United States securities and exchange commission logo
August 29, 2023
Charles Boulanger
Chief Executive Officer and Director
LeddarTech Holdings Inc.
4535, boulevard Wilfrid-Hamel, Suite 240
Quebec G1P 2J7, Canada
Re: LeddarTech Holdings
Inc.
Draft Registration
Statement on Form F-4
Submitted July 31,
2023
CIK No. 0001981462
Dear Charles Boulanger:
We have reviewed your draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-4 Submitted July 31, 2023
Cover Page
1. We note your disclosure
on the cover page that Prospector Sponsor LLC is a Cayman
Islands company. This
is inconsistent with your definition of Sponsor as Prospector
Capital Sponsor, LLC, a
Delaware limited liability company. Please revise.
2. We note that the
registration statement refers to the PIPE Financing. Please revise the
cover page to highlight
the terms of the PIPE Financing. Also expand your disclosure on
the cover page and
throughout the filing to highlight material differences in the terms and
price of securities
issued at the time of the IPO as compared to the PIPE Financing.
Charles Boulanger
FirstName
LeddarTechLastNameCharles Boulanger
Holdings Inc.
Comapany
August 29, NameLeddarTech
2023 Holdings Inc.
August
Page 2 29, 2023 Page 2
FirstName LastName
3. We note your disclosure on page 56 that consummation of the PIPE
Financing is a
condition of closing and that any failure of the PIPE Investors to
fund their Tranche B
purchase concurrently with the closing of the Business Combination
will make it more
difficult for Prospector to complete the Business Combination as
contemplated. State on
the cover page that the consummation of a PIPE Investment is a
condition to the Business
Combination and clarify that such financing is necessary for the
parties to meet the
Minimum Proceeds Condition and thus complete the Business Combination.
If true,
include disclosure that any delayed payment from the PIPE Financing
could cause
payment to redeeming shareholders to also be delayed.
4. We note your assumption that there will be no redemptions. Please
revise to provide
balanced disclosure on the cover page by providing the equity stakes
assuming additional
redemption scenarios, up to and including maximum redemptions.
5. We note your disclosure that If a substantial portion of the
Prospector Class A Shares are
redeemed in connection with the Business Combination and we are not
successful in
raising additional capital, we will be unable to comply with the
minimum cash balance
requirement under the Desjardins Credit Facility following the closing
of the Business
Combination. Please highlight this on the cover page. Also clarify
the number of
redemptions that must occur in order for the company to be unable to
comply with the
minimum cash balance requirement.
Risk Factors, page 20
6. Please include a risk factor discussing the risk that your exclusive
forum provision may
result in increased costs for investors to bring a claim in the chosen
forum.
Unaudited Pro Forma Condensed Consolidated Financial Information
Description of the Business Combination, Related Transactions and Adjustments
for Other
Material Events, page 69
7. Please disclose how you determined Amalco's aggregate equity value of
US$200 million.
8. With respect to the PIPE investors' 40% interest, please quantify the
respective number of
shares as follows:
parenthetically, explain how you calculated the 20 million Company
Common Shares
outstanding immediately prior to the Closing, of which 7.9 million
shares are held by
PIPE Investors; and
parenthetically, state that the PIPE Investors will receive
1,000,000 of the 5,000,000
Surviving Company Earnout Non-Voting Special Shares issued prior
to Closing.
Basis of Pro Forma Presentation, page 75
9. Refer to the table hereunder reflecting the pro forma ownership of
Surviving Company
Common Shares following the Business Combination. Please expand
footnotes (1), (3)
and (4) to make clear how the underlying outstanding shares in the
historical financial
Charles Boulanger
LeddarTech Holdings Inc.
August 29, 2023
Page 3
statements as of March 31, 2023 were subsequently adjusted based on
their respective
conversion and/or exchange transactions arising from The A&R
Prospector Governing
Documents Proposal on the prospectus, resulting the above-reported
shares.
10. Tell us how you considered providing a separate pro forma column so
that it is transparent
how the share issuances, conversion and exchange transactions
contemplated in the A&R
Prospector Governing Documents Proposal have been given effect in your
pro forma
presentation. Refer to Article 11-02(b)(4)(ii) of Regulation S-X.
Unaudited Pro Forma Condensed Consolidated Statement of Loss for the year ended
September
30, 2022, page 79
11. Please include pro forma transaction accounting adjustments for the
expenses charged
against Deficit in the pro forma statement of position. In this
regard, it appears you
should include adjustments for the expenses in adjustments 4(c), 4(i),
4(k), 4(p), 4(q) and
4(r). Refer to Article 11-02(a)(6)(i)(B). Disclose within each
supporting footnote that the
adjustment is for a non-recurring expense, as applicable.
12. Please disclose what the $31,815,708 adjustment under note 4(k)
represents and advise us.
