Correspondence 0001213900-23-037397 from Verde Clean Fuels, Inc. (VGAS, VGASW) (CIK 0001841425) (VGAS)
Verde Clean Fuels, Inc. (VGAS, VGASW) (CIK 0001841425)
Date: May 8, 2023 · CIK: 0001841425 · Accession: 0001213900-23-037397
AI Filing Summary & Sentiment
File numbers found in text: 333-271360
Referenced dates: May 3, 2023
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CORRESP
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Verde Clean Fuels, Inc.
600 Travis Street, Suite 5050
Houston, Texas 77002
May 8, 2023
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
Office of Energy & Transportation
100 F Street, NE
Washington, D.C. 20549
Attention:
Nicholas O’Leary
Margaret Schwartz
Re:
Verde Clean Fuels, Inc.
Registration Statement on Form S-1
Filed April 20, 2023
File No. 333-271360
Ladies and Gentlemen:
This letter sets forth the
responses of Verde Clean Fuels, Inc. (the “Company”) to the comments of the staff of the Division of Corporate
Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
set forth in your letter dated May 3, 2023, with respect to the above referenced Registration Statement on Form S-1 (the “Registration
Statement”).
Concurrently with the submission
of this letter, the Company is filing Amendment No. 1 to the Registration Statement on Form S-1, File No. 333-271360 (the “Amended
Registration Statement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto
in the Amended Registration Statement.
For your convenience, each
response is prefaced by the exact text of the Staff’s corresponding comment in bold, italicized text. All references to page numbers
and captions correspond to the Amended Registration statement unless otherwise specified.
Registration Statement on Form S-1 filed April
20, 2023
Cover Page, page 0
1. We note your disclosure of the purchase price for certain securities being registered for resale. For
each of the shares being registered for resale, disclose the price that the selling securityholders paid for such shares.
Response:
We acknowledge the Staff’s
comment and have revised the disclosure on the cover page of the Amended Registration Statement accordingly.
Prospectus Summary, page 8
2. We note you disclose that cash proceeds associated with the exercises of the warrants are dependent on
the stock price and the likelihood that warrant holders will not exercise their warrants if the warrants are out of the money. Provide
similar disclosure in the risk factors and MD&A. 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:
We acknowledge the Staff’s
comment and have revised the disclosure on pages 13, 40 and 63 of the Amended Registration Statement accordingly.
Strategies, page 10
3. Revise your prospectus to disclose the price that each selling securityholder paid for the securities
being registered for resale. Highlight any differences in the current trading price, the prices that the Sponsor, PIPE investors and other
selling securityholders acquired their shares, and the price that the public securityholders acquired their shares. Disclose that while
the selling securityholders 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 disclose the potential profit the selling securityholders will earn based on the current trading price. Lastly, please
include appropriate risk factor disclosure.
Response:
We acknowledge the Staff’s
comment and have revised the disclosure on the cover page and pages 13, 36 and 60 of the Amended Registration Statement accordingly.
Risk Factors
Risks Related to Ownership of Our Securities
and Other General Matters
Future sales and issuances of our Class A Common
Stock could result in additional dilution…,page 36
4. We note your disclosure 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. We note your illustration of this risk by disclosing
the current percentage of shares being registered for resale out of the total number of shares outstanding. Also disclose the purchase
price of the securities being registered for resale and state that even though the current trading price is at or below the SPAC IPO price,
the private investors may 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:
We acknowledge the Staff’s
comment and have revised the disclosure on page 36 of the Amended Registration Statement accordingly.
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Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Overview, page 57
5. 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. We also note your discussions with financing sources. 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:
We acknowledge the Staff’s
comment and have expanded the disclosure on pages 63 and 64 of the Amended Registration Statement to describe the Company’s liquidity
position following the Business Combination, including the redemptions and amount release from the Trust Account, and proceeds from the
PIPE Investment.
6. Please expand your discussion here to reflect the fact that this offering involves 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 to Bluescape Clean Fuels Holdings, LLC, “Holdings,” a beneficial owner of 73.14%
of your outstanding shares, will be able to sell all of its shares for so long as the registration statement of which this prospectus
forms a part is available for use.
Response:
We acknowledge the Staff’s
comment and have revised the disclosure on page 60 of the Amended Registration Statement accordingly.
*****
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We respectfully request the
Staff’s assistance in completing the review of the Registration Statement, as amended, as soon as possible. Please contact Debbie
Yee or Anne Peetz of Kirkland & Ellis LLP at (713) 836-3630 or (713) 836-3711, respectively, with any questions or further comments
regarding the responses to the Staff’s comments.
Sincerely,
VERDE CLEAN FUELS, INC.
By:
/s/ Ernest B. Miller
Name:
Ernest B. Miller
Title:
Chief Executive Officer and
Interim Chief Financial Officer
Enclosures
cc:
Debbie Yee, P.C (Kirkland & Ellis LLP)
Anne G. Peetz (Kirkland & Ellis LLP)
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