Correspondence 0001193125-23-225087 from Beneficient (BENF)
Beneficient
Date: Aug. 30, 2023 · CIK: 0001775734 · Accession: 0001193125-23-225087
AI Filing Summary & Sentiment
File numbers found in text: 333-273322
Referenced dates: August 10, 2023
Letter
August 30, 2023
VIA EDGAR
U.S. Securities and Exchange Commission
100 F Street, N.E.
Division of Corporation Finance
Officer of Finance
Washington, D.C. 20549
Attention: Robert Arzonetti and Tonya Aldave
Re: Beneficient
Registration Statement on Form S-1
Filed July 19, 2023
File No. 333-273322
Ladies and Gentlemen:
On behalf of Beneficient (the “Company”), below is the response of the Company to the comments of the staff of the Division of Corporation Finance (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) set forth in the Staff’s letter, dated August 10, 2023, regarding the Company’s Registration Statement on Form S-1 (the “Registration Statement”) filed with the Commission on July 19, 2023. In connection with this letter, an amendment to the Registration Statement (“Amendment No. 1”) has been submitted to the Commission on the date hereof.
For your convenience, the Staff’s comments are set forth in bold, followed by responses on behalf of the Company. Unless otherwise indicated, all page references in the responses set forth below are to the pages of the clean copy of Amendment No. 1. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in Amendment No. 1.
Registration Statement on Form S-1
General
1. Please disclose in the prospectus summary, risk factors and MD&A sections, the exercise price of the warrants compared to the market price of the underlying securities. Because the warrants are out the money, please disclose the likelihood that warrant holders will not exercise their warrants. Please also disclose that cash proceeds associated with the exercises of the warrants are dependent on the stock price. As applicable, describe the impact on your liquidity and update the discussion on the ability of your company to fund your operations on a prospective basis with your current cash on hand.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 7, 8, 73 and 144 of Amendment No. 1 accordingly.
2. Please revise your prospectus to disclose that while the sponsor, private placement investors or other selling shareholders may experience a positive rate of return based on the current trading price, the public securityholders may not experience a similar rate of return on the securities they purchased due to differences in the purchase prices and the current trading price. Please also include appropriate risk factor disclosure.
Haynes and Boone, LLP
2323 Victory Avenue | Suite 700 | Dallas, TX 75219
T: 214.651.5000 | haynesboone.com
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 7, 8 and 56 of Amendment No. 1 accordingly.
3. In light of the significant number of redemptions and the unlikelihood that the company will receive significant proceeds from exercises of the warrants because of the disparity between the exercise price of the warrants and the current trading price of the Class A common stock, expand your discussion of capital resources to address any changes in the company’s liquidity position since the business combination. If the company is likely to have to seek additional capital, discuss the effect of this offering on the company’s ability to raise additional capital.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 144 and 145 of Amendment No. 1 accordingly.
4. Please expand your discussion to reflect the fact that this offering and the two additional registration statements on Form S-1 filed on July 19, 2023 involve the potential sale of a substantial portion of shares for resale and discuss how such sales could impact the market price of the company’s common stock. Your discussion should highlight the fact that selling shareholders will be able to sell all of their shares for so long as the registration statements are available for use.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on page 56 of Amendment No. 1 accordingly.
5. On July 28, 2023, the Wall Street Journal article entitled “2 Billion Default Followed Warnings to Everyone but Investors” reported that millions of dollars in payments were made from you to your CEO, Brad Heppner, and his related entities including:
•
$156.5 million to HCLP Nominees, L.L.C, a Hepner-related financial trust;
•
$14.2 million to Bradley Capital Company, L.L.C., which was used to pay for a private jet; and
•
$3.1 million to The Heppner Endowment for Research Organizations, L.L.C. (“HERO”) and Research Ranch Operating Company, L.L.C. (“RROC”), which are related to the Bradley Oaks Ranch (Mr. Hepner’s ranch).
