Correspondence 0001493152-24-046278 from Aspire Biopharma Holdings, Inc. (ASBP)
Aspire Biopharma Holdings, Inc.
Date: Nov. 15, 2024 · CIK: 0001847345 · Accession: 0001493152-24-046278
AI Filing Summary & Sentiment
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File numbers found in text: 333-281991
Letter
Division of Corporate Finance Office of Life Sciences Attention: Tyler Howes, Tim Buchmiller, Eric Atallah, and Lynn Dicker Re: PowerUp Acquisition Corp. Amendment No. 1 to Registration Statement on Form S-4 Filed October 24, 2024 File No. 333-281991
Dear Mr. Howes, Mr. Buchmiller, Mr. Atallah and Ms. Dicker:
This response letter (this “Response”) is submitted on behalf of PowerUp Acquisition Corp. (the “Company”) in response to the comments that the Company received from the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”) in a letter addressed to Mr. Ajjarapu, dated November 7, 2024 (the “Comment Letter”), with respect to the Company’s Amendment No. 1 (“Amendment No. 1”) to its registration statement on Form S-4 (the “Registration Statement”), filed with the SEC on October 24, 2024. The Company is concurrently submitting a second amendment to the Registration Statement (“Amendment No. 2”), which reflects the changes discussed in this Response that the Company made to address the Staff’s comments and other updates.
For reference purposes, each of the Staff’s numbered comments from the Comment Letter is set forth in bold text below, followed by the Company’s response to each comment. All capitalized terms used but not defined in this Response have the meanings ascribed to them in Amendment No. 2.
The responses below are based on information provided to Dykema Gossett PLLC by the Company.
Amendment No. 1 to Registration Statement on Form S-4
Cover Page
1. Please clarify, if true, that the $1,000,000 owed by PowerUp to the Sponsor under the promissory note fee agreement relates to the Sponsor loaning $2,000,000 to PowerUp’s former target company via a convertible promissory note.
Response: In response the Staff’s comments, the Company has revised its disclosures on the cover page of Amendment No. 2.
California | Illinois | Michigan | Minnesota | Texas | Washington, D.C. | Wisconsin
U.S. Securities and Exchange Commission
Division of Corporate Finance
November 15, 2024
Page
Questions and Answers for Shareholders of PowerUp
Q: What conditions must be satisfied to complete the Business Combination?, page 26
2. Please explain how the parties will be able to waive the condition requiring waiting out the applicable period under the Hart-Scott-Rodino Act or revise to clarify that this condition will not be waivable.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 26 and elsewhere throughout Amendment No. 2.
Summary of the Proxy Statement/Prospectus
Aspire, page 36
3. We note your response to prior comment 11. Please revise here, and in the “Information about Aspire” section, to clearly state the current development status of your Instaprin candidate. In your revisions, please also discuss what developmental and regulatory steps you will need to take prior to commercialization of this candidate, such as clinical trials that will need to be completed or submissions with the FDA or comparable foreign regulators. Provide similar disclosure for other material product candidates you currently have in development.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 36 and elsewhere throughout Amendment No. 2.
4. We note your response to prior comment 12 and reissue in part. Please further revise to provide support for your statement that Instaprin will have “no harmful impact on the gastric system” or its mucous membrane. Alternatively, revise to clarify that these are aspirational statements that represent the beliefs of Aspire’s management.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 36 of Amendment No. 2. Further, the Company respectfully advises the Staff that Aspire’s management believes that Instaprin, by virtue of sublingual mode of administration, provides an additional health benefit of minimizing gastrointestinal intolerance or direct irritation on the gastric tract because sublingually administered Instaprin bypasses the gastrointestinal system entirely, going from the sublingual tissues directly into the bloodstream. Once in the bloodstream, sublingually administered Instaprin can indirectly affect the gastric system only through systemic circulation.
