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United States securities and exchange commission logo
January 12, 2023
Kiattipong Arttachariya
Chief Financial Officer
Zapp Electric Vehicles Group Ltd
87/1 Wireless Road
26/F Capital Tower
All Seasons Place
Lumpini, Patumwan
Bangkok 10330 Thailand
Re: Zapp Electric
Vehicles Group Ltd
Registration
Statement on Form F-4
Filed on December
16, 2022
File No. 333-268857
Dear Kiattipong Arttachariya:
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.
Form F-4 filed December 16, 2022
Market and Industry Data, page 1
1. We note that the
prospectus includes "research and studies conducted by third
parties." Please
clarify whether you commissioned any of the third-party data presented in
your registration
statement. To the extent that you commissioned any such data, please
provide the consent of
the third party in accordance with Rule 436.
Kiattipong Arttachariya
FirstName LastNameKiattipong
Zapp Electric Vehicles Group LtdArttachariya
Comapany
January 12,NameZapp
2023 Electric Vehicles Group Ltd
January
Page 2 12, 2023 Page 2
FirstName LastName
Q. What equity stake will current CIIG II stockholders and Zapp Shareholders
have in Pubco
after the Closing?, page 7
2. Revise your disclosure here and in your Unaudited Pro Forma Condensed
Combined
Financial Information section 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.
Impact of the Business Combination on Pubco's Public Float, page 25
3. You disclose on pages 7 and 25 that CIIG II s existing stockholders
including the Sponsor
will own approximately 45.6% of the issued and outstanding Pubco
Ordinary Shares upon
completion of the Business Combination. You also disclose on page 80
that these
stockholders will own approximately 41.3% of the issued and
outstanding Pubco Ordinary
Shares upon completion of the Business Combination. Please revise to
reconcile the
discrepancies.
Selected Historical Financial Data of CIIG II, page 30
4. Your Basic and Diluted Net Income (Loss) per Share amounts for the
nine months ended
September 30, 2022 disclosed in the Income Statement Data table do not
appear consistent
with the amounts disclosed on page F-23. Please revise.
Risk Factors, page 36
5. Please revise to describe the risks related to the director nomination
agreement.
6. Revise to include a risk factor regarding the exclusive forum
provision in your governing
documents.
If the net proceeds of this offering , page 75
7. Explain why this risk factor applies to the transaction you are
attempting to register.
Beginning in January 2022, page 77
8. Please revise to clarify the meaning of the disclosure in this risk
factor and its applicability
to Zapp.
Unaudited Pro Forma Condensed Combined Financial Information, page 85
9. Refer to footnote (2) to the table on page 86. Please revise to also
discuss the exclusion of
earnout shares. In this regard, we note from your disclosure on page
86 that 8,518,290
Pubco Ordinary Shares may be issued to certain Zapp s shareholders
upon the satisfaction
of certain earnout conditions.
10. We note from your disclosure on page 86 that consideration paid to
Zapp s shareholders
Kiattipong Arttachariya
FirstName LastNameKiattipong
Zapp Electric Vehicles Group LtdArttachariya
Comapany
January 12,NameZapp
2023 Electric Vehicles Group Ltd
January
Page 3 12, 2023 Page 3
FirstName LastName
upon the closing of the Business Combination includes a number of
Pubco Ordinary
Shares equal to the amount of any convertible financing received by
Zapp in excess of
$20,000,000 in the aggregate and actually converted to ordinary common
shares of Zapp
in advance of the closing divided by the effective conversion price.
Please revise footnote
(3) to the table on page 86 to clarify whether those shares are
included in the amounts
disclosed in the table.
Unaudited Pro Forma Condensed Combined Statement of Financial Position, page 89
11. Please disclose the pro forma common stock issued and outstanding on
the face of the pro
forma balance sheet.
12. Please revise your pro forma adjustment 4(E) to include the
$20,000,000 transaction costs
as a cash adjustment rather than reflecting those costs and an
adjustment to accrued
expenses. In this regard, we believe this will result in a more
appropriate depiction of your
pro forma cash balance.
