Correspondence 0001193125-24-101279 from Stardust Power Inc. (SDST)
Stardust Power Inc.
Date: April 18, 2024 · CIK: 0001831979 · Accession: 0001193125-24-101279
AI Filing Summary & Sentiment
Referenced dates: April 12, 2024
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CORRESP 1 filename1.htm CORRESP Global Partner Acquisition Corp II 200 Park Avenue 32nd Floor New York, New York 10166 April 18, 2024 VIA EDGAR Attention: Nudrat Salik Michael Fay Jessica Ansart Lauren Nguyen Division of Corporation Finance Office of Technology United States Securities and Exchange Commission 100 F Street, NE Washington, D.C. 20549-3561 Re: Global Partner Acquisition Corp II Amendment No. 1 to Registration Statement on Form S-4 Filed March 25, 2024 File No. 333- 276510 Ladies and Gentlemen: This letter sets forth the response of Global Partner Acquisition Corp II (the “Company”) to the comments of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) set forth in your letter, dated April 12, 2024, with respect to the above referenced Amendment No. 1 to the Registration Statement on Form S-4 (the “Registration Statement”). Concurrently with the submission of this letter, the Company is publicly filing Amendment No. 2 to the Registration Statement (the “Revised Registration Statement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Second Amendment. Set forth below is the Company’s response to the Staff’s comments. For the Staff’s convenience, we have incorporated your comments into this response letter in italics. Amendment No. 1 to Registration Statement on Form S-4 Filed March 25, 2024 Cover Page 1. We note your response to comment 9 and your revised disclosure here that you expect the combined company to be considered a “controlled company” upon closing. Please revise your disclosure here and throughout the registration statement to clearly identify the controlling shareholder and disclose the percentage of voting power that the shareholder will hold following completion of the offering. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure in the Proxy Statement, Notice of Extraordinary General Meeting and on pages 29, 40, 103, and 310 of the Revised Registration Statement. Summary of the Proxy Statement/Prospectus Star Power, page 2 2. We note your response to comment 5 and your revised disclosure here discussing the company’s focus on the midstream refinery process. Please revise to state, as you do in your response, that the company will seek to enter into letters of intent and memoranda of understanding to avail itself of brine feedstock supply and that its business strategy will depend on these agreements. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 2 and 255 of the Revised Registration Statement. Organizational Structure, page 3 3. We note your response to comment 6 and your revised disclosure here including to show that Global Partner Sponsor II LLC has a 80.69% ownership interest in GPAC II prior to the business combination. Please revise to also clarify who holds the remaining ownership interest in GPAC II prior to the business combination. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 4 of the Revised Registration Statement. Equity Ownership Upon Closing, page 4 4. We note your response to comment 7 and your revised disclosure here and throughout the registration statement. Please amend your disclosure to show the potential impact of redemptions on the per share value of the shares owned by non-redeeming shareholders at each redemption level, taking into account the post-transaction equity value of the combined company. Your disclosure should show the impact of certain equity issuances on the per share value of the shares, including the exercises of public and private warrants under each redemption scenario. In this regard, please separate line items to show the impact of the exercises of each the public warrants and the private placement warrants. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 8 and 9 of the Revised Registration Statement. 5. We note your revised disclosure here to include the 127,777 non-redemption shares in your sensitivity analysis. We note your disclosure in footnote 4 and on page viii that these shares will be issued pursuant to non-redemption agreements that were entered into with certain unaffiliated third parties so that they would not redeem an aggregate of 1,503,254 Class A ordinary Shares in connection with the 2024 Extension Amendment Proposal. Please clarify whether the holders of these shares are GPAC II Public Shareholders and whether these public shareholders will have redemption rights with respect to these shares. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages viii, 6, 7, 39, 137, 248 and 251 of the Revised Registration Statement. Conditions to Completion of the Business Combination Agreement, page 8 6. We note your response to comment 10 and your revised disclosure here and throughout the registration statement. Please revise to clearly indicate whether any or all of the conditions to the obligations of Stardust Power can be waived. Please also revise your disclosure beginning on page 126 to clearly identify each closing condition that is subject to waiver as you have done here. