United States securities and exchange commission logo
June 13, 2023
Dr. Whitney Haring-Smith
Chief Executive Officer
Anzu Special Acquisition Corp I
12610 Race Track Road, Suite 250
Tampa, FL 33626
Re: Anzu Special
Acquisition Corp I
Registration
Statement on Form S-4
Filed May 15, 2023
File No. 333-271920
Dear Dr. Whitney Haring-Smith:
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 May 15, 2023
Cover Page
1. On your cover page, you
briefly define Exchange Ratio. Please amend your cover page to
briefly describe the
Merger Consideration and Fully Diluted Share Number, so it is clear
from the disclosure on
your cover page how you will calculate the Exchange Ratio.
Please also provide an
estimate of the Exchange Ratio as of a recently practicable date, as
you do on page 2 of
your filing.
Q. Will Anzu enter into any financing arrangements in connection with
the Business
Combination?, page xv
2. We note your disclosure
that "Anzu agreed to issue and sell to Sponsor, 1,000,000 shares
of Series A Preferred
Stock in a private placement at a price of $10.00 per share for an
Dr. Whitney Haring-Smith
Anzu Special Acquisition Corp I
June 13, 2023
Page 2
aggregate commitment of $10,000,000." Please highlight the difference,
if material, in the
price of these Series A Preferred shares on as as converted basis,
compared to the price of
the common shares purchased by Anzu shareholders in Anzu's IPO.
Q: Why is Anzu making the Exchange Offer?, page xx
3. Please balance your discussion of the benefits of the Exchange Offer
to shareholders with
a brief discussion of the risks to shareholders of participating in
the Exchange Offer,
including but not limited to, the risk that shareholders of preferred
shares will have
"extremely limited voting rights" and the risk that New Envoy s
ability to make scheduled
dividend payments on the Series A Preferred Stock will depend on Envoy
s financial
condition and operating performance, which may not be sufficient to
enable New Envoy
to pay any dividends on the Series A Preferred Stock. Please also
confirm when you
expect to file your schedule TO.
Summary of the Proxy Statement/Prospectus
Envoy, page 1
4. Please amend your disclosure to provide a more robust summary of the
business of Envoy,
including a description of the company's business, that it has limited
operating history,
that it has incurred losses in each year since inception, and has an
accumulated deficit of
approximately $226.0 million as of its most recent fiscal year-end.
Pro Forma Ownership of Anzu Upon Closing, page 4
5. We note the following disclosure about the ownership of New Envoy
after the business
combination:
"immediately after the closing of the Business Combination,
Envoy s former
shareholders will hold approximately 71.7% of the issued and
outstanding New
Envoy Class A Common Stock, the Sponsor will hold approximately
4.8% of the
issued and outstanding New Envoy Class A Common Stock, and the
current
stockholders of Anzu will hold approximately 20.6% of the issued
and outstanding
New Envoy Class A Common Stock;" and
"Based on the assumptions in the preceding paragraph, immediately
after the closing
of the Business Combination, the Sponsor will hold approximately
77.8% of the
issued and outstanding shares of Series A Preferred Stock, and GAT
will hold
approximately 22.2% of the issued and outstanding shares of Series A
Preferred
Stock."
FirstName LastNameDr. Whitney Haring-Smith
Comapany NameAnzu
Please Special
disclose the Acquisition
voting control of Corp I
New Envoy of each party mentioned
above
immediately after
June 13, 2023 Page 2 the closing of the Business Combination.
FirstName LastName
Dr. Whitney Haring-Smith
FirstName LastNameDr.
Anzu Special AcquisitionWhitney
Corp I Haring-Smith
Comapany
June NameAnzu Special Acquisition Corp I
13, 2023
June 13,
Page 3 2023 Page 3
FirstName LastName
Related Agreements, page 4
6. Please file the Envoy Bridge Note and Convertible Note Agreements,
including the related
GAT Note and Credit Agreement and Junior notes, as exhibits to your
registration
statement. Alternatively, please tell us why you do not believe you
are required to do so.
Risk Factors, page 22
7. We note that "[c]hanged in interest rates or rates of inflation" is an
important factor that
could cause future results to be materially different from those
projected or implied
throughout your disclosure. Please revise to include risk factors
discussing the types of
costs and expenses that are subject to significant changes in interest
rates or inflationary
pressures and identify actions planned or taken, if any, to mitigate
such events.
8. With a view toward disclosure, please tell us whether your sponsor is,
is controlled by, has
any members who are, 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, please revise your
filing to 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
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 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.