Note 4 - Adjustments to Unaudited Pro Forma Condensed Combined Statement of
Financial
Position, page 94
13. Refer to Adjustment 4(K). We note the earnout shares are expected to
be recognized at
fair value of $72.6 million upon the closing of the Business
Combination and classified as
equity. Please disclose and more fully explain how you determined the
fair value of the
earnout shares, including the material assumptions, and provide a
sensitivity analysis that
discloses the potential impact changes in the post-merger stock price
would have on the
pro forma balance sheet and pro forma statement of net loss
Note 5 - Adjustments to Unaudited Pro Forma Condensed Combined Statement of
Profit or Loss,
page 95
14. Refer to adjustment 5(G). Please revise to disclose the number of
potentially dilutive
securities that have been excluded from pro forma loss per share
calculations because they
are anti-dilutive.
Comparative per Share Data, page 96
15. It appears that the shares subject to possible redemption are excluded
from the numerator
(i.e., total equity) but are included in the denominator (i.e., total
shares outstanding) in
your calculation of book value per share for CIIG II as of September
30, 2022. Please tell
us why you believe your calculation is appropriate.
The Background of the Business Combination, page 102
16. Please revise your disclosure in this section to include negotiations
relating to material
terms of the transaction, including, but not limited to, valuation,
structure, consideration,
proposals and counter-proposals, and the minimum cash amount. In your
revised
Kiattipong Arttachariya
FirstName LastNameKiattipong
Zapp Electric Vehicles Group LtdArttachariya
Comapany
January 12,NameZapp
2023 Electric Vehicles Group Ltd
January
Page 4 12, 2023 Page 4
FirstName LastName
disclosure, please explain the reasons for the terms, such as the
initial terms proposed in
the LOI, each party's position on the issues, and how you reached
agreement on the final
terms.
17. Revise to explain in more detail the discussion of the company's
financials that occurred
on September 27, 2022.
CIIG II's Board of Directors' Reasons for the Approval of the Business
Combination, page 107
18. Please expand to discuss in greater detail the matters specified in
the last three bullet
points on page 108 and how those matters relate to and support the
board's decision
regarding the transaction and its valuation of Zapp, including the
valuations referenced on
page 34 of your investor presentation in the Form 8-K dated November
22, 2022.
Likewise, if the board reviewed projected or prospective financial
information of Zapp in
connection with the Business Combination, revise to include such
information in the
proxy statement/prospectus and explain how it relates to the board's
conclusions and
reasons for the transaction.
19. Revise to clarify the reference to "financial advisors" and how the
consultations you
mention support the board's conclusions.
Materia U.S. Federal Income Tax Considerations, page 127
20. Reconcile your disclosure on page 13 regarding an inability to opine
with Exhibit 8.1 in
your exhibit index. In this regard, it appears that the tax
consequences described in this
section are material and/or unusual or complex and, therefore, a tax
opinion is required.
Please refer to Staff Legal Bulletin No. 19 for guidance on the form
and content of tax
opinions.
Zapp's Manufacturing Approach, page 149
21. We note your disclosure that "Summit will be responsible for the
procurement of [y]our
parts." We also note your disclosure that you "source [y]our bodywork
from composites
with green-to-make materials..." Please expand your disclosure to
discuss what oversight
you have, if any, over the supply chains through which Summit will
procure your
components in its manufacturing process.
Charging Solution, page 150
22. Please disclose who manufactures your charging solutions and the
nature of your
arrangement with them, if applicable.
Establishing contract manufacturing capacity, page 162
23. Refer to the disclosure here, page 149 and elsewhere regarding the
increase in production
to 300,000. Clarify whether Summit has the current capacity to produce
that number of
units of your product or whether it needs to expand its capacity. If
it needs to expand
Kiattipong Arttachariya
FirstName LastNameKiattipong
Zapp Electric Vehicles Group LtdArttachariya
Comapany
January 12,NameZapp
2023 Electric Vehicles Group Ltd
January
Page 5 12, 2023 Page 5
FirstName LastName
capacity, clarify who will fund that expansion.
Liquidity and Capital Resources, page 166
24. Please quantify and more fully disclose and discuss your short and
long term liquidity
requirements and priorities, including potential changes in your
priorities based on the
impact of changes in the amount of cash available to the post-merger
company due to the
amount of cash redemptions by shareholders, and your planned delivery
of i300 in 2023.
Officer and Director Compensation, page 185
25. Please ensure your disclosure with regard to Officer and Director
Compensation is
updated for 2022.