5. We note your revisions in response to prior comment 13. Please further revise your disclosure in this section to clarify, if true, that you intend to rely upon third-party studies confirming the safety of Aspirin for your 505(b)(2) application as opposed to the “history of safety” of your Instaprin candidate. Please also disclose here if your Instaprin candidate has been tested in any clinical trials. Please also clarify if the “history of safety” refers to doses of aspirin that are similar to your proposed prescription strength product candidate or revise as appropriate.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 36 of Amendment No. 2. Further, the Company respectfully advises the Staff that Aspire intends to rely on the voluminous scientific literature regarding the safety of aspirin. Aspire’s Instaprin product was tested in a limited clinical trial that began on March 1, 2019, with good results. Aspire’s dosing of its prescription products follows the standard, FDA-approved doses of 82 mg and 325 mg (which are both available currently over-the-counter).
U.S. Securities and Exchange Commission
Division of Corporate Finance
November 15, 2024
Page
PowerUp Sponsor, page 37
6. We note your revised disclosure in response to prior comment 15. Where you have disclosed the number of shares of stock exercising redemption rights in connection with the disclosed extensions, please further revise to provide context so that investors can understand the redemption levels associated with such extensions.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 37 of Amendment No. 2.
Dilution, page 45
7. Please revise your dilution table to also give effect to all material probable transactions such as the Working Capital Loans and the related issuance of the Working Capital Loan Shares. Outside of the table, describe each material potential source of future dilution that non-redeeming shareholders may experience such as the issuance of shares upon the exercise of the private placement warrants issued to the Original Sponsor and the Current Sponsor. Refer to Item 1604(c) of Regulation S-K.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 45 of Amendment No. 2.
Timeline of the Business Combination Negotiations with Aspire, page 141
8. We note your response to prior comment 23. Please revise this section to clearly state that no other new targets were considered by PowerUp following the decision to terminate the prior business combination agreement entered into with Candidate One, as you have stated in your response.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 141 of Amendment No. 2.
9. We note your disclosure here stating that the implied market value of the combined company was assumed to be $350 million in the letter of intent between PowerUp and Aspire. We also note disclosure on the cover page stating that the implied enterprise value of Aspire at the time of signing the Business Combination Agreement was $789 million. Please revise to discuss the negotiations related to the valuation of Aspire between the parties and explain any changes to this valuation from the initial letter of intent and revise to make clear the reason for any differences in the implied market value of the combined company versus the implied enterprise value.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 141 of Amendment No. 2. Further, the Company respectfully advises the Staff that the $350 million implied market value was a negotiated amount by which merger consideration was to be calculated. This negotiated amount was the minimum amount Aspire was willing to accept to execute the Business Combination Agreement and move forward with the Business Combination. That negotiated figure is independent from the $789 million implied enterprise value derived from the valuation set forth in the fairness opinion. The difference in the figures simply indicates that actual value of Aspire may be significantly higher than the negotiated purchase price (referred to as the implied market value by the parties).
U.S. Securities and Exchange Commission
Division of Corporate Finance
November 15, 2024
Page
Opinion of Financial Advisor to PowerUp, page 145
10. We note your revised disclosure here and elsewhere in response to prior comment 27 that the fairness opinion is being disclosed to shareholders for “informational purposes only.” Please either revise this disclosure and the fairness opinion itself to remove these statements or disclose the legal basis for your and KPSN’s belief that shareholders cannot rely on the opinion to bring state law actions, including a description of any state law authority on such a defense. If no such authority exists, please disclose that the issue will be resolved by a court, resolution of the issue will have no effect on the rights and responsibilities of PowerUp’s board under state law and the availability or non-availability of this defense has no effect on the rights and responsibilities of either KPSN or PowerUp’s board under the federal securities laws.
Response: In response the Staff’s comments, the Company has revised its disclosures on pages 41 and 145 of Amendment No. 2. Further, the Company has included the revised fairness opinion.
