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United States securities and exchange commission logo
August 6, 2021
Vadim Komissarov
Chief Executive Officer
Trident Acquisitions Corp.
One Liberty Plaza,
165 Broadway St, 23rd Floor,
165 Broadway St, 23rd Floor, New York, NY 10006
Re: Trident
Acquisitions Corp.
Registration
Statement on Form S-4
Filed July 7, 2021
File No. 333-257734
Dear Mr. Komissarov:
We have reviewed your 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 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-4
Questions and Answers About The Proposal, page vii
1. Please provide Q&As
regarding the following:
The current
deadline to consummate a business combination, including a discussion
of the original
deadline and the number of extensions made to that deadline;
The current number
of TDAC public shares outstanding following redemptions in
connection with the
multiple extensions to the deadline to consummate a business
combination;
The original amount
deposited in the trust account following the IPO and the current
balance of the
trust account following the redemptions in connection with the
multiple extensions
to the deadline;
Vadim Komissarov
FirstName LastNameVadim
Trident Acquisitions Corp. Komissarov
Comapany
August NameTrident Acquisitions Corp.
6, 2021
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That TDAC is currently not in compliance with the listing
standards of Nasdaq for
acquisition companies because it did not complete a business
combination within 36
months of the effectiveness of its IPO registration statement,
disclosing the required
date and the potential consequences of not meeting this listing
standard;
The maximum number of public shares that can be redeemed that
will meet the
condition that TDAC have at least $5,000,001 of net tangible
assets remaining
immediately after the closing; and
The impact on non-redeeming shareholders of past shareholder
redemptions and
shareholder redemptions in connection with the vote on the
Business Combination
Proposal. For example, disclose that redeeming shareholders
retain their warrants.
Quantify the value of the warrants, based on recent trading
prices, that have been and
may be retained by redeeming stockholders and identify any
material resulting risks.
What vote is required to approve the Proposals?, page vii
2. Disclose the number and percentage of TDAC public shares that would be
required to
approve the Business Combination Proposal assuming (i) all outstanding
shares are
present and voting, and (ii) only a quorum of shares is present.
Summary, page 1
3. Please disclose all possible sources and extent of dilution that
shareholders who elect not
to redeem their shares may experience in connection with the business
combination.
Provide disclosure of the impact of each significant source of
dilution, including the
amount of equity to be held by Lottery.com stockholders, TDAC initial
stockholders and
TDAC public shareholders, warrants retained by redeeming shareholders
and earnout
shares, at minimum and maximum redemption levels, including any needed
assumptions.
Interests of Certain Persons in the Business Combination, page 5
4. Please highlight the risk that the TDAC Founder Holders and initial
stockholders will
benefit from the completion of a business combination and may be
incentivized to
complete an acquisition of a less favorable target company or on terms
less favorable to
shareholders rather than liquidate.
5. Please clarify if the TDAC Founder Holders and initial stockholders
can earn a positive
rate of return on their investment, even if other TDAC shareholders
experience a negative
rate of return in the post-business combination company.
6. Please separately disclose the conflicts of interest of TDAC s
directors and officers and
Lottery.com s directors and officers.
7. Please quantify the amount of cash contributions made by TDAC and by
its insiders in
connection with extension of the deadline to complete a business
combination. Explain
how the cash contributions made by TDAC would present a conflict of
interest to TDAC s
directors and officers.
Vadim Komissarov
Trident Acquisitions Corp.
August 6, 2021
Page 3
8. Please quantify the value of the 4,000,000 earn-out shares.
9. Please include the current value of loans extended, fees due, and
out-of-pocket expenses
for which the Founder Holders, their affiliates and officers and
directors are awaiting
reimbursement.
10. Please clarify how the TDAC board considered these conflicts in
negotiating and
recommending the business combination.
Risk Factors
Risks Related to TDAC's Business and the Business Combination, page 51
11. Disclose the material risks to unaffiliated investors presented by
taking Lottery.com
public through a merger rather than an underwritten offering. These
risks could include
the absence of due diligence conducted by an underwriter that would be
subject to liability
for any material misstatements or omissions in a registration
statement.
Proposal No. 1 - The Business Combination Proposal
Background of the Merger, page 77
12. Please discuss the extent to which TDAC or its affiliates engaged in
any substantive
contacts and negotiations with potential business combination targets
between its IPO and
November 7, 2020, when it became aware of Lottery.com as a potential
target.
13. Please discuss each time the TDAC board determined to solicit a
shareholder vote to
extend the deadline to consummate a business combination. Disclose the
outcome of the
shareholder votes, including the amount of redemptions, additional
deposits made by
TDAC or any of its affiliates to the Trust Account in connection with
these extensions,
and the amount of public shares and trust funds remaining after each
extension. Disclose
what consideration the TDAC board gave to the fact that TDAC would not
meet the
Nasdaq listing requirement to consummate a business combination within
36 months of
the effectiveness of its IPO registration statement.
14. Expand your disclosure of the parties negotiations of the business
combination and
related agreements to discuss the specific, material terms proposed in
the letters of intent,
drafts of the merger agreement, and related transactions, the terms
and conditions of the
final merger agreement, the determination of the final structure of
the proposed
transaction, and the ultimate amount and form of consideration.
Certain Lottery.com Projected Financial Information, page 80
15. We note that you have included eight opportunities for strategic mergers
and acquisitions
FirstName LastNameVadim Komissarov
in the projections which are projected to close through 2023. Please
expand the disclosure
Comapany NameTrident
to include Acquisitions
the assumptions Corp. your conclusion that it is
appropriate to include
underlying
Augustthese strategic
6, 2021 Page 3mergers and acquisitions in your projections.
