United States securities and exchange commission logo
November 28, 2022
David Chung
Chief Executive Officer
Pathfinder Acquisition Corporation
1950 University Avenue
Suite 350
Palo Alto, CA 94303
Re: Pathfinder
Acquisition Corporation
Registration
Statement on Form S-4
Filed October 31,
2022
File No. 333-268068
Dear David Chung:
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 October 31, 2022
Cover Page
1. Please highlight the
material differences in the terms and prices of securities issued at the
time of Pathfinder s
initial public offering as compared to the private placement entered
into with FP Credit
Partners, L.P. Additionally, discuss the impact that Pathfinder s
entering into this
private placement will have on shareholders.
David Chung
FirstName LastNameDavid Chung
Pathfinder Acquisition Corporation
Comapany 28,
November NamePathfinder
2022 Acquisition Corporation
November
Page 2 28, 2022 Page 2
FirstName LastName
Summary of the Proxy Statement/Prospectus
Company Overview, page 27
2. We note Movella believes they have a current addressable market
opportunity of $14
billion, which they expect will scale to $30 billion in the next five
years. Please revise to
address how you calculated or determined these amounts.
Ownership of New Movella, page 37
3. We note you disclose that 34,696,398 shares will be issued to Movella
shareholders as
part of the business combination. However, on the cover page and on
page 11, you
disclose 34,696,470 shares will be issued. Please revise throughout
the filing to
consistently disclose how many shares will be issued.
4. Please revise to clarify that the organizational charts on page 38
show both Movella's and
Pathfinder's structures prior to the business combination.
5. As Pathfinder's name will change to Movella Holdings, Inc. concurrent
with the
Domestication transaction, please revise the post-business combination
organizational
chart on page 39 to identify Movella Holdings, Inc. as the parent of
Movella, Inc.
Interests of Pathfinder Directors and Executive Officers in the Business
Combination, page 42
6. We note your disclosure of the securities held by the Sponsor and
Initial Shareholders that
would be lost if Pathfinder fails to complete an initial business
combination. Please
expand your disclosure to quantify the fees, out-of-pocket expenses,
and any other
amounts for which the Sponsor and Pathfinder s officers and
directors would lose if an
initial business combination is not consummated.
Comparative Per Share Data, page 53
7. We were unable to recalculate the Movella historical book value per
share as disclosed for
either period using the weighted average shares outstanding provided.
In this regard, it
appears that the amounts were calculated using the shares outstanding
as of the balance
sheet date. Please revise as appropriate.
8. We note the Movella equivalent per share pro forma information applies
the Exchange
Ratio to the pro forma combined per share information. However, it
appears the pro
forma combined per share information already takes into account the
Exchange Ratio. In
this regard, the pro forma weighted average shares used in these
calculations are the same
and the Exchange Ratio has already been applied to the Movella shares
to convert them
into the appropriate pro forma number of shares. Please explain the
basis for presenting
this information, or revise as appropriate.
David Chung
FirstName LastNameDavid Chung
Pathfinder Acquisition Corporation
Comapany 28,
November NamePathfinder
2022 Acquisition Corporation
November
Page 3 28, 2022 Page 3
FirstName LastName
Risk Factors
Risks Related to the Business Combination and Pathfinder
We have identified a material weakness in our internal control over financial
reporting. This
material weakness could continue to..., page 70
9. We note from disclosure in your June 30, 2022 Form 10-Q that
Pathfinder had fully
remediated this material weakness and concluded that disclosure
controls and procedures
were effective as of that date. Please revise here to disclose the
remediation measures
taken and the current status of the material weakness.
Risks Related to Movella's Manufacturing Model, page 97
10. Please disclose any known trends or uncertainties that have had or are
reasonably likely to
have a material impact on Movella s cash flows, liquidity, capital
resources, cash
requirements, financial position, or results of operations arising
from, related to, or caused
by the global disruption from, Russia s invasion of Ukraine. In this
regard, we note that
Movella s business is tied to the semiconductor industry, which has
been adversely
impacted by Russia s invasion of Ukraine.
