Correspondence 0001193125-23-059809 from dMY Technology Group, Inc. VI (CIK 0001858327)
dMY Technology Group, Inc. VI (CIK 0001858327)
Date: March 3, 2023 · CIK: 0001858327 · Accession: 0001193125-23-059809
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CORRESP 1 filename1.htm CORRESP March 3, 2023 U.S. Securities & Exchange Commission Division of Corporation Finance Office of Technology 100 F Street, NE Washington, D.C. 20549 Attn: Chen Chen, Staff Accountant Attn: Kathleen Collins, Accounting Branch Chief Attn: David Plattner, Special Counsel Attn: Alexandra Barone, Staff Attorney Attn: Joshua Shainess, Legal Branch Chief Dear Ms. Chen, Ms. Collins, Mr. Plattner, Ms. Barone and Mr. Shainess: dMY VI Technology Group, Inc. VI, a Delaware corporation (the “Company,” “dMY VI”, “we,” “our” or “us”), hereby transmits the Company’s response to the comment letter received from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) dated February 16, 2023, regarding the Company’s Tender Offer Statement on Schedule TO-I filed with the Commission on January 26, 2023 (the “Schedule TO”). For the Staff’s convenience, we have repeated below the Staff’s comments in bold and have followed such comments with the Company’s response. All page references in the responses set forth below refer to page numbers in the Amended and Restated Offer to Purchase (the “A&R OTP”), as filed as Exhibit 99.(a)(1)(C) to Amendment No. 3 to the Schedule TO (“Amendment No. 3”). Exhibit 99.(a)(1)(A) to Schedule TO Questions and Answers about the Offer Q: What interests do our directors, executive officers, and Sponsor have in the Business Combination?, page 8 1. We note your disclosure that dMY VI’s officers, directors, and affiliates have incurred expenses associated with the Business Combination. Please quantify the aggregate dollar amount and describe the nature of what the sponsor and its affiliates have at risk that depends on completion of a business combination. Include the current value of securities held, loans extended, fees due, and out-of-pocket expenses for which the sponsor and its affiliates are awaiting reimbursement. Provide similar disclosure for the company’s officers and directors, if material. In response to the Staff’s comment, the Company has revised the disclosure on page 8 of the A&R OTP. Page 1 of 15 Q: Is there a limit on the total number of shares of Common Stock that may be tendered?, page 11 2. We note that you are offering to purchase all of dMY VI’s outstanding shares of common stock but that you will not consummate the Offer (and therefore the Share Purchase Agreement) if sufficient shares of Common Stock are tendered such that, after giving effect to the PIPE Investment Amount received and the assets acquired in the Business Combination, your net tangible assets will be below $5,000,001. We also note that dMY VI has not entered into any subscription agreements for a PIPE Investment, but expects to enter into PIPE Subscription Agreements with PIPE Investors in the future. Please confirm your intention to disclose developments concerning the PIPE Investment, including all material terms of any PIPE, by amending the Schedule TO. Refer to Rule 13e-4(c)(3). In response to the Staff’s comment, we confirm our intention to disclose developments concerning the PIPE Investment, including all material terms of any PIPE, by amending the Schedule TO. At the time of this filing, the Company does not have any material information about the PIPE Investment to disclose. Risk Factors, page 13 3. We note your disclosure on page 6 that there may be a controlling stockholder following the completion of the Business Combination. Please include a risk factor to address the potential risks associated with a potential controlling stockholder. In response to the Staff’s comment, the Company has revised the disclosure on page 16 of the A&R OTP to add a new risk factor to address the potential risks associated with a potential controlling stockholder. The risk factor is titled: “Our Sponsor may be a controlling stockholder of the combined company, having control over key decision making, which may not always be in the interest of the combined company’s stockholders.” 4. Please include a risk factor addressing the risks associated with the exclusive forum provision in your certificate of incorporation. In response to the Staff’s comment, the Company has revised the disclosure on page 17 of the A&R OTP to add a new Risk Factor to address the risks associated with the exclusive forum provision in the Company’s certificate of incorporation. The risk factor is titled: “dMY VI’s Amended and Restated Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for substantially all disputes between dMY VI and its stockholders, and also provides that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit the ability of dMY VI’s stockholders to obtain a favorable judicial forum for disputes with dMY VI or its directors, officers, or employees.” Page 2 of 15 5. In your risk factors, please