We also note that you disclose a number of related party transactions with entities that Mr. Heppner has an interest. In order for investors to better understand the extent of Mr. Heppner’s interest my be different from your shareholders, provide a tabular presentation detailing all payments made to Mr. Heppner as well as to present any rights to payments, securities or other cash flows that are senior to those of your common shareholders.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 213 to 218 of Amendment No. 1 to include a tabular disclosure describing payments made to Mr. Heppner for his benefit for the periods required to be disclosed in the Form S-1 by relevant items of Regulation S-K as well as a description of equity interests held by Mr. Heppner or entities in which he has an interest.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
6. Please provide all of the information required by the applicable provisions of Item 404 of Regulation S-K, including the following:
•
On page 170 of your annual report on Form 10-K for fiscal year ended March 31, 2023, you stated that Messrs. Jon and Steven Sabes contributed 1,452,155 shares of GWG’s common stock to a limited liability company (“SPV”) owned by a Related Entity and an entity held by one of the current directors of Ben Management, the general partner of BCG, in exchange for certain equity interests in the SPV. “Related Entity” or “Related Entities” include certain trusts that are directly or indirectly controlled by your CEO, Brad Heppner, and those entities are directly or indirectly held by such trusts. Please disclose the names of the Related Entities, Mr. Heppner’s relationship with the Related Entities, and the amount of shares received by each Related Entity.
•
On pages 170 to 171 of your annual report on Form 10-K for fiscal year ended March 31, 2023, you stated that on May 31, 2019, certain trusts included in the ExAlt Plan (the “LiquidTrust Borrowers”) executed a Promissory Note payable to GWG Life for a principal amount of $65.0 million that matures on June 30, 2023. Please disclose the names of the trusts and the basis on which such trusts are related persons.
•
On pages 172 of your annual report on Form 10-K for fiscal year ended March 31, 2023, you stated that on May 15, 2020, you, through your BCC subsidiary, executed a term sheet with the lender, HCLP, a Related Entity, to amend the First Lien Credit Agreement and Second Lien Credit Agreement dated September 1, 2017 and December 28, 2018, respectively. Please disclose the basis on which HCLP is a related person.
•
On page 174 of your annual report on Form 10-K for fiscal year ended March 31, 2023, you stated that in connection with the Second Amended and Restated Agreements, BHI, a Related Entity that owns a majority of the Class S Ordinary Units, Class S Preferred Units, Preferred A-0 Unit Accounts, Preferred A-1 Unit Accounts, and BCH FLP-1 Unit Accounts issued by BCH, will grant certain tax-related concessions to HCLP as may be mutually agreed upon between the parties. Please disclose the basis on which BHI is a related person.
•
On page 175 of your annual report on Form 10-K for fiscal year ended March 31, 2023, under the heading “Relationship with Ben Securities,” you made a general statement that Ben Securities creates various conflicts of interest and incentives because, through your ownership of Ben Securities, you and your owners and employees receive profit participation, equity incentives or similar benefits, including your CEO, Ben Heppner. Please disclose names of the related persons, and the approximate dollar amount involved in the transactions, as required by Item 404 of Regulation S-K.
•
On page 178 of your annual report on Form 10-K for fiscal year ended March 31, 2023, under the heading “Administrative Services Agreement between Constitution Private Capital Company, L.L.C. (‘Constitution’) and Beneficient USA,” you stated that Constitution is an entity owned 50.5% by BHI and 49.5% by BMP and that it was acquired by a Related Entity in 1996. You further state on page 20 of your Form 10-K that BMP is owned by certain of your directors and senior employees. Please disclose the Related Entity that purchased Constitution, the identity and ownership percentages of the directors/employees that own BMP, as well as any relationship between Constitution/BMP and your CEO, Brad Heppner.
•
On page 178 of your annual report on Form 10-K for fiscal year ended March 31, 2023, under the heading “Relationship with The Heppner Endowment for Research Organizations, L.L.C. (‘HERO’) and Research Ranch Operating Company, L.L.C. (‘RROC’),” you stated that HERO and RROC are indirectly owned by a Related Entity. Please disclose the Related Entity, any relationship between the Related Entity and your CEO, Brad Heppner.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
•
On page 179 of your annual report on Form 10-K for fiscal year ended March 31, 2023, under the heading “Relationship between Ben and Hicks Holdings LLC,” you stated that Hicks Holdings LLC, an entity associated with one of your current directors, is one of the owners and serves as the manager of a limited liability company and that a Related Entity also has ownership in the limited liability company. Please disclose the director associated with Hicks Holdings, the name of the limited liability company Hicks Holdings serves as a manager of, and the name of the Related Entity that has any ownership in the limited liability company.