Uncertainties with respect to the legal system of the People's Republic of
China..., page 113
11. Please quantify the percentage of your revenues that are derived from
mainland China,
Hong Kong and Macau for the periods presented.
Risks Related to Being a Public Company After the Business Combination
New Movella will qualify as an "emerging growth company" and a "smaller
reporting company"
within the meaning of the Securities Act..., page 117
12. We note that New Movella will qualify as an emerging growth company,
and will elect
not to opt out of the extended transition period for new or revised
accounting standards.
Please revise to address the fact that this election may make
comparability of New
Movella's financial statements difficult or impossible with other
companies who comply
with public company adoption dates.
Extraordinary General Meeting of Pathfinder
Pathfinder Initial Shareholders' Agreements, page 130
13. You indicate that At any time at or prior to the Business
Combination, during a period
when they are not then aware of any material nonpublic information
regarding us or our
securities, the Initial Shareholders, Movella and/or their directors,
officers, advisors or
respective affiliates may purchase public shares from institutional
and other investors who
vote, or indicate an intention to vote, against any of the Condition
Precedent Proposals, or
execute agreements to purchase such shares from such investors in the
future, or they may
enter into transactions with such investors and others to provide them
with incentives to
acquire public shares or vote their public shares in favor of the
Condition Precedent
David Chung
FirstName LastNameDavid Chung
Pathfinder Acquisition Corporation
Comapany 28,
November NamePathfinder
2022 Acquisition Corporation
November
Page 4 28, 2022 Page 4
FirstName LastName
Proposals. Such a purchase may include a contractual acknowledgement
that such
shareholder, although still the record or beneficial holder of our
shares, is no longer the
beneficial owner thereof and therefore agrees not to exercise its
redemption rights
Please provide your analysis on how such potential purchases would
comply with Rule
14e-5 under the Exchange Act. For guidance, refer to Tender Offer
Compliance and
Disclosure Interpretation 166.01.
Proposal No. 1 - Business Combination Proposal
Certain Movella Projected Financial Information, page 164
14. We note Movella s controlling ownership stake in Qingdao JV and its
intention to reduce
its ownership stake in this entity. Please provide further detail
surrounding Movella s
intention to reduce its ownership stake and how it intends to do so.
Opinion of Duff & Phelps, Pathfinder's Financial Advisor, page 175
15. Please disclose how the discounted cash flow analysis prepared by Duff
& Phelps
compares with the model used for the financial projections prepared by
Movella.
Unaudited Pro Forma Condensed Combined Financial Information
Unaudited Pro Forma Condensed Combined Balance Sheet, page 237
16. It appears the pro forma adjustment of $325.2 million to cash and cash
equivalents under
the maximum redemption scenario relates to pro forma adjustment (O)
rather than (N).
Please revise or advise.
Note 3 - Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet,
page 244
17. Please revise the disclosure regarding adjustment (D) to explain what
is included in the
$30 million in transactions costs, separately identifying and
quantifying each component.
Additionally, please identify which entity (i.e., Pathfinder or
Movella) will pay these
costs.
Information about Movella, page 278
18. Please disclose on what basis Movella is a leading global
full-stack provider of integrated
sensors, software, and analytics that enable the digitization of
movement.
Growth Strategies, page 286
19. We note your reference here to a land and expand strategy and
your disclosure that
Movella plans to generate additional recurring revenue through the
introduction of a new
product. We also note the risk factor disclosure on page 94 addressing
possible
fluctuations in customer renewal rates and in the rate at which
customers expand their use
of Movella s platforms. Please tell us whether you track customer
retention and
expansion, recurring revenue and/or customer renewals, and, if so,
revise to disclose how
these measures are calculated and tracked. Additionally, tell us
whether you consider
David Chung
FirstName LastNameDavid Chung
Pathfinder Acquisition Corporation
Comapany 28,
November NamePathfinder
2022 Acquisition Corporation
November
Page 5 28, 2022 Page 5
FirstName LastName
these to be key performance metrics and revise to include these
metrics and related
disclosures in MD&A, as applicable, or tell us what measures Movella
does use to
monitor their business. Refer to SEC Release No. 33-10751.
