Correspondence 0001213900-25-004335 from Webull Corp (BULL)
Webull Corp
Date: Jan. 16, 2025 · CIK: 0001866364 · Accession: 0001213900-25-004335
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-283635
Referenced dates: December 5, 2024, January 10, 2025, November 25, 2024
Letter
United States VIA EDGAR Office of Crypto Assets Division of Corporation Finance Securities and Exchange Commission Washington, D.C. 20549 Re: Webull Corporation (CIK No. 0001866364) Response to the Staff’s Comments on Amendment No. 2 to Registration Statement on Form F-4 Filed December 26, 2024 File No. 333-283635
Dear Ms. Tillan, Mr. Brunhofer. Ms. Bednarowski and Mr. McWilliams:
On behalf of our client, Webull Corporation (the “Company”), we submit to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated January 10, 2025 on the Company’s Amendment No. 2 to Registration Statement on Form F-4 filed on December 26, 2024 (the “Registration Statement”). The Staff’s comments are repeated below in bold and are followed by the Company’s responses. Statements about the Company or otherwise regarding actions or acknowledgments of the Company are based on representations from the Company.
Concurrently with the submission of this letter, the Company is filing its Amendment No. 3 to Registration Statement on Form F-4 (the “Revised Registration Statement”) via EDGAR with the Commission for review. Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them in the Revised Registration Statement.
Austin Bay Area Beijing Boston Brussels Chicago Dallas Hong Kong Houston London Los Angeles Miami Munich Paris
Riyadh Salt Lake City Shanghai Washington, D.C.
Division of Corporation Finance
Securities and Exchange Commission
January 16,
Page 2
Amendment No. 2 to Registration Statement on Form F-4
General
1. We note your response to prior comment 1 as well as your responses to related comments in prior comment letters. Please confirm your understanding in writing that our decision not to issue additional comments should not be interpreted to mean that we either agree or disagree with your responses, or any conclusions you have made, positions you have taken, or practices you have engaged in or may engage in with respect to your fractional bond program.
The Company hereby respectfully confirms its understanding that the Staff’s decision not to issue additional comments should not be interpreted to mean that the Staff either agrees or disagrees with the Company’s responses, or any conclusions the Company has made, positions the Company has taken, or practices the Company has engaged in or may engage in with respect to the Company’s fractional bond program.
2. Please provide us with copies of any correspondence that Webull Financial LLC submits in response to the letter dated November 25, 2024 from the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party.
Substantially concurrently with the submission of this response letter, the Company has provided the Staff, on a confidential basis under separate cover, a copy of the correspondence that Webull Financial LLC has submitted to the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (the “Select Committee”) in response to the letter dated December 5, 2024 from the Select Committee.
Summary of the Proxy Statement/Prospectus
Corporate History and Structure of Webull, page 1
3. Please disclose here your recent restructuring initiatives, including the establishment of a VIE structure in April 2021, subsequent elimination of the VIE structure completed in August 2022, and the July 2023 spin of Webull Pay LLC, and discuss the reasons for each. Balance this section by summarizing the risks you are subject to from your historical operations and include a cross-reference to the relevant risk factor discussion.
In response to the Staff’s comment, the Company has added the requested disclosure on pages 188 and 189 of the Revised Registration Statement.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 3
Corporate History and Structure of Webull, page 1
4. You disclose potential dilution from the issuance of up to 44,400,984 Webull Ordinary Shares reserved for issuance under the 2021 Global Share Incentive Plan of Webull, which after applying the current Share Subdivision Factor of 3.3593 represents approximately 13,217,332 pre-transaction ordinary shares of Webull. In your draft registration statement submitted August 28, 2024, you disclosed on page 14 this amount as 80,756,743 Webull Ordinary Shares, which after applying the then-current Share Subdivision Factor of 5.4732 represented approximately 14,754,941 pre-transaction ordinary shares of Webull. Please address the following:
● Tell us why the pre-transaction historical ordinary shares of Webull associated with the 2021 Global Share Incentive Plan declined 1,537,609 shares from the draft registration statement submitted on August 28, 2024, and, to the extent applicable, tell us where you explained this difference in your filing. In this regard, based on the disclosures in Note 9 of your September 30, 2024 interim financial statements compared to your March 31, 2024 interim financial statements in your last draft registration statement, it appears that you granted only 60,500 awards (10,500 stock options and 50,000 restricted stock units) during the second and third quarters of 2024, and we note no disclosure of additional awards in your subsequent events in Note 18 on page F-82.