•
On page 180 of your annual report on Form 10-K for fiscal year ended March 31, 2023, under the heading “Services provided by representatives of Ben and the trusts associated with the loans,” you stated that an independent party currently serves as trustee for the LiquidTrusts and certain of the other trusts in the associated ExAlt Plan but that previously an employee of yours and another individual served as co-trustees for these trusts. Please disclose the names of the other trusts, the names of the employee and the other individual that served as co-trustees if those parties remain your related parties to or any of your subsidiaries.
•
On page 185 of your annual report on Form 10-K for fiscal year ended March 31, 2023, under the heading “BCH FLP Unit Accounts,” you stated that BCH issued the BCH FLP-3 Unit Accounts to an entity controlled and directly or indirectly owned by your CEO, Brad Heppner. Please disclose the name of the entity in question and Mr. Heppner’s role in and ownership of such entity.
Response: The Company acknowledges the Staff’s comment and, except as provided below, has revised the disclosure throughout Amendment No. 1 accordingly.
With respect to the disclosure under the heading, “Relationship with Ben Securities,” the Company acknowledges the Staff’s comment and respectfully advises the Staff that the disclosure concerning Ben Securities was not included in response to Item 404 of Regulation S-K; rather, it was included to provide disclosure concerning the potential conflicts of interest that could arise or be perceived due to the nature of certain interests held by the Company’s officers, employees and directors. While certain allocations based on the revenue of Ben Securities are made pursuant to the BCH Eighth A&R LPA to BHI, as a result of its ownership of the BCH FLP-1 Unit Accounts, and to BMP, as a result of its ownership of the BCH FLP-2 Unit Accounts, such allocations are based in part on the overall performance of Ben Securities and are not derived from specific transactions between Ben Securities and the Company. In addition, to the extent any executive officers receive any commissions or other compensation relating to any specific transactions involving Ben Securities, such compensation would be reported under Item 402 of Regulation S-K if the executive officer would have been a named executive officer and, pursuant to Instruction 5 of Item 404 of Regulation S-K, no disclosure would be required. The Company respectfully maintains that there are no specific transactions involving Ben Securities that would be reportable under Item 404 of Regulation S-K and therefore, the Company believes that its relationship with Ben Securities does not constitute a related party transaction under Item 404 of Regulation S-K. Accordingly, the Company has relocated the disclosure under the heading “Relationship with Ben Securities” within the section “Certain Relationships and Related Party Transactions” and has clarified that it does not believe there are any reportable transactions between the Company and Ben Securities pursuant to Item 404 of Regulation S-K.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
Prospectus Summary
Forward Purchase Agreement, page 5
7. We note your disclosure related to the Prepaid Forward Purchase Agreement between you and RiverNorth SPAC Arbitrage Fund. Please revise to disclose who RiverNorth agreed to purchase the shares from. In this regard we note that Section (1)(a)(i) of the Form of Prepaid Forward Purchase Agreement filed as Exhibit 10.27 refers to “redeeming shareholders” without identifying the shareholders. In addition, disclose if any of the redeeming shareholders are your related parties. If applicable, include this agreement in the related party transactions section of the registration statement or advise.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 5 and 6 of Amendment No. 1 to disclose that, to the Company’s knowledge, RiverNorth did not purchase any shares under the Forward Purchase Agreement from related parties of the Company.
Risk Factors, page 9
8. Please include an additional risk factor highlighting the negative pressure potential sales of shares pursuant to this registration statement could have on the public trading price of the Class A common stock. To illustrate this risk, disclose the purchase price of the securities being registered for resale on the two additional registration statements on Form S-1 filed on July 19, 2023, as well as the securities that may be sold by RiverNorth under the forward purchase agreement. Also disclose that even though the current trading price is significantly below the SPAC IPO price, some of the selling securityholders have an incentive to sell because they will still profit on sales because of the lower price that they purchased their shares than the public investors.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on page 56 of Amendment No. 1 accordingly.
