United States securities and exchange commission logo
November 21, 2023
Ryan Polk
Chief Financial Officer
SideChannel, Inc.
146 Main Street, Suite 405
Worcester, MA 01608
Re: SideChannel, Inc.
Schedule TO-I Filed
November 7, 2023
File No. 005-83375
Dear Ryan Polk:
We have reviewed your
filing and have the following comments.
Please respond to these comments by providing the requested
information or advise us as
soon as possible when you will respond. If you do not believe our
comments apply to your facts
and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have
additional comments.
All defined terms used herein have the same meaning as in your offer
materials, unless otherwise
indicated.
Schedule TO-I Filed November 7, 2023
General
1. The cover page of your
Schedule TO includes a check box for offsetting filing fees and
related captions. This
is not included in the current version of Schedule TO and should be
removed from future
filings.
2. See the comment above.
We note that the filing fee calculation included on the cover page
of your Schedule TO and
the supporting table filed as Exhibit 107 only factor in the
maximum amount of new
Shares in determining the transaction value. Please update the
transaction value, and
filing fee, to also reflect the maximum amount of New Warrants
that may be issued in
the Offer. See Exchange Act Rule 0-11(b)(2). Additionally, please
revise Exhibit 107 to
conform with the format specified in Schedule TO under the heading
Calculation of
Filing Fee Tables.
3. Throughout the Offer to
Exchange, we have noticed several instances where the undefined
term "Warrants" is used
instead of 2021 Investor Warrants. Please revise to consistently
Ryan Polk
FirstName LastNameRyan Polk
SideChannel, Inc.
Comapany 21,
November NameSideChannel,
2023 Inc.
November
Page 2 21, 2023 Page 2
FirstName LastName
use the defined term 2021 Investor Warrants, or another defined term,
to refer to the
warrants that are subject to the Offer to Exchange to prevent any
confusion about who is
eligible to participate in the Offer.
4. Throughout your Schedule TO and the Offer to Exchange, we have noticed
several
instances where references to the New Warrants appear to be missing as
part of the
Offer s consideration. For example, Item 7(a) of your Schedule TO
only refers to funding
not being required to issue the new Shares. Additionally, Section 10
of the Offer to
Exchange (Material U.S. Federal Income Tax Consequences) only
considers the tax
consequences of exchanging the 2021 Investor Warrants for the Shares.
Please revise.
5. Under Item 4(a) of your Schedule TO, you state that [o]ur
Certificate of Incorporation
authorizes the issuance of 10,0000,000 [sic] undesignated shares of
Preferred Stock . . . .
Please revise to disclose the correct number of shares.
6. Refer to the following statement made on page iii of the Offer to
Exchange: If you want
to tender your 2021 Investor Warrants, but your other required
documents cannot be
delivered to the Company before the Expiration date of the Offer, then
you can still tender
your 2021 Investor Warrants if you comply with the procedures
described in Section
2. As there are no guaranteed delivery procedures outlined in
Section 2 of the Offer to
Exchange, please revise to clarify what specific procedures you are
referring to here, or
delete.
7. Revise the Offer to Exchange to include a section prominently
describing all material
terms of the New Warrants being offered. We note that the features of
the New Warrants
were amended on November 14, 2023 at a time when, according to
Amendment No. 1 to
your Schedule TO, approximately 23% of the 2021 Investor Warrants have
already been
tendered. Given the materiality of changing the offer consideration,
including removing
the Cashless Exercise restriction from the New Warrants, the amended
Offer to Exchange
addressing these comments should be disseminated to target security
holders in the same
manner as was done with the initial Offer to Exchange, with sufficient
time remaining in
the Offer Period for target security holders to react to these
changes. Please confirm your
understanding in your response letter.
Procedure for Tendering Warrants, page 6
8. Under the subheading "Withdrawal Rights," on page 7 of the Offer to
Exchange, disclose
that tendering holders of 2021 Investor Warrants may withdraw their
tenders if not
accepted for exchange after the expiration of forty business days from
the commencement
of the Offer. See Rule 13e-4(f)(2)(ii).
9. On page 7 of the Offer to Exchange, in the first paragraph under the
subheading
"Withdrawal Rights," you state that "[d]elivery of the Withdrawal Form
by facsimile or
email will not be accepted," whereas the first sentence of that
paragraph and the
Withdrawal Form indicate that email is an acceptable method of
delivery. Please revise to
address this discrepancy. Additionally, if the Withdrawal Form will be
accepted via email
Ryan Polk
FirstName LastNameRyan Polk
SideChannel, Inc.
Comapany 21,
November NameSideChannel,
2023 Inc.
November
Page 3 21, 2023 Page 3
FirstName LastName
delivery, then provide an email address where forms can be submitted
in the "Withdrawal
Rights" section.