13. Please remove adjustments 5(d), 5(e), 5(g) and 5(i) which eliminate
the subject non-
recurring expenses included in the historical financial statements. In
lieu of these
adjustments, please explain the nature of these expenses and the
amounts that are non-
recurring. Refer to Article 11-02(a)(11)(i).
14. Refer to footnote 5(g). It appears you should give pro forma effect to
the charge that will
be incurred upon the automatic acceleration of vesting of all ESOP and
MSOP options.
Unaudited Pro Forma Condensed Consolidated Statement of Loss for the Six Months
Ended
March 31, 2023, page 80
15. Please remove adjustments 6(g), 6(i), 6(k) and 6(j) which eliminate
the subject non-
recurring expenses reflected in the historical financial statements.
In lieu of these
adjustments, please disclose in the notes the nature of these expenses
and the related
amounts that are non-recurring.
4. Adjustments to the Pro Forma Condensed Consolidated Statement of Financial
Position, page
93
16. Refer to note 4(l). Addressing the respective conversion rates, please
make clear how
LeddarTech's 5,976,388 Class A, B, C, D-1 and D-2 preferred shares were
converted
into 99,387,510 common shares prior to the Business Combination. To the
extent that the
FirstName LastNameCharles Boulanger
conversion reflects favorable changes to the original conversion terms
or the payment of
Comapany NameLeddarTech
additional Holdings
consideration, Inc.
please disclose how it was given pro forma
effect in the Pro
Forma Condensed
August 29, 2023 Page 3 Consolidated Statement of loss.
FirstName LastName
Charles Boulanger
FirstName
LeddarTechLastNameCharles Boulanger
Holdings Inc.
Comapany
August 29, NameLeddarTech
2023 Holdings Inc.
August
Page 4 29, 2023 Page 4
FirstName LastName
The Business Combination, page 105
17. We note the Prospector Board has recommended shareholders vote "FOR"
the transaction.
We further note that Messrs. Aberle and Stone serve on the board of
directors of
LeddarTech, and that all of your officers and directors except Ron
Lumbra have direct or
indirect investments in LeddarTech. Please clarify how Prospector's
board considered the
conflicts of interest presented by the affiliation between Prospector
and LeddarTech and
the overlapping nature of directors and officers of Prospector and
LeddarTech in
negotiating and recommending the Business Combination.
Prospector's Board of Directors Reasons for the Approval of the Business
Combination, page
112
18. Revise to discuss all of the factors that Prospector's Board of
Directors considered in
deciding to approve the Business Combination, including any negative
material factors.
Information about LeddarTech, page 205
19. Provide an overview of your business plan for the next 12 months,
including how and
when the company intends to generate revenue from its fusion and
perception software
business. As part of your disclosure, include a discussion of any key
operating metrics the
company uses or intends to use in evaluating the business.
20. We note your disclosure that you have discontinued LeddarTech s
modules and
components business, and that you have not generated material revenue
from your
continuing ADAS business. We further note your risk factor on page 21
indicating that
you may not generate meaningful revenue from your ADAS business moving
forward.
Please revise this section, and elsewhere as appropriate, to more
clearly differentiate the
aspects of your business that have been discontinued with those of
your business plan
moving forward. As part of your disclosure, be sure to clearly discuss
the fact that the
company has not yet generated material revenue from its planned
business operations.
LeddarTech's Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Transition to a Pure-Play Automotive Software Business Model, page 222
21. Please disclose the remaining carrying amounts of the Modules and
Components
businesses as of March 31, 2023 that will be subject to impairment.
For additional context,
please summarize the total impairment costs as of the year ended
September 30, 2022 and
the interim period ended March 31, 2023.
22. So that it is transparent to investors, please disclose the total
revenues that you have
recognized under your Pure-Play Automotive Software Business
Model for all periods
presented.
Charles Boulanger
FirstName
LeddarTechLastNameCharles Boulanger
Holdings Inc.
Comapany
August 29, NameLeddarTech
2023 Holdings Inc.
August
Page 5 29, 2023 Page 5
FirstName LastName
Results of Operations - Comparison of Six-Month Periods Ended March 31, 2023
and 2022,
page 226
23. Please make clear what portion of the reported revenues consist of
recurring engineering
revenues, software sales based on unit sales, licensing fees and
maintenance fees related to
the pure play automotive software and those from the
discontinued components and
modules businesses. Further identify any significant elements of your
loss from
continuing operations which do not arise from or are not necessarily
representative of the
LedderTech's ongoing business. In this regard, we note that most of
your revenues consist
of product sales. Refer to Instruction 2 to Item 303(c) of Regulation
S-K.