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 10 and 130 of the Revised Registration Statement. The GPAC II Board’s Reasons for the Approval of the Business Combination, page 18 7. We note your response to comment 12 and your revised disclosure here and throughout the registration statement. In your response, you state that “the evaluation of Stardust Power included a discount to account for the risk inherent in an investment of a development stage company.” Please revise your disclosure, including in the Background of the Business Combination section, to disclose the discount rate and address how this discount was determined and its impact on negotiations of the payable consideration. RESPONSE: The Company respectfully acknowledges the Staff’s comment and advises the Staff that, when the Company was evaluating Stardust Power, the Company considered many factors, including the fact that Stardust Power is a development stage company and does not yet have any operations. The development stage company status was one factor that mitigated the attractiveness of this investment opportunity. This factor, along with the other factors described under “The GPAC II Board’s Reasons for the Approval of the Business Combination,” were all used in preparing the valuation range that GPAC II used in its negotiations with Stardust Power. The Company did not apply a specific discount rate for this factor. The Company has revised the disclosure on pages 21 and 159 of the Revised Registration Statement. Q: How will the Combined Company Public Warrants differ from the Combined Company Private Placement Warrants and what are the related risks, page 45 8. We note your response to comment 17 and reissue the comment in part. Please revise your disclosure here to clarify whether recent common stock trading prices exceed the threshold that would allow the company to redeem public warrants. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 54 of the Revised Registration Statement. Nasdaq may delist the Combined Company’s securities from trading on its exchange, which could limit investors’ ability to make transactions, page 91 9. We note the disclosure that the Nasdaq Hearing Panel’s hearing for GPAC II was scheduled to be held on April 2, 2024 and that GPAC II presented its views with respect to its additional listing deficiency to the Panel in writing on February 5, 2024. Please revise to update the disclosure in regard to GPAC II’s listing remediation. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 94, 232 and 249 of the Revised Registration Statement. Negotiations with Stardust Power, page 143 10. We note your response to comment 21 and we reissue the comment. Please revise to include additional detail to describe the changes in the agreements. For example, please describe the “mechanics to deal with certain items of indebtedness that had surfaced during GPAC II’s due diligence, among other revisions.” RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 145, 147 and 148 of the Revised Registration Statement. 11. We note your response to comment 22 and your revised disclosure on page 144 and reissue the comment in part. Please also disclose the date on which you retained Kirkland & Ellis. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 147 of the Revised Registration Statement. Discounted Cash Flow Analysis, page 150 12. We note your response to comment 28 and your revised disclosure stating that “Stardust Power’s financial projections were not presented to the Board, but rather Enclave was asked to create and use in its preparation of the Fairness Opinion its own metrics based on financial and other information provided by Stardust Power.” We further note your revised disclosure on page 152 stating that “Enclave selected and applied reference range multiples of (i) 1.5x to 2.5x to Enclave’s independently forecasted revenue of Stardust Power for an appropriate period and (ii) 3.0x to 5.0x to the projected EBITDA of Stardust Power for the same, in each case as reflected in Enclave’s independently derived forecast of Stardust Power’s revenue and EBITDA for such periods based on information supplied by Stardust Power […].” Please clarify what types of “financial and other information” Stardust Power provided to Enclave that permitted Enclave to derive forecasted revenue and EDITDA and whether any of that information was prospective. Please also clarify the period that was “an appropriate period” for the forecasted revenue and EBITDA and how it was determined to be “appropriate.” RESPONSE: The Company respectfully acknowledges the Staff’s comment and advises the Staff that the financial and other information of Stardust Power provided to Enclave included: information about the proposed size and production capacity of the refinery in each phase, an estimated timeline and milestones needed to complete Phase 1 only, the potential Oklahoma state incentives that may be available to Stardust Power and information