United States securities and exchange commission logo
July 13, 2023
Hope Stawski
President and Chief Executive Officer
Amphitrite Digital Incorporated
6501 Red Hook Plaza, Suite 201-465
St. Thomas, Virgin Islands, U.S., 00802
Re: Amphitrite Digital
Incorporated
Draft Registration
Statement on Form S-1
Submitted June 16,
2023
CIK No. 0001933762
Dear Hope Stawski:
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 S-1 submitted June 16, 2023
Cover Page
1. Please provide an agent
for service that is located in the United States.
Company Overview, page 1
2. We note your disclosure
that your "operating units have received more than 8,300 four or
five star reviews on
the major review sites: Google Reviews, TripAdvisor, and
Facebook." Please
revise your disclosure to provide additional context for this statement.
For example, in
addition to four and five star reviews, quantify reviews from the bottom
end of the scale (if
any), clarify the total number of reviews for your company received by
these review sites, and
specify the date range of these reviews.
Hope Stawski
FirstName
Amphitrite LastNameHope Stawski
Digital Incorporated
Comapany
July NameAmphitrite Digital Incorporated
13, 2023
July 13,
Page 2 2023 Page 2
FirstName LastName
Reorganization and Acquisitions, page 2
3. We note your disclosure indicating that as part of your formation, you
acquired Windy of
Chicago Limited, formed STDC Holdings Incorporated and acquired
Paradise Adventures
LLC as a wholly owned subsidiary and anticipate acquiring another
subsidiary upon the
consummation of this initial public offering. You also list operating
business units. Please
disclose here your principal subsidiaries and any entities in which
your operations are
conducted. We note the "corporate structure" diagram at page 78.
Prospectus Summary
Our Solutions and Competitive Strengths, page 4
4. We note that you have included a graphic on page 4 illustrating your
digital operating
platform. Please revise to include additional narrative details so
that an investor may
understand how your platform is utilized to "to more effectively
market and book tours,
manage resources and improve [y]our operating efficiencies." In
addition, please clarify
how your digital platform specifically addresses certain opportunities
within the "in-
destination tours, activities and attractions" that you identify on
page
3 including "advertising and marketing, customer service, repair and
maintenance and
overall operations."
5. We note your disclosure that your "marketing programs resulted in a
return on advertising
spending ( ROAS ) of 836.58% for the twelve months ended March 31,
2023." Please
enhance your disclosure to describe the mechanics of these programs,
how you measured
the return on advertising spending, and to clarify the meaning of your
"digitally enabled
campaign management."
Corporate Information, page 10
6. You state that you do not incorporate your website content as part of
the prospectus.
Nonetheless, we note that on July 13, 2023, content on your public
website includes this
statement: "... we hope you will consider us as your next investment
opportunity. Visit
our [hyperlinked] page for more information on this opportunity, and
join our growing
community of early investors today."
Provide us with the linked text and any similar statements from your
website. Also,
please tell us how long this solicitation has appeared on your
website, describe the content
of any similar statements or linked text, and quantify any sales which
have directly or
indirectly resulted from information that appeared there. If you
believe that these
statements, offers, and any resulting sales are consistent with
Section 5 of the Securities
Act of 1933, please provide support for your position including legal
analysis in your
letter of response. In the alternative, explain how you propose to
address any offers or
sales which were made in a manner that was inconsistent with Section
5.
Hope Stawski
FirstName
Amphitrite LastNameHope Stawski
Digital Incorporated
Comapany
July NameAmphitrite Digital Incorporated
13, 2023
July 13,
Page 3 2023 Page 3
FirstName LastName
Risk Factors
Risks Related to our Financial Condition
We have a history of losses and may not achieve or sustain profitability in the
future, page 21
7. Please provide a new risk factor with a title which references the
going concern language
in the auditor's report. We note the related information you include
in this risk factor.
Risks Relating to Our Business
We rely on supply chain vendors and third-party service providers who are
integral to the
operations of our businesses..., page 25
8. We note your risk factor relating to your dependence on supply chain
vendors and third-
party service providers. Update your risks characterized as potential
if recent supply chain
disruptions have impacted your operations.
Risks Related to our Management
We depend on our executive officers, particularly Scott and Hope Stawski, page
36
9. You state that "We do not have employment agreements with our
executive officers
... that require them to continue to work for us for any specified
period; therefore, they
could terminate their employment with us at any time." This appears to
be inconsistent
with the disclosure under "Employment Agreements with Executive
Officers" that begins
at page 107 and the substance of the agreements filed as exhibits.