Guideline Public Company Method Cross-Check, page 148
11. We note your response to prior comment 29. Please revise to further discuss how KPSN considered the differing stages of operations when comparing Aspire Biopharma to the companies listed under the “Market Leader and Established Track Record” heading. For example, explain if any adjustments to the final enterprise value were made based on the fact that Aspire does not yet have any products approved for commercial sale.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 148 of Amendment No. 2.
Projected Financial Information, page 149
12. We note your response to prior comment 30 and reissue in part. Please further revise to explain why you believe you will begin to generate revenue from product sales and licensing revenue in 2025 given that you currently have no products approved for commercial sale and have not entered into any licensing agreements at this time. In addition, please indicate when you have assumed that Aspirin, OTC will receive OTC monograph approval from the FDA for purposes of the financial projections.
Response: In response the Staff’s comments, the Company has revised its disclosures on page 149 of Amendment No. 2.
Unaudited Pro Forma Condensed Combined Financial Information
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, page 201
13. We note from your revised disclosure in response to comment 35 that the Subscription Agreement provision calls for the repayment of the Subscription Agreement Loan by PowerUp upon closing. Please explain why this does not result in a reduction to your cash and cash equivalents.
Response: In response the Staff’s comments, the Company respectfully advises the Staff that the $2.5 million in subscription agreements is a reduction in cash in adjustment number 2 to the Unaudited Pro Forma Condensed Combined Balance Sheet and is the principal value of the loan to be repaid. The $2.4 million is taken to Retained Earnings because it is the fair value of the stock received for the subscription agreements.
U.S. Securities and Exchange Commission
Division of Corporate Finance
November 15, 2024
Page
14. We
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CORRESP
1
filename1.htm
Dykema
Gossett PLLC
111
E. Kilbourn Ave.
Suite
1050
Milwaukee,
WI 53202
www.dykema.com
Tel:
414-488-7300
Kate
Bechen
Direct
Dial: (414) 488-7333
Email:
KBechen@dykema.com
November
15, 2024
U.S.
Securities and Exchange Commission
Division
of Corporate Finance
Office
of Life Sciences
100
F Street, N.E.
Washington,
D.C. 20549
Attention:
Tyler Howes, Tim Buchmiller, Eric Atallah, and Lynn Dicker
Re: PowerUp
Acquisition Corp.
Amendment
No. 1 to Registration Statement on Form S-4
Filed
October 24, 2024
File
No. 333-281991
Dear
Mr. Howes, Mr. Buchmiller, Mr. Atallah and Ms. Dicker:
This
response letter (this “Response”) is submitted on behalf of PowerUp Acquisition Corp. (the “Company”)
in response to the comments that the Company received from the staff of the Division of Corporation Finance (the “Staff”)
of the U.S. Securities and Exchange Commission (the “SEC”) in a letter addressed to Mr. Ajjarapu, dated November 7,
2024 (the “Comment Letter”), with respect to the Company’s Amendment No. 1 (“Amendment No. 1”)
to its registration statement on Form S-4 (the “Registration Statement”), filed with the SEC on October 24, 2024.
The Company is concurrently submitting a second amendment to the Registration Statement (“Amendment No. 2”), which
reflects the changes discussed in this Response that the Company made to address the Staff’s comments and other updates.
For
reference purposes, each of the Staff’s numbered comments from the Comment Letter is set forth in bold text below, followed by
the Company’s response to each comment. All capitalized terms used but not defined in this Response have the meanings ascribed
to them in Amendment No. 2.
The
responses below are based on information provided to Dykema Gossett PLLC by the Company.
Amendment
No. 1 to Registration Statement on Form S-4
Cover
Page
1. Please
clarify, if true, that the $1,000,000 owed by PowerUp to the Sponsor under the promissory
note fee agreement relates to the Sponsor loaning $2,000,000 to PowerUp’s former target
company via a convertible promissory note.
