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United States securities and exchange commission logo
March 16, 2021
Scott R. Zemnick
General Counsel
VPC Impact Acquisition Holdings
c/o Victory Park Capital Advisors, LLC
150 North Riverside Plaza, Suite 5200
Chicago, IL 60606
Re: VPC Impact
Acquisition Holdings
Draft Registration
Statement on Form S-4
Submitted February
16, 2021
CIK No. 0001820302
Dear Mr. Zemnick:
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-4
Questions and Answers for Shareholder of VIH
What equity stake will current VIH shareholders and Bakkt Equity Holders
hold in Bakkt
Pubco..., page 14
1. We note that you
disclose the equity stake of stockholder groups assuming no redemption.
Please revise to also
disclose the equity stake of these groups assuming maximum
redemption.
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings
Comapany
March NameVPC Impact Acquisition Holdings
16, 2021
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What vote is required to approve each proposal at the extraordinary general
meeting?, page 23
2. On page 213, you disclose that VIH's Sponsor, executive officers and
directors have
agreed to vote in favor of the business combination. Please revise
this Q&A and elsewhere
to disclose the percentage of VIH shares that are subject to an
agreement to vote in favor
of the business combination. Additionally, since the business
combination proposal
requires only the affirmative vote of the majority of the votes cast
by VIH stockholders,
also disclose the percentage of remaining shares needed to vote for
the business
combination proposal if only a quorum of VIH shares are present.
Post-Closing Company Structure, page 32
3. Please revise the post-closing company structure chart to show the
percentage ownership
in Bakkt Holdings Inc. held by the VIH public shareholders, the VIH
sponsor and
independent directors, the PIPE investors and the Bakkt equity
holders. Also, show the
percentage ownership in Bakkt Opco Holdings, LLC. held by Bakkt
Holdings Inc. and the
Bakkt equity holders.
Risk Factors, page 52
4. You state that your digital asset marketplace is designed to enable
participants to
transact in digital assets. Please state clearly whether you intend to
include digital asset
securities as part of your business. Discuss how you will determine
whether a particular
digital asset is not a security. Add a risk factor that there may be
uncertainty regarding
your determination and regulators may disagree with your analysis.
Discuss the
regulatory oversight that you will have from the Securities and
Exchange Commission and
whether you would be required to register as an exchange or an ATS.
5. Please advise whether you will be a controlled company under the rules
of the NYSE
following the business combination. If so, please provide risk factor
disclosure of this
status and the corporate governance exemptions available to you as a
controlled company.
6. You disclose that Bakkt Marketplace is registered as a "money services
business" with the
U.S. U.S. Department of Treasury s Financial Crimes Enforcement
Network and that
Bakkt Marketplace is subject to federal and state consumer protection
laws and
regulations applicable to its activities by the Consumer Financial
Protection Bureau.
Please discuss risks and uncertainties related to being subject to the
laws and regulations
by FinCEN and the CFBP. Further, please clarify on page 84 that you
may be subject to
laws relating to securities, commodities and derivative laws.
7. Please provide the basis for your statement that the Commodity Futures
Trading
Commission has "publicly taken the position that certain virtual
currencies, which can
include cryptocurrencies, are commodities, and as such,
exchange-traded derivatives
involving bitcoin are subject to the CFTC s jurisdiction and
enforcement powers."
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings
Comapany
March NameVPC Impact Acquisition Holdings
16, 2021
March3 16, 2021 Page 3
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FirstName LastName
The Proposed Certificate of Incorporation will designate a state or federal
court..., page 65
8. Please revise the risk factor to state, as you do on pages 170 and
173, that the exclusive
forum provision does not apply to actions arising under the Exchange
Act. Also, state that
under Article XII of your proposed charter, the federal district
courts of the U.S. will be
the exclusive forum for actions arising under the Securities Act, that
there is uncertainty as
to whether a court would enforce such provision, and that investors
cannot waive
compliance with the federal securities laws and the rules and
regulations thereunder.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
VIH, page 222
9. Please tell us what operating metrics you regularly review and what
consideration you
gave to disclosing information about those metrics. We refer you to
Section III.B of SEC
Release No. 33-8350.
Information About Bakkt, page 247
10. Please disclose your timetable for adding other digital assets to your
marketplace.
Address any regulatory or other requirements that must be satisfied
before you can add
specific digital assets to your platform. Also, disclose the material
terms of your
agreements with loyalty sponsors. Finally, discuss the terms of your
arrangement with
Starbucks to use your alternative payment method.
Loyalty Redemption, page 247
11. Please provide more detail about the Loyalty Redemption service and
the alternative
payment method. Specifically, explain how bitcoin may be used as a
payment means
within those programs and how digital assets may be used in those
programs in the future.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Bakkt, page 261
12. Please clarify how you earn revenue, or expect to earn revenue,
through the services
provided on your platform. Also, disclose whether you accept, or plan
to accept, payment
for such services in the form of digital assets and, if so, whether
you intend to hold the
digital assets for investment or convert them into fiat currency after
receipt.