Please revise to disclose
the duration of each such agreement and to eliminate any inconsistent
disclosures.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Factors Affecting Our Operating Results, page 56
10. We note your disclosure here stating that your total indebtedness,
excluding capital leases,
was $5,699,239. Please clarify whether this amount includes all of the
notes payable
disclosed on pages 66 and 67. Please also file all outstanding
promissory notes as exhibits
to your registration statement or tell us why you believe you are not
required to do so.
Refer to Item 601(b)(10) of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Non-GAAP Financial Measures, page 70
11. We note you describe Adjusted EBTIDA as "EBITDA, adjusted for
share-based
compensation expenses, development costs and one-time expenses,"
though in your table
showing its computation you exclude "non-cash stock compensation,"
"non-reoccurring
operating expenses" and "settlements and other non-core expenses."
Please revise your disclosures as necessary to reconcile the
description and line items in
the table and to provide further detail of the specific nature of the
expenses that you
consider to be development costs, one-time or non-recurring,
settlements, and non-core.
Hope Stawski
FirstName
Amphitrite LastNameHope Stawski
Digital Incorporated
Comapany
July NameAmphitrite Digital Incorporated
13, 2023
July 13,
Page 4 2023 Page 4
FirstName LastName
Also address the guidance of Item 10(e)(1)(ii)(B) of Regulation S-K
and Questions 100.01
and 102.03 of our Compliance & Disclosure Interpretations on Non-GAAP
Financial
Measures in your computation of Adjusted EBITDA.
12. We note you present the non-GAAP measure, Adjusted net cash from
operating activities
and Adjusted net cash as a percent of revenues. Please explain the
purpose of the
presentation of these measures as required by Item 10(e)(1)(i)(C) of
Regulation S-K.
As you are reconciling your non-GAAP measures to net cash provided by
(used in)
operating activities, it appears that you regard these measures as
liquidity measures. As
such, please tell us how you considered Item 10(e)(1)(ii)(A) of
Regulation S-K, which
generally prohibits the exclusion of charges or liabilities that
require, or may require, cash
settlement from a liquidity measure.
Our Business
Company History, page 76
13. We note your disclosure that on March 24, 2023, you entered into a
binding Purchase
Agreement to acquire Paradise Yacht Management, LLC. You further
disclose that the
base price was to paid on the earlier of the closing of this offering
and June 22, 2023. You
state here and elsewhere that the acquisition is to be completed upon
the consummation of
this initial public offering. However, your corporate structure chart
on page 78 indicates
that Paradise Yacht Management LLC is 100% owned by Amphitrite Digital
Incorporated. Please revise to confirm the status of this acquisition
and also to update the
status of any leases which are past the listed expiration date.
14. We note that the consideration to acquire Paradise Yacht Management
LLC includes up to
$2,500,000 as "contingent consideration" based on meeting and
exceeding financial plans
for 2022 and 2023. Please revise your disclosure to describe the terms
of the arrangement
and whether any amount is due and payable prior to the completion of
this initial public
offering. In this regard, we note that Section 1.2.4.1 of the
Membership Interest Purchase
Agreement provides that the contingent consideration for the 2022
financial year is due no
later than July 31, 2023. In addition, include a risk factor that
describes the potential risks
associated with the contingent consideration, including, if true, that
the Company may not
realize revenues from Paradise Yacht Management LLC until 2024.
Our Business
Company History
The Amphitrite Digital Fleet of Maritime Charter and Tour Vessels, page 81
15. We understand from your disclosure that you own or manage 59 vessels
in the Caribbean,
Florida and Lake Michigan as of March 31, 2022.
Hope Stawski
FirstName
Amphitrite LastNameHope Stawski
Digital Incorporated
Comapany
July NameAmphitrite Digital Incorporated
13, 2023
July 13,
Page 5 2023 Page 5
FirstName LastName
Please expand your disclosures as necessary to address the guidance in
Instruction 1 to
Item 102 of Regulation S-K, which requires information that will
reasonably inform
investors as to the suitability, adequacy, productive capacity, and
extent of utilization of
your principal material properties.
Security Ownership of Certain Beneficial Owners and Management, page 117
16. Please revise footnote 14 of your beneficial ownership table to
disclose all natural persons
who exercise voting or investment control over Oceanview Management
Services LLC.
Refer to Item 403 of Regulation S-K.
Consolidated Financial Statements, page F-1
17. Please update the financial statements and related information in your
registration
statement to comply with Rule 8-08 of Regulation S-X.
Consolidated Statements of Changes in Stockholders' Deficit, page F-5
18. We note your disclosure in Note 10 explaining that you issued
6,400,000 common shares
to the owners of Ham and Cheese Events, LLC in exchange forWindy of
Chicago Ltd. and
certain operating assets utilized in tour operations, and that you
consider this to have been
a transaction between entities under common control that resulted in a
change in the
reporting entity.