● To the extent you granted additional awards after September 30, 2024, tell us:
o The quantity and type of awards;
o When you issued those awards;
o The strike price, vesting provisions and other relevant terms of those awards;
o How you valued those awards and the value assigned thereto;
o The value of ordinary shares used to calculate the value of the awards; and
o How the value of ordinary shares relates to the latest value provided in your June 14, 2024 response to comment 15 from our May 31, 2024 letter, and explain the drivers for the change in value of your ordinary shares.
The Company respectfully informs the Staff that subsequent to the draft registration statement submitted on August 28, 2024, Webull and SKGR amended the Business Combination Agreement, the Company decided to amend its 2021 Global Share Incentive Plan (the “Plan”) prior to the Closing so that the amount of Webull Class A Ordinary Shares potentially issuable will decrease by 1,537,804 (representing the entire difference noted by the Staff), prior to the application of the Share Subdivision Factor. After the Closing, the Plan will have a share reserve balance of 44,440,984.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 4
The Company also respectfully informs the Staff that in response to the Staff’s comment, the Company has (i) added disclosure on pages 14 and 15 of the Revised Registration Statement that the amount of Webull Class A Ordinary Shares reserved for issuance under the Plan reflects the amendment of the Plan and (ii) added a cross-reference on pages 14 and 15 of the Revised Registration Statement to the section titled “Other Related Events or Agreements in Connection with the Business Combination — Amendment of 2021 Global Share Incentive Plan of Webull” on page 230 of the Registration Statement that discusses the effects of the amendment of the Plan on the amount of Webull Class A Ordinary Shares reserved for issuance under the Plan.
Our business depends on our strong brand, page 39
5. Please clarify that each of the referenced letters makes allegations specifically with respect to the People’s Republic of China and that the December 5, 2024 letter was delivered by the House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party. Also disclose that the House Select Committee requested information from Webull Financial and briefly summarize the nature of the information requested. Similarly revise the risk factor on page 66.
In response to the Staff’s comment, the Company has added the requested disclosure on pages 39 and 40 of the Revised Registration Statement as a new risk factor to specifically disclose risks relating to U.S. government action against companies with connections to China. As a result, the Company has removed the relevant language in the risk factors on pages 39 and 66 of the Registration Statement.
We may be involved in regulatory investigations, page 42
6. Please disclose the administrative proceeding and cease-and-desist order concerning Webull Financial and briefly describe the nature of the allegations and sanctions. Refer to Exchange Act Rel. No. 101707 (Nov. 22, 2024).
In response to the Staff’s comment, the Company has added the requested disclosure on page 44 of the Revised Registration Statement.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 5
Risks Relating to SKGR and the Business Combination, page 63
7. Please add a risk factor describing the risk that the business combination may be subject to regulations and review by the Committee on Foreign Investment in the United States (CFIUS). We note the disclosure in SKGR’s Form 10-K for the fiscal year ended December 31, 2023 and Definitive Proxy Statement on Schedule 14A filed September 3, 2024.
In response to the Staff’s comment, the Company has added the requested disclosure on pages 65 and 66 of the Revised Registration Statement.
Unaudited Pro Forma Condensed Combined Financial Information, page 223
8. On page 118 and elsewhere, you disclose the issuance of 20,000,000 Incentive Warrants to Webull’s later round investors. Please tell us your intended accounting for these warrants and explain why you do not appear to include them in your pro forma financial statements. In this regard, although you disclose on page 13 and elsewhere that these warrants are expected to have zero initial cash value, they have economic value. In your response, specifically tell us whether these warrants represent the issuance of a dividend. Reference for us the authoritative literature you rely upon to support your position.
