Correspondence 0001104659-23-090604 from MOBIX LABS, INC (MOBX)
MOBIX LABS, INC
Date: Aug. 11, 2023 · CIK: 0001855467 · Accession: 0001104659-23-090604
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File numbers found in text: 333-271197
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CORRESP 1 filename1.htm August 11, 2023 Securities and Exchange Commission Division of Corporation Finance 100 F Street NE Washington, D.C. 20549-3561 Attention: Beverly Singleton Jean Yu Jenny O’Shanick Asia Timmons-Pierce Re: Chavant Capital Acquisition Corp. Registration Statement on Form S-4 Filed on April 10, 2023 File No. 333-271197 Ladies and Gentlemen: On behalf of our client, Chavant Capital Acquisition Corp., a Cayman Islands company (the “Company”), set forth below are the Company’s responses to the comments of the staff of the Securities and Exchange Commission (the “Staff”) communicated to the Company in the Staff’s letter, dated May 9, 2023. In connection with such responses, the Company will submit, electronically via EDGAR, Amendment No. 1 (“Amendment No. 1”) to the Registration Statement on Form S-4 of the Company (File No. 333-271197) (the “Registration Statement”). The Registration Statement, as amended by Amendment No. 1, is referred to as the “Amended Registration Statement.” For ease of reference, each of the Staff’s comments is reproduced below in bold and is followed by the Company’s response. In addition, unless otherwise indicated, all references to page numbers in such responses are to page numbers in the Amended Registration Statement. Capitalized terms used in this letter but not otherwise defined herein have the respective meanings ascribed to them in the Amended Registration Statement. Registration Statement on Form S-4 Market and Industry Data, page 10 1. We note your disclosure that you obtained some of the market and industry data included in the registration statement from various third-party sources and that you have not independently verified this information. This statement appears to imply a disclaimer of responsibility for this information in the registration statement. Please either revise this section to remove such implication or specifically state that you are liable for all information in the registration statement. Response: The Company has revised page 10 of the Amended Registration Statement to remove the disclosure that Mobix Labs has not independently verified any third-party information. Questions and Answers about the Special Meeting and the Related Proposals How much dilution may non-redeeming Chavant shareholders experience..., page 22 2. Please revise your sensitivity analysis to include interim redemption levels. Response: The Company respectfully advises the Staff that given the small amount remaining in the Trust Account of $8,521,341 as of July 31, 2023, following redemptions in connection with the Company’s extensions of the date by which it must consummate an initial business combination, it does not believe it would be meaningful information to shareholders to present the potential impact of interim redemption levels on the per share value of the shares owned by non-redeeming shareholders. Accordingly, the Company has shown the potential impact of redemptions on the per share value of the shares owned by non-redeeming shareholders with respect to only the No Redemption Scenario and the Maximum Redemption Scenario. Do Mobix Labs Stockholders need to approve the Transaction?, page 27 3. We note your disclosure that more information can be found in the section entitled “Certain Agreements Related to The Transaction — Written Consents.” However, this section does not appear and the section entitled “Certain Agreements Related to the Business Combination” on page 172 does not include a discussion on Written Consents. Please advise or revise. Response: The Company has revised pages 44 and 192 of the Amended Registration Statement to provide the requested disclosure. What interests do Chavant’s current officers and directors have in the Transaction?, page 28 4. We note your disclosure on F-8 that in connection with the First Extension and Second Extension you made certain deposits in the Trust which were funded by promissory notes issued to the Sponsor. Please revise to disclose the total outstanding promissory note owed to the Sponsor. Response: The Company has revised pages 26, 31, 46, 169, 300 and 303 of the Amended Registration Statement to disclose the outstanding aggregate balance of the Working Capital Loans owed to the Sponsor under the promissory notes issued to the Sponsor, including an additional promissory note issued on June 22, 2023. 