9. We note that on page 55 of your Annual Report on Form 10-K for fiscal year ended March 31, 2023, you stated that on June 29, 2023 you had received a Wells Notice from the staff of t
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CORRESP
1
filename1.htm
CORRESP
August 30, 2023
VIA EDGAR
U.S. Securities and Exchange
Commission
100 F Street, N.E.
Division of Corporation
Finance
Officer of Finance
Washington, D.C. 20549
Attention: Robert Arzonetti and Tonya Aldave
Re:
Beneficient
Registration Statement on Form S-1
Filed July 19, 2023
File No. 333-273322
Ladies and Gentlemen:
On behalf of Beneficient
(the “Company”), below is the response of the Company to the comments of the staff of the Division of Corporation Finance (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) set
forth in the Staff’s letter, dated August 10, 2023, regarding the Company’s Registration Statement on Form S-1 (the “Registration Statement”) filed with the Commission on July 19, 2023. In connection with this
letter, an amendment to the Registration Statement (“Amendment No. 1”) has been submitted to the Commission on the date hereof.
For your convenience, the Staff’s comments are set forth in bold, followed by responses on behalf of the Company. Unless otherwise
indicated, all page references in the responses set forth below are to the pages of the clean copy of Amendment No. 1. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in Amendment
No. 1.
Registration Statement on Form S-1
General
1.
Please disclose in the prospectus summary, risk factors and MD&A sections, the exercise price of the
warrants compared to the market price of the underlying securities. Because the warrants are out the money, please disclose the likelihood that warrant holders will not exercise their warrants. Please also disclose that cash proceeds associated with
the exercises of the warrants are dependent on the stock price. As applicable, describe the impact on your liquidity and update the discussion on the ability of your company to fund your operations on a prospective basis with your current cash on
hand.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 7,
8, 73 and 144 of Amendment No. 1 accordingly.
2.
Please revise your prospectus to disclose that while the sponsor, private placement investors or other
selling shareholders may experience a positive rate of return based on the current trading price, the public securityholders may not experience a similar rate of return on the securities they purchased due to differences in the purchase prices and
the current trading price. Please also include appropriate risk factor disclosure.
Haynes and Boone, LLP
2323 Victory Avenue | Suite 700 | Dallas, TX 75219
T: 214.651.5000 | haynesboone.com
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
2
Response: The Company acknowledges the Staff’s comment and has revised the
disclosure on pages 7, 8 and 56 of Amendment No. 1 accordingly.
3.
In light of the significant number of redemptions and the unlikelihood that the company will receive
significant proceeds from exercises of the warrants because of the disparity between the exercise price of the warrants and the current trading price of the Class A common stock, expand your discussion of capital resources to address any
changes in the company’s liquidity position since the business combination. If the company is likely to have to seek additional capital, discuss the effect of this offering on the company’s ability to raise additional capital.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 144 and
145 of Amendment No. 1 accordingly.
4.
Please expand your discussion to reflect the fact that this offering and the two additional registration
statements on Form S-1 filed on July 19, 2023 involve the potential sale of a substantial portion of shares for resale and discuss how such sales could impact the market price of the company’s common
stock. Your discussion should highlight the fact that selling shareholders will be able to sell all of their shares for so long as the registration statements are available for use.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on page 56 of Amendment No. 1
accordingly.
5.
On July 28, 2023, the Wall Street Journal article entitled “2 Billion Default Followed Warnings to
Everyone but Investors” reported that millions of dollars in payments were made from you to your CEO, Brad Heppner, and his related entities including:
•
$156.5 million to HCLP Nominees, L.L.C, a Hepner-related financial trust;
•
$14.2 million to Bradley Capital Company, L.L.C., which was used to pay for a private jet; and
•
$3.1 million to The Heppner Endowment for Research Organizations, L.L.C. (“HERO”) and Research
Ranch Operating Company, L.L.C. (“RROC”), which are related to the Bradley Oaks Ranch (Mr. Hepner’s ranch).
We also note that you disclose a number of related party transactions with entities that Mr. Heppner has an interest. In order for
investors to better understand the extent of Mr. Heppner’s interest my be different from your shareholders, provide a tabular presentation detailing all payments made to Mr. Heppner as well as to present any rights to payments,
securities or other cash flows that are senior to those of your common shareholders.
