United States securities and exchange commission logo
October 29, 2020
Jonathan Ledecky
Chief Executive Officer
Pivotal Investment Corp II
c/o Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Re: Pivotal Investment
Corp II
Registration
Statement on Form S-4
Filed October 2,
2020
File No. 333-249248
Dear Mr. Ledecky:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Form S-4 filed October 2, 2020
Cover Page
1. Please disclose the
current Exchange Ratio.
Summary of the Material Terms of the Merger, page 1
2. Refer to the fourth
bullet. Please tell us how you intend to effect the transactions
described in that
bullet. We note that those securities are not included in your fee table.
Jonathan Ledecky
FirstName LastNameJonathan Ledecky
Pivotal Investment Corp II
Comapany
October 29,NamePivotal
2020 Investment Corp II
October
Page 2 29, 2020 Page 2
FirstName LastName
Questions and Answers about the Proposals, page 4
3. Please add question and answer that addresses the interests of the
Sponsor and Pivotal s
directors and officers in the Business Combination
Interests of the Sponsor and Pivotal s Directors and Officers in the Business
Combination , page
22
4. We note that you intend to include the value of the Sponsor shares and
warrants as of the
record date for the special meeting. In your next amendment please
fill in the blanks to
include the value as of the most practicable date.
Selected Historical Financial Information, page 29
5. Based upon your audited financial statements of Pivotal included
elsewhere in the filing,
Pivotal was incorporated on March 20, 2019 and your audited financial
statements include
the balance sheet as of December 31, 2019 and statement of operations
for the period from
March 20, 2019 (inception) to December 31, 2019. We note the periods
disclosed in the
third paragraph of this section do not correspond to the periods in
your audited financial
statements. Please revise your disclosures in this section
accordingly.
Selected Unaudited Pro Forma Combined Financial Statements, page 31
6. We refer to the third bullet point on page 31. You indicate Pivotal's
audited financial
statements are based on the year ended December 31, 2019; however,
Pivotal was
incorporated on March 20, 2019 and the audited financial statements
are for a period
shorter than a year. We also note in the penultimate paragraph on the
same page, you refer
to the unaudited pro forma condensed combined statements of operations
for the year
ended December 31, 2019 as combining the the audited statement of
operations of Pivotal
for the year ended December 31, 2019 with the audited consolidated
statement of
operation of XL for the same period. As the audited statement of
operations for Pivotal is
less than a year, please revise your disclosures to refer to the
appropriate audited period of
Pivotal. Please revise similar disclosures contained elsewhere in the
filing with respect to
Pivotal's audited financial statements for 2019 (e.g. page 34, 105,
106, etc.), as
appropriate.
Risk Factors, page 36
7. It appears from your disclosure beginning on page 91 that the tax
consequences of the
transaction are uncertain. If so, please revise to add a risk factor
relating to that
uncertainty, and describe the risks to investors. Please also file the
opinion required by
Item 601(b)(8) of Regulation S-K.
Jonathan Ledecky
FirstName LastNameJonathan Ledecky
Pivotal Investment Corp II
Comapany
October 29,NamePivotal
2020 Investment Corp II
October
Page 3 29, 2020 Page 3
FirstName LastName
Risk Factors
Risk Related to XL's Business and Industry
XL is an early stage company with a history of losses, and expects to incur
significant expenses
and continuing losses, page 36
8. You disclose in the first sentence of the risk factor that XL incurred
a net loss of
approximately $8 million for the six months ended June 30, 2020 and
has incurred net
losses of approximately $35 million from January 1, 2018 through June
30, 2020;
however, based upon the financial statements for the related periods
included in the filing,
we note XL incurred a net loss of approximately $14.4 million for the
six months ended
June 30, 2020 and net losses of $42.2 million from January 1, 2018
through June 30,
2020. Please advise or revise your disclosures, accordingly.
Increases in costs, disruption of supply . . .,, page 45
9. If the risks to which you refer have actually occurred or are
occurring, as indicated by
your disclosures on pages 167-69, please revise to state so directly,
rather than presenting
the risk as a possibility.
