Correspondence 0001213900-23-058047 from CERO THERAPEUTICS HOLDINGS, INC. (CERO)
CERO THERAPEUTICS HOLDINGS, INC.
Date: July 19, 2023 · CIK: 0001870404 · Accession: 0001213900-23-058047
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-272467
Referenced dates: July 5, 2023
Letter
Goodwin Procter
The New York Times Building
620 Eighth Avenue
New York, NY 10018
VIA EDGAR
July 19, 2023
United States Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
100 F Street, N.E.
Washington, D.C. 20549-3628
Attention: Ibolya Ignat, Lynn Dicker, Dillon Hagius and Alan Campbell
Re: Phoenix Biotech Acquisition Corp.
Registration Statement on Form S-4
Filed June 7, 2023
File No. 333-272467
Ladies and Gentlemen,
On behalf of Phoenix Biotech Acquisition Corp. (the “Company”), we are submitting this letter to the Securities and Exchange Commission (the “SEC”) via EDGAR in response to the comment letter from the staff of the SEC (the “Staff”), dated July 5, 2023 (the “Comment Letter”), pertaining to the Company’s above-referenced Registration Statement on Form S-4 (the “Registration Statement”). In connection with such responses, the Company is concurrently filing Amendment No. 1 to the Registration Statement (the “Amended Registration Statement”).
For your convenience, the Staff’s comments are summarized in this letter, and each comment is followed by the applicable responses on behalf of the Company. Unless otherwise indicated, page references in the responses correspond to the page numbers in the Amended Registration Statement, and page references otherwise correspond to the page numbers in the Registration Statement. Capitalized terms used in this letter but otherwise not defined herein shall have the meanings set forth in the Amended Registration Statement.
Registration Statement on Form S-4
Cover Page
1. Please revise your cover page, Q&A, and Summary, as necessary, to include the following information:
● on December 16, 2022, in connection with PBAX’s First Extension proxy, holders of 16,211,702 shares of your Class A common stock exercised their right to redeem their shares resulting in a payment of $167,693,708 from the trust account;
● any additional redemptions resulting from the Second Extension proxy; and
● a quantification of the total amount of funds available in the trust account as of the latest practicable date.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages ix, 1, 2, 14, 149, and 179 of the Amended Registration Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 2
2. Please clearly and prominently disclose on the cover page, in the Q&A and in the Summary that (1) your Sponsor controls, and your CEO beneficially owns, a majority of your outstanding shares of common stock; (2) your CEO is the manager of your Sponsor; (3) your Sponsor has agreed to vote in favor of the Business Combination Proposal and all other Proposals; and (4) as a result, the Business Combination Proposal and all other Proposals will be approved regardless of how the Class A stockholders vote. Please also revise to discuss the possibility that the Combined Company will be a “controlled company” under Nasdaq rules and, as a result, may elect not to comply with certain corporate governance requirements.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages viii, 4, 12, 13 and 79 of the Amended Registration Statement in response to the Staff’s comment.
3. You disclose that PBAX’s “public stockholders” are expected to hold between 18.7% and 8.1% of the Combined Company’s common stock under “no redemptions” and “maximum redemptions” scenarios. Please revise your disclosure to separately include the ownership percentages of the Sponsor, CERo stockholders, and any other significant stockholders of the Combined Company. In your revisions, please ensure that the ownership percentages of the Sponsor and your other stockholders are presented separately.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages viii, 4 and 125 of the Amended Registration Statement in response to the Staff’s comment.
4. Please revise the cover page and Q&A, where appropriate, to discuss the deficiency notice received from Nasdaq that is described on page F-40. In your revisions, please discuss whether this notice would impact the ability of the Combined Company to list on Nasdaq and disclose whether the current intentions of the parties are to waive the Nasdaq listing condition if the stock of the Combined Company is not approved for listing.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages 2, 84 and 179 of the Amended Registration Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 3
Market and Industry Data, page ii
5. We note your statement that you have not independently verified the market and industry data contained in the proxy statement/prospectus and that your own internal research has not been verified by any independent source. These statements may imply an inappropriate disclaimer of responsibility with respect to such information. Please either delete these statements or specifically state that you are liable for such information.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page ii of the Amended Registration Statement in response to the Staff’s comment.
Frequently Used Terms, page v
6. Please revise your definition of the term “Business Combination Consideration” to quantify the amount and/or value of the consideration, including the Earn-out Shares.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages vii and viii of the Amended Registration Statement in response to the Staff’s comment.