Response: The Company acknowledges the
Staff’s comment and has revised the disclosure on pages 213 to 218 of Amendment No. 1 to include a tabular disclosure describing payments made to Mr. Heppner for his benefit for the periods required to be disclosed in the Form S-1 by relevant items of Regulation S-K as well as a description of equity interests held by Mr. Heppner or entities in which he has an interest.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
3
6.
Please provide all of the information required by the applicable provisions of Item 404 of Regulation S-K, including the following:
•
On page 170 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, you stated that Messrs. Jon and Steven Sabes contributed 1,452,155 shares of GWG’s common stock to a limited liability company (“SPV”) owned by a Related Entity and an entity held by one of the current directors
of Ben Management, the general partner of BCG, in exchange for certain equity interests in the SPV. “Related Entity” or “Related Entities” include certain trusts that are directly or indirectly controlled by your CEO, Brad
Heppner, and those entities are directly or indirectly held by such trusts. Please disclose the names of the Related Entities, Mr. Heppner’s relationship with the Related Entities, and the amount of shares received by each Related Entity.
•
On pages 170 to 171 of your annual report on Form 10-K for fiscal year
ended March 31, 2023, you stated that on May 31, 2019, certain trusts included in the ExAlt Plan (the “LiquidTrust Borrowers”) executed a Promissory Note payable to GWG Life for a principal amount of $65.0 million that
matures on June 30, 2023. Please disclose the names of the trusts and the basis on which such trusts are related persons.
•
On pages 172 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, you stated that on May 15, 2020, you, through your BCC subsidiary, executed a term sheet with the lender, HCLP, a Related Entity, to amend the First Lien Credit Agreement and Second Lien Credit Agreement dated
September 1, 2017 and December 28, 2018, respectively. Please disclose the basis on which HCLP is a related person.
•
On page 174 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, you stated that in connection with the Second Amended and Restated Agreements, BHI, a Related Entity that owns a majority of the Class S Ordinary Units, Class S Preferred Units, Preferred
A-0 Unit Accounts, Preferred A-1 Unit Accounts, and BCH FLP-1 Unit Accounts issued by BCH, will grant certain tax-related concessions to HCLP as may be mutually agreed upon between the parties. Please disclose the basis on which BHI is a related person.
•
On page 175 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, under the heading “Relationship with Ben Securities,” you made a general statement that Ben Securities creates various conflicts of interest and incentives because, through your ownership of Ben Securities, you and
your owners and employees receive profit participation, equity incentives or similar benefits, including your CEO, Ben Heppner. Please disclose names of the related persons, and the approximate dollar amount involved in the transactions, as required
by Item 404 of Regulation S-K.
•
On page 178 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, under the heading “Administrative Services Agreement between Constitution Private Capital Company, L.L.C. (‘Constitution’) and Beneficient USA,” you stated that Constitution is an entity owned 50.5% by BHI
and 49.5% by BMP and that it was acquired by a Related Entity in 1996. You further state on page 20 of your Form 10-K that BMP is owned by certain of your directors and senior employees. Please disclose the
Related Entity that purchased Constitution, the identity and ownership percentages of the directors/employees that own BMP, as well as any relationship between Constitution/BMP and your CEO, Brad Heppner.
•
On page 178 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, under the heading “Relationship with The Heppner Endowment for Research Organizations, L.L.C. (‘HERO’) and Research Ranch Operating Company, L.L.C. (‘RROC’),” you stated that HERO and RROC are
indirectly owned by a Related Entity. Please disclose the Related Entity, any relationship between the Related Entity and your CEO, Brad Heppner.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
4
•
On page 179 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, under the heading “Relationship between Ben and Hicks Holdings LLC,” you stated that Hicks Holdings LLC, an entity associated with one of your current directors, is one of the owners and serves as the manager of a
limited liability company and that a Related Entity also has ownership in the limited liability company. Please disclose the director associated with Hicks Holdings, the name of the limited liability company Hicks Holdings serves as a manager of,
and the name of the Related Entity that has any ownership in the limited liability company.