9. Please disclose whether and how, based on global events such as the
COVID-19 pandemic
or the conflict in Ukraine or economic pressures such as inflation,
your business segments,
products, lines of service, projects or operations are materially
impacted by supply chain
disruptions.
10. 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.
Dr. Whitney Haring-Smith
FirstName LastNameDr.
Anzu Special AcquisitionWhitney
Corp I Haring-Smith
Comapany
June NameAnzu Special Acquisition Corp I
13, 2023
June 13,
Page 4 2023 Page 4
FirstName LastName
Failure of a key information technology system, process or site could have an
adverse effect on
our business., page 26
11. We note that, as a result of the COVID-19 pandemic, you and your
third-party service
providers may face increased cybersecurity risks. Please expand your
disclosure of the
functions of the third party vendors, disclose any breaches of
information systems and
controls to date, if any, and discuss steps the Company has taken to
protect its subjects'
data.
We will be dependent upon contract manufacturing organizations and material
suppliers . . .,
page 31
12. We note your disclosure that "[s]ome of the critical materials and
components used in
manufacturing the Acclaim are sourced from single suppliers." Please
revise this section
to identify these single suppliers. Refer to Item 101(h)(4)(v) of
Regulation S-K. Please
also file any agreements you have with these suppliers as an exhibit,
consistent with Item
601(b)(10) of Regulation S-K. Alternatively, please tell us why you do
not believe you
are required to do so.
Certain of our directors, director nominees and/or officers . . ., page 33
13. You disclose that "[c]ertain of our directors currently own, operate
and manage other
entities, which may have similar or different objectives than ours."
In an appropriate
place in your filing, please identify the relevant director and other
entities, and the duties
of each director to the relevant entities.
Risks Related to Regulation and Litigation
Envoy and its directors are defendants in ongoing litigation . . ., page 38
14. Please quantify the extent of your potential liability related to the
ongoing litigation, if
material and estimable. Please also disclose the status of this
litigation.
A new 1% U.S. federal excise tax could be imposed on Anzu . . ., page 54
15. We note your disclosure that any redemption or other repurchase that
occurs after
December 31, 2022, in connection with the Business Combination,
extension vote or
otherwise, including in connection with the Special Meeting, may be
subject to the excise
tax. If applicable, include in your disclosure that the excise tax
could reduce the trust
account funds available to pay redemptions. Also describe the risk
that if existing SPAC
investors elect to redeem their shares such that their redemptions
would subject the SPAC
to the stock buyback excise tax, the remaining shareholders that did
not elect to redeem
may economically bear the impact of the excise tax.
Dr. Whitney Haring-Smith
FirstName LastNameDr.
Anzu Special AcquisitionWhitney
Corp I Haring-Smith
Comapany
June NameAnzu Special Acquisition Corp I
13, 2023
June 13,
Page 5 2023 Page 5
FirstName LastName
Proposal No. 2 - The Charter Proposal, page 98
16. Please amend your disclosure to briefly describe the "key provisions"
referenced by the
"Amendment" provision of the Charter Proposal.
Unaudited Pro Forma Condensed Combined Financial Statements , page 127
17. With respect to Note 3(h), please describe how you determined the
value of the 12.5
million of private warrants to be forfeited.
18. You note on page 124 that the Envoy will borrow a Bridge Note of $10
million from GAT
concurrently with the execution and delivery of the Business
Combination Agreement.
Contingent upon, and effective concurrently with the PIPE closing,
Anzu will issue shares
of Series A Preferred Stock to GAT equal to the outstanding principal
of the Envoy
Bridge Note. Please reflect this transaction in your pro forma
financial statements.
19. We note on page F-18 that the 2022 Working Capital Loan is repayable
in full upon on the
earlier of (i) March 29, 2023 or (ii) the consummation of the Company
s initial Business
Combination. Upon the consummation of a Business Combination, the
Sponsor shall
have the option to convert the principal balance of the 2022 Working
Capital Loan, in
whole or in part, into warrants. Please address the need to reflect
these notes as issued and
then either (i) converted into warrants or (ii) repaid in cash within
your pro forma
financial statements. If there are varying scenarios related to the
conversion/repayment of
these notes, address these various scenarios. See Article 1102(a)(10)
of Regulation S-X.
20. We note on page F-52 that Envoy Medical Corp drew $5.0 million of the
available funds
from the 2012 Convertible Notes in 2013 and subsequently the Company
entered into a
convertible promissory note agreement with a shareholder for a
principal of $10.0 million
and interest rate of 4.5%. Common Stock. Please reflect the
transactions in the pro forma
financial statements if needed.
