Correspondence 0001193125-23-207515 from enGene Therapeutics Inc. (ENGN)
enGene Therapeutics Inc.
Date: Aug. 9, 2023 · CIK: 0001980845 · Accession: 0001193125-23-207515
AI Filing Summary & Sentiment
Referenced dates: July 12, 2023
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CORRESP 1 filename1.htm CORRESP Howard Kenny +1.212.309.6843 howard.kenny@morganlewis.com August 9, 2023 Securities and Exchange Commission Division of Corporation Finance 100 F. Street, N.E. Washington, D.C. 20549 Re: enGene Holdings Inc. To Whom it May Concern: On behalf of enGene Holdings Inc. (the “Company”), we submit this letter in response to comments from the staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) contained in its letter dated July 12, 2023, relating to the above referenced Draft Registration Statement on Form S-4 (the “June 14 DRS”). Concurrently herewith, the Company is filing a Registration Statement on Form S-4 (the “Registration Statement”). For the Staff’s convenience, the Staff’s comments have been stated below in their entirety in bold, followed by the corresponding responses from the Company. Except for any page references appearing in the headings or the Staff’s comments (which are references to the June 14 DRS), all page references herein correspond to the page of the Registration Statement. Capitalized terms used but not defined in this letter have the meanings ascribed to such terms in the Registration Statement. Where appropriate, changes conforming to those noted in responses have also been made elsewhere in the prospectus. Draft Registration Statement on Form S-4 Cover Page 1. Please revise your cover page to disclose the valuation assigned to enGene for purposes of the Business Combination. Response: The Company advises the Staff that it has revised the disclosure on the cover page of the Registration Statement to state the valuation assigned to enGene for purposes of the Business Combination. Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178-0060 +1.212.309.6000 United States +1.212.309.6001 Securities and Exchange Commission August 9, 2023 Page 2 Questions and Answers About the Business Combination and the Special Meeting Q: Why is FEAC proposing the Business Combination, page 11 2. You state that in approving the business combination the FEAC board considered certain factors and proceed to discuss them. Please revise your answer to balance the description with equally prominent disclosure of regulatory and competitive challenges you face. Response: The Company advises the Staff that it has revised the disclosure on page 14 of the Registration Statement in response to this comment. 3. In the second bullet point on page 12, please specify the milestones that the FEAC Board considered that could provide an opportunity for potential uplifts in enGene’s valuation. Response: The Company advises the Staff that it has revised the disclosure on pages 13 and 189 of the Registration Statement in response to this comment. Q: What interests do FEAC’s current officers and directors have in the Business Combination?, page 14 4. Please quantify any out-of-pocket expenses for which the sponsor and its affiliates are awaiting reimbursement. Response: The Company advises the Staff that it has revised the disclosure on pages 19 of the Registration Statement in response to this comment. Q: What equity stake will current FEAC Shareholders, the enGene Shareholders and the Sponsor..., page 19 5. Please add a table showing the pro forma ownership interests described in this section, as expanded to include each group of security holders, based on all shares that may be issued on a fully-diluted basis, including the ownership interests of the PIPE investors and the Convertible Bridge Financing investors, based on a no redemption scenario, a 50% redemption scenario and a maximum redemption scenario, including any needed assumptions. Ensure your revised disclosure addresses all possible sources and extent of dilution that shareholders who elect not to redeem their shares may experience in connection with the business combination. Provide disclosure of the impact of each significant source of dilution, including the amount of equity held by founders, convertible securities, including warrants retained by redeeming shareholders, at each of the redemption levels detailed in your sensitivity analysis, including any needed assumptions. Response: The Company advises the Staff that in response to this comment it has revised the disclosure on pages 21, 22 and 23 of the Registration Statement under the new prompt, “Q: What will the respective percentage ownership interests of New enGene be following the consummation of the Business Combination.” 2 Securities and Exchange Commission August 9, 2023 Page 3 6. Quantify the value of warrants, based on recent trading prices, that may be retained by redeeming shareholders assuming maximum redemptions and identify any material resulting risks. Response: The Company advises the Staff that it has revised the disclosure on pages 25, 26 and 167 of the Registration Statement in response to this comment. 