United States securities and exchange commission logo
September 30, 2022
William A. Ackman
Chief Executive Officer
Pershing Square SPARC Holdings, Ltd./DE
787 Eleventh Avenue, 9th Floor
New York, New York 10019
Re: Pershing Square
SPARC Holdings, Ltd./DE
Amendment No. 2 to
Registration Statement on Form S-1
Filed September 9,
2022
File No. 333-261376
Dear Mr. Ackman:
We have reviewed your amended 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.
Unless we note
otherwise, our references to prior comments are to comments in our July
15, 2022 letter.
Amended Registration Statement on Form S-1 filed September 9, 2022
Prospectus Cover Page, page i
1. We note your response
to comment 9, as well as disclosure in the prospectus that the
Business Combination
Registration Statement may take the form of a post-effective
amendment to this
registration statement or that of other eligible registration statements
under the Securities
Act or the Exchange Act. Please confirm that any increase in the
exercise price of the
SPARs will be reflected in a post-effective amendment to this
registration statement.
Also, references to the exercise price not being "fixed" or being
"variable" may suggest
that there is variability in the exercise price, whereas we
understand that the $10
price may be changed to another (higher) fixed price prior to the
time that the SPARs
become exercisable. Please revise to clarify. Finally, please also add
William A. Ackman
FirstName LastNameWilliam A. Ackman
Pershing Square SPARC Holdings, Ltd./DE
Comapany 30,
September NamePershing
2022 Square SPARC Holdings, Ltd./DE
September
Page 2 30, 2022 Page 2
FirstName LastName
disclosure throughout the prospectus to state that there is no limit
on the amount by which
you may determine to increase the exercise price and that investors
may be priced out of
the ability to exercise the warrants.
2. We reissue comment 10. Please reduce the disclosure on the cover page
significantly.
Much of the information in the six pages of cover page is repeated in
the summary.
Please consider the requirements of Item 501(b) of Regulation S-K, and
try to limit the
cover page only the information required by the item and other
information that is key to
an investment decision.
3. We note your disclosure that the amount of the potential backstop is
limited to the overall
maximum Forward Purchase amount. Please clarify the significance of
the backstop
given that the Additional Purchaser could purchase these same shares
in the Additional
Forward Purchase.
Benefits Relative to Customary IPO, page iii
4. We note new disclosure that the "trading price of the SPARs prior to
the completion of the
transaction should give a good indication of the expected trading
price of the stock of the
newly public company (by adding the trading price of the SPAR to its
exercise price) once
the transaction closes." Please elaborate on the limitations of this
statement, as it appears
to assume that the market's assessment of the value of the SPAR before
the transaction
would necessarily be consistent with its assessment of the value of
the stock of the newly
public company after the transaction, as to which there can be no
certainty. Identify
factors that contribute to this uncertainty, such as the possible
failure of a market for the
SPARs or the stock to develop, the lack of an underwriter's due
diligence and price
stabilization, risks associated with quotation on OTCQX instead of
NYSE or
Nasdaq, sponsor conflicts of interest, uncertainties associated with
closing conditions to
the business combination and the operation of the combined company
thereafter,
susceptibility of the SPARs to rumors and market manipulation, and any
other material
factors.
Summary, page 1
5. Please revise the table on page 7, and similar tables elsewhere in the
prospectus, to clearly
state that this information assumes the maximum exercise of SPARs and
that there is no
minimum amount of SPARs that are required to be exercised and thus no
guarantee that
any SPARs will be exercised.
Sponsor Warrants and Director Warrants, page 37
6. We note the disclosure that "in the event a director nominee resigns
for any reason prior to
the exercise or sale of his or her Director Warrants, we will be
entitled, at our election, to
repurchase in full such director s Director Warrants (and if we do
not elect to make such
repurchase, our Sponsor may repurchase the warrants). The repurchase
price in each case
will be $1,000,000 with respect to each director, or $4,000,000 in the
aggregate." Please
William A. Ackman
FirstName LastNameWilliam A. Ackman
Pershing Square SPARC Holdings, Ltd./DE
Comapany 30,
September NamePershing
2022 Square SPARC Holdings, Ltd./DE
September
Page 3 30, 2022 Page 3
FirstName LastName
clarify whether such repurchases would occur before or in connection
with the initial
business combination. Please also clarify how you determined the
repurchase price.
Capitalization, page 101
7. We note your response to our comment 18 and your revisions to your
filing. Given your
statement that there is no guarantee that the Committed Forward
Purchase will be
consummated, or that any amount of the SPARs will be exercised, we
continue to be
unclear why you believe it is appropriate to present your
capitalization assuming that all
the SPARs are exercised and assuming the sale of shares pursuant to
the Committed
Forward Purchase Agreement. Please advise or revise.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
103
8. We note your response to our prior comment 19 and reissue our comment
in part. Please
further expand your disclosures to state the significant
methodologies, inputs and
assumptions that you will use in arriving at fair value for the SPARs
and the Forward
Purchase Shares.
