SecProbe.io

United States securities and exchange commission logo
December 12, 2023
Karl Brenza
Chief Executive Officer
ScanTech AI Systems Inc.
Americas Tower
1177 Avenue of the Americas, Suite 5100
New York, NY 10036
Re:ScanTech AI Systems Inc.
Draft Registration Statement on Form S-4
Submitted November 13, 2023
CIK No. 0001994624
Dear Karl Brenza:
            We have reviewed your draft registration statement and have the following comments.
            Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR. If you do not believe a comment applies to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
            After reviewing the information you provide in response to this letter and your amended
draft registration statement or filed registration statement, we may have additional comments.
Draft Registration Statement on Form S-4, submitted November 13, 2023
Cover Page
1.Please revise the letter to Mars Acquisition shareholders and elsewhere in the prospectus
where relevant to:
•disclose the expected ownership percentages in the combined company of Mars
Acquisition's public shareholders, the Sponsor, the target and the various investors,
including the underwriter and RiverNorth, including potential earnout shares, if the
business combination is approved and consummated;
•quantify the business combination consideration, including the potential
consideration in the form of contingent value rights;
•disclose the Earnout Period and the fact that all Earnout Shares will be issued if there
is a change in control during the earnout period; and
•clarify which shareholders are entitled to vote with respect to the resolutions that

 FirstName LastNameKarl Brenza
 Comapany NameScanTech AI Systems Inc.
 December 12, 2023 Page 2
 FirstName LastNameKarl Brenza
ScanTech AI Systems Inc.
December 12, 2023
Page 2
must be approved under Cayman Islands law.

2.Please revise the letter to shareholders and other relevant disclosure to explain the purpose
of the separate mergers in connection with the business combination.
Questions and Answers, page 9
3.Please revise to clarify whether recent common stock trading prices exceed the threshold
that would allow the company to redeem public warrants.
4.Here, and elsewhere as necessary, please add disclosure regarding the interests of the
underwriters, to include any deferred commissions, as referenced throughout your
registration statement. Also, in your disclosure showing your sensitivity analysis
regarding 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.  We note from the beneficial ownership tables on pages 14 and 25 it appears you
have included Maxim's interests together with the Insiders.
Summary of the Proxy Statement/Prospectus/Consent Solicitation, page 28
5.Please revise the summary to provide a more robust and balanced view of the ScanTech,
including a description of the company's business, the development status of its
product(s), that it has limited operating history, that it has incurred losses in each year
since inception.  We note, for example, from page F-57 that "[a]s of June 30, 2023, the
Company had $70,992 in cash, a significant working capital deficit of $110,704,137 and
accumulated deficit of $136,268,316" and that the company "has no revenue as of the
balance sheet date."
6.Where you describe each of the entities in the Summary, please revise to provide the full
name of each entity at first use, in addition to the shortened version.
7.To facilitate understanding, please include an organizational chart depicting
the organizational structure of the entities involved both before and after the
consummation of the transactions. This chart also should illustrate the states or countries
of incorporation of various legal entities and various affiliations that exist and beneficial
ownership percentages.
8.We note the reference on page 31 and elsewhere in the prospectus to potential Transaction
Financing pursuant to the Business Combination Agreement.  Please include disclosure
about the sources and uses of funds for the business combination assuming minimum and
maximum redemptions.
9.We note disclosure on page 33 and elsewhere in the document of the Prepaid Forward
Purchase Agreement dated September 4, 2023.  Please provide your analysis of how
purchases under your forward purchase agreement will comply with Rule 14e-5. To the
extent that you are relying on Tender Offer Compliance and Disclosure Interpretation