Background of the Merger , page 81
10. Please revise to discuss the exception to the interim operating
covenants for certain
actions taken in response to the COVID-19 pandemic.
Pivotal s Board of Directors Reasons for Approval of the Business
Combination, page 85
11. Please clarify how long XL s current stockholders have agreed to
retain 100% of their
equity interests in the Business Combination.
Certain Forecasted Financial Information for XL, page 87
12. We note your disclosure of significant estimated growth in total
revenue year over year
starting in 2021. Among the drivers you disclose include growth in the
number of XL
hybrid electric, plug-in hybrid electric, electric, and fuel cell
electric systems sold, and the
average sales price per system as well as growth in system sales to
international customers
and revenue from commissions and services. To help investors better
understand the
forecast, please describe in more detail the relative weight of the
drivers disclosed in
arriving at your total revenue estimates.
Satisfaction of 80% Test, page 89
13. Please expand to clarify how your board determined that the value of
XL was at least
equal to 80% of the balance of funds in the trust account.
Unaudited Pro Forma Condensed Combined Financial Statements, page 105
14. Please revise the introductory paragraph on page 105 to explain the
pro forma presentation
Jonathan Ledecky
FirstName LastNameJonathan Ledecky
Pivotal Investment Corp II
Comapany
October 29,NamePivotal
2020 Investment Corp II
October
Page 4 29, 2020 Page 4
FirstName LastName
is giving effect to the transaction as a reverse acquisition and
recapitalization of XL.
15. We refer to pro forma adjustment E related to the loss from
extinguishment of debt of
$1,038,000 on the face of the unaudited pro forma condensed combined
statement of
operations for the six months ended June 30, 2020. Please explain to
us and revise your
notes to the pro forma financial statements why this adjustment is
appropriate and meets
the requirements for pro forma presentation under Article 11 of
Regulation S-X.
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
Pro Forma Condensed Combined Balance Sheet - as of June 30, 2020, page 111
16. Please revise your disclosure to include how the exchange ratio of
..756 included in the
table at the top of page 114 was determined.
Pro Forma Condensed Combined Statement of Operations - For the Six Months Ended
June 30,
2020, page 115
17. We refer you to Note G. You disclose the adjustment to record pro
forma effect of the
maximum redemption of Pivotal's common stock is 21,775,816 shares.
However, we note
the corresponding adjustment on the face of the pro forma statement of
operations for the
six months ended June 30, 2020 on page 109 indicates an adjustment of
21,768,560
shares. Please advise or revise to fix the discrepancy.
Pro Forma Combined Net Loss Per Share, page 116
18. Please tell us how the exchange ratio used in the table was determined
and reconcile
the exchange ratio with the one used in Note 7 on page 114. As part of
your response,
please explain to us the reason(s) for the difference.
19. Please explain why the number of maximum redemption of Pivotal shares
in the table is
the same for the six month ended June 30, 2020 and for the year ended
December 31,
2019.
Pro Forma Condensed Combined Statement of Operations - For the Year Ended
December 31,
2019, page 116
20. We refer to Note GG. Based upon disclosures provided elsewhere in the
filing, it appears
the pro forma adjustment to give effect to the maximum redemption of
Pivotal common
stock for the year ended December 31, 2019 should be 21,768,560 rather
than 21,775,816.
Please advise or revise as necessary.
Business of XL, page 151
21. We note your disclosure that XL intends in the future to expand
internationally. We also
note that the forecasted financial information includes sales to
international customers.
We also note from your Investor Presentation, filed as exhibit to your
Form 8-K filed
September 21, 2020, that you plan to use $25 million of the funds to
expand
Jonathan Ledecky
FirstName LastNameJonathan Ledecky
Pivotal Investment Corp II
Comapany
October 29,NamePivotal
2020 Investment Corp II
October
Page 5 29, 2020 Page 5
FirstName LastName
internationally. Please revise this section to disclosure your
international expansion plans
by identifying the markets and your anticipated timeframe to enter
into such markets.
