United States securities and exchange commission logo
January 26, 2022
Steven Rosen
Co-Chief Executive Officer
Zanite Acquisition Corp.
25101 Chagrin Boulevard Suite 350
Cleveland, Ohio 44122
Re: Zanite Acquisition
Corp.
Preliminary Proxy
Statement on Schedule 14A
Filed December 30,
2021
File No. 001-39704
Dear Mr. Rosen:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Preliminary Proxy Statement on Schedule 14A
General
1. 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.
2. Please revise to
disclose 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.
3. Please highlight the
material risks to public warrant holders, including those arising from
Steven Rosen
FirstName LastNameSteven Rosen
Zanite Acquisition Corp.
Comapany
January 26,NameZanite
2022 Acquisition Corp.
January
Page 2 26, 2022 Page 2
FirstName LastName
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.
4. We note that certain shareholders agreed to waive their redemption
rights. Please describe
any consideration provided in exchange for this agreement.
5. We note that you plan to issue shares of common stock assuming the
Business
Combination Proposal is approved. Please advise us of the exemption
from the Securities
Act that you are relying upon and provide an analysis supporting the
use of such
exemption.
Summary of the Proxy Statement, page 1
6. We note your disclosure that Zanite has agreed to issue to the
Strategic Investors new
warrants in connection with the achievement of certain UAM Business
milestones. Please
disclose the UAM Business milestones.
7. Please include disclosure regarding potential dilution related to the
issuance of warrants to
PIPE investors.
The Proposed Charter includes a forum selection clause, page 65
8. We note your disclosure that the federal district courts of the United
States of America
will be the sole and exclusive forum for the resolution of any
complaint asserting a cause
of action arising under federal securities laws. Please revise this
disclosure so that it is
consistent with Article XII(B) of the Proposed Charter.
Unaudited Pro Forma Condensed Combined Financial Information, page 78
9. We note that Embraer Aircraft Holding, Inc. ("EAH") has entered into
put option
agreements with certain strategic PIPE investors to provide "price
protections in the
amount of up to their $30 million aggregate commitments in the form of
credits for parts
and services or cash in exchange for the transfer of their shares to
EAH." Please tell us
how you plan to account for this feature, including reference to the
technical guidance that
supports your accounting and presentation. Also tell us how you
determined this
agreement should not be reflected in your pro forma financial
statements.
10. Pursuant to the Tax Receivable Agreement, we note that Zanite
Acquisition Corp. will pay
EAH 75% of certain net tax savings realized, or deemed realized, in
periods after the
closing of the business combination. We further note that under the
Tax Sharing
Agreement, Zanite will provide payments to EAH based on the increase
to the parent's
income tax liability as a result of being a member of a consolidated
group for tax
purposes. Please tell us and clearly disclose your anticipated
accounting treatment for
these agreements. Such disclosure should clarify for investors their
impact on your
Steven Rosen
FirstName LastNameSteven Rosen
Zanite Acquisition Corp.
Comapany
January 26,NameZanite
2022 Acquisition Corp.
January
Page 3 26, 2022 Page 3
FirstName LastName
balance sheet and statement of operations and include, but not
necessarily be limited to, a
description of how you account for the initial recognition of the
obligations, subsequent
changes in the measurement of the obligations, and the financial
statement line items
impacted. Quantify the related amounts or a range of amounts for the
periods presented
and include pro forma adjustments reflecting the distributions or
advise us why such
adjustments are not necessary.
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, page 86
11. Within the pro adjustment (l) description, you disclose that new
warrants to be issued
contingent upon certain future milestones are considered share-based
payment awards
granted to nonemployees and are within the scope of ASC 606. Please
explain to us why
you account for these awards within the scope of ASC 606 as opposed to
ASC 718.
Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations,
page 88
12. We note that pro forma adjustment (f) reflects the reclassification of
public warrants from
liability to equity on your balance sheet. Since your pro forma
statements of operations
are giving effect to transactions as if they occurred on January 1,
2020, please remove the
related change in derivative fair values related to these warrants or
explain why you do not
believe such adjustments are necessary.
Service Agreements, page 119
13. Please more clearly and separately describe the material terms of each
Service Agreement,
including services provided, licenses, royalty terms, fees due, and
termination.
Background of Business Combination, page 122
14. Please revise your disclosure in this section to include negotiations
relating to material
terms of the transaction, including, but not limited to, structure,
consideration, proposals
and counter-proposals and size of PIPE. In your revised disclosure,
please explain the
reasons for the terms, each party's position on the issues, and how
you reached agreement
on the final terms. Please also discuss the negotiations related to
the material ancillary
agreements related to the business combination.