Principal Stockholders, page 154
9. We note the as adjusted column reflects the public shares issuable
upon exercise of all
SPARs. However, such SPARs will not be exercisable until concurrent
with the
completion of the initial business combination. Consider including a
separate as adjusted
column to reflect the stock ownership immediately after completion of
the distribution,
excluding the public shares issuable upon exercise of all SPARs.
Pershing Square SPARC Holdings, LTD. Financial Statements
Notes to Financial Statements
Note 2 - Summary of Significant Accounting Policies
Expected Accounting for the Company's Securities, page F-11
10. We note you previously disclose that you will account for the Private
Warrants in
accordance with the guidance in ASC 480 and ASC 815-40, that you
expect the Private
Warrants will not meet the criteria for equity treatment upon
issuance, and that you
expect the Private Warrants to be classified as liabilities once they
are outstanding. It
appears that you have changed your accounting policy for these
warrants and you will
now account for such warrants under ASC 718 and as equity-classified
awards. Please
address the following:
Please clarify for us the reasons for your revisions to your
accounting policy for these
instruments.
Please tell us how you determined these instruments should now be
accounted for
under ASC 718 and as equity-classified awards.
We note your disclosure that these instruments will be issued to
the Sponsor and
William A. Ackman
FirstName LastNameWilliam A. Ackman
Pershing Square SPARC Holdings, Ltd./DE
Comapany 30,
September NamePershing
2022 Square SPARC Holdings, Ltd./DE
September
Page 4 30, 2022 Page 4
FirstName LastName
Directors at no consideration in connection with their services
towards the
Company s operations and potential Business Combination. Please
tell us how you
determined that these instruments are issued as consideration for
services provided to
you.
General
11. We note the disclosure added in response to comment 4 that you must
register or have an
exemption from registration in each state where you offer and sell
securities. You also
state that you will not offer or sell these securities in any state
where registration has not
been made or has expired, or where no exemption is available. Please
clarify how this
requirement will impact this distribution. Please clarify, if true,
that the former
shareholders and noteholders of Pershing Square Tontine Holdings, Ltd.
in states where
you are not registered and no exemption is available will not receive
subscription warrants
in this distribution. Also clarify whether they will be entitled to
any consideration in lieu
of the subscription warrants. To the extent you are aware of the
states where this offering
is not registered and no exemption is available, please provide clear
disclosure.
12. Regarding comment 5, we note disclosures beginning on page 138
comparing the SPARC
terms to those of a traditional SPAC listed on the NYSE. Please revise
your disclosure
here and throughout, including the summary and business sections, to
highlight how the
OTCQX listing requirements are different from those of the NYSE and
Nasdaq, and may
be different from your organizational documents and the SPAR Agreement
as well,
including, but not limited to, differences in the minimum percentage
held in the trust
account and value of the de-SPAC transaction. Also provide a more
thorough explanation
in the difference in corporate governance provisions. Finally, please
highlight how you
differ from a traditional SPAC listed on the NYSE or Nasdaq, including
any negatives
associated with your structure as compared to a traditional SPAC.
13. Please note that the Division of Investment Management is still
reviewing the response to
comment 6 and may have further comment.
14. We note your response to comment 7 and your analysis of value in the
context of the offer
of the SPARC II Tontine SPARs. Please elaborate on how you have
thought about
"value" other than as monetary consideration, both currently and at
the time of the
business combination, when SPAR holders are making the decision
whether to exercise
their SPARs. For example, and without limitation, we note your
disclosure that you
believe the potential distribution of SPARC II Tontine SPARs to
holders who exercise
their SPARs in connection with your business combination will increase
the likelihood
that all or substantially all of your SPARs will be exercised. Please
also describe more
specifically the "significant cooling off period" you refer to in your
response and clarify
when you would expect to register the distribution of the SPARC II
warrants in relation to
the lifecycle of the company.
15. We note your response to comment 8. Please confirm when you have
completed the
William A. Ackman
Pershing Square SPARC Holdings, Ltd./DE
September 30, 2022
Page 5
process of determining the mechanisms that will be utilized to enforce or
release
restrictions on trading, based on your current discussions with your
transfer agent and
DTC. Provide us with any updated information in response to the comment
and note that
we may have additional comments following receipt of your response.
You may contact Ameen Hamady at 202-551-3891 or Jennifer Monick at
202-551-3295
if you have questions regarding comments on the financial statements and
related
matters. Please contact Pamela Long at 202-551-3765 with any other questions.
Sincerely,
FirstName LastNameWilliam A. Ackman
Division of Corporation
Finance
Comapany NamePershing Square SPARC Holdings, Ltd./DE
Office of Real Estate &
Construction
September 30, 2022 Page 5
cc: Gregory P. Patti, Jr.
FirstName LastName