
those issues we have
addressed in our 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 S-1
Cover Page
1. You disclose that Matt
Reid, your sole officer and director, beneficially owns 68.83% of
your outstanding common
stock. Please disclose on the cover page that you are
a "controlled company"
and the identity and beneficial ownership percentage of your
controlling
shareholder.
The Offering, page 16
2. We note that you
entered into an Equity Financing Agreement with GHS Investments
LLC on December 15,
2022. Please incorporate by reference or file the Equtiy
Financing Agreement as
an exhibit to your registration statement. Refer to Item 601 of
Regulation S-K.
Matthew Reid
APPlife Digital Solutions Inc
February 7, 2023
Page 2
Description of Business
Products, page 20
3. With respect to your planned Lollipop NFT platform, please describe
the policies and
procedures that the company follows to avoid impermissibly engaging in
or facilitating
transactions in unregistered securities. In addition, please address
the specific risks
inherent in the operation of a marketplace, including those associated
with the company s
policies and procedures for determining that the NFTs the company may
offer in the
future through the platform are not securities. Please describe the
limitations of any such
policies and procedures and state that they involve risk-based
judgments by the company
and are not a legal standard or determination binding on any
regulatory body or court.
Please also describe the specific potential consequences if any of the
NFTs the
company may offer in the future through the marketplace are determined
to be securities
under U.S. law.
4. With respect to your planned NFT platform, please identify the
blockchain that you intend
to utilize and include a description of the processes and fees related
to the use of such
blockchain. To the extent that you intend to develop your own
blockchain, please provide
a discussion regarding the functional differences between the
blockchain you are
developing and other popular blockchains used for minting NFTs
(Ethereum, Solana,
etc.). Be sure to include a discussion of the impact of transaction
fees, lack of liquidity,
and volatility as it relates to your NFT platform.
5. Please provide a more detailed discussion of your planned NFT platform
with regards to
its functionality and the range of crypto assets you intend to utilize.
To the extent you will
accept crypto assets as payments, or otherwise acquire crypto assets,
provide a discussion
regarding whether you have a specific policy in place regarding when and
how you will
convert those crypto assets into fiat currency. Tell us whether you will
maintain any
royalty interest or intellectual property ownership of the NFTs sold on
your platform. For
example, explain whether the platform will permit creators or the
company to receive a
portion of all subsequent sales of each NFT, or only on the initial
sale. Discuss the
intellectual property underlying the NFTs and explain to us how disputes
over such rights
will be resolved and your role in such resolution, including your role
in the enforcement
of such rights. Additionally, disclose any risks relating to the
operation of such a platform
and any regulatory requirements with which you are required to comply.
For example,
discuss whether your NFT platform would be considered a money
transmitter requiring
FirstName LastNameMatthew Reid
registration as a money services business pursuant to FinCEN
requirements. As another
Comapany NameAPPlife
example, discuss theDigital Solutions
impact Inc and transaction fees, lack
of liquidity, and
of high gas
volatility
February 7, 2023asPage
it relates
2 to the NFT platform.
FirstName LastName
Matthew Reid
FirstName LastNameMatthew
APPlife Digital Solutions Inc Reid
Comapany7,NameAPPlife
February 2023 Digital Solutions Inc
February
Page 3 7, 2023 Page 3
FirstName LastName
6. We note that your NFT platform will also serve as a "wallet for
non-fungible
tokens." Please revise to clarify how you intend to hold the NFTs such
as whether they
will be held in digital wallets, exchanges, or hardware wallets, and
the security
precautions you will take to keep your and your customers crypto
assets secure. To the
extent you intend to utilize a third-party for custody of your and
your customers crypto
assets, provide a discussion of the custody arrangements and include
risk factors to
address the relevant risks.
7. Please supplementally provide us with your legal analysis as to
whether the NFTs offered
and sold through your marketplace are securities under Section 2(a)(1)
of the Securities
Act of 1933. In responding to this comment, please address your
operation of the
marketplace. See Gary Plastic Packaging Corp. v. Merrill Lynch,
Pierce, Fenner & Smith,
Inc., 756 F.2d 230 (2d Cir. 1985).
Signatures, page 60
8. With respect to director signatures, we note that you appear to have
five directors and only
one has signed. Please revise to provide the required signatures.
General
9. We note that your sole officer and director, is also your sole
full-time employee and is
located in China, that your marketing, business management, and
executive team operate
from China, and that your offices in China exist so that you can take
advantage of skilled
coders and developers at lower cost than developed countries. Please
tell us the percentage
of revenue generated from your operations in China. To the extent that
you are a china
based issuer please refer to the Dear Issuer Letter found at
https://www.sec.gov/corpfin/sample-letter-china-based-companies.
Matthew Reid
FirstName LastNameMatthew
APPlife Digital Solutions Inc Reid
Comapany7,NameAPPlife
February 2023 Digital Solutions Inc
February
Page 4 7, 2023 Page 4
FirstName LastName
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.
Please contact Kyle Wiley, Staff Attorney, at 202-344-5791 or Jan Woo,
Legal Branch
Chief, at 202-551-3453 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Chase Chandler