Where you can find more information, page 235
26. Please tell us the authority on which you relied to include the second
paragraph of this
section.
Exhibits
27. Please file your manufacturing agreement with Summit as an exhibit to
your registration
statement. Refer to Item 601(b)(10) of Regulation S-K.
General
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. 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, also 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. 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. Please quantify the aggregate dollar amount and describe the nature of
what the sponsor,
its affiliates, and the anchor investors have at risk that depends on
completion of a
business combination. Include the current value of securities held,
loans extended, fees
due, and out-of-pocket expenses for which the sponsor and its
affiliates are awaiting
reimbursement. Provide similar disclosure for the company s officers
and directors, if
material.
Kiattipong Arttachariya
FirstName LastNameKiattipong
Zapp Electric Vehicles Group LtdArttachariya
Comapany
January 12,NameZapp
2023 Electric Vehicles Group Ltd
January
Page 6 12, 2023 Page 6
FirstName LastName
30. Please highlight the risk that the sponsor will benefit from the
completion of a business
combination and may be incentivized to complete an acquisition of a
less favorable target
company or on terms less favorable to shareholders rather than
liquidate.
31. Please clarify if the sponsor and its affiliates can earn a positive
rate of return on their
investment, even if other SPAC shareholders experience a negative rate
of return in the
post-business combination company.
32. 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.
33. Please disclose the sponsor, its affiliates', and the anchor
investors' total potential
ownership interest in the combined company, assuming exercise and
conversion of all
securities.
34. We note that certain shareholders agreed to waive their redemption
rights. Please describe
any consideration provided in exchange for this agreement. Please also
disclosure whether
the anchor investors have agreed to waive their redemption rights.
35. We note your disclosure that the anchor investors have entered into
separate agreements
with your sponsor pursuant to which the anchor investors will purchase
founders shares
and private warrants upon the closing of the business combination.
Please revise to
explain the purpose of this agreement and to provide more prominent
disclosure, wherever
applicable, related to these agreements, and expand your disclosure to
describe the
material terms of the agreements, including the selling price of
securities and obligations
of the parties. Please also file these agreements as exhibits to your
registration statement.
36. Please tell us whether you have entered into any agreements to ensure
that the business
combination is closed and that the minimum net tangible assets
condition is met.
37. We note that Barclays Capital Inc. is ending its role with respect to
the business
combination. Please revise to describe Barclays' role and explain how
its resignation may
impact the transaction. Please provide us with any correspondence
between Barclays and
CIIG Capital Partners II, Inc. relating to Barclays resignation.
Note that this comment is
not limited to paper correspondence.
38. Please tell us whether Barclays was involved in the preparation of any
disclosure that is
included in the registration statement, or material underlying
disclosure in the registration
statement, including but not limited to the disclosure regarding the
summary of the
financial analyses prepared by Zapp's management and reviewed by the
board of directors
of CIIG Capital Partners II or the projected financial information of
Zapp. If Barclays was
involved in preparing this disclosure, please also include a risk
factor describing their role
in connection with the preparation of the registration statement and
the valuation of Zapp
Kiattipong Arttachariya
FirstName LastNameKiattipong
Zapp Electric Vehicles Group LtdArttachariya
Comapany
January 12,NameZapp
2023 Electric Vehicles Group Ltd
January
Page 7 12, 2023 Page 7
FirstName LastName
and that they disclaim any liability in connection with such
disclosure included in the
registration statement. If applicable, please also disclose the
rationale for continuing to
rely on information disclaimed by the professional organization
associated with or
responsible for such information.
39. Please disclose whether Barclays assisted in the preparation or review
of any materials
reviewed by CIIG Capital Partners II's board of directors or
management as part of their
services to Zapp and whether Barclays has withdrawn its association
with those materials
and notified CIIG Capital Partners II of such disassociation. For
context, include that there
are similar circumstances in which a financial institution is named
and that
Barclays' resignation indicates it is not willing to have the
liability associated with such
work in this transaction.
40. Please provide us with the engagement letter between Barclays and CIIG
and/or Zapp.
Please disclose any ongoing obligations of the Company pursuant to the
engagement letter
that will survive the termination of the engagement, such as
indemnification provisions,
rights of first refusal, and lockups, and discuss the impacts of those
obligations on the
Company in the registration statement.
