United States securities and exchange commission logo
July 18, 2022
Justin Mirro
Chairman and Chief Executive Officer
Kensington Capital Acquisition Corp. IV
1400 Old Country Road, Suite 301
Westbury, NY 11590
Re: Kensington Capital
Acquisition Corp. IV
Registration
Statement on Form S-4
Filed June 21, 2022
File No. 333-265740
Dear Mr. Mirro:
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 Filed June 21, 2022
Cover Page
1. Please revise the cover
page and the question and answer section to disclose the cash
value of the securities
that (i) the public shareholders, (ii) the public warrantholders, (iii)
the Sponsor, and (iv)
the holders of Amprius capital stock will receive in connection with
the Domestication and
Business Combination. In addition, please disclose here the voting
power of (i) the public
shareholders, (ii) the Sponsor, (iii) the equity financing investors,
and (iv) the holders of
Amprius capital stock following the Business Combination.
2. Please disclose the
equity financing occurring in connection with the business
combination.
3. We note that Amprius,
Inc. will hold a majority interest in Amprius after the business
Justin Mirro
FirstName
KensingtonLastNameJustin Mirro
Capital Acquisition Corp. IV
Comapany
July NameKensington Capital Acquisition Corp. IV
18, 2022
July 18,
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combination regardless of the redemption scenario. As such, please
tell us whether the
combined company will be a "controlled company" under exchange listing
rules and, if so,
describe the corporate governance exemptions on which you will be
entitled to rely and
the related risks to investors.
Questions and Answers About the Business Combination, page 8
4. We note that certain shareholders agreed to waive their redemption
rights. Please
describe any consideration provided in exchange for this agreement.
5. 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.
6. 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.
7. Please add a question and answer or expand your disclosure on page 11
to include
disclosure regarding the ownership of the equity financing investors,
and the Sponsor and
its affiliates of the combined company after the merger that shows a
range of redemption
scenarios, including a maximum, minimum and interim redemption
scenario. In addition,
please disclose the Sponsor's total potential ownership interest in
the combined company
assuming exercise and conversion of all securities as well as the
approximate dollar value
of the interest based on the transaction value and recent trading
prices as compared to the
price paid. Disclose the approximate dollar value of the interest
based on the transaction
value and recent trading prices as compared to the price paid.
8. Please add a question and answer that identifies the Minimum Cash
Condition and the
maximum percentage of public shares that may be redeemed such that the
remaining
funds held in the trust account are sufficient to satisfy the Minimum
Cash Condition.
9. Please disclose the sponsor and its affiliates' total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
10. 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.
11. Please add a question and answer that addresses the consideration that
Amprius equity
holders will receive for vested and unvested stock options.
Justin Mirro
FirstName
KensingtonLastNameJustin Mirro
Capital Acquisition Corp. IV
Comapany
July NameKensington Capital Acquisition Corp. IV
18, 2022
July 18,
Page 3 2022 Page 3
FirstName LastName
12. Please add a question and answer that discloses the deferred
underwriting fees that are
contingent upon the the Business Combination as well as the fees to
the Placement Agents
for the equity financing that are contingent upon the Business
Combination.
Summary Risk Factors, page 38
13. Please revise your risk factor summary to ensure that it is no more
than two pages in
length. Refer to Item 105(b) of Regulation S-K.
14. Please quantify Amprius' net losses.
Unaudited Pro Forma Condensed Combined Financial Information, page 86
15. Refer to the scenario Assuming Maximum Redemptions on page 87 and the
pro forma
balance sheet on page 90. Please clarify and expand your disclosure
that at Closing
Kensington will be required to have a minimum of $200 million in cash,
since we note the
cash balance in the pro forma balance sheet at March 31, 2022, under
the maximum
redemptions scenario, is less than $200 million. Please explain how
the current
presentation meets the Minimum Cash Amount. To the extent you expect
to receive
additional proceeds from investors in an Equity Financing, please
disclose and discuss the
terms of the financing. In this regard, we note the discussion on page
118 of your
intention to enter into an Equity Financing prior to Closing. If
appropriate, please include
disclosures and adjustments related to the Equity Financing in the pro
forma financial
statements.