15. Please elaborate on what led to Zanite s management team's initial
meeting with Eve's
management team.
16. Please elaborate on what terms were revised in the February 23, 2021
draft of the
LOI. Please also discuss the changes made in the various amendments to
the LOI.
Strategic Warrant, Lock-Up Agreements and Put Option Agreements, page 122
17. We note your disclosure that Zanite has agreed to issue to the
Strategic Investors new
warrants to acquire an aggregate of 14,150,000 shares of common stock,
which warrants
will be issued at the Closing or in connection with the achievement of
certain UAM
Steven Rosen
FirstName LastNameSteven Rosen
Zanite Acquisition Corp.
Comapany
January 26,NameZanite
2022 Acquisition Corp.
January
Page 4 26, 2022 Page 4
FirstName LastName
Business milestones following the Closing. Please revise to quantify
the warrants that will
be issued at the Closing and the warrants that will be issued in
connection with the
achievement of certain UAM Business milestones.
18. Please disclose the material terms of the put option agreements.
Projected Financial Information, page 133
19. We note your disclosure that the financial projections reflect
estimates and assumptions.
Please revise to describe such estimates, matters and assumptions with
greater specificity
and quantify where practicable. Please disclose any other information
to facilitate investor
understanding of the basis for and limitations of these projections.
Clearly describe the
basis for projecting this growth and the factors or contingencies that
would affect such
growth ultimately materializing.
20. We note that the financial projections include projected revenue of
$20.6 million for the
fiscal year 2024. Please reconcile this with the disclosure that you
do not expect to
generate revenue "unless and until [you] obtain regulatory approval of
and commercialize
[y]our first eVTOL" and the disclosure that Eve does not expect to
obtain type
certification for its first eVTOL until 2025.
Interests of Zanite's Directors and Officers in the Business Combination, page
136
21. Please revise the conflicts of interest discussion so that it
highlights all material interests
in the transaction held by the sponsor and the company s officers
and directors. This could
include fiduciary or contractual obligations to other entities as well
as any interest in, or
affiliation with, the target company. In addition, please clarify how
the board considered
those conflicts in negotiating and recommending the business
combination.
22. Please 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.
INFORMATION ABOUT EVE, page 181
23. Please explain with greater specificity the material operations that
Eve conducts separate
from the Master Services Agreements.
Executive Compensation, page 219
24. Please update your compensation disclosure as of the fiscal year ended
December 31,
2021.
The UAM Business of Embraer S.A. Combined Financial Statements
3. Summary of Significant Accounting Policies
Steven Rosen
Zanite Acquisition Corp.
January 26, 2022
Page 5
Basis of Presentation, page F-60
25. We note that the UAM Business financial statements have been prepared
on a carve-out
basis and reflect the allocation of direct and indirect expenses.
Please address the
following comments:
Pursuant to Question 1 of SAB Topic 1.B.1, confirm that your
historical financial
statements reflect all expenses that the parent incurred on your
behalf.
Since agreements with related parties are, by definition, not
at arm s length and may
be changed at any time, please disclose, when practicable,
management s estimate of
what your expenses would have been on a stand-alone basis, that
is, the cost that
would have been incurred if you had operated as an unaffiliated
entity. Please
provide this disclosure for each year for which an income
statement was required
when such basis produced materially different results. See
Question 2 of SAB Topic
1.B.1. As part of your response, ensure that you tell us in
greater detail the nature of
the expenses included in adjustment (dd) to your pro forma
financial statements and
why none of those additional expenses should be reflected in your
historical financial
statements.
Form of Warrant Agreement, page P-1
26. Please consider including more than one form of the warrant agreement
given that there
are substantial differences in the provisions in your Strategic
Warrant Agreements.
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.
You may contact Eiko Yaoita Pyles at (202) 551-3587 or Andrew Blume at
(202) 551-
3254 if you have questions regarding comments on the financial statements and
related
matters. Please contact Bradley Ecker at (202) 551-4985 or Asia Timmons-Pierce
at (202) 551-
3754 with any other questions.
FirstName LastNameSteven Rosen Sincerely,
Comapany NameZanite Acquisition Corp.
Division of
Corporation Finance
January 26, 2022 Page 5 Office of
Manufacturing
FirstName LastName