Incentive Warrants Classification
The Company respectfully informs the Staff that the Incentive Warrants to be issued to certain of the existing Webull preferred shareholders at the Closing are identical in form to the Incentive Warrants that are to be issued to non-redeeming SKGR Shareholders at the Closing. Based upon the Company’s preliminary accounting assessment, as disclosed on page 228 of the Revised Registration Statement, the Company believes that the Incentive Warrants will qualify for equity accounting treatment. The Company further respectfully informs the Staff that in response to the Staff’s comment, the Company has revised footnote “V” in Note 2 to the Unaudited Pro Forma Condensed Combined Financial Information on page 241 of the Revised Registration Statement to disclose the Company’s accounting for the dividend in the Unaudited Pro Forma Condensed Combined Balance Sheet.
Dividend Accounting
As disclosed in the Company’s registration statement filed on December 5, 2024, the Company and SKGR amended the Business Combination Agreement. A significant change to the terms of the Business Combination reflected in the amended Business Combination Agreement was the decreased transaction value from $7.7 billion to $5.0 billion. In light of the decreased valuation, the Company proposed to issue approximately 42.7 million incentive shares (as further discussed below in the Company’s response to the Staff’s comment number 9) and 20 million Incentive Warrants to certain existing Webull preferred shareholders at the Closing consistent with the provision within the Shareholders’ Agreement, which establishes expected return thresholds for certain preferred shareholders.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 6
The Company acknowledges the Staff’s comment that the Incentive Warrants to be issued have economic value. While the proposed issuance of Incentive Warrants (the “Warrant Issuance”) represents a return to such Webull preferred shareholders, the Warrant Issuance does not meet the definition of “stock dividend” and is not within the scope of ASC 505-20 as the Warrant Issuance involves shares of a different class. However, the Company has determined that the Warrant Issuance meets the general definition of a dividend because the substance of such distribution is a return to the Webull preferred shareholders and the number of Incentive Warrants to be distributed was objectively determined based on a consistent approach including cons
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CORRESP
1
filename1.htm
Christian
O. Nagler, P.C.
To
Call Writer Directly:
+1 212 446 4660
christian.nagler@kirkland.com
601
Lexington Avenue
New
York, NY 10022
United
States
+1
212 446 4800
www.kirkland.com
Facsimile:
+1 212 446 4900
January
16, 2025
VIA EDGAR
Ms. Kate
Tillan
Mr. Mark Brunhofer
Ms. Sonia Bednarowski
Mr. J. Nolan McWilliams
Office
of Crypto Assets
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Re: Webull Corporation (CIK No.
0001866364)
Response to the Staff’s Comments on Amendment No. 2 to Registration Statement on Form
F-4 Filed December 26, 2024
File No. 333-283635
Dear Ms.
Tillan, Mr. Brunhofer. Ms. Bednarowski and Mr. McWilliams:
On
behalf of our client, Webull Corporation (the “Company”), we submit to the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s
responses to the comments contained in the Staff’s letter dated January 10, 2025 on the Company’s Amendment No. 2 to
Registration Statement on Form F-4 filed on December 26, 2024 (the “Registration Statement”). The Staff’s
comments are repeated below in bold and are followed by the Company’s responses. Statements about the Company or otherwise
regarding actions or acknowledgments of the Company are based on representations from the Company.
Concurrently
with the submission of this letter, the Company is filing its Amendment No. 3 to Registration Statement on Form F-4 (the “Revised
Registration Statement”) via EDGAR with the Commission for review. Unless otherwise indicated, capitalized terms used herein
have the meanings assigned to them in the Revised Registration Statement.
Austin
Bay Area Beijing Boston Brussels Chicago Dallas
Hong Kong Houston London Los Angeles Miami
Munich Paris
Riyadh Salt Lake City Shanghai
Washington, D.C.
Division
of Corporation Finance
Securities
and Exchange Commission
January 16,
2025
Page 2
Amendment
No. 2 to Registration Statement on Form F-4
General
1. We note
your response to prior comment 1 as well as your responses to related comments in prior comment
letters. Please confirm your understanding in writing that our decision not to issue additional
comments should not be interpreted to mean that we either agree or disagree with your responses,
or any conclusions you have made, positions you have taken, or practices you have engaged
in or may engage in with respect to your fractional bond program.
The
Company hereby respectfully confirms its understanding that the Staff’s decision not to issue additional comments should not be
interpreted to mean that the Staff either agrees or disagrees with the Company’s responses, or any conclusions the Company has
made, positions the Company has taken, or practices the Company has engaged in or may engage in with respect to the Company’s fractional
bond program.