16. Refer to page 87. We note pro forma disclosures are based on two
redemption scenarios,
one Assuming No Redemptions, which assumes no shares of Kensington
Class A ordinary
shares are redeemed, and the other Assuming Maximum Redemptions, which
assumes the
redemption of 3 million shares of Kensington Class A ordinary shares.
Please disclose
what will occur if redemptions exceed 3 million shares and, if
accurate, clarify and
disclose that if redemptions exceed 3 million shares, the Business
Combination will not
occur. If that is not accurate, please explain how you determined the
current
disclosure presents the maximum redemptions scenario and complies with
Rule 11-
02(a)(10) of Regulation S-X.
17. Refer to notes 3(f) and 3(bb) on page 95. We note Kensington accounts
for public
warrants and private warrants as liabilities. We also note after the
Business Combination,
the public warrants and private warrants will be classified in equity.
Please clarify if the
private warrants include any terms or provisions that provide for
potential changes to the
settlement amount that are dependent on and will continue to be
dependent on the
characteristics of the holder of the warrant, and if so, explain how
you determined the
private warrants should be classified in equity after the Business
Combination.
18. Refer to note 3(h) on page 95. Please disclose how holders of options
to acquire shares of
Amprius and its Parent will be accounted for in the Business
Combination. If the options
will be exchanged for new options, please disclose the accounting for
the exchange and
Justin Mirro
Kensington Capital Acquisition Corp. IV
July 18, 2022
Page 4
quantify the impact, if any, on the pro forma financial statements.
Also, please explain or
reconcile the number of Amprius options disclosed in the pro forma
financial statements
relative to the options disclosed in Amprius historical financial
statements. It appears the
options disclosed in the pro forma financial statements may not
include options to acquire
shares of Amprius' Parent. Please disclose and discuss if and how the
Parent options will
be settled.
The Background of the Business Combination, page 106
19. Please expand your disclosure to discuss in greater detail
Kensington's other potential
targets, including their size and material attributes, and the reasons
they were not pursued.
20. Please revise the disclosure on page 107 to clarify that the business
combination proposed
valuation of Amprius' financial advisor does not address the fairness
of the merger from a
financial point of view for Kensington's Public Unitholders, Public
Shareholders and
Public Warrantholders.
Equity Financing, page 118
21. Please highlight material differences in the terms and price of
securities issued at the time
of the IPO as compared to private placements contemplated at the time
of the business
combination. Disclose if the SPAC's sponsors, directors, officers or
their affiliates will
participate in the private placement.
Certain U.S. Federal Income Tax Considerations, page 127
22. Please revise the heading of this section as well as the introductory
paragraph to clarify
that the discussion is of the material tax consequences, not merely
certain material tax
consequences. Please refer to Section III.C.1 of Staff Legal Bulletin
No. 19 for guidance.
23. You disclose on page 17 that the Domestication should constitute a
reorganization under
Section 368(a) of the Code. Please include a similar statement in this
section that clearly
describes the tax treatment of the merger and the related
transactions. Please ask counsel
to provide, or to explain why it cannot provide, a will opinion.
In that case, ask counsel
to describe the degree of uncertainty in the opinion. Please also
remove any statement that
assumes the material tax consequences at issue (e.g., "Assuming the
Domestication
qualifies as an F Reorganization ..."). Refer to Section III of Staff
Legal Bulletin No. 19
for guidance.
Director
FirstName Compensation,
LastNameJustinpage 193
Mirro
Comapany
24. NameKensington
Please Capital
report compensation Acquisition
values in your Corp.
tables IV
in dollars and
rounded to the nearest
July 18,dollar.