highlight the risk that the sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate. We note that this is discussed on page 73. In response to the Staff’s comment, the Company has revised the disclosure on pages 21 to 22 of the A&R OTP to add a new risk factor highlighting the risk that the sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate. The risk factor is titled: “The Sponsor and its affiliates will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate.” If dMY VI’s due diligence investigation of Rainwater Tech was inadequate..., page 14 6. Expand your disclosure to address the material risks to unaffiliated investors presented by taking the company 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. In response to the Staff’s comment, the Company has revised the disclosure on pages 18 to 19 of the A&R OTP to add a new risk factor that addresses the material risks to unaffiliated investors presented by taking Rainwater Tech public through a merger rather than an underwritten offering. The risk factor is titled: “You may not have the same benefits as an investor in an underwritten public offering and may be subject to material risks present when a company is taken public through a business combination including, but not limited to, 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.” dMY VI may redeem the warrants at a time..., page 15 7. Please expand your discussion of the material risks to public warrant holders, including those arising from differences between private and public warrants. Clarify whether recent common stock trading prices exceed the threshold that would allow the company to redeem public warrants. Clearly explain the steps, if any, the company will take to notify all shareholders, including beneficial owners, regarding when the warrants become eligible for redemption. In response to the Staff’s comment, the Company has revised the disclosure on pages 10 to 11 and 19 to 21 of the A&R OTP to expand its discussion of the material risks to public warrant holders if the Company redeems the warrants at a time that is Page 3 of 15 not beneficial to public warrant holders. On pages 19 to 21 of the A&R OTP, the Company has added new risk factors that address other material risks to public warrant holders. In addition, the Company has added disclosure in the section “Questions and Answers About the Offer—The Offer” on pages 10 to 11 of the A&R OTP to further address material risks to public warrant holders, whether recent common stock trading prices exceed the threshold that allow the Company to redeem public warrants, and the steps that the Company would take to notify all shareholders regarding when the warrants become eligible for redemption. Rainwater Tech is dependent on our suppliers and manufacturers, and supply chain issues could delay..., page 30 8. In order to provide investors with relevant context, please clarify whether Rainwater Tech has established any relationships with potential suppliers or manufacturers. The Company respectfully advises that at the time of this filing, Rainwater Tech has not established any relationships with potential suppliers or manufacturers. The Company has revised the risk factor disclosure on pages 37 to 38 of the A&R OTP to provide investors with this additional context. The Company respectfully advises that at the time of this filing, Rainwater Tech has engaged in preliminary discussions with a number of potential suppliers and manufacturers in the United States and Australia, however it has not yet established any formal contractual relationships with a particular potential supplier or manufacturer. Rainwater Tech’s Strategy, page 47 9. Please identify which senior technical advisor you are referring to in this section. Similarly, identify the senior technical advisor that participated in the third-party trial in Oman and describe their role in that trial. In response to the Staff’s comment, the Company notes that Scott Morris is the senior technical advisor that it is referring to in this section. Mr. Morris was also the senior technical advisor that participated in the third-party trial in Oman. The Company has updated the disclosure on pages 54 to 56 of the A&R OTP to refer to Mr. Morris specifically, and to describe Mr. Morris’ role in that trial. Industry Background: Ionization Rainfall Generation, page 48 10. Describe with specificity the steps Rainwater Tech’s management team believes are necessary to commercialize and scale ionization rainfall generation. In response to the Staff’s comment, the Company has revised the disclosure on pages 56 to 57 of the A&R OTP to summarize the steps that Rainwater Tech believes are necessary to commercialize and scale ionization rainfall generation technology. In addition, the Company has added a cross-reference to the section “Rainwater Tech Management’s Discussion and Analysis of Financial Condition and Results of Operations—Plan of Operations”, which includes a detailed and specific description of the steps that Rainwater Tech’s