13. Disclose how the company intends to use the funds available after the
business
combination to grow Bakkt's business.
Our Corporate Structure, page 263
14. We note that you have identified Bakkt as the predecessor for
accounting purposes.
Please provide your analysis that supports this conclusion. We note
that B2S Holdings,
Inc. operations are significantly larger than that of Bakkt. In
addition, due to its
significance explain why B2S Holdings, Inc. is not included in your
MD&A.
Scott R. Zemnick
VPC Impact Acquisition Holdings
March 16, 2021
Page 4
Alternatively, consider whether the discussion of the results of
operations and financial
condition should be supplemented by a discussion based upon pro forma
financial
information for this combination.
15. You state that Bakkt Trust has been approved to, and does, offer
non-trading-related,
standalone custody of bitcoin to institutional customers and select
individual investors.
Please discuss which regulatory entity approved the activity, the form
of the approval, and
any conditions or limitations to the approval.
Management of the Company Following the Business Combination, page 283
16. For Messrs. Michael, Clifton and Watson, please briefly discuss the
specific experience,
qualifications, attributes or skills that led to the conclusion that
each should serve as a
director for your company, in light of your business and structure.
Please also indicate any
other directorships each has held during the last five years. Refer to
Item 401(e)(1) of
Regulation S-K.
Consolidated Statements of Operations, page F-37
17. You present operating expense by nature and by function. Please
consider revising this
statement to present your expenses on a consistent format. Your MD&A
discussion of
each expense items should describe how the nature of each expense
items is attributable to
a function. Further, clearly indicate the amounts of compensation that
represent equity
compensation and indicate how the use of equity for compensation will
impact future
trends in compensation.
Bakkt Holdings, LLC
4. Acquisitions, page F-47
18. Please provide your analysis that supports your conclusion that the
acquisition of Bakkt
Clearing, LLC and Digital Asset Custody Company, Inc. each represents
a business
combination and not an asset acquisition. We refer you to ASC
805-10-25-1 and 55-3A to
55-9. In addition, please disclose a qualitative description of the
factors that make up the
goodwill. See ASC 805-30-50-1(a).
13. Fair Value Measurements, page F-58
19. You disclose that the carrying amount of the deposits with clearinghouse
affiliate
approximate their fair values due to their short-term nature. Please
tell us why you
present these amounts as noncurrent assets on your balance sheet. You
also disclose that a
FirstName LastNameScott R. Zemnick
portion of the deposits is comprised of U.S. government securities.
Please tell us what
Comapany
formNameVPC
of financialImpact
assetsAcquisition Holdings
comprises the remaining balance of the
deposits. Please describe
how you will
March 16, 2021 Page 4 account and present investments in digital assets.
FirstName LastName
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings
Comapany
March NameVPC Impact Acquisition Holdings
16, 2021
March5 16, 2021 Page 5
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B2S Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss), page
F-65
20. You present operating expense by nature and function. Please consider
presenting the
expense items on a consistent format.
Revenue Recognition, page F-69
21. You disclose that professional services revenue primarily consists of
fees for software
development services associated with implementation and customization
of the B2S s
cloud- based software platform and revenues are recognized over the
longer of the
estimated customer relationship period. Please clarify whether these
services represent
distinct performance obligations. Tell us how you considered the
guidance in ASC 606-
10-25-21 and 606-10-25-27. In addition, revise your disclosures to
clearly identify the
performance obligations included in your arrangements. Further, tell
us whether a material
right exist in these arrangements. We refer you to ASC 606-10-55-41 to
55-45.
22. You disclose on page F-73 that your perpetual license is a separate
performance obligation
and revenues are recognized upon delivery. Please tell us if the
license relates to your
subscription services. Explain why your revenue recognition policy
does not disclose this
license. Further, indicate whether there are support services provided
with the license.
Ensure that your disclosure clearly identifies each distinct
performance obligation. In
addition, tell us what consideration was given to separately
presenting revenue from
products (i.e. licenses) and revenue from services (i.e. subscription
or services).
23. Please disclose the revenue recognized during the reporting period
that was included in
deferred revenue at the beginning of the period. We refer you to ASC
606-10-50-8(b).
24. Please provide your analysis for recording the transaction fee on a
net basis instead of a
gross basis. Identify the party that is legally obligated to provide
the loyalty or reward to
the end user. That is, please clarify which party controls the goods
or services upon
redemption of the loyalty reward before they are transferred to the
end user. Refer to ASC
606-10-25-18(f).
You may contact Amanda Kim, Staff Accountant, at (202) 551-3241 or
Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Matthew Crispino,
Staff Attorney, at (202) 551-3456 or Jan Woo, Legal Branch Chief, at (202)
551-3453 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
Scott R. Zemnick
VPC Impact Acquisition Holdings
FirstName
March 16, 2021 LastNameScott R. Zemnick
Comapany
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