Correspondence 0001213900-23-077789 from 10X Capital Venture Acquisition Corp. II (AAGR, AAGRW) (CIK 0001848898)
10X Capital Venture Acquisition Corp. II (AAGR, AAGRW) (CIK 0001848898)
Date: Sept. 19, 2023 · CIK: 0001848898 · Accession: 0001213900-23-077789
AI Filing Summary & Sentiment
File numbers found in text: 333-269342
Referenced dates: August 23, 2023
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99 Bishopsgate
London EC2M 3XF
United Kingdom
Tel: +44(0)20.7710.1000 Fax: +44(0)20.7374.4460
www.lw.com
FIRM / AFFILIATE OFFICES
Austin
Milan
Beijing
Munich
Boston
New York
Brussels
Orange County
September 19, 2023
Century City
Paris
Chicago
Riyadh*
VIA EDGAR
Dubai
San Diego
Düsseldorf
San Francisco
United States Securities and Exchange Commission
Frankfurt
Seoul
Division of Corporation Finance
Hamburg
Shanghai
Office of Energy & Transportation
Hong Kong
Silicon Valley
100 F Street, N.E.
Houston
Singapore
Washington, DC 20549
London
Tel Aviv
Los Angeles
Tokyo
Madrid
Washington, D.C.
Attention:
Jeanne Baker
Brian Cascio
Jordan Nimitz
Jason Drory
Re:
10X Capital Venture Acquisition Corp. II
Amendment No. 2 to Registration Statement on Form
S-4
Filed August 11, 2023
File No. 333-269342
To the addressees
set forth above:
On
behalf of 10X Capital Venture Acquisition Corp. II (the “Company”), set forth below are the Company’s
responses to the comments of the Staff (the “Staff”) of the Division of Corporation Finance of the Securities
and Exchange Commission (the “Commission”) relating to the Company’s Amendment No. 2 to Registration
Statement on Form S-4 (the “Amendment No. 2”), filed on August 11, 2023. Concurrently with its submission of
this letter to the Staff, the Company has filed Amendment No. 3 to the Form S-4 (the “Amendment No. 3”) with
the Commission through its EDGAR system.
Set
forth below are the responses of the Company to the comments in the Staff’s letter to the Company, dated August 23, 2023, relating
to the Amendment No. 2. For convenience of reference, the text of the comments in the Staff’s letter has been reproduced in bold
and italics herein. The Company has also provided its response immediately after each numbered comment. Capitalized terms used but not
otherwise defined herein have the meanings assigned to such terms in Amendment No. 3.
Amendment
No. 2 to Registration Statement on Form S-4 filed August 11, 2023
Background
to the Business Combination, page 109
1. We
note your revised disclosure in response to our prior comment 11. Please revise to disclose
the size and material attributes of each of the five potential targets considered when you
narrowed the potential target companies from 20 potential companies to 5, and also clarify
the meaning of “PropTech” on page 110. Please expand your disclosure relating
to the five target companies you considered following the termination of the PrimeBlock Merger
Agreement to address the disclosure issues included in our prior comment 11.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on page 110-111 of Amendment No. 3.
2. We
note your revised disclosure in response to our prior comment 12, including your statement
that the financial model was delivered “[o]n or about September 15, 2023.” Please
revise your disclosure to confirm the date was on or about September 15, 2022 or otherwise
advise.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on page 113 of Amendment No. 3.
Latham & Watkins is the business name of Latham & Watkins (London) LLP, a registered limited liability partnership organised under the
laws of New York and authorised and regulated by the Solicitors Regulation Authority (SRA No. 203820). A list of the names of the partners
of Latham & Watkins (London) LLP is open to inspection at its principal place of business, 99 Bishopsgate, London EC2M 3XF, and such
persons are either solicitors, registered foreign lawyers, or managers authorised by the SRA. We are affiliated with the firm Latham & Watkins LLP, a limited liability partnership organised under the laws of Delaware.
September
19 2023
Page
2
Certain AFRAG
Projected Financial Information, page 126
3. We
acknowledge your revised disclosure in response to our prior comment 15, which we reissue.
Please revise to clarify whether 10X II still believes that the projections, and the fairness
opinion that partially relies on those projections, are reasonable.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on page 130 of Amendment No. 3. The Company notes
that if AFRAG develops materially different projections, it will provide such updated projections in the registration statement prior
to seeking effectiveness.
4. We
note your response to our prior comment 17, which we reissue in part. We refer to your disclosure
that the favorable results of AFRAG’s initial 305 hectares pilot program supported
AFRAG management’s assumption of alfalfa yields of 2.5 ton per hectare per cut through
2023 increasing to 3 tons per hectare from 2024 through 2027. Please expand your disclosure
relating to AFRAG’s pilot program and discuss the evidence that support AFRAG management’s
projections regarding alfalfa yields through 2027.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on pages 127-128 of Amendment No. 3.
5. We
note your response to prior comment 19 and revised disclosure and reissue. Please revise
your disclosure to discuss the aggregate amount of capital AFRAG assumed was needed for each
year projected or otherwise advise. In addition, we note your disclosure that your projected
revenue for the year ended December 31, 2023 was less than projected, “as a result
of AFRAG not raising anticipated interim financing.” Please clarify whether AFRAG have
received any interim financing to date and quantify the additional transactions or capital
AFRAG needs to “roll forward” its projections.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on pages 129-130 of Amendment No. 3.