22. Please elaborate on the development and timeframe of your product and
services
offerings. In that regard we note recent public statements by XL
officers that XL Grid will
be launching soon and that XL plans to introduce a hydrogen fuel cell
fleet in 2022. Refer
to XL Fleet Fireside Chat with Pivotal Investment Corp. II and XL
Fleet Conference
Call, October 26, 2020.
Business of XL
Customers and Backlog, page 155
23. We note your disclosure that "As of September 25, 2020, XL has a
backlog of 961 firm
purchase orders representing $12.3M in revenue." Please reconcile this
disclosure with
the public statements made by XL Chief Strategy Officer Tod Hynes and
Jon Ledecky,
Chairman & CEO of Pivotal Investment Corp. II that XL Fleet has $220
million in the
current sales pipeline. Refer to IPO EDGE interview in September 2020.
In your
response, please address how the sales backlog disclosed in the filing
and the public
statements regarding the sales pipeline made by management are
reflected in your
forecasted financial information for XL found on page 88.
Production/Supply Chain Partnerships, page 156
24. Please revise to discuss the supply chain disruptions mentioned on
pages 167-69. Also
revise to clarify the nature of your arrangements with those
suppliers.
Recent Developments, page 165
25. We note that XL obtained a loan under the Small Business
Administration Paycheck
Protection Program, pursuant to which the company borrowed $1,100,000.
Please disclose
the following: (i) the material terms of the loan; (ii) how you intend
to use the loan
proceeds; and (iii) whether you expect the loan to be forgiven. Please
revise your risk
factor section to disclose any associated risks with the loan,
including, but not limited to
the risk that all or parts of the loan may not be forgiven.
Results of Operations
Comparison of Six Months Ended June 30, 2020 and 2019, page 167
26. Please expand your disclosure to provide further insight into known
trends and your
outlook in 2020. In that regard, we note recent public statements by
Mr. Kazarinoff that
XL expects to triple its revenue despite the challenges of the
pandemic, and that XL is on
track for $21 million in revenue in 2020. Refer to XL Fleet
Fireside Chat with Pivotal
Investment Corp. II and XL Fleet Conference Call, October 26, 2020. We
also note your
disclosure that revenue decreased 27.6%, from $4.3 million in the six
months ended June
30, 2019 to $3.1 million in the same period in 2020.
Jonathan Ledecky
Pivotal Investment Corp II
October 29, 2020
Page 6
XL Hybrid, Inc. Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Note 2. Summary Of Significant Accounting Policies
Segment information, page F-54
27. We note your disclosure that you operate as one operating segment. Please
disclose the
factors used to identify your reportable segments, including the basis of
organization in
accordance with ASC 280-10-50-21.
Revenue, page F-58
28. We note in limited instances you provide installation services to
end-user fleet customers
related to the purchased hybrid electric powertrain equipment and that
such services are
not distinct within the context of the contract. Please tell us if
revenue from contracts that
include installation services are material and disclose the timing over
which such revenues
are recognized.
General
29. We note your Investor Presentation filed as an exhibit to your Form 8-K
discussing the
allocation and anticipated use of the funds in the post combination
company. Please
disclose the anticipated use of funds in the post combination company.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Charles Eastman at (202) 551-3794 or Jean Yu, Assistant
Chief Accountant at (202) 551-3305 if you have questions regarding comments on
the financial
statements and related matters. Please contact Geoff Kruczek at (202) 551-3641
or Asia
Timmons-Pierce at (202) 551-3754 with any other questions.
Sincerely,
FirstName LastNameJonathan Ledecky
Division of
Corporation Finance
Comapany NamePivotal Investment Corp II
Office of
Manufacturing
October 29, 2020 Page 6
cc: David Miller
FirstName LastName