Response:
In response the Staff’s comments, the Company has revised its disclosures on the cover page of Amendment No. 2.
California
| Illinois | Michigan | Minnesota | Texas | Washington, D.C. | Wisconsin
U.S.
Securities and Exchange Commission
Division
of Corporate Finance
November
15, 2024
Page
2
Questions
and Answers for Shareholders of PowerUp
Q:
What conditions must be satisfied to complete the Business Combination?, page 26
2. Please
explain how the parties will be able to waive the condition requiring waiting out the applicable
period under the Hart-Scott-Rodino Act or revise to clarify that this condition will not
be waivable.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 26 and elsewhere throughout Amendment No.
2.
Summary
of the Proxy Statement/Prospectus
Aspire,
page 36
3. We
note your response to prior comment 11. Please revise here, and in the “Information
about Aspire” section, to clearly state the current development status of your Instaprin
candidate. In your revisions, please also discuss what developmental and regulatory steps
you will need to take prior to commercialization of this candidate, such as clinical trials
that will need to be completed or submissions with the FDA or comparable foreign regulators.
Provide similar disclosure for other material product candidates you currently have in development.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 36 and elsewhere throughout Amendment No.
2.
4. We
note your response to prior comment 12 and reissue in part. Please further revise to provide
support for your statement that Instaprin will have “no harmful impact on the gastric
system” or its mucous membrane. Alternatively, revise to clarify that these are aspirational
statements that represent the beliefs of Aspire’s management.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 36 of Amendment No. 2. Further, the Company
respectfully advises the Staff that Aspire’s management believes that Instaprin, by virtue of sublingual mode of administration,
provides an additional health benefit of minimizing gastrointestinal intolerance or direct irritation on the gastric tract because
sublingually administered Instaprin bypasses the gastrointestinal system entirely, going from the sublingual tissues directly into the
bloodstream. Once in the bloodstream, sublingually administered Instaprin can indirectly affect the gastric system only through
systemic circulation.
5. We
note your revisions in response to prior comment 13. Please further revise your disclosure
in this section to clarify, if true, that you intend to rely upon third-party studies confirming
the safety of Aspirin for your 505(b)(2) application as opposed to the “history of
safety” of your Instaprin candidate. Please also disclose here if your Instaprin candidate
has been tested in any clinical trials. Please also clarify if the “history of safety”
refers to doses of aspirin that are similar to your proposed prescription strength product
candidate or revise as appropriate.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 36 of Amendment No. 2. Further, the Company
respectfully advises the Staff that Aspire intends to rely on the voluminous scientific literature regarding the safety of aspirin. Aspire’s
Instaprin product was tested in a limited clinical trial that began on March 1, 2019, with good results. Aspire’s dosing of its
prescription products follows the standard, FDA-approved doses of 82 mg and 325 mg (which are both available currently over-the-counter).
U.S.
Securities and Exchange Commission
Division
of Corporate Finance
November
15, 2024
Page
3
PowerUp
Sponsor, page 37
6. We
note your revised disclosure in response to prior comment 15. Where you have disclosed the
number of shares of stock exercising redemption rights in connection with the disclosed extensions,
please further revise to provide context so that investors can understand the redemption
levels associated with such extensions.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 37 of Amendment No. 2.
Dilution,
page 45
7. Please
revise your dilution table to also give effect to all material probable transactions such
as the Working Capital Loans and the related issuance of the Working Capital Loan Shares.
Outside of the table, describe each material potential source of future dilution that non-redeeming
shareholders may experience such as the issuance of shares upon the exercise of the private
placement warrants issued to the Original Sponsor and the Current Sponsor. Refer to Item
1604(c) of Regulation S-K.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 45 of Amendment No. 2.
Timeline
of the Business Combination Negotiations with Aspire, page 141
8. We
note your response to prior comment 23. Please revise this section to clearly state that
no other new targets were considered by PowerUp following the decision to terminate the prior
business combination agreement entered into with Candidate One, as you have stated in your
response.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 141 of Amendment No. 2.