on the lithium market and peer companies, including estimated battery-grade lithium prices based on Benchmark Minerals’ long-term price study, revenue potential (calculated as the product of production capacity multiplied by a lithium price forecast prepared by Benchmark Mineral, a third party industry data provider), upfront estimates of initial capital expenditures for Phase 1 and Phase 2, an illustrative gross margin for the full year 2029, illustrative operating margin for the full year 2029 and illustrative operating expenditures for each megaton of lithium produced. Other than the foregoing, no forecasted operational or financial information was prepared by Stardust Power. The information did not include any forecasted financial information for specific fiscal periods prepared by Stardust Power. As Stardust Power is a development stage company, the potential size and capacity of the facility and timeline is prospective in nature. The Company also advises the Staff that in determining the “appropriate period” for its independently developed financial projections, Enclave selected a period from 2023 through 2030. Enclave selected this period based on its application of valuation multiples, which were derived from an analysis of mature publicly traded comparable companies, and such period was based upon an assessment of the earliest year when Enclave believed the financial performance of Stardust Power would be comparable to the selected comparable companies with respect to revenue growth and operating margins. Summary of Financial Analyses, page 150 13. We note your response to comment 29 and reissue in part. With respect to each of the selected publicly traded companies analysis and the selected precedent transactions analysis, please revise your disclosure to address the following: • We note your revised disclosure that Enclave selected publicly traded companies and precedent transactions in part based on “their comparability to Stardust Power.” Please revise to disclose the criteria on which comparability to Stardust Power was determined for the selected companies and transactions. • We note your revised disclosure that when selecting each of the comparable companies and transactions, “Enclave also considered the operational history of companies.” Please revise your disclosure to explain what specifically was considered with respect to operational history. For example, clarify whether Enclave selected development stage companies or a range of companies at various stages in their operational development. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 154 of the Revised Registration Statement. Material U.S. Federal Income Tax Consequences of the Domestication and Redemption to Public Shareholders, page 198 14. We note your response to comment 30 and reissue the comment in part. We note your disclosure on page 200 that the Domestication “will qualify as a reorganization” and that “[t]his conclusion is not free from doubt.” It therefore appears that there is uncertainty regarding the tax treatment. If there is uncertainty regarding the tax treatment of the transactions, counsel may (1) issue a “should” or “more likely than not” opinion to make clear that the opinion is subject to a degree of uncertainty and (2) explain why it cannot give a firm opinion. For guidance, refer to Section III.B.2 of Staff Legal Bulletin 19. RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 30, 51, 114 and 203 of the Revised Registration Statement. Unaudited Pro Forma Condensed Combined Financial Information, page 215 15. We note your response to comment 32. Please note that Rule 11-01(a)(8) of Regulation S-X requires pro forma financial information when consummation of other transactions has occurred or is probable for which disclosure of pro forma financial information would be material to investors. We believe pro forma financial information is required for your January 10, 2024 agreement to purchase land given the significance of the purchase price of the land relative to your pro forma balance sheets. Please revise accordingly. If you will be financing the purchase and recording a liability, please also disclose the terms of the financing. RESPONSE: The Company respectfully acknowledges the Staff’s comment and respectfully submit that we have added discussion in adjustment K and L to reflect the impact of the purchase, and we have set up a corresponding payable that is expected to be paid out of the existing cash balance that the Company would have on hand at year end. Please see revised disclosure on pages 224 and 228 of the Revised Registration Statement. 16. We note in connection with the Non-Redemption Agreements, “the Sponsor agreed to transfer or cause to be issued for no consideration an aggregate of 127,777 shares and simultaneous forfeiture of 127,777 shares in the case of an issuance of a transfer in connection with the consummation of the Business Combination. It is anticipated that there will be a new issuance of 127,777 shares in accordance with the Non-Redemption Agreements.” Please disclose your accounting for t