 FirstName LastNameKarl Brenza
 Comapany NameScanTech AI Systems Inc.
 December 12, 2023 Page 3
 FirstName LastName
Karl Brenza
ScanTech AI Systems Inc.
December 12, 2023
Page 3
166.01 (March 22, 2022), please provide an analysis regarding how it applies to your
circumstances. Revise your disclosure as appropriate for consistency.
Risk Factors, page 45
10.Please highlight 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.
11.Revise the risk factors, summary and Q&A to identify the officers and directors with
actual or potential conflicts of interest.  For example, identify the officers and directors
who will remain with PubCo after the transactions and the potential conflicts related to
their employment agreements.
12.Please revise the risk factor on page 46 and related disclosure in the background of the
transaction to clarify why Mars is going forward with the transaction at this time if it does
not feel it has had adequate time for due diligence.  We note the disclosure that "Mars has
had limited time to conduct due diligence" and "Mars . . . has made its decision to pursue
a business combiation with ScanTech on the basis of limited information."  Revise to
clarify the additional information that Mars has not obtained that would provide Mars
more certainty with respect to the transaction.
13.Revise the risk factor on page 47 to clarify the means by which the insiders have agreed to
vote their shares in favor of the business combination and provide a cross-reference to a
description of the material terms of that agreement.
14.Revise the risk factor on page 50 and related disclosure elsewhere in the document to
quantify the insiders' and founders' investments in the company on a per share basis and
the gain they will realize if the transaction is completed, including potential gain from the
CVRs.
15.Revise the second risk factor on page 50 to clarify that you refer to Mars' public
shareholders, rather than all Mars shareholders as a group.
16.Please revise the last risk factor on page 53 so that the title of the risk factor reflects the
related disclosure.  We note the title contemplates that a large number of redemptions may
prevent the transaction; however, the associated disclosure relates to a shareholder
potentially suffering a loss if he or she wants immediate dilution and sells shares on the
open market before the meeting.  Revise the disclosure here, in the summary and on the
cover page to clarify the level of redemptions that would prevent completion of the
transaction.

 FirstName LastNameKarl Brenza
 Comapany NameScanTech AI Systems Inc.
 December 12, 2023 Page 4
 FirstName LastName
Karl Brenza
ScanTech AI Systems Inc.
December 12, 2023
Page 4
Representations and Warranties, page 101
17.Your disclosure in this section states that the Business Combination Agreement contains
"customary" representations and warranties, and you describe general topics of
representations and warranties. Please tailor your disclosure to your particular facts and
circumstances by describing the specific, material representations and warranties included
in your Business Combination Agreement.
Interests of Mars' Directors, Officers and Advisors in the Business Combination, page 110
18.We note your disclosure on pages 21 and 49 that the Sponsor, other Initial Shareholders
and each member of your management team have agreed to waive their redemption rights.
Please describe here and elsewhere in the prospectus any consideration provide in
exchange for this agreement. Please also revise your disclosure summarizing the
background of the business combination to discuss the negotiation of this agreement.
Background of the Business Combination, page 111
19.Please revise your disclosure throughout this section to provide greater detail as to the
background of the transaction, including the material issues discussed and key negotiated
terms. The disclosure should provide shareholders with an understanding of how, when,
and why the material terms of your proposed transaction evolved and why this transaction
is being recommended as opposed to the alternatives. In your revised disclosure, please
ensure that you address the following:
•the number of potential strategic partners with whom the company held discussions,
the form of those discussions and the industries in which those companies operate
and at what point those potential strategic partners were eliminated from
consideration and by which party;
•the material terms for any proposals and subsequent proposals and counter offers;
•negotiation of the transaction structure and documents and the parties involved; and
•valuations.
20.Throughout this section when referring to meetings, discussions, negotiations, or similar
correspondence between Mars, ScanTech, or any other relevant party, please
identify the individuals and/or specific parties who participated in the correspondence. By
way of example only, we note that on March 31, 2023, a call was held between Mars and
ScanTech to discuss the preliminary information.
21.We note that from April 28, 2023 to February 3, 2023, Mars and ScanTech exchanged
drafts of the letter of intent. Please revise your disclosures to clearly discuss the evolution
of the negotiation of key terms in the LOI, merger agreement, and any other related
agreements.
22.We note the first mention of RiverNorth in connection with the July 10, 2023 preliminary
draft of the Prepaid Forward Purchase Agreement.  Please revise to disclose how
RiverNorth came to be involved in the transactions.

