United States securities and exchange commission logo
July 15, 2021
Gideon Ben-Zvi
Chief Executive Officer
Valens Semiconductor Ltd.
8 Hanagar St.
POB 7152
Hod Hasharon 4501309
Israel
Re: Valens
Semiconductor Ltd.
Registration
Statement on Form F-4
Filed June 17, 2021
File No. 333-257176
Dear Mr. Ben-Zvi:
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.
Registration Statement on Form F-4 filed June 17, 2021
Industry and Market Data, page ii
1. Please tell us whether
you commissioned any of the third-party data presented in your
document and, if so,
please file the consent as an exhibit.
Questions and Answers about the Business Combination and the Special
Meeting, page vi
2. Please add a Q&A that
discloses 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
Gideon Ben-Zvi
Valens Semiconductor Ltd.
July 15, 2021
Page 2
warrants retained by redeeming shareholders, at each of the redemption
levels detailed in
your sensitivity analysis, including any needed assumptions.
3. Please add a question and answer that addresses the positive and
negative factors that the
board considered when determining to enter into the business
combination agreement and
its rationale for approving the transaction
4. Please add a question and answer that addresses the equity stake that
current
Valens securityholders and current PTK securityholders will have in
the Company after
the business combination. Further, please provide an expanded
breakdown of to
disclose the ownership percentage of PTK public stockholders, Sponsor,
and PIPE
investors. In that regard, we note your disclosure on page 2 and
elsewhere.
How do I exercise my redemption rights?, page viii
5. Please clarify whether public shareholders that redeem their shares
will retain any
warrants. If so, quantify the value of warrants, based on recent
trading prices, that may be
retained by redeeming stockholders assuming maximum redemptions and
identify any
material resulting risks. Also, revise your disclosure to show the
potential impact of
redemptions on the per share value of the shares owned by
non-redeeming shareholders by
including a sensitivity analysis showing a range of redemption
scenarios, including
minimum, maximum and interim redemption levels.
What interests do the Sponsor and the current officers and directors of PTK
have in the Business
Combination?, page x
6. 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.
7. Please clarify if the Sponsor and its affiliates can earn a positive
rate of return on their
investment, even if other shareholders experience a negative rate of
return in the post-
business combination company.
8. Please revise the first bullet point to provide the number of Founder
Shares held by the
Sponsor.
Interests of PTK's Directors and Officers in the Business Combination, page 6
9. Please quantify the aggregate dollar amounts contributed by the sponsor
and affiliates and
describe the nature of what the sponsor and the affiliates have at risk
and are dependent on
the completion of the business combination. Include the current value of
the securities
FirstName LastNameGideon Ben-Zvi
held, loans extended, fees due and out of pocket expenses for which the
sponsor and
Comapany NameValens
affiliates Semiconductor
are awaiting Ltd. Provide similar disclosure for
officers and directors,
reimbursement.
July 15,if2021
material.
Page 2
FirstName LastName
Gideon Ben-Zvi
FirstName LastNameGideon
Valens Semiconductor Ltd. Ben-Zvi
Comapany
July NameValens Semiconductor Ltd.
15, 2021
July 15,
Page 3 2021 Page 3
FirstName LastName
Risk Factors, page 11
10. Please disclose the material risks to unaffiliated investors presented
by taking the
company public through a merger rather than an underwritten offering.
These risks could
include the absence of due diligence conducted by an underwriter that
would be subject to
liability for any material misstatements or omissions in a
registration statement.
Our amended and restated articles of association to be effective upon the
closing of the Business
Combination provide that unless we ..., page 34
11. Please disclose the exclusive forum provision in the amended and
restated articles of
association to be effective upon closing of the Business Combination
will not apply to
causes of actions arising under the U.S. Securities Exchange Act of
1934, as amended. In
this regard, we note section 72(a) on page B-27 of Annex B.
PTK's Board of Directors' Reason for the Business Combination, page 68
12. The assumptions provided appears to serve as a basis for prospective
financial information
that cover the years through 2026. We note your disclosure that the
PTK board of
directors is projecting revenue to grow to approximately $1B+ in
2030. Please provide
the basis and material assumptions underlying this projection.
Unaudited Prospective Financial Information of Valens, page 71
13. We note your disclosure on page 72 that the prospective financial
information was
prepared using several assumptions. Please revise to describe the
assumptions, such as
headcount, with greater specificity and quantify where practicable.
Investors' Rights Agreement, page 90
14. Please disclose whether there are any maximum cash penalties under the
registration
rights agreement, if applicable. Please also disclose any additional
penalties resulting from
delays in registering your common stock. Refer to ASC 825-20-50-1.
Facilities, page 114
15. Please file your material lease agreements as exhibits to your
registration statement. Refer
to Item 21 of Form F-4 and Item 601(b)(10)(ii)(D) of Regulation S-K.
Contractual Obligations, page 117
16. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
Gideon Ben-Zvi
FirstName LastNameGideon
Valens Semiconductor Ltd. Ben-Zvi
Comapany
July NameValens Semiconductor Ltd.