5. In your next amendment, please include the missing bracketed information. Response: The Company has revised pages 30 and 31 of the Amended Registration Statement to complete the previously bracketed items. If my shares are held in “street name,” will my broker, bank or nominee..., page 34 6. We note your disclosure that broker non-votes will not be counted for purposes of determining the presence of a quorum at the special meeting. This disclosure appears inconsistent with your other disclosure that broker non-votes will be considered present for the purposes of establishing a quorum, on page 12. Please revise your filing. Response: The Company has revised page 36 to clarify that if a shareholder of the Company fails to instruct its bank, broker or other nominee how to vote, and does not participate in the virtual Special Meeting, those shares will not be counted for purposes of determining whether a quorum is present at, and the number of votes voted at, the Special Meeting, and its bank, broker or nominee will not vote those shares. Selected Unaudited Pro Forma Condensed Combined Financial Information, page 52 7. We note you define the Transaction on page 8 as the Domestication, the Merger and the other transactions contemplated by the Business Combination Agreement. However, we note your disclosure on page 142 that on November 15, 2022 you entered into the Business Combination Agreement, Sponsor Letter Agreement, PIPE Subscription Agreement and related transaction documents. Please consider expanding your definition of the Transaction, if appropriate, to specify inclusion of these particular agreements. Also expand the disclosure in footnote two on page 53 to disclose the number of Mobix Labs common stock assumed to be issued pursuant to subscription, warrant and convertible note agreements entered into from January 1, 2023 through March 31, 2023. Response: The Company has revised the cover page of the proxy statement/prospectus and page 8 of the Amended Registration Statement to expand the definition of the Transaction as requested. The Company also has revised the disclosure in footnote two on page 55, and pages 124, 125, 132 and 274 to disclose the number of Mobix Labs common stock assumed to be issued pursuant to subscription and warrant agreements entered into from April 1, 2023 through July 31, 2023. Mobix Labs did not enter into any convertible note agreements from April 1, 2023 to July 31, 2023. Risk Factors Mobix Labs’ plan to add incremental revenues and diversify its connectivity customer base through the acquisition of EMI Solutions..., page 65 8. Please revise to update the status of the EMI Merger Agreement, for which the termination date was March 31, 2023. Response: The Company has revised pages 60, 67, 123, 132, 168, 255 and 269 of the Amended Registration Statement to explain that Mobix Labs currently expects to close the EMI Transaction in the fourth quarter of calendar year 2023. Although no formal amendment to the EMI Merger Agreement has been executed prior to the date of the filing of the Amended Registration Statement, the parties to the EMI Merger Agreement are in negotiation to extend the termination date under the EMI Merger Agreement from March 31, 2023 to December 31, 2023, as disclosed on pages 67, 117, 247 and 260 of the Amended Registration Statement. Mobix Labs’ business and operations could suffer in the event of a security breach involving its IT systems..., page 77 9. We note that you may be subject to cyberattacks. Update your risks characterized as potential if you have experienced a cyberattack. To the extent material, disclose any new or heightened risk of potential cyberattacks by state actors or others since Russia’s invasion of Ukraine. Response: The Company advises the Staff that Mobix Labs has not experienced a cyberattack and, as a result, has not updated the risk factor. The Company has revised page 80 of the Amended Registration Statement to disclose a heightened risk of potential cyberattacks since Russia’s invasion of Ukraine. Risks Related to the Transaction, page 88 10. Please disclose the material risks to unaffiliated investors presented by taking Mobix Labs public through a merger rather than an underwritten offering. These risks could include the absence of due diligence conducted by an underwriter that would be subject to liability for any material misstatements or omissions in a registration statement. Response: The Company has revised page 94 of the Amended Registration Statement to add the requested disclosure. CFIUS or other regulatory agencies may modify, delay or prevent our Transaction, page 93 11. Please revise to disclose that the warrants would expire worthless in the event of liquidation. Response: The Company has revised page 99 of the Amended Registration Statement to add the requested disclosure. Unaudited Pro Forma Condensed Combined Financial Information Introduction, page 113 12. Refer to your disclosure in the third paragraph on page 114 regarding the Post-March 26 Financing Securities. We note that the estimated maximum number of such additional shares that may be issued is 2,500,000, and the estimate was provided solely for the purpose of registering a maximum amount under the Form S-4 registration statement. We also note your disclosure that the Business Combination Agreement does not cap the number of such shares that may be issuable, and that as of March 31, 2023, Mobix Labs had not issued any Post-March 26 Financing Securities. Given that there is potential for issuance of an additional maximum of 2,500,000 shares that will increase the aggregate transaction consideration, please expand your redemption scenarios from two to three to provide for the share issuance under the Post-March 26 Financing Securities. In this regard, you should have the no redemption, maximum redemption, along with a Post-March 26 Financing Securities or similar description scenario to appropriately reflect the range of possible results as required by Rule 11-02(a)(10) of Regulation S-X. Please revise throughout the filing to reflect assumption of