7. It appears that underwriting fees remain constant and are not adjusted based on redemptions. Revise to disclose the effective underwriting fee on a percentage basis for shares at each redemption level presented in your sensitivity analysis related to dilution. Response: The Company advises the Staff that it has revised the disclosure on pages 169, 397 and 398 of the Registration Statement in response to this comment. The Company respectfully advises the Staff that the amount of the deferred underwriting fees payable to the underwriters of FEAC’s IPO are not required to be adjusted for any FEAC Class A Shares that are redeemed in connection with FEAC’s initial business combination. Q: What is the PIPE Financing?, page 24 8. Please highlight in this question and answer, and in the next question and answer regarding the Convertible Bridge Financing, the material differences in the price of the FEAC Shares issued at the time of the IPO and the price of the securities being issued in the private placements at the time of the Business Combination. Disclose if the SPAC’s sponsors, directors, officers or their affiliates will participate in the private placements. Response: The Company respectfully submits to the Staff that FEAC issued FEAC Units in its IPO at an offering price of $10.00 per FEAC Unit, which consisted of one FEAC Class A Share and one-third of one FEAC Public Warrant. The Company further respectfully submits to the Staff that in connection with the PIPE Financing, FEAC entered into Subscription Agreements with New enGene and certain PIPE Investors pursuant to which it agreed that it will issue and sell to the PIPE Investors (or after the Assumption, New enGene) the number of FEAC Class A Shares (or after the Assumption, New enGene Shares) provided for in the applicable Subscription Agreement in exchange for the purchase price of $10.25 per FEAC Class A Share (or after the Assumption, New enGene Share), which purchase price was set on the basis of the initial amount available per FEAC Class A Share in FEAC’s Trust Account immediately upon the consummation of its IPO. Immediately following the execution and delivery of the Subscription Agreements, FEAC and New enGene entered into a Side Letter Agreement with each PIPE Investor, amending such PIPE Investor’s Subscription Agreement, pursuant to which each PIPE Investor will receive a specified number of additional FEAC Class A Shares (or after the Assumption, New enGene Shares) and a specified number of FEAC Public Warrants (of after the Assumption, New enGene Warrants), in each case in consideration of the aggregate purchase price set forth in the relevant PIPE Investor’s original Subscription Agreement. 3 Securities and Exchange Commission August 9, 2023 Page 4 In addition, the Company respectfully submits to the Staff that, pursuant to the Non-Redemption Agreement entered into between FEAC, New enGene and a FEAC shareholder, FEAC will, in consideration of such FEAC shareholder’s commitment not to redeem its FEAC Class A Shares in connection with the approval of the Business Combination by the shareholders of FEAC, issue additional FEAC Class A Shares and FEAC Public Warrants (or after the Assumption, New enGene will issue additional New enGene Shares and New enGene Warrants) to such FEAC shareholder, such that, in the aggregate, such FEAC shareholder will hold the same amount of FEAC Class A Shares and FEAC Public Warrants (or after the Assumption, New enGene Shares and New enGene Warrants) as it would have received if it had subscribed, in an amount equal to its existing IPO investment in FEAC Class A Shares, for FEAC Class A Shares in the PIPE Financing (or after the Assumption, New enGene Shares) on the same terms and at the same purchase price per FEAC Class A Share as the PIPE Financing, taking into account the additional FEAC Class A Shares and FEAC Public Warrants (or after the Assumption, New enGene Shares and New enGene Warrants) allocated to the PIPE Investors pursuant to the Side Letter Agreements. Finally, the Company respectfully submits to the Staff that the Convertible Bridge Financing indebtedness will be converted in the Transactions into that number of New enGene Shares and New enGene Warrants that, when exchanged at the Company Exchange Ratio, shall equal that number of FEAC Class A Shares and FEAC Public Warrants (or after the Assumption, New enGene Shares and New enGene Warrants) that the holders of such indebtedness would have received if they had subscribed, in an amount equal to their existing investment in the Convertible Bridge Financing, for FEAC Class A Shares in the PIPE Financing (or after the Assumption, New enGene Shares) on the same terms and at the same purchase price per FEAC Class A Share as the PIPE Financing, taking into account the additional FEAC Class A Shares and FEAC Public Warrants (or after the Assumption, New enGene Shares and New enGene Warrants) allocated to the PIPE Investors pursuant to the Side Letter Agreements. In response to the last part of the question, the Company has revised the disclosure on pages 13, 189 and 190 of the Registration Statement. The Non-Redemption Agreement, page 34 9. Please disclose the number of FEAC Class A Shares and FEAC Warrants (or after the Assumption, the number of New enGene Shares and New enGene Warrants) issuable to the FEAC Shareholders under the Non-Redemption Agreement. Response: The Company advises the Staff that in response to this comment it has revised the disclosure on pages 39, 207, 223 of the Registration Statement and the Notice of Special Meeting. 