Liquidity and Capital Management, page 233
24. You disclose that in order for the Company s anticipated
financial resources to be
sufficient to meet its capital requirements for the 12 months
following the date hereof, if
the Surviving Company does not raise additional capital in connection
with the Business
Combination, even if there are no redemptions of Prospector Class A
Shares, the
Company or the Surviving Company, as applicable, will need to reduce
its operating costs
to ensure sufficient liquidity for its operations and to comply with
the requirements of its
debt obligations. Revise to discuss the company s plans, if any,
to meet the minimum
cash balance requirement.
Certain Prospector Relationships and Related Party Transactions, page 274
25. We note that Messrs. Aberle and Stone serve on the board of directors
of LeddarTech, and
that all of your officers and directors except Ron Lumbra have direct
or indirect
investments in LeddarTech. Please revise this section to provide a
detailed discussion of
any and all the transactions entered into with LeddarTech by each of
your officers and
directors, either directly or indirectly and quantify their respective
ownership interests in
LeddarTech. For each transaction, be sure to specifically identify the
officer or director
involved and their relationship with LeddarTech. Refer to Item 404 of
Regulation S-K.
Security Ownership of Certain Beneficial Owners and Management, page 302
26. Please revise to disclose the names, including identifying the natural
person(s) that hold
voting and/or dispositive power of the relevant shares, of all
entities that are beneficial
owners.
Consolidated statements of financial position, page F-3
27. In light of the retrospective restatement, tell us how you considered
presenting a third
statement of financial position. Refer to IAS 1.40A-40B.
28. Please provide a separate note on non-controlling interest that
describes your basis for
measurement.
Charles Boulanger
LeddarTech Holdings Inc.
August 29, 2023
Page 6
Notes to the consolidated financial statements
1. Nature of operations and going concern uncertainty, page F-8
29. Regarding your strategic decision to divest your modules and
components businesses
during FY22 per your disclosure on page 222, tell us how you
considered presenting the
related non-current assets as either held for sale or discontinued
operations. Refer to
paragraphs 6 and 13 of IFRS 5.
2. Summary of significant accounting policies
Intangible Assets, page F-16
30. We understand from your disclosures elsewhere in the filing that
certain of the
development costs are associated with the Components and Modules
businesses that will
be divested. Please separately disclose the expected remaining useful
lives of
such development costs to the extent that they remained in use as of
the period ended.
Defined contribution pension plans, page F-19
31. We note that portions of your contributions to the Canadian and
Israeli subsidiary defined
contribution plans were capitalized as intangible assets. Please
disclose the amounts
capitalized, the particular category of intangible assets in which
these amounts were
included, and your basis for capitalization pursuant to the applicable
accounting guidance.
10. Intangible Assets, page F-26
32. Please tell us how you considered disaggregation of development costs
into smaller
classes in order that your investors may better understand the nature
of such costs that
were impaired and those that are recoverable. Refer to paragraphs 59,
66-67, and 119 of
IAS 38.
16. Other component of equity, page F-39
33. Citing the terms and conditions under which the NCI holder s right
under the put option is
exercisable, please explain why the put option may be deemed a
component of equity and
"will not be marked to market at each reporting date thereafter."
Refer to the pertinent
guidance under IAS 32.
Notes to the unaudited interim condensed consolidated financial statements -
Three and six
months ended March 31, 2023
2. Summary of significant accounting policies, page F-65
34. Please disclose your revenue recognition policy as it relates to the
"Pure-Play Automotive
FirstName LastNameCharles Boulanger
Software Business Model" described on page 222. Addressing your Tier 1
design and
Comapany NameLeddarTech
integration win, please Holdings Inc. significant judgments with
respect to the application
disclose your
Augustof29,paragraphs
2023 Page123-126
6 of IFRS 15.
FirstName LastName
Charles Boulanger
FirstName
LeddarTechLastNameCharles Boulanger
Holdings Inc.
Comapany
August 29, NameLeddarTech
2023 Holdings Inc.
August
Page 7 29, 2023 Page 7
FirstName LastName
General
35. In your letter to shareholders, you disclose that if redemptions by
Prospector s public
shareholders cause the parties to be unable to meet the Minimum
Proceeds Condition,
then the Company will not be required to consummate the Business
Combination. Please
clarify the amount of redemptions that may occur that would cause the
parties to be unable
to meet the Minimum Proceeds Condition. In this regard, we note your
disclosure on page
51 that it is not expected that any amount of redemptions by
Prospector s public
shareholders will result in the parties to being unable to meet the
Minimum Cash Proceeds
Condition.
36. 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.
You may contact Kathryn Jacobson, Senior Staff Accountant, at (202)
551-3365 or
Robert Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Alexandra Barone,
Staff Attorney, at (202) 551-8816 or Matthew Derby, Legal Branch Chief, at
(202) 551-3334
with any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Christopher G. Barrett