9. We
note your disclosure here stating that the implied market value of the combined company was
assumed to be $350 million in the letter of intent between PowerUp and Aspire. We also note
disclosure on the cover page stating that the implied enterprise value of Aspire at the time
of signing the Business Combination Agreement was $789 million. Please revise to discuss
the negotiations related to the valuation of Aspire between the parties and explain any changes
to this valuation from the initial letter of intent and revise to make clear the reason for
any differences in the implied market value of the combined company versus the implied enterprise
value.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 141 of Amendment No. 2. Further, the Company
respectfully advises the Staff that the $350 million implied market value was a negotiated amount by which merger consideration was to
be calculated. This negotiated amount was the minimum amount Aspire was willing to accept to execute the Business Combination Agreement
and move forward with the Business Combination. That negotiated figure is independent from the $789 million implied enterprise value
derived from the valuation set forth in the fairness opinion. The difference in the figures simply indicates that actual value of Aspire
may be significantly higher than the negotiated purchase price (referred to as the implied market value by the parties).
U.S.
Securities and Exchange Commission
Division
of Corporate Finance
November
15, 2024
Page
4
Opinion
of Financial Advisor to PowerUp, page 145
10. We
note your revised disclosure here and elsewhere in response to prior comment 27 that the
fairness opinion is being disclosed to shareholders for “informational purposes only.”
Please either revise this disclosure and the fairness opinion itself to remove these statements
or disclose the legal basis for your and KPSN’s belief that shareholders cannot rely
on the opinion to bring state law actions, including a description of any state law authority
on such a defense. If no such authority exists, please disclose that the issue will be resolved
by a court, resolution of the issue will have no effect on the rights and responsibilities
of PowerUp’s board under state law and the availability or non-availability of this
defense has no effect on the rights and responsibilities of either KPSN or PowerUp’s
board under the federal securities laws.
Response:
In response the Staff’s comments, the Company has revised its disclosures on pages 41 and 145 of Amendment No. 2. Further,
the Company has included the revised fairness opinion.
Guideline
Public Company Method Cross-Check, page 148
11. We
note your response to prior comment 29. Please revise to further discuss how KPSN considered
the differing stages of operations when comparing Aspire Biopharma to the companies listed
under the “Market Leader and Established Track Record” heading. For example,
explain if any adjustments to the final enterprise value were made based on the fact that
Aspire does not yet have any products approved for commercial sale.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 148 of Amendment No. 2.
Projected
Financial Information, page 149
12. We
note your response to prior comment 30 and reissue in part. Please further revise to explain
why you believe you will begin to generate revenue from product sales and licensing revenue
in 2025 given that you currently have no products approved for commercial sale and have not
entered into any licensing agreements at this time. In addition, please indicate when you
have assumed that Aspirin, OTC will receive OTC monograph approval from the FDA for purposes
of the financial projections.
Response:
In response the Staff’s comments, the Company has revised its disclosures on page 149 of Amendment No. 2.
Unaudited
Pro Forma Condensed Combined Financial Information
Adjustments
to Unaudited Pro Forma Condensed Combined Balance Sheet, page 201
13. We
note from your revised disclosure in response to comment 35 that the Subscription Agreement
provision calls for the repayment of the Subscription Agreement Loan by PowerUp upon closing.
Please explain why this does not result in a reduction to your cash and cash equivalents.
Response:
In response the Staff’s comments, the Company respectfully advises the Staff that the $2.5 million in subscription agreements
is a reduction in cash in adjustment number 2 to the Unaudited Pro Forma Condensed Combined Balance Sheet and is the principal value
of the loan to be repaid. The $2.4 million is taken to Retained Earnings because it is the fair value of the stock received for the subscription
agreements.
U.S.
Securities and Exchange Commission
Division
of Corporate Finance
November
15, 2024
Page
5
14. We