4 Securities and Exchange Commission August 9, 2023 Page 5 Conditions to Closing, page 36 10. We note your disclosure that it is a condition to closing that New enGene’s initial listing application with the Nasdaq or other exchange shall have been approved but such condition appears to be waivable. Please revise to disclose whether the terms of the Business Combination Agreement permit that the Nasdaq listing closing condition could be waived without recirculation or resolicitation. If so, please revise the risk factor on page 145 to reflect as such and describe the risks attendant to such a waiver, and revise this section to indicate that shareholders may not have certainty at the time they vote or make their redemption decision as to whether the New enGene’s securities will be listed on a national securities exchange following the business combination. Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has revised the disclosure on pages 32, 33, 49, 145, 146, 153, 154 and 202 of the Registration Statement in response to this comment and to clarify that in the event of a waiver of any waivable condition to the Business Combination, including the condition with respect to the listing on Nasdaq or any other national securities exchange, the FEAC Board and the enGene Board will evaluate the materiality of any such waiver to determine whether recirculation or resolicitation would be required, and that FEAC and enGene may waive one or more of the waivable conditions to the Business Combination (including the Nasdaq listing closing condition) without recirculation of the proxy statement/prospectus or resoliciting stockholder approval. Recirculation and resolicitation would significantly delay the closing of the Business Combination and divert the attention of FEAC and enGene management from the operations of their respective businesses. Given these potential risks and considerations, the FEAC Board and the enGene Board need to be able to exercise their business judgment and have discretion to waive the condition as permitted under the Business Combination Agreement and disclosed in the proxy statement/prospectus. While the Nasdaq listing requirement is material, the FEAC Board and the enGene Board need to be able weigh the benefits of the Nasdaq listing requirement against the consequences of a failed or delayed transaction as a result of recirculation or resolicitation. Further, the combined company (i.e. New enGene) may, following the Business Combination, have its securities publicly traded on an over-the-counter market and, if it decides that it is in its best interest to do so, may reapply at the appropriate time to have its securities listed on Nasdaq or apply to be listed on any other national exchange. Given the FEAC Board’s and the enGene Board’s discretion as well as the alternatives available to the combined company if its securities were not to be listed on Nasdaq, the Company respectfully advises the Staff that the Company does not believe that recirculation or resolicitation should be required if this condition was to be waived. Interests of enGene’s Significant Shareholders, Directors and Executive Officers in the Business Combination, page 43 11. Please expand your disclosure regarding Forbion Capital Fund III’s ownership interests in enGene. Disclose the approximate dollar value of the interests based on the transaction value and recent trading prices as compared to the price paid for the ownership interests. In addition, please clarify how the FEAC Board considered these interests in negotiating and recommending the Business Combination. Response: The Company advises the Staff that it has revised the disclosure on pages 48, 49 and 201 of the Registration Statement in response to this comment. Potential Purchases of Shares and/or Public Warrants, page 159 12. We note your disclosure here and on page 137 that the Sponsor, enGene and/or its affiliates may purchase shares and/or warrants in privately negotiated transactions or in the open market from public shareholders, or they may enter into transactions with investors and others to provide them with incentives to acquire shares of FEAC Class A Shares or vote their shares in favor of the Business Combination, and that the purpose of such purchases and other transactions could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval. In an appropriate location, please disclose how such purchases will comply with the requirements of Rule 14e-5 under the Exchange Act. Refer to Tender Offer Rules and Schedules Compliance and Disclosure Interpretation 166.01 for guidance. Response: The Company advises the Staff that in response to this comment it has revised the disclosure on pages 143, 144, 169 and 170 of the Registration Statement to clarify that any purchases of FEAC Class A Shares or FEAC Warrants made by FGOF, the Sponsor, enGene and FEAC’s directors, officers or their respective affiliates in privately negotiated transactions or in the open market from FEAC Shareholders will comply with the requirements of Rule 14e-5 under the Exchange Act, including that any such shares will not be voted in favor of the Business Combination. 5 Securities and Exchange Commission August 9, 202