•
On page 180 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, under the heading “Services provided by representatives of Ben and the trusts associated with the loans,” you stated that an independent party currently serves as trustee for the LiquidTrusts and certain of the other
trusts in the associated ExAlt Plan but that previously an employee of yours and another individual served as co-trustees for these trusts. Please disclose the names of the other trusts, the names of the
employee and the other individual that served as co-trustees if those parties remain your related parties to or any of your subsidiaries.
•
On page 185 of your annual report on Form 10-K for fiscal year ended
March 31, 2023, under the heading “BCH FLP Unit Accounts,” you stated that BCH issued the BCH FLP-3 Unit Accounts to an entity controlled and directly or indirectly owned by your CEO, Brad
Heppner. Please disclose the name of the entity in question and Mr. Heppner’s role in and ownership of such entity.
Response: The Company acknowledges the Staff’s comment and, except as provided below, has revised the disclosure throughout
Amendment No. 1 accordingly.
With respect to the disclosure under the heading, “Relationship with Ben Securities,” the
Company acknowledges the Staff’s comment and respectfully advises the Staff that the disclosure concerning Ben Securities was not included in response to Item 404 of Regulation S-K; rather, it was
included to provide disclosure concerning the potential conflicts of interest that could arise or be perceived due to the nature of certain interests held by the Company’s officers, employees and directors. While certain allocations based on
the revenue of Ben Securities are made pursuant to the BCH Eighth A&R LPA to BHI, as a result of its ownership of the BCH FLP-1 Unit Accounts, and to BMP, as a result of its ownership of the BCH FLP-2 Unit Accounts, such allocations are based in part on the overall performance of Ben Securities and are not derived from specific transactions between Ben Securities and the Company. In addition, to the extent
any executive officers receive any commissions or other compensation relating to any specific transactions involving Ben Securities, such compensation would be reported under Item 402 of Regulation S-K if the
executive officer would have been a named executive officer and, pursuant to Instruction 5 of Item 404 of Regulation S-K, no disclosure would be required. The Company respectfully maintains that there are no
specific transactions involving Ben Securities that would be reportable under Item 404 of Regulation S-K and therefore, the Company believes that its relationship with Ben Securities does not constitute a
related party transaction under Item 404 of Regulation S-K. Accordingly, the Company has relocated the disclosure under the heading “Relationship with Ben Securities” within the section “Certain
Relationships and Related Party Transactions” and has clarified that it does not believe there are any reportable transactions between the Company and Ben Securities pursuant to Item 404 of Regulation
S-K.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
August 30, 2023
Page
5
Prospectus Summary
Forward Purchase Agreement, page 5
7.
We note your disclosure related to the Prepaid Forward Purchase Agreement between you and RiverNorth SPAC
Arbitrage Fund. Please revise to disclose who RiverNorth agreed to purchase the shares from. In this regard we note that Section (1)(a)(i) of the Form of Prepaid Forward Purchase Agreement filed as Exhibit 10.27 refers to “redeeming
shareholders” without identifying the shareholders. In addition, disclose if any of the redeeming shareholders are your related parties. If applicable, include this agreement in the related party transactions section of the registration
statement or advise.
Response: The Company acknowledges the Staff’s comment and has revised the
disclosure on pages 5 and 6 of Amendment No. 1 to disclose that, to the Company’s knowledge, RiverNorth did not purchase any shares under the Forward Purchase Agreement from related parties of the Company.
Risk Factors, page 9
8.
Please include an additional risk factor highlighting the negative pressure potential sales of shares
pursuant to this registration statement could have on the public trading price of the Class A common stock. To illustrate this risk, disclose the purchase price of the securities being registered for resale on the two additional registration
statements on Form S-1 filed on July 19, 2023, as well as the securities that may be sold by RiverNorth under the forward purchase agreement. Also disclose that even though the current trading price is
significantly below the SPAC IPO price, some of the selling securityholders have an incentive to sell because they will still profit on sales because of the lower price that they purchased their shares than the public investors.
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on page 56 of
Amendment No. 1 accordingly.
9.
We note that on page 55 of your Annual Report on Form 10-K for
fiscal year ended March 31, 2023, you stated that on June 29, 2023 you had received a Wells Notice from the staff of t