2022 Page 4
FirstName LastName
Justin Mirro
FirstName
KensingtonLastNameJustin Mirro
Capital Acquisition Corp. IV
Comapany
July NameKensington Capital Acquisition Corp. IV
18, 2022
July 18,
Page 5 2022 Page 5
FirstName LastName
Amprius Management's Discussion and Analysis of Financial Condition and Results
of
Operations
Establishing Manufacturing Capacity, page 197
25. We note disclosures here and throughout the filing regarding the need
to establish a high
volume manufacturing facility and develop automated anode production
equipment. We
also note disclosure that the capacity, timing and related capital
expenditures are
uncertain. Although we note and understand the amount and timing of
related capital
expenditures may not be fully known, please disclose and discuss the
range of capital
expenditures and the anticipated timing of those expenditures based on
your current
expectations.
Critical Accounting Policies and Significant Management Esimates, page 211
26. Please revise the disclosures under Common Stock Valuations to
quantify, in total or on a
per share basis, the estimated fair values determined as of each
valuation date and the
factors that resulted in significant changes in the estimated fair
values.
Management After the Business Combination, page 250
27. The description of management of New Amprius following the business
combination does
not indicate whether they are located inside or outside of the United
States. Please disclose
the locations of the board members and CEO. Please advise whether
your executive officers and directors reside in the United States. If
not, please include a
risk factor addressing the risk to U.S. stockholders of effecting
service of process,
enforcing judgments and bringing original actions in foreign courts to
enforce liabilities
based on the U.S. federal securities laws. Also, if at least one
director or officer
is located outside the United States, please disclose in a separate
Enforceability section the
limitations and difficulties of bringing an action against such
director or officer.
Audited Financial Statements of Amprius Technologies, Inc.
Report of Independent Registered Public Accounting Firm, page F-2
28. Refer to the second paragraph under Basis for Opinion. We note the
auditors report
indicates their audits were conducted in accordance with the
auditing standards of the
PCAOB. Please be advised, based on the facts and circumstances related
to the Business
Combination, the auditor is required to conduct their audits in
accordance with the
standards of the PCAOB, which include standards in addition to
auditing standards.
Please have the auditor refer to the guidance in paragraph .09 of AS
3101 and revise their
report accordingly. Please also revise the related disclosure under
frequently used terms
for "PCAOB Financials" on page 5.
Justin Mirro
FirstName
KensingtonLastNameJustin Mirro
Capital Acquisition Corp. IV
Comapany
July NameKensington Capital Acquisition Corp. IV
18, 2022
July 18,
Page 6 2022 Page 6
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2. Summary of Significant Accounting Policies
Basis of Presentation, page F-9
29. We note the company's historical financial statements reflect an
allocation of its Parent's
general and administrative expenses and the expenses were allocated
"evenly" among the
Parent's subsidiaries; however, it is not clear what evenly allocated
means or how you
determined it is reasonable. It is also not clear how many
subsidiaries the Parent had or
what the level of activity and operations of each subsidiary was such
that the methodology
is reasonable. Please more clearly explain how shared costs were
allocated and how you
determined the methodology is reasonable. Please also disclose
management's estimate of
what expenses would have been on a stand-alone basis for each period
presented. Refer to
SAB Topic 1:B:2. This comment is also applicable to the disclosures on
page F-35.
30. We note the company's Parent provided capital contributions to fund
the company during
the periods presented; however, we note no allocation of interest
expense to the company's
historical financial statements. Please disclose the source of the
funds provided by the
Parent to the company. If the Parent incurred debt to fund the capital
contributions, please
explain how and why you determined the company's historical financial
statements are not
required to record allocated interest expense. Refer to SAB Topic 1:B.
This comment is
also applicable to the interim financial statements.
14. Subsequent Events, page F-27
31. Please expand the disclosures related to the new options granted
subsequent to March 31,
2022, here and on page F-49, to disclose: the material terms of the
options; the average
exercise price; the estimated fair value; and the amounts of
recognized and/or
unrecognized compensation expense. If applicable, please address any
material
differences between the fair value of the new options and the fair
value implied by the
current Business Combination.