Questions and Answers About the Proposals, page vi
7. Please revise this section as well as the section titled “Summary of the Proxy Statement/Prospectus,” where appropriate, to include a discussion of the Combined Company’s liquidity position following the Business Combination. In your revisions, please describe and quantify the payments required to be made by the Combined Company following the Business Combination, including transaction expenses, as well as any other debt obligations of the Combined Company. In your discussion, please include disclosure regarding the Combined Company’s liquidity position if the Available Closing Cash condition is waived.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page x in response to the Staff’s comment.
What will CERo stockholders and holders of CERo options receive in the Business Combination?, page vi
8. Please revise this Q&A to: (1) disclose the “certain trading milestone events” that trigger the release of the Earnout Shares and (2) explain what would constitute a “change of control.”
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages iv, vi and vii of the Amended Registration Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 4
Did the Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?, page viii
9. Please revise to explain why RNA Advisors did not evaluate or take into account the Earn-Out Consideration. To the extent PBAX instructed RNA Advisors to omit the Earn-Out Consideration from its analysis as indicated on Annex F-1, please revise to explain why PBAX gave this instruction. Please similarly revise, as necessary, the Summary section and the section entitled “Opinion of the Financial Advisor to the Board” on page 130 and file a consent from RNA Advisors as an exhibit. Refer to Rule 436 and Securities Act Section 7.
Response: The Company advises the Staff that it did not instruct RNA Advisors to omit the Earn-Out Consideration from its analysis. As noted in the fairness opinion, the phrase “at your direction” on Annex F-1 applied only to the assumption of the aggregate value of the Merger Consideration. The Company advises the Staff that it has revised the disclosure on pages ix and 136 of the Amended Registration Statement in response to the Staff’s comment. In addition, the Company advises the Staff that the consent of RNA Advisors is being filed as Exhibit 99.2.
Will New CERo obtain new financing in connection with the Business Combination and are there any arrangements. . ., page viii
10. Please revise this Q&A to: (1) clarify that there is currently no new financing currently in place in connection with the Business Combination that would satisfy the condition that there be $30 million in Available Closing Cash; (2) clarify that there is no guarantee that you will obtain this financing; and (3) explain what would happen to the Business Combination if new financing is not obtained. Please also reconcile the statement that the Business Combination Agreement permits the condition that there be least $5,000,001 of net tangible assets to be waived by PBAX or CERo with the statement on page xii that this condition cannot be waived. Ensure that statements about whether this condition is waivable are consistent throughout the filing.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages x, xi and 93 of the Amended Registration Statement in response to the Staff’s comment.
What happens if a substantial number of stockholders vote in favor of the Business Combination Proposal and exercise redemption rights?, page xi
11. Please revise your presentation in this Q&A as follows:
● Prior to the presentation of the fully-diluted ownership table, please include an ownership table that shows ownership of the Combined Company based on the anticipated number of shares of outstanding New CERo common stock immediately following the Business Combination, at each of the redemption levels included in your sensitivity analysis;
● Revise your presentation to avoid commingling shares owned by your Sponsor, Cantor Fitzgerald or CCM and shares owned by your other stockholders. In that regard, we note that the “Public Shares” figure appears to include both shares owned by your Sponsor, Cantor Fitzgerald and CCM as well as shares owned by your other stockholders;
● Revise your fully-diluted ownership table to include the Earnout Shares.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the presentation on pages xv to xvii of the Amended Registration Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 5
Do the Sponsor or any of PBAX’s directors or officers have interests that may conflict with my interests with respect to the Business. . ., page xiii
12. 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. Similarly, highlight this risk on pages 8 and 139 in the related sections.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages xviii to xx, pages 10 to 12 and 145 to 148 of the Amended Registration Statement in response to the Staff’s comment.
13. Please revise the conflicts of interest discussion so that it highlights all material interests in the transaction held by the Sponsor and the Company’s officers and directors. This could include fiduciary or contractual obligations to other entities as well as any interest in, or affiliation with, the target company. In addition, please clarify how the board considered those conflicts in negotiating and recommending the Business Combination. In this regard, we note your disclosure on page 129 that Brian Atwood, who has served as your Chairman since October 2021, previously se
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filename1.htm
Goodwin Procter
The New York Times Building
620 Eighth Avenue
New York, NY 10018
VIA EDGAR
July 19, 2023
United States Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
100 F Street, N.E.
Washington, D.C. 20549-3628
Attention: Ibolya Ignat, Lynn Dicker, Dillon Hagius and Alan Campbell
Re:
Phoenix Biotech Acquisition Corp.
