United States securities and exchange commission logo
October 17, 2023
Morgan Callagy
Co-Chief Executive Officer
Revelstone Capital Acquisition Corp.
14350 Myford Road
Irvine, CA 92692
Re: Revelstone Capital
Acquisition Corp.
Amendment No. 1 to
Registration Statement on Form S-4
Filed September 27,
2023
File No. 333-274049
Dear Morgan Callagy:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies 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 this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our September 13,
2023 letter.
Amendment No. 1 to Form S-4 filed on September 27, 2023
Merger Consideration; Earnout Consideration, page 22
1. We note your response
to prior comment 8, and your revised disclosure that the Closing
Adjustment will only be
used to issue more or less shares of Revelstone Common Stock,
as the case may be,
calculated using the Reference Price, if the Closing Debt is less or
more than $14,970,000,
respectively. Please revise to clarify whether the issuance of any
such shares would be in
addition to the 5,703,000 shares of Class A common stock
referenced in this
section. If so, please revise to quantify such additional shares and tell us
whether you intend to
register the issuance of such shares under the Securities Act.
Morgan Callagy
FirstName
RevelstoneLastNameMorgan Callagy
Capital Acquisition Corp.
Comapany
October 17,NameRevelstone
2023 Capital Acquisition Corp.
October
Page 2 17, 2023 Page 2
FirstName LastName
Treatment of Convertible Notes, page 23
2. We note your response to prior comment 9. Please disclose the number
of shares of
common stock that may be issuable under the SJ Fund Convertible Note,
and how such
amount is determined.
Risks Related to Revelstone, page 62
3. We note your response to prior comment 17. Please revise your
disclosure to discuss
whether your waiver of the corporate opportunities doctrine in your
existing charter
impacted your search for an acquisition target. In addition, we note
your disclosure that
the proposed Amended Charter waives any interest or expectancy of the
Combined
Company in, or in being offered an opportunity to participate in, any
Excluded
Opportunity. However, this does not appear to be consistent with the
proposed amended
charter set forth in Annex B, or your disclosures regarding the
proposal to eliminate the
current limitations in place on the corporate opportunity doctrine.
Please revise.
We may be deemed a "foreign person" under the regulations relating to CFIUS,
page 66
4. We note your response to prior comment 19, and your disclosure that
you do not believe
that any of your current officers or your Sponsor constitutes a
foreign person under
CFIUS rules and regulations. With a view toward disclosure, please
also tell us whether
anyone or any other entity associated with or otherwise involved in
the transaction, such
as Set Jet, Inc., is, is controlled by, or has substantial ties with a
non-U.S. person.
Background of the Business Combination, page 90
5. We note your response to prior comment 22 and your disclosure on page
91 that in June of
2022, Bank of America advised Revelstone that they were withdrawing as
advisor and
that they waive any future entitlement to $4,042,500 as deferred
underwriters fee. Please
tell us whether Bank of America was involved in the preparation of any
disclosure that is
included in the registration statement, or material underlying
disclosure in the registration
statement. In addition, please disclose whether Bank of America
assisted in the
preparation or review of any materials reviewed by Revelstone s
board of directors or
management and whether Bank of America has withdrawn its association
with those
materials and notified Revelstone of such disassociation. For context,
include that there
are similar circumstances in which a financial institution is named
and that Bank of
America s resignation indicates it is not willing to have the
liability associated with such
work in this transaction.
6. Please provide us with any correspondence between Bank of America and
Revelstone
relating to the firm s resignation. In addition, please provide us
with the engagement
letter between Revelstone and Bank of America. Please disclose any
ongoing obligations
of Revelstone pursuant to the engagement letter that will survive the
termination of the
engagement, such as indemnification provisions, rights of first
refusal, and lockups, and
Morgan Callagy
FirstName
RevelstoneLastNameMorgan Callagy
Capital Acquisition Corp.
Comapany
October 17,NameRevelstone
2023 Capital Acquisition Corp.
October
Page 3 17, 2023 Page 3
FirstName LastName
discuss the impacts of those obligations on Revelstone in the
registration statement.