General
32. With a view toward disclosure, please tell us whether your sponsor is,
is controlled by, or
has substantial ties with a non-U.S. person. Please also tell us
whether anyone or any
entity associated with or otherwise involved in the transaction, is,
is controlled by, or has
substantial ties with a non-U.S. person. If so, also include risk
factor disclosure that
addresses how this fact could impact your ability to complete your
initial business
combination. For instance, discuss the risk to investors that you may
not be able to
complete an initial business combination with a U.S. target company
should the
transaction be subject to review by a U.S. government entity, such as
the Committee on
Foreign Investment in the United States (CFIUS), or ultimately
prohibited. Further,
disclose that the time necessary for government review of the
transaction or a decision to
prohibit the transaction could prevent you from completing an initial
business
combination and require you to liquidate. Disclose the consequences of
liquidation to
Justin Mirro
FirstName
KensingtonLastNameJustin Mirro
Capital Acquisition Corp. IV
Comapany
July NameKensington Capital Acquisition Corp. IV
18, 2022
July 18,
Page 7 2022 Page 7
FirstName LastName
investors, such as the losses of the investment opportunity in a
target company, any price
appreciation in the combined company, and the warrants, which would
expire worthless.
33. We understand the sponsor will receive additional securities pursuant
to an anti-dilution
adjustment based on the company s additional financing activities.
Please quantify the
number and value of securities the sponsor will receive. In addition,
disclose the
ownership percentages in the company before and after the additional
financing to
highlight dilution to public stockholders.
34. 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.
35. Please describe the direct or indirect impact of Russia s invasion
of Ukraine on your
business. In addition, please also consider any impact:
resulting from sanctions, limitations on obtaining relevant
government approvals,
currency exchange limitations, or export or capital controls,
including the impact of
any risks that may impede your ability to sell assets located in
Russia, Belarus, or
Ukraine, including due to sanctions affecting potential
purchasers;
resulting from the reaction of your investors, employees,
customers, and/or other
stakeholders to any action or inaction arising from or relating
to the invasion,
including the payment of taxes to the Russian Federation; and
that may result if Russia or another government nationalizes
your assets or operations
in Russia, Belarus, or Ukraine.
If the impact is not material, please explain why.
36. Please disclose whether and how your business segments, products,
lines of service,
projects, or operations are materially impacted by supply chain
disruptions, especially in
light of Russia s invasion of Ukraine. For example, discuss whether
you have or expect to:
suspend the production, purchase, sale or maintenance of
certain items due to a lack
of raw materials, parts, or equipment; inventory shortages;
closed factories or stores;
reduced headcount; or delayed projects;
experience labor shortages that impact your business;
experience cybersecurity attacks in your supply chain;
experience higher costs due to constrained capacity or
increased commodity prices or
challenges sourcing materials;
experience surges or declines in consumer demand for which you
are unable to
adequately adjust your supply;
be unable to supply products at competitive prices or at all
due to export
restrictions, sanctions, or the ongoing invasion.
Justin Mirro
Kensington Capital Acquisition Corp. IV
July 18, 2022
Page 8
Explain whether and how you have undertaken efforts to mitigate the
impact and where
possible quantify the impact to your business.
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 Beverly Singleton, Staff Accountant, at (202) 551-3328
or Anne
McConnell, Staff Accountant, at (202) 551-3709 if you have questions regarding
comments on
the financial statements and related matters. Please contact Sherry Haywood,
Staff Attorney, at
(202) 551-3345 or Erin Purnell, Legal Branch Chief, at (202) 551-3454 with any
other questions.
FirstName LastNameJustin Mirro Sincerely,
Comapany NameKensington Capital Acquisition Corp. IV
Division of Corporation
Finance
July 18, 2022 Page 8 Office of Manufacturing
FirstName LastName