Movella's Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Components of Results of Operations - Revenue, page 299
20. We note your disclosure here that subscription revenue is generated
from either Movella's
MotionCloud or Kinduct's AMS platforms; however, in your revenue
disclosures
elsewhere you do not mention the MotionCloud platform. Additionally,
in your
disclosure on page 312 we note you incurred research and development
expenses for the
"development of MotionCloud." Please revise to clarify whether the
MotionCloud
platform is currently operational and generates revenue, or whether it
is still in the
development stage. Revise disclosures throughout to clarify the
current status of this
platform.
Non-GAAP Financial Measures, page 302
21. We note that in your calculation of non-GAAP net income (loss)
attributable to Movella,
Inc. the adjustment for loss from discontinued operations for December
31, 2020 of
$6,132 does not agree to the GAAP Statement of Operations on page
F-53. Please revise
or advise.
22. We note you exclude the results of your joint venture Qingdao JV from
each of your non-
GAAP measures. Since this joint venture is consolidated pursuant to
GAAP guidance in
ASC 810, adjusting to remove the financial results of this entity
substitutes individually
tailored recognition and measurement methods for those of GAAP. Please
revise to
remove these adjustments from each of your non-GAAP measures. Refer to
Non-GAAP
C&DI Question 100.04 and Rule 100(b) of Regulation G.
23. Notwithstanding the comment above, please explain your basis for
including an
adjustment for the non-controlling interest in the reconciliations on
page 307. In this
regard, we note that both measures are reconciled from Net loss
attributable to Movella
Inc. which already excludes the non-controlling interests.
Liquidity and Capital Resources, page 313
24. Please revise your disclosures here to discuss the restrictions on the
Company s ability to
transfer cash and cash equivalents held outside of the U.S. by its
subsidiary and its joint
venture entity in China. In this regard, we refer you to disclosure on
page F-61.
Movella Inc. Consolidated Statements of Operations, page F-53
25. Please revise to separately present revenue and cost of revenues for
sales of products,
sales of services (e.g., SaaS subscriptions), and other revenues.
Refer to Rule 5-03(b)(1)
David Chung
FirstName LastNameDavid Chung
Pathfinder Acquisition Corporation
Comapany 28,
November NamePathfinder
2022 Acquisition Corporation
November
Page 6 28, 2022 Page 6
FirstName LastName
and (2) of Regulation S-X. We also note your disclosure on page F-65
that there were no
material differences that warranted further disaggregation. However,
it would appear that
product revenue, which is recognized at a point in time, differs
significantly from
service revenues which are recognized over time. Refer to ASC
606-10-50-5.
18. Segment Information, page F-95
26. Please revise to present revenue and long-lived assets for your
country of domicile, the
U.S., separately from foreign amounts. Additionally, separately
disclose information from
any other individually significant country, as applicable. Refer to
ASC 280-10-50-41.
General
27. 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.
28. 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. If so, 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. Disclose that
as a result, the pool of potential targets with which you could
complete an initial business
combination may be limited. 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 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.
29. 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.
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.
David Chung
Pathfinder Acquisition Corporation
November 28, 2022
Page 7
You may contact Brittany Ebbertt, Senior Staff Accountant, at (202)
551-3572 or
Christine Dietz, Senior Staff Accountant, at (202) 551-3408 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Alexandra Barone,
Staff Attorney, at (202) 551-8816 or Jeff Kauten, Staff Attorney, at (202)
551-3447 with any
other questions.
Sincerely,
FirstName LastNameDavid Chung
Division of
Corporation Finance
Comapany NamePathfinder Acquisition Corporation
Office of Technology
November 28, 2022 Page 7
cc: Matthew R. Pacey
FirstName LastName