The Business Combination Agreement, page 139
21. We note your disclosure that "no person should rely on the
representations and warranties
in the Business Combination Agreement or the summaries thereof in this
proxy
statement/prospectus as characterizations of the actual state of facts
about Envoy, Anzu or
Merger Sub or any other matter." Please revise to remove any
implication that the
Business Combination Agreement and your disclosure of the same does
not constitute
public disclosure under the federal securities laws.
Dr. Whitney Haring-Smith
FirstName LastNameDr.
Anzu Special AcquisitionWhitney
Corp I Haring-Smith
Comapany
June NameAnzu Special Acquisition Corp I
13, 2023
June 13,
Page 6 2023 Page 6
FirstName LastName
Representations, Warranties and Covenants, page 141
22. Your disclosure in this section states that the Business Combination
Agreement contains
"customary" representations, warranties, and covenants, and you
describe general topics
of representations, warranties, and covenants. Please tailor your
disclosure to your
particular facts and circumstances by describing the specific,
material representations,
warranties, and covenants included in your Business Combination
Agreement.
Envoy Support Agreements, page 153
23. In an appropriate place in your filing, please identify the Key
Shareholders.
Sponsor Support Agreement, page 153
24. Please disclose, as of a recently practicable date, estimates of the
current amount of shares
the sponsor would forfeit, the Retained Sponsor Shares, the Expense
Excess Shares, and
the Contingent Sponsor shares, or tell us why you believe you are not
required to do so.
Forward Share Purchase Agreement, page 154
25. Please provide your analysis of how purchases under your forward
purchase
agreement will comply, and how the extension support agreements
described at the
bottom of page 11 comply, with Rule 14e-5. To the extent that you are
relying on Tender
Offer Compliance and Disclosure Interpretation 166.01 (March 22,
2022), please provide
an analysis regarding how it applies to your circumstances. Revise
your disclosure as
appropriate for consistency.
26. Your disclosure includes various defined terms throughout your
description of the
Forward Share Purchase Agreement. For clarity, please quantify or
define these terms, as
appropriate, throughout your discussion of the terms of the agreement.
Termination of Legacy Forward Share Purchase Agreements, page 156
27. Please disclose the consequences, if any, to Anzu related to the
termination of the legacy
forward share purchase agreements. Please also clarify whether the
side letter forward
purchase agreements were terminated, and any related consequences to
Anzu.
Background of the Business Combination, page 156
28. Please revise your disclosure in this section to include descriptions
of negotiations relating
to material terms of the business combination and related
transactions, including, but not
limited to, the key terms of the PIPE Transaction; the Sponsor Support
Agreement,
including the Sponsor agreeing to forfeit certain securities; the
proposed Envoy
Conversions and the cancellation of outstanding Envoy options for
nominal
consideration; the determination to enter into the Forward Purchase
Agreement and the
key terms of the agreement, including the Shortfall Warrants; the
determination to enter
into the Envoy Bridge note and the key terms of the note, including
the purpose of the
Dr. Whitney Haring-Smith
Anzu Special Acquisition Corp I
June 13, 2023
Page 7
note and any conflicts of interest considered; the initial valuation
for Envoy of $150.0
million and any related negotiations; the agreements with Key
Shareholders; and the
Exchange Offer. In your revised disclosure, please explain the reasons
for such
agreements and terms, each party's position on such issues, and how
you reached
agreement on the final terms and agreements.
29. We note that you identified over 150 potential targets for your
business combination,
conducted further due diligence on over 80 potential targets, and
entered into non-
disclosure agreements with 34 companies. We also note the factors,
listed on pages 157
and 158, to be used in considering the viability of potential targets.
These factors
notwithstanding, please provide more detail regarding the process of
narrowing your
search, how you differentiated between the many potential targets, and
the duration of this
process. In addition, where you discuss the termination of
negotiations with specific
parties, please provide more detail regarding the reason underlying
why those discussions
did not proceed. For example, where you disclose that negotiations
were terminated "for
reasons similar to those discussed above," discuss the specific
reasons negotiations were
terminated.
30. We note that Randy Nitzsche, a member of the Envoy Board, is the Chief
Executive
Officer of Northland, and Glen Taylor, a member of the Envoy Board,
who is the holder
of approximately 20% of the outstanding Envoy Common Stock and the
holder of all of
the outstanding Envoy Preferred Stock, had an approximately 49%
ownership interest in
Northland s holding company parent until its acquisition by First
National of Nebraska on
May 1, 2023. Please provide more detail regarding these relationships
between the
individuals and the two companies, how Anzu determined that Northland
Securities, Inc.
would serve as its financial advisor, and ensure all conflicts are
disclosed. Please make
conforming changes to your risk factors, as appropriate.