 FirstName LastNameKarl Brenza
 Comapany NameScanTech AI Systems Inc.
 December 12, 2023 Page 5
 FirstName LastNameKarl Brenza
ScanTech AI Systems Inc.
December 12, 2023
Page 5
Package and Check-Point Scanning Equipment Poised for Growth, page 119
23.We note that certain "representatives from international airports have expressed interests
in ScanTech’s technology." Please revise to specify these international airports and the
status of any such discussions of interest or remove the statement.
Description of Fairness Opinion of Network 1, page 120
24.Please provide us with copies of the materials that your financial advisor prepared and
shared with the special committee or board in connection with this transaction, including
any board books, transcripts and summaries of oral presentations. We may have additional
comments after we review those materials.
25.We note from the fifth bullet point on page 121 that Network 1 "[r]eviewed ScanTech's
projections for fiscal years ended December 31, 2023 to December 31, 2028."  We also
note the disclosure on page 123 that "Mars reviewed the projections with a consideration
of probabilities and potential discounts and believes that disclosing the financial
projections could potentially mislead public investors."   Please revise to disclose such
projections and discuss all material assumptions used to develop the projections.  Disclose
the probabilities and assumptions Mars Acquisition's Board and/or Special Committee
utilized in considering the projections.  Also discuss the possible impact if the projections
are not correct and clarify when the projections were provided.
Satisfaction of the 80% Test, page 123
26.Please revise this section to specifically discuss how the Mars Acquisition Board and/or
Special Committee determined that the transactions satisfy the 80% test.
Proposal 3: The Charter Proposal, page 128
27.Please revise to clarify the changes in the charter with respect to the corporate
opportunities doctrine.
Unaudited Pro Forma Condensed Combined Financial Information
The Unaudited Pro Foma Condensed Combined Financial Statements, page 146
28.Please explain to us how the Prepaid Forward Purchase Agreement entered into
September 4, 2023 disclosed on page 148 is reflected in the pro forma financial
information.
Unaudited Pro Forma Condensed Combined Balance Sheet, page 151
29.We reference the disclosure in Note D that you will not have sufficient cash to pay the
estimated transaction costs. Please revise to disclose how you plan to address this and the
impact that it will have on the business combination transaction.
30.In addition, we note from page 101 the condition to the closing of the business

 FirstName LastNameKarl Brenza
 Comapany NameScanTech AI Systems Inc.
 December 12, 2023 Page 6
 FirstName LastNameKarl Brenza
ScanTech AI Systems Inc.
December 12, 2023
Page 6
combination of net tangible assets of $5,000,001. Please revise the pro forma information
to disclose all conditions to the closing, including any required minimum cash and your
plans to meet these conditions along with the impact to the business combination if they
are not met.
31.Please revise Note A to explain the nature of the prepaid forward purchase agreement
asset of $14.5 million and your basis for recognizing this asset.
32.We reference Note G. Please explain to us and update your footnotes to disclose why the
Series A units subject to possible redemption are not reflected as being redeemed under
the maximum redemption scenario. Explain whether Series A unit holders have entered
into agreements to not redeem these shares. In addition, explain how you considered
presenting a scenario assuming that these shares must be redeemed for cash in the pro
forma information. Refer to requirements of Article 11 of Regulation S-X.
33.We reference Notes G and J that reflect the extinguishment of all ScanTech debt and the
gain on extinguishment of debt, warrants and derivative liabilities pursuant to Section
6.28. Revise to clarify your basis for reflecting this debt as extinguished and converted to
equity in the pro forma balance sheet and recorded into income in the pro forma statement
of operations. Section 6.28 does not discuss how the debt is to be extinguished and the
basis for reflecting it as such in your pro forma financial information is not clear. We also
note that as of this date no debt holders have entered into any agreements to extinguish
their debt. Please explain to us how this adjustment meets the requirements in Article 11
of Regulation S-X.
Unaudited Pro Forma Condensed Combined Statements of Operations, page 153
34.Revise to reflect Mars Acquisition amounts for the six months ended June 30, 2023.
35.Please explain to us your basis for removing historical expenses related to formation and
operating costs in Note H and how this is consistent with the guidance in Article 11 of
Regulation S-X.
Fair Market Value of ScanTech Business, page 158
36.We note that "[t]he fair market value of ScanTech was determined by the Mars Board
based upon one or more standards generally accepted by the financial community." Please
revise to more fully explain by which standard(s) the fair market value of ScanTech was
determined. In your disclosure, please include a discussion of the considerations given to
the factors impacting