41. Please provide us with a letter from Barclays stating whether it
agrees with the statements
made in your prospectus related to their resignation 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 Barclays and it either agrees or does
not agree with the
conclusions and the risks associated with such outcome. If Barclays
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
Barclays withdrew from
its role and forfeited its fees, if applicable, and that the firm
refused to discuss the reasons
for its resignation and forfeiture of fees, if applicable, with
management. Clarify whether
Barclays performed substantially all the work to earn its fees.
42. Please revise your disclosure to highlight for investors that
Barclays' withdrawal indicates
that it does not want to be associated with the disclosure or
underlying business analysis
related to the transaction. In addition, revise your disclosure to
caution investors that they
should not place any reliance on the fact that Barclays has been
previously involved with
the transaction.
43. Please discuss the potential impact on the transaction related to the
resignation of
Barclays. We note that Barclays was an underwriter for the IPO of the
SPAC. If Barclays
would have played a role in the closing, please revise to identify the
party who will be
filling Barclays role.
44. Please disclose any fees paid or due to Barclays in connection with
its role. If any of these
fees will be forfeited by their resignation, please revise to disclose
this information.
45. We understand that Barclays, the lead underwriter in your SPAC IPO,
intends to waive
the deferred underwriting commissions that would otherwise be due to
it upon the closing
Kiattipong Arttachariya
FirstName LastNameKiattipong
Zapp Electric Vehicles Group LtdArttachariya
Comapany
January 12,NameZapp
2023 Electric Vehicles Group Ltd
January
Page 8 12, 2023 Page 8
FirstName LastName
of the business combination. Please disclose how this waiver was
obtained, why the
waiver was agreed to, and clarify the SPAC s current relationship
with Barclays. Revise
your pro forma financial information and relevant disclosure referring
to the payment of
deferred underwriting commissions.
46. Please describe what relationship existed between Barclays and CIIG
Capital Partners II
after the close of the IPO, including any financial or merger-related
advisory services
conducted by Barclays. For example, clarify whether Barclays had any
role in the
identification or evaluation of business combination targets.
47. Please tell us whether you are aware of any disagreements with
Barclays regarding the
disclosure in your registration statement. Further, please add risk
factor disclosure that
clarifies that Barclays was to be compensated, in part, on a deferred
basis for its
underwriting services in connection with the SPAC IPO and such
services have already
been rendered, yet Barclays is waiving such fees and disclaiming
responsibility for the
Form F-4 registration statement. Clarify the unusual nature of such a
fee waiver and the
impact of it on the evaluation of the business combination.
48. Disclose whether Barclays provided you with any reasons for the fee
waiver. If there was
no dialogue and you did not seek out the reasons why Barclays was
waiving deferred fees,
despite already completing their services, please indicate so in your
registration statement.
Further, revise the risk factor disclosure to explicitly clarify that
Barclays has performed
all their obligations to obtain the fee and therefore is gratuitously
waiving the right to be
compensated.
49. We note statements "other than as disclosed elsewhere in this proxy
statement/prospectus"
on page 173 and "except as disclosed otherwise in this proxy
statement/prospectus" on
page 206. Please revise to include all applicable and related
disclosure in the same
location so that investors do not have to piece together significant
aspects of your
business, operations and share capital from multiple locations in your
document.
50. Please revise to clarify when during 2023 you expect to launch sales
of your product.
51. Disclose the material risks to unaffiliated investors presented by
taking the company
public through a merger rather than an underwritten offering. These
risks could include
the absence of due diligence conducted by an underwriter that would be
subject to liability
for any material misstatements or omissions in a registration
statement.
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.
Kiattipong Arttachariya
Zapp Electric Vehicles Group Ltd
January 12, 2023
Page 9
You may contact SiSi Cheng at (202) 551-5004 or Melissa Gilmore at (202)
551-3777 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Bradley Ecker at (202) 551-4985 or Geoffrey Kruczek at (202) 551-3641
with any other
questions.
Sincerely,
FirstName LastNameKiattipong Arttachariya
Division of
Corporation Finance
Comapany NameZapp Electric Vehicles Group Ltd
Office of
Manufacturing
January 12, 2023 Page 9
cc: Rachel Wong
FirstName LastName