However, while you indicate the financial statements have been
retrospectively adjusted
to include the assets and liabilities and business operations for all
periods presented, as if
the reorganization occurred at the beginning of the earliest period
covered by your
financial statements, the Statements of Changes in Stockholders'
Equity on page F-5
depicts the issuance of common shares as having occurred during 2022.
Please address the inconsistency referenced above and revise as
necessary to comply with
the guidance in FASB ASC 250-10-45-21 and FASB ASC 805-50-45.
Note 9 - Asset Purchase of Windy of Chicago Ltd., page F-14
19. We note the Stock Sale and Purchase Agreement filed as Exhibit 2.1
indicates that Ham
and Cheese Events LLC acquired 100% of the common stock of Windy of
Chicago Ltd in
January 2022, and in connection with this purchase entered into
agreements to acquire the
vessel named Windy, which Windy of Chicago Ltd. had been leasing from
Tall Ship
Adventures of Chicago, Inc. However, your disclosure indicates that
Windy of Chicago
Ltd. was acquired on this date by STDC Holdings, which you identify as
your wholly-
owned subsidiary.
Please revise your disclosures in Notes 9, 10 and 11 as necessary to
resolve this
inconsistency and to clarify the sequence of transactions pertaining
to the conveyances of
entities, net assets and operations, along with the rationale and
associations between the
Hope Stawski
FirstName
Amphitrite LastNameHope Stawski
Digital Incorporated
Comapany
July NameAmphitrite Digital Incorporated
13, 2023
July 13,
Page 6 2023 Page 6
FirstName LastName
parties involved to understand how these agreements and parties are
related.
Please clarify the association with Tall Ship Adventures of Chicago,
Inc., and its owners,
as necessary to understand whether this is also a related party, and
file the Vessel
Purchase and Sale Agreement between Windy of Chicago Ltd. and Tall
Ship Adventures
of Chicago, Inc. as an exhibit.
Please also submit the analyses that you performed in concluding that
the acquisition of
Windy of Chicago Ltd and the vessel and operations would be reported
as an asset
purchase, rather than a business, considering the guidance in both
FASB ASC 805 and
Rule 11-01(d) of Regulation S-X.
Note 14 - Subsequent Events, page F-19
20. We note that you report having acquired Paradise Adventures, LLC on
January 13,
2023 for approximately $3,195,000; and having entered into a binding
purchase agreement on March 24, 2023 to acquire Paradise Yacht
Management LLC,
upon completion of your initial public offering, in exchange for
$8,780,000.
Given the apparent significance of these transactions, it appears that
you may need to
include separate historical financial statements for each of these
entities to comply with
Rule 3-05 of Regulation S-X, and pro forma financial statements
illustrating the effects of
these transactions to comply with Article 11 of Regulation S-X, as
applicable via Rule 8-
04 and Rule 8-05 of Regulation S-X.
However, if you do not believe that either transaction would require
financial statements
based on significance, or that either entity constitutes a business
for either accounting or
reporting purposes, provide us with the analyses that you performed of
the guidance in
Rule 3-05(b)(2) of Regulation S-X, or FASB ASC 805-10-55-3A through
55-9 and,
separately, Rule 11-01(d) of Regulation S-X, as applicable, in
formulating your view.
Please expand your various disclosures pertaining to these
acquisitions as necessary to
describe the nature and extent of any operations being conducted by
these entities,
including, to the extent applicable, all of the information that is
required by FASB ASC
805-10-50, 805-20-50 and 805-30-50.
Undertakings, page II-6
21. Please revise to include all the undertakings Item 512 of Regulation
S-K requires.
General
22. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications. Please contact the staff
member associated
Hope Stawski
Amphitrite Digital Incorporated
July 13, 2023
Page 7
with the review of this filing to discuss how to submit the materials, if
any, to us for our
review.
You may contact Jenifer Gallagher, Staff Accountant at (202) 551-3706
or Karl
Hiller, Accounting Branch Chief, at (202) 551-3686 if you have questions
regarding
comments on the financial statements and related matters. Please contact Anuja
A. Majmudar,
Attorney-Adviser, at (202) 551-3844 or Timothy S. Levenberg, Special Counsel,
at (202) 551-
3707 with any other questions.
Sincerely,
FirstName LastNameHope Stawski
Division of
Corporation Finance
Comapany NameAmphitrite Digital Incorporated
Office of Energy &
Transportation
July 13, 2023 Page 7
cc: Brenda Hamilton
FirstName LastName