FirstName LastName
Vadim Komissarov
FirstName LastNameVadim
Trident Acquisitions Corp. Komissarov
Comapany
August NameTrident Acquisitions Corp.
6, 2021
August
Page 4 6, 2021 Page 4
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16. It appears the Lottery.com projections may have been prepared in 2021.
Please explain
why the projections show 2020 revenues of $11 million when 2020
revenues were $7.5
million.
Material U.S. Federal Income Tax Considerations, page 115
17. The Business Combination Agreement and other disclosure indicates that
the parties
intend for the merger to be tax free to certain U.S. holders pursuant
to Section 368(a) of
the Internal Revenue Code. Please include an opinion of counsel that
supports this
conclusion. See Item 601(b)(8) of Regulation S-K and our Staff Legal
Bulletin No. 19.
Business of Lottery.com
Our Company
Overview, page 124
18. We note that you state that you intend to execute on strategic
acquisitions and other
synergistic opportunities. We also note on page 135 that you have
identified as potential
acquisition candidates businesses that operate in jurisdictions with
sizable TAM. Please
expand the disclosure here and elsewhere throughout the document
wherever you mention
such intentions, such as on pages 131, 135, 143, 146, 151, F-73, to
clarify whether you
have any acquisitions that are probable of occurring and whether you
have any
negotiations or letters of intent or agreements for acquisitions at
this time that may be
significant in the aggregate.
Lottery.com Management's Discussion and Analysis of Financial Condition and
Results of
Operations, page 143
19. Tell us whether there are any financial metrics used by Lottery.com
s management to
evaluate financial performance.
Lottery.com Management's Discussion and Analysis of Financial Condition...
Components of Our Results of Operations
Results of Operations, page 147
20. Please expand the discussion of revenue changes from period to period
to include
separately quantifying changes due to price and volume of the various
types of revenues.
Refer to Financial Reporting Codification section 501.04 for guidance.
Unaudited Pro Forma Condensed Combined Financial Information
Mexican Acquisitions, page 167
21. Please expand the disclosure to explain the methodology used to
determine the Autolotto
share value as of June 30, 2021 of $2.01 used in the purchase
consideration calculation.
Please also expand the disclosure in Note 2(A) on page 175
accordingly.
Vadim Komissarov
FirstName LastNameVadim
Trident Acquisitions Corp. Komissarov
Comapany
August NameTrident Acquisitions Corp.
6, 2021
August
Page 5 6, 2021 Page 5
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Beneficial Ownership of Securities, page 188
22. Please disclose the natural person or persons who exercise the voting
and/or dispositive
powers with respect to the securities owned by Polar Asset Management
Partners Inc.
Financial Statements - AutoLotto Inc.
Note 2. Significant Accounting Policies
Revenue Recognition, page F-58
23. Please expand the accounting policy for data licensing revenue and
other licensing
revenue to clarify that revenue from symbolic licenses are recognized
over the term of the
agreement. Please also revise the disclosure on page F-76 accordingly.
24. Please expand the disclosure to explain the basis for recognition of
revenues on a gross
basis, i.e. the retail value of the game, focusing on your role in
control of the assets in the
satisfaction of your performance obligations for lottery gaming
revenues.
Note 4. Intangible Assets, net, page F-60
25. We note on the statement of cash flows that you purchased $3.05
million of intangible
assets with cash and $15.45 million through the issuance of
convertible debt. Please
expand the disclosure in Note 4 to provide sufficient detail to
explain the increase from
December 31, 2020 to March 31, 2021 of $18.3 million.
Note 5. Notes Payable and Convertible Debt, page F-63
26. We note on page 151 that a portion of the Series B convertible
promissory notes matured
on December 31, 2020 and you have verbally agreed with the noteholders
to extend the
maturity of the notes pending a qualified financing that has not yet
occurred. Please
expand the disclosure to explain the basis for classification of these
notes as current or
long-term. If classified as long-term, tell us the basis for your
belief that such
classification is appropriate.
Note 11. Related Party Transactions, page F-66
27. We note on page F-66 that you have agreed to payment or reimbursement
of certain initial
and as-incurred expenses to a contractually capped limit, subject to
offset by any of
Master Goblin's positive net income attributable on a per location
basis. Please expand
the disclosure to clarify the accounting for initial and as-incurred
expenses and how the
offset of Master Goblin's positive net income is determined and
recorded. Please expand
the disclosure on page 142 accordingly.
Vadim Komissarov
FirstName LastNameVadim
Trident Acquisitions Corp. Komissarov
Comapany
August NameTrident Acquisitions Corp.
6, 2021
August
Page 6 6, 2021 Page 6
FirstName LastName
Note 13. Subsequent Events, page F-94
28. We note in February 2021 that you terminated an agreement with
Playsino Inc. to pursue a
business combination and issued Series B notes to Playsino Inc.
amounting to $12.4
million. Please expand the disclosure to clarify the accounting
treatment afforded to this
transaction.
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.
You may contact Claire DeLabar, Senior Staff Accountant, at
202-551-3349 or Robert
Littlepage, Accounting Branch Chief, at 202-551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Alexandra Barone,
Staff Attorney, at 202-551-8816 or Kathleen Krebs, Special Counsel, at
202-551-3350 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Mitchell S. Nussbaum