United States securities and exchange commission logo
August 23, 2021
Lyndon Lea
President and Chief Executive Officer
Leo Holdings III Corp.
Albany Financial Center, South Ocean Blvd, Suite #507
P.O. Box SP-63158
New Providence, Nassau, The Bahamas
Re: Leo Holdings III
Corp.
Registration
Statement on Form S-4
Filed July 19, 2021
File No. 333-257997
Dear Mr. Lea:
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 S-4
Cover page
1. With reference to
Regulation S-K, Item 501(b), please revise the coverpage to simplify the
presentation,
particularly as it relates to the fourth paragraph.
Market and Industry Data, page i
2. Your statements
regarding information in the document provided by third-party sources,
or based on information
from third-party sources inappropriately implies you are not
responsible for the
disclosure in the prospectus. Revise to clarify you are responsible for
all disclosure in the
prospectus.
Lyndon Lea
FirstName LastNameLyndon Lea
Leo Holdings III Corp.
Comapany
August 23, NameLeo
2021 Holdings III Corp.
August
Page 2 23, 2021 Page 2
FirstName LastName
Summary of the Joint Proxy Statement/Prospectus
The NYSE Proposal, page 6
3. Please unbundle Proposal No. 8, addressed more specifically beginning
on page 152, so
that shareholders may vote separately whether to increase the
authorized number of shares
for the proposed Business Combination and for the PIPE financing.
Refer to Exchange
Act Rule 14a-3. For additional guidance, see the Compliance and
Disclosure
Interpretations under Rule 14a-4(a)(3) generally and regarding
unbundling in the M&A
context.
The Director Election Proposal, page 6
4. With reference to your disclosure on page 175, please revise to
clarify whether the Class
A holders are voting on the Director Election Proposal. If a vote in
favor of the directors
is assured by virtue of the Sponsor Agreement, please revise to
clarify this point.
Interests of Leo Directors and Executive Officers in the Business Combination,
page 16
5. Please revise this section and the risk factor on page 63 to quantify
the aggregate dollar
amount and describe the nature of what the sponsor and its affiliates
have at risk that
depends on completion of a business combination. Include the current
value of securities
held, loans extended, fees due, and out-of-pocket expenses for which
the sponsor and its
affiliates are awaiting reimbursement. Provide similar disclosure for
the company s
officers and directors, if material.
Background to the Business Combination, page 113
6. Revise the background to disclose on what dates Leo s management
team evaluated over
20 potential business combination targets, and entered into
non-disclosure agreements
with approximately 10 potential business combination targets (other
than Local Bounti)
disclosed on page 114. Disclose the industries of those potential
targets. Disclose the
reasons the other potential business combinations did not move forward
and the timing the
discussions ended.
7. With respect to the March 4, 2021 entry, please revise to explain the
contents of the
"valuation reference materials" and disclose the terms of the form
term sheet. Revise the
background discussion to disclose how the material terms of the
potential transaction
changed over time and why. Disclose the material terms of the letter
of intent and term
sheet approved by the Leo Board on March 22, 2021.
8. With regard to the May 10 entry, please revise to explain the revision
to the transaction
valuation.
9. Revise to summarize the material provisions of the report provided to
the Board by PwC
on May 20, 2021.
Lyndon Lea
FirstName LastNameLyndon Lea
Leo Holdings III Corp.
Comapany
August 23, NameLeo
2021 Holdings III Corp.
August
Page 3 23, 2021 Page 3
FirstName LastName
10. With regard to the June 13 entry, please revise to disclose the dollar
and/or share impact
of the decision to exclude shares issued in connection with conversion
of Local Bounti s
convertible notes from Local Bounti s fully diluted share count.
Clarify whether this
decision provided added financial benefit to the Leo or the Local
Bounti holders.
Leo Board of Directors' Reasons for the Business Combination, page 122
11. Revise to clarify what consideration Leo s Board gave to the
projections provided by
Local Bounti, including what consideration the Board gave to the
reasonableness of Local
Bounti s projections, which address a five-year period and grow from
a near-term
projected revenue of $1 million based on one facility, to 2025
projected revenue of $462
million based on 8 facilities.
Certain Local Bounti Projected Financial Information, page 126
12. Revise the heading, introductory paragraph, and associated disclosure
to clarify that you
have disclosed all material projections Local Bounti provided to Leo,
not merely certain
or the key elements of those projections.
13. You state in the disclaimers on page 126-27 that Local Bounti prepared
these projections
in the first quarter of 2021 and also that the projections
assume the consummation of
the Business Combination. Revise to disclose the date these
projections were prepared
and the date they were provided to Leo. We note the disclosure on
paragraph 129 that
these are the updated and final version of the financial projection
model reviewed by
LEO and assume the consummation of the Business Combination. Revise
to also
disclose where any prior projections provided to Leo differed in any
material respects
from these figures. If so, provide the provide the prior projections,
explain the material
differences and why they changed. We note the disclosure on page 114
that Local Bounti
provided projections beginning on March 2, 2021.