2. Please
provide us with copies of any correspondence that Webull Financial LLC submits in response
to the letter dated November 25, 2024 from the House Select Committee on the Strategic Competition
Between the United States and the Chinese Communist Party.
Substantially concurrently with the submission of this response letter, the
Company has provided the Staff, on a confidential basis under separate cover, a copy of the correspondence that Webull Financial LLC
has submitted to the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (the
“Select Committee”) in response to the letter dated December 5, 2024 from the Select Committee.
Summary
of the Proxy Statement/Prospectus
Corporate History and Structure of Webull, page 1
3. Please
disclose here your recent restructuring initiatives, including the establishment of a VIE
structure in April 2021, subsequent elimination of the VIE structure completed in August
2022, and the July 2023 spin of Webull Pay LLC, and discuss the reasons for each. Balance
this section by summarizing the risks you are subject to from your historical operations
and include a cross-reference to the relevant risk factor discussion.
In
response to the Staff’s comment, the Company has added the requested disclosure on pages 188 and 189 of the Revised Registration
Statement.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 3
Corporate
History and Structure of Webull, page 1
4. You
disclose potential dilution from the issuance of up to 44,400,984 Webull Ordinary Shares
reserved for issuance under the 2021 Global Share Incentive Plan of Webull, which after applying
the current Share Subdivision Factor of 3.3593 represents approximately 13,217,332 pre-transaction
ordinary shares of Webull. In your draft registration statement submitted August 28, 2024,
you disclosed on page 14 this amount as 80,756,743 Webull Ordinary Shares, which after applying
the then-current Share Subdivision Factor of 5.4732 represented approximately 14,754,941
pre-transaction ordinary shares of Webull. Please address the following:
● Tell
us why the pre-transaction historical ordinary shares of Webull associated with the 2021
Global Share Incentive Plan declined 1,537,609 shares from the draft registration statement
submitted on August 28, 2024, and, to the extent applicable, tell us where you explained
this difference in your filing. In this regard, based on the disclosures in Note 9 of your
September 30, 2024 interim financial statements compared to your March 31, 2024 interim financial
statements in your last draft registration statement, it appears that you granted only 60,500
awards (10,500 stock options and 50,000 restricted stock units) during the second and third
quarters of 2024, and we note no disclosure of additional awards in your subsequent events
in Note 18 on page F-82.
● To
the extent you granted additional awards after September 30, 2024, tell us:
o The
quantity and type of awards;
o When
you issued those awards;
o The
strike price, vesting provisions and other relevant terms of those awards;
o How
you valued those awards and the value assigned thereto;
o The
value of ordinary shares used to calculate the value of the awards; and
o How
the value of ordinary shares relates to the latest value provided in your June 14, 2024 response
to comment 15 from our May 31, 2024 letter, and explain the drivers for the change in value
of your ordinary shares.
The
Company respectfully informs the Staff that subsequent to the draft registration statement submitted on August 28, 2024, Webull and
SKGR amended the Business Combination Agreement, the Company decided to amend its 2021 Global Share Incentive Plan (the
“Plan”) prior to the Closing so that the amount of Webull Class A Ordinary Shares potentially issuable will
decrease by 1,537,804 (representing the entire difference noted by the Staff), prior to the application of the Share Subdivision
Factor. After the Closing, the Plan will have a share reserve balance of 44,440,984.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 4
The
Company also respectfully informs the Staff that in response to the Staff’s comment, the Company has (i) added disclosure on pages
14 and 15 of the Revised Registration Statement that the amount of Webull Class A Ordinary Shares reserved for issuance under the Plan
reflects the amendment of the Plan and (ii) added a cross-reference on pages 14 and 15 of the Revised Registration Statement to
the section titled “Other Related Events or Agreements in Connection with the Business Combination —
Amendment of 2021 Global Share Incentive Plan of Webull” on page 230 of the Registration Statement that discusses the effects
of the amendment of the Plan on the amount of Webull Class A Ordinary Shares reserved for issuance under the Plan.