31. You disclose on page 162 that on February 28, 2023, Anzu held the
February Special
Meeting, at which Anzu's stockholders voted to approve the Extension
Amendment and as
a result of the Extension Redemptions, approximately $45.2 million
remained in the Trust
Account. Please disclose, as a percentage, the number of your total
shares outstanding
redeemed in connection with the February Special Meeting.
32. We note your disclosure that, on March 15, 2023, "Dr. Haring-Smith and
other Anzu
representatives discussed the status of business, accounting and
regulatory due diligence,
and Morrison Foerster representatives discussed legal diligence
(including the findings
contained in the due diligence report delivered by representatives of
Morrison Foerster to
Anzu s management on the same day)." Please revise your disclosure to
include a brief
summary of the due diligence report, including the findings Anzu's
management
FirstName considered
LastNameDr. Whitneyin evaluating the business combination.
Haring-Smith
Comapany
33. NameAnzu
Please Special
identify the Acquisition
medical Corp I engaged by Anzu to conduct
diligence in
device consultant
connection
June 13, 2023 Pagewith
7 the Business Combination.
FirstName LastName
Dr. Whitney Haring-Smith
FirstName LastNameDr.
Anzu Special AcquisitionWhitney
Corp I Haring-Smith
Comapany
June NameAnzu Special Acquisition Corp I
13, 2023
June 13,
Page 8 2023 Page 8
FirstName LastName
The Anzu Board's Reasons for the Business Combination, page 164
34. Given Northland Securities, Inc.'s continued involvement leading up
to, and including, the
Company's resolution that the proposed business combination was fair
and in the best
interests of the Company and its stockholders, please explain the
board's reasoning in
deciding not to obtain a fairness opinion regarding the transaction.
In doing so, please
describe the relevant expertise of the board, and identify the
management and financial,
legal, tax and accounting advisors consulted by management. Also,
please amend your
disclosure in the background of the business combination section to
discuss, in detail, the
advisory duties of Northland entitling Northland to receive a success
fee of $1,500,000
upon the completion of the Business Combination.
35. As a related matter, please disclose the financial and operating
information of Envoy
considered by the Anzu board in determining the value of Envoy, the
Exchange Ratio and
Merger Consideration. In this regard, we note your reference to
diligence throughout the
background of the merger, and your disclosure throughout the filing
that Anzu s officers
and directors have substantial experience in evaluating the operating
and financial merits
of companies from a wide range of industries, but it is unclear how
the Anzu board valued
Envoy.
36. Please disclose the basis for your statement that "there is a
realistic possibility of the
Acclaim implant device being reimbursable by insurance and/or
Medicare."
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Anzu
Liquidity and Capital Resources, page 178
37. We note your disclosure that "we reversed $4,462,500 of deferred
underwriting fees, as
certain underwriters resigned from their role in any potential future
business combination
and thereby waived their entitlement to these fees." Please amend your
disclosure to
describe the circumstances surrounding the certain underwriters'
resignation from their
role in any future business combination and identify the "certain
underwriters." With
respect to any underwriter that is still entitled to payments that are
contingent on
completion of a business combination, please identify the underwriter
and quantify the
aggregate fees payable to the underwriter that are contingent upon
completion of the
business combination.
Acclaim's Market Opportunity, page 185
38. You discuss, here and throughout your filing, "published literature,"
"recent publications,"
and "industry sources." Please revise to provide disclosure and or
citations supporting the
underlying data or sources discussed.
39. Please revise your disclosure, here and throughout, to balance your
prominent discussions
of your device's competitive strengths with a discussion of the
challenges you face
Dr. Whitney Haring-Smith
FirstName LastNameDr.
Anzu Special AcquisitionWhitney
Corp I Haring-Smith
Comapany
June NameAnzu Special Acquisition Corp I
13, 2023
June 13,
Page 9 2023 Page 9
FirstName LastName
in corporate growth, distribution capabilities and partnerships,
product development, and
regulatory approvals.
Timeline to Commercialization of Acclaim, page 187
40. Here and throughout your disclosure, when discussing FDA or other
regulatory approvals,
please revise to include a statement acknowledging that FDA or other
regulatory agency,
foreign or domestic, approval is not guaranteed and may take longer
than planned. Where
you mention the Breakthrough Device designation, please revise your
disclosure to clarify
that the process of medical device development is inherently uncertain
and that there is no
guarantee that this designation will accelerate the timeline for
approval or make it more
likely that the Acclaim will be approved.