Unaudited
Pro Forma Condensed Combined Financial Information
The Forward
Purchase Agreement, page 170
6. We
note your revised disclosures in response to prior comments 22 and 24. We have the following
additional comments:
● You
indicate that the Forward Purchase Agreement is intended to reduce redemption related risks.
Please explain the nature of those risks. In this regard, your disclosures imply that the
Forward Purchase Agreement may provide you with liquidity. However, even though Scenario
2a and Scenario 3a reference shares purchased under the Forward Purchase Agreement, the cash
adjustments in 2(H) are the same with and without shares purchased under the Forward Purchase
Agreement. Please clarify. Specifically, if true, expand your disclosures to indicate that
since Vellar will purchase the Company’s shares in the open market, the Company will
not receive any cash for Vellar’s purchases under the Forward Purchase Agreement;
● You
disclose at the top of page 171 that, assuming Vellar purchases the maximum shares, and does
not sell such shares prior to the Maturity, the Maturity Consideration would be $2.1 million
and $4.2 million under the 50% and 100% redemption scenario. Please reconcile this disclosure
to your disclosure at the bottom of page 171 that, if Vellar purchases any shares pursuant
to the Forward Purchase Agreement, immediately following the closing of the Business Combination,
the Company will need to pay Vellar the Prepayment Amount and the Share Consideration. Please
quantify these obligations and explain how they are reflected in your pro forma financial
statements. In this regard, your current pro forma financial statements appear to only reflect
the fee due at maturity and the resulting impact of the number of shares outstanding; and
● In
order to provide additional clarity, please separately present the shareholder redemptions
from the funding and liability incurred from the Forward Purchase Agreement.
September
19 2023
Page
3
Response:
In response to the first bullet point, the Company respectfully advises the Staff that the redemption-related risks include all of
the risks associated with high redemptions, including reduced funds in the trust account at Closing. Pursuant to the Forward Purchase
Agreement, Vellar has agreed to waive any redemption rights with respect to the shares it acquires. The Forward Purchase Agreement is
not intended to provide additional liquidity to the Company prior to the time of Closing.
In
response to the second bullet point, the Company respectfully advises the Staff that the Maturity Consideration is a separate payment
due on the Maturity Date as set forth in the Forward Purchase Agreement. The Prepayment Amount and the Share Consideration are due in
connection with the Closing of the Business Combination. The Prepayment Amount is a cash payment due to Vellar and the Share Consideration
is a non-cash payment (i.e., to be paid in shares of AFRAG PubCo). The Company has revised the disclosure on pages 184
of Amendment No. 3.
In
response to the third bullet point, the Company has revised the disclosure on page 173 of Amendment No. 3.
7. We
reissue prior comment 25. It is unclear where you have clarified if Vellar must wait until
the end of the three years following the consummation of the Business Combination to sell
their shares back to the Company.
Response:
The Company acknowledges the Staff’s comment and respectfully advises the Staff that Amendment No. 3 includes disclosure on
pages 108, 171-172, 184 and 206 to the effect that Vellar may, in its discretion, declare an Optional Early Termination (as defined in
Amendment No.3) from time to time prior to the Maturity Date (as defined in Amendment No.3) and sell their shares at such time. Vellar
may wait until the Maturity Date to sell their shares back to the Company, but they are not required to do so.
Note 2(E),
page 181
8. We
note your expanded disclosure provided in response to prior comment 23. In light of the fact
that you may pay the vendors with funds under the SEPA or from additional capital raises,
please expand your disclosures to provide a sensitivity analysis of the number of shares
that may be issued. Specifically, disclose the number of shares that may be issued using
the current market price and also the incremental number of shares that would be issued for
each $1.00 decrease in the market price.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on page 183 of Amendment No. 3.
Note 2(cc),
page 182
9. We
note your revisions made in response to prior comment 26. Adjustment (cc) under the Adjustments
to the Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended
December 31, 2022 indicates that the adjustment reflects the post December 31, 2022 transactions
costs. Given that you have presented pro forma information through March 31, 2023, adjustment
(cc) should only reflect the post March 31, 2023 transaction costs as the costs incurred
during January 1, 2023 through March 31, 2023 should already be reflected in the historical
financial statements. Please advise or revise your disclosures accordingly.
Response:
In response to the Staff’s comment, the Company respectfully advises the Staff that Section 3230.3 of Regulation S-X requires
that pro forma adjustments be computed assuming that the transaction occurred at the beginning of the fiscal year presented, which would
be January 1, 2022 for the Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended December 31, 2022. As such,
the company has included transaction costs in the Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended
December 31, 2022, but not the the Unaudited Pro Forma Condensed Combined Statements of Operations for the Six Months Ended June 30,
2023. The Company has adjusted the Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2023 to include transaction costs
to be incurred after June 30, 2023.
September
19 2023
Page
4
Information
about AFRAG, page 210
10. We
note your revised disclosure in response to our prior comment 29, which we reissue in part.
Please revise your disclosure on page 210 to quantify AFRAG’s history of net losses.
We refer to your revised disclosure on page 34.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on page 213 of Amendment No. 3.
Relative Logistics,
page 222
11. We
note your response to our prior comment 30, which we reissue in part. You disclose that AFRAG’s
existing power sources will be sufficient to support its business for the next 18 months.
Please revise to disclose the extent to which the completion of the solar power plant was
assumed in AFRAG’s projections beyond this 18-month period.
Response:
In response to the Staff’s comment, the Company has revised the disclosure on page 225 of Amendment No. 3.