management team believes are necessary to commercialize and scale ionization rainfall generation technology. Page 4 of 15 Research & Development, page 55 11. We note statements by Mr. Nefkens, as filed in your Form 425 on February 1, 2023, asserting that Rainwater Tech will not be “investing for years in R&D” but rather will be focused on commercialization efforts. Please reconcile those statements with the disclosure in this section, which indicates that the company will need to invest in significant research and development in order to bring its products to market. Please revise to provide a more detailed roadmap of the technological developments and improvements you will need to undertake to bring your proposed products to market. In response to the Staff’s comment, the Company respectfully advises that Mr. Nefkens’ statements in the Form 425 filed on February 1, 2023 were meant to convey that Rainwater Tech’s initial technology is ready to be deployed in the near-term, such that additional R&D is not necessary for initial installations of the rain generation systems (which, as disclosed, have shown promise to work in third-party trials). However, Rainwater Tech intends to invest in significant research and development in order to commercialize and scale the technology, rather than simply bring it to market. Accordingly, the Company has revised the disclosure on page 62 of the A&R OTP to better clarify Rainwater Tech’s intentions with respect to research and development. In addition, Rainwater Tech has added extensive disclosure in the section “Rainwater Tech Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 122 to 133 of the A&R OTP to include a more detailed roadmap of the technological developments and improvements Rainwater Tech will need to undertake to bring advancements to its proposed products to market. The Business Combination General Description of the Business Combination; Closing Consideration, page 60 12. Please tell us how the parties agreed to the $3.045 million total consideration and reconcile such amount to the $200 million fair market value of Rainwater Tech as determined by your Board. The $3.045 million total consideration to be paid to Sellers was the result of negotiation between the Sellers and representatives of dMY VI. In addition to the upfront value of the consideration offered to the Sellers, the Sellers considered how Rainwater Tech could benefit through a business combination with dMY VI, including the benefits of becoming a public company from the perspectives of talent Page 5 of 15 attraction and access to capital, as well as the ability to make acquisitions using public equity currency. They also considered the track record and demonstrated ability of the dMY VI sponsor team in bringing a pioneering technology onto the public markets. The Rainwater Tech Sellers applied their business judgment in reviewing and agreeing to the total consideration with dMY VI. As disclosed in the prospectus for dMY VI’s initial public offering, the determination as to the fair market value of dMY VI’s initial business combination is to be made by the Board. Given the early stage of Rainwater Tech’s operations and the pre-revenue, high-growth profile of its business, dMY VI’s Board did not ascribe a specific value to Rainwater Tech. As described in the A&R OTP, however, the Board determined that the fair market value of Rainwater Tech is at least $200 million. The Board, in consultation with dMY VI management and its financial and legal advisors, and utilizing its substantial experience in evaluating the operating and financial merits of companies, including in sectors relevant to water infrastructure and generation, considered a variety of factors in reaching this determination. In particular, the Board considered the analyses described under the heading “Valuation Analysis” on pages 79 to 82 of the A&R OTP. In evaluating this information, the Board considered that it was reasonably achievable for Rainwater Tech to achieve a 1% market share of the total addressable market (“TAM”) for Rainwater Tech’s business by 2032. The Board also considered that, based on analysis by dMY VI management and Needham derived from underlying assumptions provided by Rainwater Tech, Rainwater Tech’s share of TAM for such year would imply earnings before interest, tax, depreciation and amortization (“EBITDA”) of approximately $269 million (based on dMY VI management’s expectations regarding the ability of Rainwater Tech’s management team to achieve a long-term EBITDA margin target of 30%). Applying multiples of 13x to 15x for 2032 EBITDA (based on an assessment of reasonably comparable companies) implied a future enterprise value in 2032 of $3.5 to $4.0 billion, which, discounted to present value using a conservative discount rate of 30%, implied a present enterprise value of Rainwater Tech’s business of $254 million to $293 million. The Board considered the risks inherent in developing Rainwater Tech’s business, which are described in the “Risks