Registration Statement on Form S-4
Filed June 7, 2023
File No. 333-272467
Ladies and
Gentlemen,
On behalf of Phoenix Biotech Acquisition Corp.
(the “Company”), we are submitting this letter to the Securities and Exchange Commission (the “SEC”)
via EDGAR in response to the comment letter from the staff of the SEC (the “Staff”), dated July 5, 2023 (the “Comment
Letter”), pertaining to the Company’s above-referenced Registration Statement on Form S-4 (the “Registration
Statement”). In connection with such responses, the Company is concurrently filing Amendment No. 1 to the Registration Statement
(the “Amended Registration Statement”).
For your convenience, the Staff’s comments
are summarized in this letter, and each comment is followed by the applicable responses on behalf of the Company. Unless otherwise indicated,
page references in the responses correspond to the page numbers in the Amended Registration Statement, and page references otherwise
correspond to the page numbers in the Registration Statement. Capitalized terms used in this letter but otherwise not defined herein
shall have the meanings set forth in the Amended Registration Statement.
Registration Statement on Form S-4
Cover Page
1. Please revise your cover page, Q&A, and
Summary, as necessary, to include the following information:
● on
December 16, 2022, in connection with PBAX’s First Extension proxy, holders of 16,211,702
shares of your Class A common stock exercised their right to redeem their shares resulting
in a payment of $167,693,708 from the trust account;
● any
additional redemptions resulting from the Second Extension proxy; and
● a
quantification of the total amount of funds available in the trust account as of the latest
practicable date.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages ix, 1, 2,
14, 149, and 179 of the Amended Registration Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 2
2. Please clearly and prominently disclose on
the cover page, in the Q&A and in the Summary that (1) your Sponsor controls, and your
CEO beneficially owns, a majority of your outstanding shares of common stock; (2) your CEO
is the manager of your Sponsor; (3) your Sponsor has agreed to vote in favor of the Business
Combination Proposal and all other Proposals; and (4) as a result, the Business Combination
Proposal and all other Proposals will be approved regardless of how the Class A stockholders
vote. Please also revise to discuss the possibility that the Combined Company will be a “controlled
company” under Nasdaq rules and, as a result, may elect not to comply with certain
corporate governance requirements.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages viii, 4, 12,
13 and 79 of the Amended Registration Statement in response to the Staff’s comment.
3. You disclose that PBAX’s “public
stockholders” are expected to hold between 18.7% and 8.1% of the Combined Company’s
common stock under “no redemptions” and “maximum redemptions” scenarios.
Please revise your disclosure to separately include the ownership percentages of the Sponsor,
CERo stockholders, and any other significant stockholders of the Combined Company. In your
revisions, please ensure that the ownership percentages of the Sponsor and your other stockholders
are presented separately.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages viii, 4 and
125 of the Amended Registration Statement in response to the Staff’s comment.
4. Please revise the cover page and Q&A,
where appropriate, to discuss the deficiency notice received from Nasdaq that is described
on page F-40. In your revisions, please discuss whether this notice would impact the ability
of the Combined Company to list on Nasdaq and disclose whether the current intentions of
the parties are to waive the Nasdaq listing condition if the stock of the Combined Company
is not approved for listing.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages 2, 84 and
179 of the Amended Registration Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 3
Market and Industry Data, page ii
5. We note your statement that you have not independently
verified the market and industry data contained in the proxy statement/prospectus and that
your own internal research has not been verified by any independent source. These statements
may imply an inappropriate disclaimer of responsibility with respect to such information.
Please either delete these statements or specifically state that you are liable for such
information.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page ii of the Amended Registration
Statement in response to the Staff’s comment.
Frequently Used Terms, page v
6. Please revise your definition of the term
“Business Combination Consideration” to quantify the amount and/or value of the
consideration, including the Earn-out Shares.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages vii and viii of the Amended Registration
Statement in response to the Staff’s comment.
