United States securities and exchange commission logo
June 14, 2023
Scott Honour
Chairman of the Board
Perception Capital Corp. II
315 Lake Street East, Suite 301
Wayzata, MN 55391
Re: Perception Capital
Corp. II
Amendment No 2. to
Preliminary Proxy Statement on Schedule 14A
Filed May 26, 2023
File No. 001-40976
Dear Scott Honour:
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 and any amendment you may file in
response to these
comments, we may have additional comments.
Amendment No. 2 to the Preliminary Proxy Filed May 26, 2023
Certain Unaudited Projected Financial Information, page 2
1. We note your response
to comment 12. To help investors better understand the material
assumptions used to
determine the projected financial information presented, please
provide additional
insight as to when you expect to start achieving each of the three
revenue streams.
Unaudited Pro Forma Condensed Combined Financial Information, page 72
2. We note your response
to comment 2. In a similar manner to your response, please
expand your disclosures
to explain the terms of the Bridge Loan specifically as it relates to
mandatory prepayments.
Scott Honour
FirstName
Perception LastNameScott
Capital Corp. II Honour
Comapany
June NamePerception Capital Corp. II
14, 2023
June 14,
Page 2 2023 Page 2
FirstName LastName
3. We note in your disclosures on page F-68 that the Arosa loan agreement
also resulted in
Arosa transferring founder units to Spectaire which were then
distributed to shareholders.
Please disclose how these units and the distributions were accounted
for and also what
consideration was given to reflecting this part of the transaction in
the pro forma financial
information.
Background to the Business Combination, page 184
4. We note your revisions in response to our prior comment 8. We note
that PCCT
management took into account the fundamentals of the industrial
technology sector and
execution risks inherent within scaling [Spectaire s]
technologies. Please revise to
briefly summarize the fundamentals and inherent risks that PCCT
management took into
account, including PCCT s position on those matters.
5. We note that the initial LOI submitted by PCCT on November 30, 2022
already contained
the $125 million pre-money valuation and the 7.5 million earnout
shares and that the
amount and structure of the earn-out was determined through through
the process of
negotiation described on page 189. Please disclose the dates that
these discussions and
negotiations took place, including when Spectaire sought the $300
million valuation and
when PCCT proposed the earnout provisions.
6. We note your revisions and response to our prior comment 11. Please
revise your
disclosure related to the January 10, 2023 Board Meeting to disclose
the "material findings from prior informational business due diligence
discussions with
Spectaire management" that were presented to the PCCT Board. We refer
to your
disclosure that the "Results of Due Diligence Conducted by PCCT" were
a supporting
factor that the Board considered in its decision to enter the business
combination.
U.S. Federal Income Tax Considerations, page 227
7. We note your response to comment 14. Please provide disclosure as to
the tax
consequences of the merger in this section and file a tax opinion as
an exhibit to the
registration statement as we view the tax consequences to be material
to the transaction
and your disclosure contains representations as to the tax-free nature
of the transaction. In
this regard, we note that if the tax consequences are material to the
transaction as a whole,
which we believe to be the case with respect to the merger, then
disclosure and an
appropriate tax opinion are required with respect to the transaction
as a whole. If there is
uncertainty regarding the tax treatment of the merger, counsel may
issue a "should" or
"more likely than not" opinion to make clear that the opinion is
subject to a degree of
uncertainty, and explain why it cannot give a firm opinion.
Scott Honour
FirstName
Perception LastNameScott
Capital Corp. II Honour
Comapany
June NamePerception Capital Corp. II
14, 2023
June 14,
Page 3 2023 Page 3
FirstName LastName
Note 1. Organization and Business Operations, page F-56
8. We note your response to comment 15. Please help us better understand
how you
determined that MicroMS should be considered the accounting acquirer
pursuant to ASC
805. Specifically please address the following:
You determined that Spectaire was a Newco that lacked substance
from inception in
September 2022 to December 13, 2022 and had limited
pre-combination activities.
Please tell us what specific activities this entity was engaged in
during this period,
including whether the entity was focused on raising capital,
identifying and
promoting acquisition targets, and negotiating any other types of
transactions.
You disclose that the board composition and management is mixed
between former
MicroMS and Spectaire executives. Please tell us the specific
composition of both
the board and management, including how many members of the board
are
representatives of MicroMS as well as representatives of
Spectaire.
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 Nudrat Salik at 202-551-3692 or Al Pavot at 202-551-3738
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Jordan Nimitz at 202-551-5381 or Jane Park at 202-551-7439 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Industrial Applications and
Services
cc: Michael Mies, Esq.