Early Feasibility Study, page 188
41. We note your statements here and throughout the filing that "[i]nitial
results of the study
have demonstrated that the Acclaim is in fact capable of delivering
the therapy." Please
revise these and all similar statements in your proxy
statement/prospectus to eliminate
conclusions or predictions that your device in development is
effective, as determinations
of safety and efficacy are solely within the authority of the FDA and
comparable
regulatory bodies. We do not object to the presentation of objective
data resulting from
your trials without conclusions related to efficacy.
Intellectual Property, page 189
42. Please revise to identify, for each material patent and provisional
patent application, the
identification number, type of patent protection, jurisdiction in
which the protection is
held, and expiration dates. Please also update your discussion to
include the timeline of
your specific trademarks, whether they are currently in active use,
and whether they must
be in continued use or will be maintained until a third-party
challenge. In this regard, a
tabular format may be useful.
Management's Discussion and Analysis and Results of Operations of Envoy Medical
Corporation
Results of Operations, page 205
43. You disclose that there was a temporary reduction in clinical and R&D
headcount for
Acclaim in the second and third quarters of 2022. Please clarify the
reason for this
reduction and disclose whether you expect this trend to continue in
future periods.
Certain Relationships and Related Person Transactions - Envoy, page 228
44. You disclose that "in connection with the parties entering into the
Business Combination
Agreement, GAT agreed to amend the GAT Convertible Note to provide
that, unless
earlier repaid or converted pursuant to its terms, the outstanding
principal amount of and
all accrued and unpaid interest on the GAT Convertible Note . . .
shall, immediately prior
Dr. Whitney Haring-Smith
FirstName LastNameDr.
Anzu Special AcquisitionWhitney
Corp I Haring-Smith
Comapany
June NameAnzu Special Acquisition Corp I
13, 2023
June 13,
Page 10 2023 Page 10
FirstName LastName
to the consummation of the Merger, automatically convert into . . .
shares of Envoy
Common Stock." Please amend your disclosure throughout the filing,
where you discuss
the interests of the Envoy directors and officers, to include a
reference to the GAT
Convertible Note, including that this note will convert into shares of
Envoy common stock
immediately prior to the business combination. Also, please provide an
estimate of the
number of envoy shares into which the note will convert as of a
recently practicable date.
Where you discuss the "fully diluted" capital stock of New Envoy,
please confirm that the
shares issuable pursuant to the GAT Convertible Note are included in
this calculation.
Anti-dilution Adjustments, page 246
45. We note your disclosure that your warrant agreement has an exclusive
forum provision.
Please revise your risk factors to disclose, as you do in this
section, that your warrant
agreement has an exclusive forum provision, and the related risks.
Material U.S. Federal Income Tax Considerations of the Business Combination to
Holders of
Envoy Common Stock, page 252
46. It appears that you intend to file a short form tax opinion as Exhibit
8.1 to your filing.
Please revise this section to state clearly where the disclosure is
the opinion of named
counsel, and to ensure that the disclosure clearly identifies and
articulates the opinion
being rendered with respect to each material tax consequence being
opined upon. For
guidance, refer to Section III.B.2 of Staff Legal Bulletin 19.
Note 14 - Commitments and Contingencies, page F-51
47. We note you have not recorded accruals for potential losses relating
to pending litigation
claims as you have determined there are no matters where a potential
loss is probable and
reasonably estimable. You further state the legal matters could have a
material impact on
your financial statements. If there is at least a reasonable
possibility that a loss may have
been incurred, please disclose an estimate of the possible loss or a
statement that such an
estimate cannot be made as required by ASC 450-20-50.
General
48. 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.
49. Please revise to include the following disclosure related to dilution:
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
Dr. Whitney Haring-Smith
Anzu Special Acquisition Corp I
June 13, 2023
Page 11
by redeeming shareholders, at each of the redemption levels detailed
in your
sensitivity analysis, including any needed assumptions.
If there are any underwriting fees that remain constant and are
not adjusted based
upon redemptions, please 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.
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 Christie Wong at 202-551-3684 or Terence O'Brien at
202-551-3355 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Benjamin Richie at 202-551-7857 or Katherine Bagley at 202-551-2545
with any other
questions.
Sincerely,
FirstName LastNameDr. Whitney Haring-Smith Division of
Corporation Finance
Office of Industrial
Applications and
Comapany NameAnzu Special Acquisition Corp I
Services
June 13, 2023 Page 11
cc: David Slotkin
FirstName LastName