7. Please provide us with a letter from Bank of America stating whether
it agrees with the
statements made in your prospectus related to their withdrawal and, if
not, stating the
respects in which they do not agree. Please revise your disclosure
accordingly to reflect
that you have discussed the disclosure with Bank of America and it
either agrees or does
not agree with the conclusions and the risks associated with such
outcome. If Bank of
America does not respond, please revise your disclosure to indicate
you have asked and
not received a response and disclose the risks to investors.
Additionally, please indicate
that Bank of America refused to discuss the reasons for its withdrawal
and forfeiture of
fees, if applicable, with management. Clarify whether Bank of America
performed
substantially all the work to earn its fees.
8. Please discuss the potential impact on the transaction related to the
resignation of Bank of
America.
Certain Material U.S. Federal Income Tax Consequences of the Business
Combination to U.S.
Holders of Set Jet Common Stock, page 131
9. We note your response to prior comment 19, and your disclosure that
Snell & Wilmer
L.L.P. has delivered an opinion that the Business Combination
should qualify as a
reorganization within the meaning of Section 368(a) of the Code.
If the opinion is
subject to uncertainty, please obtain and file a revised tax opinion
that explains the facts or
circumstances giving rise to the uncertainty, and provide disclosure
of the possible
alternative tax consequences including risk factor and other
appropriate disclosure setting
forth the risks of uncertain tax treatment to investors. For guidance,
refer to Staff Legal
Bulletin No. 19, Legality and Tax Opinions in Registered Offerings.
Non-GAAP Financial Measure - Adjusted EBITDA Loss, page 181
10. We have read your response to prior comment 37. Refer to your
disclosure on page 181
that states, Pre-operating costs are associated with pandemic
delays in FAA certifications
of aircraft and vendor delays in refurbishing and releasing aircraft
for member charters.
For each period presented, quantify for us the pre-operating costs, as
follows:
Costs related specifically to pandemic related delays in FAA
certifications of aircraft,
and
Costs related to vendor delays in refurbishing and releasing
aircraft for member
charters.
Please explain to us the nature of your vendor relationships, what
specific services are
provided under these vendor arrangements, and why these costs continue
to represent a
significant portion of your post pandemic operating costs. For
example, we note that pre-
operating costs represented approximately 6% of total operating
expenses for the six
months ended June 30, 2023.
Morgan Callagy
Revelstone Capital Acquisition Corp.
October 17, 2023
Page 4
On page 175 you state, Pre-operating costs include all expenses
pertaining to chartered
aircraft before they have been certified to charter members or are
generating revenue
through operations. These costs include pre-revenue maintenance,
conformity costs to
meet regulatory requirements and other costs incurred related to new
routes and charter
services. It appears the pre-operating costs are necessary for the
aircraft to enter service,
recognize charter flight revenue from charters that you arrange for your
members, and are
integral to your expansion plans to enter various new markets. Absent
further substantial
analysis, it appears the pre-operating costs that are unrelated to the
pandemic are vital to
your operations and growth strategy, and represent normal, recurring,
cash operating
expenses necessary to operate your business.
Comparison of Stockholder Rights, page 215
11. We note your response to prior comment 39. It does not appear that the
descriptions of
your exclusive forum provision on pages 213 and 222 are consistent with
the exclusive
forum provision set forth in Article IX of your proposed amended charter.
Please revise.
Exhibits
12. We note your response to prior comment 41. Please file your lease
agreement for your
terminal and office space in Scottsdale, Arizona, or tell us why such
agreement is not
required to be filed. Refer to Item 601(b)(10) of Regulation S-K. In
addition, please file
each agreement required to be filed under Item 601(b)(10)(ii)(A) with
respect to contracts
to which directors, officers or security holders named in the
registration statement are
parties.
Please contact Robert Babula at 202-551-3339 or Jenifer Gallagher at
202-551-3706 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Michael Purcell at 202-551-5351 or Laura Nicholson at 202-551-3584 with
any other
questions.
Sincerely,
FirstName LastNameMorgan Callagy
Division of
Corporation Finance
Comapany NameRevelstone Capital Acquisition Corp.
Office of Energy &
Transportation
October 17, 2023 Page 4
cc: Alex Weniger-Araujo
FirstName LastName