14. We note that the disclosure at the bottom of page 128 addresses Local
Bounti's beliefs
concerning the assumptions used to generate the projections. Please
revise to indicate
whether Leo agreed with each of the stated assumptions.
Summary of Leo Financial Analysis, page 129
15. Revise to clarify what valuations or conclusions were determined from
the analyses
summarized here. In this regard, please disclose what valuation(s) Leo
derived from the
comparable companies and how the Local Bounti valuation compares to
such valuations.
Please also tell us whether the Leo Board considered a discounted cash
flow analysis.
16. On page 124, you state that the board considered the valuations and
trading of publicly
traded companies and valuations of precedent merger and acquisition
targets in similar
and adjacent sectors. Revise this section to address those
analyses.
US Holders, page 188
Lyndon Lea
FirstName LastNameLyndon Lea
Leo Holdings III Corp.
Comapany
August 23, NameLeo
2021 Holdings III Corp.
August
Page 4 23, 2021 Page 4
FirstName LastName
17. Please revise to include a tax opinion covering the material tax
consequences of the
domestication and redemption. Please revise so that the
disclosure/opinion concerning the
tax consequences are not "subject to the PFIC rules". With regard to
the PFIC rules, the
opinion should address the company's status, and indicate, if
applicable, if the status is
uncertain. For guidance concerning assumptions and opinions subject to
uncertainty,
please refer to Staff Legal Bulletin No. 19. Revise the Q&A and
Summary sections
accordingly.
Introduction, page 202
18. We note that the total consideration payable to Local Bounti
stockholders, and the implied
enterprise value of Local Bounti is $650 million. We also note the
following disclosure
from the prospectus page, "... all convertible debt of Local Bounti
will be fully converted
into Local Bounti common stock as of immediately prior to the Closing
and become
eligible to receive New Local Bounti Common Stock (which amount, for
the avoidance of
doubt, is excluded from the implied equity value) based on the number
of shares of Local
Bounti common stock issuable upon conversion of such convertible
debt." Please revise
the filing to more clearly explain the following:
- Why the convertible debt is excluded from the implied enterprise
value of Local Bounti.
- What is meant by the statement in the above excerpt, "(which amount,
for the avoidance
of doubt, is excluded from the implied equity value)".
Notes to Unaudited Pro Forma Condensed Combined Financial Information
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information,
page 211
19. Please clarify if the earnout payable to Local Bounti equityholders is
reflected as a pro
forma adjustment. Describe how you concluded an adjustment was not
appropriate or
identify the adjustment and explain how it was calculated and
determined.
20. With regards to adjustment J, please explain what debt the reversal
of debt is related to.
We note that adjustment T is related to interest for the Cargill notes
payable and the PPP
loan. If adjustment J is related to the same debt, please add language
to adjustment J to
connect it to what is referenced in adjustment T.
21. Please revise to further explain that adjustment V is also subject to
certain additional
conditions specified in the Merger Agreement and not just the $100
million minimum
cash requirement.
Local Bounti's Management's Discussion and Anaylsis of Financial Condition and
Results of
Operations
Long Term Loans, page 255
22. Consistent with pro forma adjustment T on page 213, please revise the
disclosure included
here to state that you expect the long-term loan from Cargill
Financial Services
International, Inc. entered into in March 2021, to be paid off upon
the closing of the
Lyndon Lea
Leo Holdings III Corp.
August 23, 2021
Page 5
Business Combination.
Beneficial Ownership of Securities, page 280
23. Please identify the natural person or persons who directly or indirectly
exercise sole or
shared voting and/or dispositive power with respect to the common stock
held by Live
Oak Ventures, LLC. Refer to Item 403 of Regulation S-K.
Certain Relationships and Related Person Transactions, page 283
24. Revise this section to provide all information required by Item 404(a) of
Regulation S-K.
In particular, we note that Item 404(a)(1) requires that you name the
related person and
the basis on which they are related, which is often not provided in the
Local Bounti
subsection.
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 Christine Torney at (202) 551-3652 or Kevin Kuhar at
(202) 551-3662
if you have questions regarding comments on the financial statements and
related
matters. Please contact Abby Adams at (202) 551-6902 or Joe McCann at (202)
551-6262 with
any other questions.
Sincerely,
FirstName LastNameLyndon Lea
Division of
Corporation Finance
Comapany NameLeo Holdings III Corp.
Office of Life
Sciences
August 23, 2021 Page 5
cc: Christian O. Nagler
FirstName LastName