10. Refer to the following statements on page 8 of the Offer to Exchange:
We will
determine, in our discretion, all questions as to form, validity,
including time of receipt,
eligibility and acceptance of any tender of 2021 Investor Warrants or
withdrawal of
tendered 2021 Investor Warrants. Our determination of these matters
will be final and
binding on all parties. Please revise these statements to include a
qualifier that warrant
holders are not foreclosed from challenging your determination in a
court of competent
jurisdiction. Also, add a similar qualifier to the bolded language in
all caps at the end of
the subsection entitled Withdrawal Rights.
11. On page 8 of the Offer to Exchange, you state: [u]pon the terms and
subject to the
conditions of the Offer, we expect, upon the expiration of the Offer,
to . . . issue Common
Stock and New Warrants in exchange for tendered Warrants pursuant to
the Offer . . . .
Please revise to disclose your anticipated timing for issuing the
Common Stock and New
Warrants after the Expiration Date, ensuring that payment for or
return of tendered
securities is made promptly. See Rule 13e-4(f)(5).
12. Refer to the following statement made at the top of page 9 of the
Offer to Exchange: If
you tender Warrants pursuant to the Offer, you will receive legended
Shares and you will
generally be entitled to tack your holding period of the 2021
Investor Warrants so
tendered for purposes of Rule 144 under the Securities Act. If
true, please revise to
clarify that the Shares received by participating holders of the 2021
Investor Warrants will
be restricted securities, and please reconcile with your statement, on
page 6 of the Offer to
Exchange, that the new securities are being issued in reliance on the
exemption set forth in
Section 3(a)(9) of the Securities Act of 1933.
Background and Purpose of the Offer, page 10
13. Revise the subheading "Purpose of the Offer," starting on page 10 of
the Offer to
Exchange, to address the tender offer for Company warrants (including
the 2021 Investor
Warrants) conducted by the Company in August 2023. Please explain why
the terms of
this Offer to Exchange differ from that previous tender offer and how
those differences
are consistent with the purpose(s) for conducting this Offer.
14. On page 11 of the Offer to Exchange, you describe the Board of
Directors discretionary
authority to implement a reverse stock split, but state that
[t]he Board of Directors has
not yet determined what if any action will be taken pursuant to this
reverse-split
authorization. Please describe how a future reverse stock split
would impact the holders
of the 2021 Investor Warrants and impact their decision to tender (or
not). Also, revise
similar disclosure elsewhere in the Offer to Exchange and your
Schedule TO accordingly.
Finally, revise here and under the subheading "Purpose of the Offer,"
on page 10 of the
Offer to Exchange, to explain how undertaking a reverse stock split
after the Offer to
Exchange is consistent with the stated purpose of "increasing the
public float in the
Ryan Polk
SideChannel, Inc.
November 21, 2023
Page 4
market" as expressed there.
Transactions and Agreements Concerning the Warrants, page 12
15. We note the disclosure here that the Company has engaged Paulson as a
consultant in
connection with this Offer to Exchange. Please provide the disclosure
required by Item 9
of Schedule TO and Item 1009(a) of Regulation M-A.
Financial Information Regarding the Company, page 12
16. Where a filing person elects to incorporate by reference the
information required by Item
1010(a) of Regulation M-A, all of the summarized financial information
required by Item
1010(c) must be disclosed in the document furnished to security
holders. See Instruction 6
to Item 10 of Schedule TO and telephone interpretation I.H.7 in the
July 2001 supplement
to our Manual of Publicly Available Telephone Interpretations
available on the
Commission s website at http://www.sec.gov. Please revise the Offer
to Exchange to
include the information required by Item 1010(c) of Regulation M-A and
disseminate the
amended disclosure in the same manner as the original offer materials.
17. Please update the book value per share disclosed in this section of
the Offer to Exchange
and Item 10(a) of Schedule TO to reflect the most recent balance sheet
presented in the
financial information incorporated by reference. See Item 1010(a)(4)
of Regulation M-A.
18. It appears you have not provided the pro forma financial information
required by Item
1010(b) of Regulation M-A. Please explain why you do not believe that
pro forma
financial information is material in the context of this Offer to
Exchange, or revise to
provide it in the amended offer materials.
We remind you that the filing persons are responsible for the accuracy
and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please direct any questions to Christina Chalk at 202-551-3263, Shane
Callaghan at 202-
330-1032, or Eddie Kim at 202-679-6943.
FirstName LastNameRyan Polk Sincerely,
Comapany NameSideChannel, Inc.
Division of
Corporation Finance
November 21, 2023 Page 4 Office of
Mergers & Acquisitions
FirstName LastName