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United States securities and exchange commission logo
September 23, 2021
Jason Conroy
Chief Executive Officer
Iris Energy Pty Ltd
Level 21, 60 Margaret Street
Sydney, NSW 2000 Australia
Re: Iris Energy Pty Ltd
Draft Registration
Statement on Form F-1
Submitted August
26, 2021
CIK No. 0001878848
Dear Mr. Conroy:
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 F-1
Cover Page
1. Please tell us why you
include references to the designated market maker here and on
page 102 when it
appears that you intend to list on the Nasdaq. Also, tell us why you refer
to multiple financial
advisors when it appears that B. Riley Securities, Inc. is the only
financial advisor for
this offering.
Jason Conroy
FirstName
Iris EnergyLastNameJason Conroy
Pty Ltd
Comapany 23,
September NameIris
2021 Energy Pty Ltd
September
Page 2 23, 2021 Page 2
FirstName LastName
Prospectus Summary
Our Company, page 1
2. Please disclose the company's revenues and net loss for the periods
presented.
Summary Historical Financial Information, page 8
3. Please revise to include pro forma earnings per share information that
reflects the
conversion of the convertible notes into ordinary shares upon the IPO,
along with the
related impact to interest expense. Also, to the extent the IPO will
satisfy the share price
thresholds for any tranche in the incentive arrangement with Daniel
and William Roberts
such that compensation expense will be recorded and ordinary shares
issued upon
effectiveness of the offering, revise to include adjustments to the
numerator and
denominator of your pro forma per share calculations for the
additional shares and related
share-based compensation expense. Further, include comparable pro
forma statements of
financial position information.
Risk Factors
Any critical failure of key electrical or data equipment..., page 12
4. Please provide examples of the types of equipment that represent
single points of failure
and that have long lead times from the time an order is placed until
installation and
commissioning.
We may be unable to raise additional capital..., page 14
5. We note your disclosure of your binding commitment to purchase mining
hardware.
Please disclose the material terms of such agreement(s), including the
term, termination
provisions and any minimum purchase requirements.
Our reliance on third-party mining pool service providers..., page 26
6. We note your disclosure of your reliance on third-party mining pool
service providers.
Please disclose the material terms of any service agreement with such
providers, including
the term and termination provisions.
The registration and listing of our Ordinary shares..., page 40
7. Please replace the first two sentences of this risk factor with the
sentence: "Prior to the
opening of trading on the Nasdaq Stock Market LLC, there will be no
book building
process and no price at which underwriters initially sell shares to
the public..." in order to
properly focus the risk on the underwriting activities that will not
be present.
Jason Conroy
FirstName
Iris EnergyLastNameJason Conroy
Pty Ltd
Comapany 23,
September NameIris
2021 Energy Pty Ltd
September
Page 3 23, 2021 Page 3
FirstName LastName
Capitalization, page 58
8. Please revise to include pro forma information here in columnar format
reflecting the
impact of the conversion of the convertible debt upon the IPO, the
impact of the incentive
arrangement with Daniel and William Robert, if any, as well as the two
classes of shares
to be outstanding following the offering.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Comparison of Our Results of Operations for the Half Year ended December 31,
2020 and
December 31, 2019, page 61
9. You state on page 63 that the increase in mining revenue was primarily
attributable to
higher Bitcoin prices and the greater number of Bitcoin produced and
sold in the half year
ended December 31, 2020. Please revise to quantify the number of
Bitcoin produced and
sold for each period as well as the amount of the increase in revenue
attributable to the
higher Bitcoin prices. Refer to Section III.D of SEC Release No.
33-6835.
Liquidity and Capital Resources, page 65
10. Please revise to state whether, as of the most recent balance sheet
date, your existing cash
will be sufficient to meet capital expenditure needs for the next 12
months. To the extent
it will not, disclose how long you will be able to continue to fund
your operations using
current available cash resources. We refer you to FRC 501.03(a) and
Section IV of SEC
Release 33-8350.
Management
Remuneration, page 81
11. Please file the Employee Share Plan, Employee Option Plan and the
employment
agreements with your executive officers as exhibits to your
registration statement or
advise. Refer to Item 601(b)(10)(iii)(A) of Regulation S-K.
Certain Relationships and Related Party Transactions, page 87
12. Please disclose the material terms of the related party loans
described on page F-30. Also,
identify the entity affiliated with Mr. Gozowski that purchased your
ordinary shares in a
private placement. Refer to Item 7.B of Form 20-F.
Jason Conroy
FirstName
Iris EnergyLastNameJason Conroy
Pty Ltd
Comapany 23,
September NameIris
2021 Energy Pty Ltd
September
Page 4 23, 2021 Page 4
FirstName LastName
Principal and Registered Stockholders, page 88
13. Please disclose the portion of each class of securities held in the
United States and the
number of record holders in the United States. Refer to Item 7.A.2 of
Form 20-F.
Description of Share Capital and Constitution
Key Provisions in Our Constitution, page 89
14. Please describe the circumstances under which holders of your ordinary
shares will be
entitled to vote separately as a single class.
Plan of Distribution, page 112
15. Please disclose which specific Nasdaq rule provision requires Nasdaq
to consult with B.
Riley Securities, Inc. when conducting its price validation checks and
clarify the type of
guidance Nasdaq may seek from B. Riley Securities, Inc. when
conducting its price
validation checks on the day of listing.
Notes to the consolidated financial statements
Note 2. Significant accounting policies
Revenue Recognition, page F-10
16. You disclose that in certain pools the amount of reward for computing
power depends on
the pool s success in mining blocks. Please revise to clarify
whether revenue earned from
these pools consists of block rewards and transaction fees and how the
amount of revenue
earned is determined. Further, you disclose that in other pools, the
group is not directly
exposed to the pool s success in mining blocks. For these other
pools, revise to explain
how revenue is generated, how it is determined and how that differs
from pools in which
rewards are based on the pool s success.
Notes to the unaudited interim consolidated financial statements
Note 14. Events after the reporting period, page F-45
17. Please disclose the date when the financial statements were authorized
for issue and who
gave that authorization. Refer to IAS 10.17.
18. You disclose an incentive arrangement with Daniel Roberts and William
Roberts under
which the number of options will convert into ordinary shares upon
achieving certain
share price thresholds. Please revise to include the estimated
share-based compensation
expense to be recorded upon completion of the IPO if the various
thresholds are met.
Refer to IAS 10.21(b).
19. Please provide us with a breakdown of all share-based compensation
awards granted since
January 1, 2021. Provide the fair value of the underlying shares used
to value each award.
To the extent there was any significant fluctuations in the fair
values, describe for us the
factors that contributed to such fluctuations, including any
intervening events within the
Jason Conroy
Iris Energy Pty Ltd
September 23, 2021
Page 5
company or changes in your valuation assumptions or methodology. Please
continue to
update this analysis through effectiveness of the registration statement.
Also, disclose any
share-based issuances subsequent to the most recent balance sheet date
and the expected
financial statement impact in your subsequent event footnote, if
material.
General
20. 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.
You may contact Melissa Kindelan, Senior Staff Accountant, at (202)
551-3564 or
Kathleen Collins, Accounting Branch Chief, at (202) 551-3499 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Priscilla Dao, Staff
Attorney, at (202) 551-5997 or Jeff Kauten, Staff Attorney, at (202) 551-3447
with any other
questions.
Sincerely,
FirstName LastNameJason Conroy
Division of
Corporation Finance
Comapany NameIris Energy Pty Ltd
Office of
Technology
September 23, 2021 Page 5
cc: Drew Capurro
FirstName LastName