this third redemption scenario. Response: The Company advises the Staff that it does not believe it is necessary to include a Post-March 26 Financing Securities scenario as the No Redemption and Maximum Redemption Scenarios include the 1,995,612 additional shares that are expected to be issued for the Post-March 26 Financing Securities. The Company will update this number in future amendments to the Registration Statement to reflect the issuance of any future Post-March 26 Financing Securities. Because the Post-March 26 Financing Securities are securities issued to shareholders of Mobix Labs, rather than to current shareholders of the Company, the holders of the Post-March 26 Financing Securities are not entitled to elect to redeem those shares in connection with the Transaction. Accordingly, the number of Post-March 26 Financing Securities does not change depending on the different redemption scenarios that apply to the Company’s shares. Further, the Company advises the Staff that it does not believe that including the additional scenarios reflecting the issuance of 2,500,000 additional shares would be meaningful information to shareholders, as the percentage change in pro forma ownership between showing 1,995,612 shares and 2,500,000 shares is not material. 13. We note from your disclosures on pages 115 and 121 in January 2023 Mobix Labs issued 1,233,108 shares of its common stock in settlement of its dispute with the seller related to the acquisition of Cosemi. Please describe how you accounted for the settlement in the pro forma financial statements and how the shares of common stock issued to settle the liability were valued. Response: The Company advises the Staff that the issuance of these shares is now reflected in the Unaudited Condensed Financial Statements of Mobix as of and for the six months ended March 31, 2023 that is included in the Amended Registration Statement and, consequently, is no longer reflected as an adjustment to the Unaudited Pro Forma Condensed Combined Financial Statements. In the Unaudited Condensed Financial Statements of Mobix as of and for the six months ended March 31, 2023, the issuance of these shares was accounted for as an $8,434,000 increase in additional paid-in capital and an $8,434,000 decrease in the loss contingency liability, based on the estimated fair value per share at the date of issuance of $6.84, and is described in Note 12 (Commitments and Contingencies) appearing on page F-62 of the Amended Registration Statement. Notes to the Unaudited Pro Forma Condensed Combined Financial Information Note 4. Pro Forma Adjustments, page 122 14. Refer to the second paragraph at the top of page 123 regarding pro forma basic and diluted earnings per share. Please clarify that the pro forma per share amounts are based on the New Mobix Labs’s shares assuming the Transaction occurred on January 1, 2022. Your current disclosure refers to Mobix Labs, rather than New Mobix Labs. In this regard, the pro forma basic and diluted earnings per share are based on both the outstanding shares of Chavant and Mobix Labs, as adjusted for the issuance of New Mobix Labs securities in the Transaction as described in Note 5 on page 124. Please revise accordingly. Response: The Company has revised page 135 of the Amended Registration Statement to add the requested disclosure. 15. Refer to Adjustment 4(E)(1). Please clarify for the “No Redemption” scenario, that 856,042 shares and value thereof are still classified as shares subject to possible redemption, while such number of shares and redemption value are considered to have been redeemed under the “Maximum Redemption” scenario. In this regard, also provide a separate adjustment for the 96,991 shares redeemed in January 2023 as an adjustment to Chavant’s December 31, 2022 historical balance sheet. Response: The Company advises the Staff that as the redemption of the 96,991 shares has been reflected in the Company’s historical Unaudited Condensed Financial Statements for the three months ended March 31, 2023 that are included in the Amended Registration Statement, no adjustment to the Unaudited Pro Forma Condensed Combined Financial Information regarding such redemptions is necessary. The Company has included a separate adjustment in the Unaudited Pro Forma Condensed Combined Financial Information for the 77,130 shares redeemed in July 2023 in connection with the Company’s July 18, 2023 extraordinary general meeting. Note 5. Loss Per Share, page 124 16. Refer to the last paragraph on page 124 and the table on page 125. Please expand the table to reflect all dilutive securities, including the Working Capital Loans, Equity Incentive Plan and Employee Stock Purchase Plan as outlined in the second table on page 22. Response: The Company has revised page 137 of the Amended Registration Statement to add the requested disclosure. Proposal No. 1 - The Transaction Proposal The Background of the Transaction, page 132 17. Your charter waived the corporate opportunities doctrine. Please address this potential conflict of interest and whether it impacted your search for an acquisition target. Response: The Company has revised page 169 of the Amended Registration Statement to add the requested disclosure. 18. We note your disclosure on F-16 that Roth Capital Partners, LLC and Craig-Hallum Capital Group LLC, as Chavant’s IPO underwriters, are entitled t