Our
business depends on our strong brand, page 39
5. Please
clarify that each of the referenced letters makes allegations specifically with respect to
the People’s Republic of China and that the December 5, 2024 letter was delivered by
the House Select Committee on Strategic Competition Between the United States and the Chinese
Communist Party. Also disclose that the House Select Committee requested information from
Webull Financial and briefly summarize the nature of the information requested. Similarly
revise the risk factor on page 66.
In
response to the Staff’s comment, the Company has added the requested disclosure on pages 39 and 40 of the Revised Registration
Statement as a new risk factor to specifically disclose risks relating to U.S. government action against companies with connections to
China. As a result, the Company has removed the relevant language in the risk factors on pages 39 and 66 of the Registration Statement.
We
may be involved in regulatory investigations, page 42
6. Please
disclose the administrative proceeding and cease-and-desist order concerning Webull Financial
and briefly describe the nature of the allegations and sanctions. Refer to Exchange Act Rel.
No. 101707 (Nov. 22, 2024).
In
response to the Staff’s comment, the Company has added the requested disclosure on page 44 of the Revised Registration Statement.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 5
Risks
Relating to SKGR and the Business Combination, page 63
7. Please
add a risk factor describing the risk that the business combination may be subject to regulations
and review by the Committee on Foreign Investment in the United States (CFIUS). We note the
disclosure in SKGR’s Form 10-K for the fiscal year ended December 31, 2023 and Definitive
Proxy Statement on Schedule 14A filed September 3, 2024.
In
response to the Staff’s comment, the Company has added the requested disclosure on pages 65 and 66 of the Revised Registration
Statement.
Unaudited
Pro Forma Condensed Combined Financial Information, page 223
8. On page
118 and elsewhere, you disclose the issuance of 20,000,000 Incentive Warrants to Webull’s
later round investors. Please tell us your intended accounting for these warrants and explain
why you do not appear to include them in your pro forma financial statements. In this regard,
although you disclose on page 13 and elsewhere that these warrants are expected to have zero
initial cash value, they have economic value. In your response, specifically tell us whether
these warrants represent the issuance of a dividend. Reference for us the authoritative literature
you rely upon to support your position.
Incentive Warrants Classification
The Company respectfully informs the Staff that
the Incentive Warrants to be issued to certain of the existing Webull preferred shareholders at the Closing are identical in form to the
Incentive Warrants that are to be issued to non-redeeming SKGR Shareholders at the Closing. Based upon the Company’s preliminary
accounting assessment, as disclosed on page 228 of the Revised Registration Statement, the Company believes that the Incentive Warrants
will qualify for equity accounting treatment. The Company further respectfully informs the Staff that in response to the Staff’s
comment, the Company has revised footnote “V” in Note 2 to the Unaudited Pro Forma Condensed Combined Financial Information
on page 241 of the Revised Registration Statement to disclose the Company’s accounting for the dividend in the Unaudited Pro Forma
Condensed Combined Balance Sheet.
Dividend Accounting
As disclosed in the Company’s
registration statement filed on December 5, 2024, the Company and SKGR amended the Business Combination Agreement. A significant
change to the terms of the Business Combination reflected in the amended Business Combination Agreement was the decreased
transaction value from $7.7 billion to $5.0 billion. In light of the decreased valuation, the Company proposed to issue
approximately 42.7 million incentive shares (as further discussed below in the Company’s response to the Staff’s comment
number 9) and 20 million Incentive Warrants to certain existing Webull preferred shareholders at the Closing consistent with the
provision within the Shareholders’ Agreement, which establishes expected return thresholds for certain preferred
shareholders.
Division of Corporation Finance
Securities and Exchange Commission
January 16, 2025
Page 6
The Company acknowledges the Staff’s comment
that the Incentive Warrants to be issued have economic value. While the proposed issuance of Incentive Warrants (the “Warrant
Issuance”) represents a return to such Webull preferred shareholders, the Warrant Issuance does not meet the definition of
“stock dividend” and is not within the scope of ASC 505-20 as the Warrant Issuance involves shares of a different class.
However, the Company has determined that the Warrant Issuance meets the general definition of a dividend because the substance of such
distribution is a return to the Webull preferred shareholders and the number of Incentive Warrants to be distributed was objectively
determined based on a consistent approach including cons