Questions and Answers About the Proposals,
page vi
7. Please revise this section as well as the
section titled “Summary of the Proxy Statement/Prospectus,” where appropriate,
to include a discussion of the Combined Company’s liquidity position following the
Business Combination. In your revisions, please describe and quantify the payments required
to be made by the Combined Company following the Business Combination, including transaction
expenses, as well as any other debt obligations of the Combined Company. In your discussion,
please include disclosure regarding the Combined Company’s liquidity position if the
Available Closing Cash condition is waived.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on page x in response to the Staff’s
comment.
What will CERo stockholders and holders
of CERo options receive in the Business Combination?, page vi
8. Please revise this Q&A to: (1) disclose
the “certain trading milestone events” that trigger the release of the Earnout
Shares and (2) explain what would constitute a “change of control.”
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on the cover page and pages iv, vi and
vii of the Amended Registration Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 4
Did the Board obtain a third-party valuation
or fairness opinion in determining whether or not to proceed with the Business Combination?, page viii
9. Please revise to explain why RNA Advisors
did not evaluate or take into account the Earn-Out Consideration. To the extent PBAX instructed
RNA Advisors to omit the Earn-Out Consideration from its analysis as indicated on Annex F-1,
please revise to explain why PBAX gave this instruction. Please similarly revise, as necessary,
the Summary section and the section entitled “Opinion of the Financial Advisor to the
Board” on page 130 and file a consent from RNA Advisors as an exhibit. Refer to Rule
436 and Securities Act Section 7.
Response: The Company advises
the Staff that it did not instruct RNA Advisors to omit the Earn-Out Consideration from its analysis. As noted in the fairness opinion,
the phrase “at your direction” on Annex F-1 applied only to the assumption of the aggregate value of the Merger Consideration.
The Company advises the Staff that it has revised the disclosure on pages ix and 136 of the Amended Registration Statement in response
to the Staff’s comment. In addition, the Company advises the Staff that the consent of RNA Advisors is being filed as Exhibit 99.2.
Will New CERo obtain new financing in
connection with the Business Combination and are there any arrangements. . ., page viii
10. Please revise this Q&A to: (1) clarify
that there is currently no new financing currently in place in connection with the Business
Combination that would satisfy the condition that there be $30 million in Available Closing
Cash; (2) clarify that there is no guarantee that you will obtain this financing; and (3)
explain what would happen to the Business Combination if new financing is not obtained. Please
also reconcile the statement that the Business Combination Agreement permits the condition
that there be least $5,000,001 of net tangible assets to be waived by PBAX or CERo with the
statement on page xii that this condition cannot be waived. Ensure that statements about
whether this condition is waivable are consistent throughout the filing.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages x, xi and 93 of the Amended Registration
Statement in response to the Staff’s comment.
What happens if a substantial number
of stockholders vote in favor of the Business Combination Proposal and exercise redemption rights?, page xi
11. Please revise your presentation in this Q&A
as follows:
● Prior
to the presentation of the fully-diluted ownership table, please include an ownership table
that shows ownership of the Combined Company based on the anticipated number of shares of
outstanding New CERo common stock immediately following the Business Combination, at each
of the redemption levels included in your sensitivity analysis;
● Revise
your presentation to avoid commingling shares owned by your Sponsor, Cantor Fitzgerald or
CCM and shares owned by your other stockholders. In that regard, we note that the “Public
Shares” figure appears to include both shares owned by your Sponsor, Cantor Fitzgerald
and CCM as well as shares owned by your other stockholders;
● Revise
your fully-diluted ownership table to include the Earnout Shares.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the presentation on pages xv to xvii of the Amended Registration
Statement in response to the Staff’s comment.
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Life Sciences
July 19, 2023
Page 5
Do the Sponsor or any of PBAX’s
directors or officers have interests that may conflict with my interests with respect to the Business. . ., page xiii
12. 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. Similarly, highlight this risk on pages 8 and 139 in the related sections.
Response: The Company respectfully
acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages xviii to xx, pages 10 to 12 and
145 to 148 of the Amended Registration Statement in response to the Staff’s comment.
13. Please revise the conflicts of interest discussion
so that it highlights all material interests in the transaction held by the Sponsor and the
Company’s officers and directors. This could include fiduciary or contractual obligations
to other entities as well as any interest in, or affiliation with, the target company. In
addition, please clarify how the board considered those conflicts in negotiating and recommending
the Business Combination. In this regard, we note your disclosure on page 129 that Brian
Atwood, who has served as your Chairman since October 2021, previously se