15, 2021
July 15,
Page 4 2021 Page 4
FirstName LastName
Critical Accounting Policies and Estimates, page 135
17. We note your critical accounting policy disclosures related to revenue
recognition, stock-
based compensation, ordinary shares valuations, fair value of
financial instruments and
inventory appear to repeat the disclosures in your summary of
significant accounting
policies footnote. Please be advised these disclosures are meant to
provide investors
greater insight into the quality and variability of information
regarding your financial
condition and operating performance. While accounting policy notes in
financial
statements generally describe the methods used to apply an accounting
principle, the
discussion in MD&A should present a company's analysis of the
uncertainties involved in
applying a principle at a given time or the variability that is
reasonably likely to result
from application over time. For example, please expand your
disclosures to quantify and
discuss the impact of your estimates related to enforceable rights,
material rights, variable
considerations, cash flow assumptions used for ordinary shares
valuations and
assumptions and estimates for fair value of financial instruments,
stock-based
compensation and inventory during each period presented and to address
how
management estimated the amounts, including management's accuracy of
prior estimates
relative to actual experience, where applicable.
Unaudited Pro Forma Condensed Combined Balance Sheet, page 143
18. Please revised your balance sheets as of December 31, 2020 to show the
number of shares
authorized, issued and outstanding on a historical and pro forma
basis.
Unaudited Pro Forma Condensed Combined Statement of Operations, page 145
19. In regard to the income tax expense recorded during period ended
December 31, 2020, we
note you have not included any pro forma adjustments related to income
taxes. Given the
changes in financial income under each redemption scenario, please
clarify how you
determined no pro forma adjustments related to income taxes are
necessary.
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
Adjustments to Unaudited Pro Forma Combined Balance Sheets, page 148
20. In regards to footnote (B), you indicated that there were estimated
transaction costs of
$26,212 thousand under both redemption scenarios. Please reflect the
transactions costs
related to PTK and any transaction costs related to Valens that are
not offering costs or
issuance costs in the pro forma statement of operations under both
redemption scenarios.
Certain Material U.S. Federal Income Tax Considerations, page 173
21. Please delete the term "Certain" from the title of this section.
22. We note the disclosure that it is "intended" that the business
combination to be a
reorganization within the meaning of Section 368(a) of the Code.
However, the disclosure
does not indicate whether the parties expect the business combination
to be tax-free (with
Gideon Ben-Zvi
Valens Semiconductor Ltd.
July 15, 2021
Page 5
respect to the receipt of stock) to U.S. holders. Revise to make clear
whether the parties
expect the combination to be tax-free to U.S. holders. If you are
unable to conclude that
the business combination is likely to be tax-free, revise your risk
factor on page 52
relating to the material tax consequences of the business combination
to focus on the
uncertainty and the consequences of the business combination being
taxable to U.S.
holders. If you are able to conclude that the business combination is
likely to be tax-free to
U.S. holders, include a tax opinion supporting such a conclusion. For
further guidance see
Staff Legal Bulletin No. 19 (October 14, 2011) and Item 601(b)(8) of
Regulation S-K.
Security Ownership of Certain Beneficial Owners and Management, page 217
23. Please revise the footnotes to the table to disclose the natural
person that holds the voting
and/or investment power of the shares held by the entities.
24. Pease disclose the portion of each class of the company's securities
held in the United
States and the number of record holders in the United States. Refer to
Item 18 of Form F-4
and Item 7.A.2 of Form 20-F.
25. In addition to disclosing the beneficial ownership of your sponsor and
its affiliates, also
disclose the sponsor and its affiliates total potential ownership
interest in the combined
company, assuming exercise and conversion of all securities they own,
including equity
securities that the sponsor has the right to acquire beyond sixty
days.
Note 2 - Summary of Significant Accounting Policies
m. Revenue recognition, page F-11
26. You indicate that when a contract with a customer includes a material
right to acquire
future goods or services, the Company allocates the transaction price to
the optional goods
or services by reference to the goods or services expected to be
provided and the
corresponding expected consideration. Please tell us what consideration
you gave to
recognizing revenues for this customer option when those future goods or
services are
FirstName LastNameGideon Ben-Zvi
transferred or when the option expires. Please also clarify whether you
are accounting for
Comapany NameValens
this customer Semiconductor
option as a contract Ltd.
modification or as a continuation of
an existing
July 15,contract.
2021 PagePlease
5 refer to ASC 606-10-55-42.
FirstName LastName
Gideon Ben-Zvi
FirstName LastNameGideon
Valens Semiconductor Ltd. Ben-Zvi
Comapany
July NameValens Semiconductor Ltd.
15, 2021
July 15,
Page 6 2021 Page 6
FirstName LastName
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 Ernest Greene at 202-551-3733 or Kevin Stertzel at
202-551-3723 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Thomas Jones at 202-551-3602 or Sergio Chinos at 202-551-7844 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing
cc: Michael Kaplan