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United States securities and exchange commission logo
May 9, 2023
Dr. Jiong Ma
Chief Executive Officer
Chavant Capital Acquisition Corp.
445 Park Avenue, 9th Floor
New York, NY 10022
Re: Chavant Capital
Acquisition Corp.
Registration
Statement on Form S-4
Filed on April 10,
2023
File No. 333-271197
Dear Dr. Jiong Ma:
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
Market and Industry Data, page 10
1. We note your disclosure
that you obtained some of the market and industry data included
in the registration
statement from various third-party sources and that you have not
independently verified
this information. This statement appears to imply a disclaimer of
responsibility for this
information in the registration statement. Please either revise this
section to remove such
implication or specifically state that you are liable for all
information in the
registration statement.
Questions and Answers about the Special Meeting and the Related
Proposals
How much dilution may non-redeeming Chavant shareholders experience...,
page 22
2. Please revise your
sensitivity analysis to include interim redemption levels.
Dr. Jiong Ma
FirstName LastNameDr. Jiong Ma
Chavant Capital Acquisition Corp.
Comapany
May 9, 2023NameChavant Capital Acquisition Corp.
May 9,
Page 2 2023 Page 2
FirstName LastName
Do Mobix Labs Stockholders need to approve the Transaction?, page 27
3. We note your disclosure that more information can be found in the
section entitled
Certain Agreements Related to The Transaction Written Consents.
However, this
section does not appear and the section entitled "Certain Agreements
Related to the
Business Combination" on page 172 does not include a discussion on
Written Consents.
Please advise or revise.
What interests do Chavant's current officers and directors have in the
Transaction?, page 28
4. We note your disclosure on F-8 that in connection with the First
Extension and Second
Extension you made certain deposits in the Trust which were funded by
promissory notes
issued to the Sponsor. Please revise to disclose the total outstanding
promissory note
owed to the Sponsor.
5. In your next amendment, please include the missing bracketed
information.
If my shares are held in "street name," will my broker, bank or nominee...,
page 34
6. We note your disclosure that broker non-votes will not be counted for
purposes of
determining the presence of a quorum at the special meeting. This
disclosure appears
inconsistent with your other disclosure that broker non-votes will be
considered present
for the purposes of establishing a quorum, on page 12. Please revise
your filing.
Selected Unaudited Pro Forma Condensed Combined Financial Information, page 52
7. We note you define the Transaction on page 8 as the Domestication, the
Merger and the
other transactions contemplated by the Business Combination Agreement.
However, we
note your disclosure on page 142 that on November 15, 2022 you entered
into the
Business Combination Agreement, Sponsor Letter Agreement, PIPE
Subscription
Agreement and related transaction documents. Please consider expanding
your definition
of the Transaction, if appropriate, to specify inclusion of these
particular agreements.
Also expand the disclosure in footnote two on page 53 to disclose the
number of Mobix
Labs common stock assumed to be issued pursuant to subscription,
warrant and
convertible note agreements entered into from January 1, 2023 through
March 31, 2023.
Risk Factors
Mobix Labs' plan to add incremental revenues and diversify its connectivity
customer base
through the acquisition of EMI Solutions..., page 65
8. Please revise to update the status of the EMI Merger Agreement, for
which the
termination date was March 31, 2023.
Mobix Labs' business and operations could suffer in the event of a security
breach involving its
IT systems..., page 77
9. We note that you may be subject to cyberattacks. Update your risks
characterized as
Dr. Jiong Ma
FirstName LastNameDr. Jiong Ma
Chavant Capital Acquisition Corp.
Comapany
May 9, 2023NameChavant Capital Acquisition Corp.
May 9,
Page 3 2023 Page 3
FirstName LastName
potential if you have experienced a cyberattack. To the extent
material, disclose any new
or heightened risk of potential cyberattacks by state actors or others
since Russia s
invasion of Ukraine.
Risks Related to the Transaction, page 88
10. Please disclose the material risks to unaffiliated investors presented
by taking Mobix Labs
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.
CFIUS or other regulatory agencies may modify, delay or prevent our
Transaction., page 93
11. Please revise to disclose that the warrants would expire worthless in
the event of
liquidation.
Unaudited Pro Forma Condensed Combined Financial Information
Introduction, page 113
12. Refer to your disclosure in the third paragraph on page 114 regarding
the Post-March 26
Financing Securities. We note that the estimated maximum number of
such additional
shares that may be issued is 2,500,000, and the estimate was provided
solely for the
purpose of registering a maximum amount under the Form S-4
registration statement. We
also note your disclosure that the Business Combination Agreement does
not cap the
number of such shares that may be issuable, and that as of March 31,
2023, Mobix Labs
had not issued any Post-March 26 Financing Securities. Given that
there is potential for
issuance of an additional maximum of 2,500,000 shares that will
increase the aggregate
transaction consideration, please expand your redemption scenarios
from two to three to
provide for the share issuance under the Post-March 26 Financing
Securities. In this
regard, you should have the no redemption, maximum redemption, along
with a Post-
March 26 Financing Securities or similar description scenario to
appropriately reflect the
range of possible results as required by Rule 11-02(a)(10) of
Regulation S-X. Please
revise throughout the filing to reflect assumption of this third
redemption scenario.
13. We note from your disclosures on pages 115 and 121 in January 2023
Mobix Labs issued
1,233,108 shares of its common stock in settlement of its dispute with
the seller related to
the acquisition of Cosemi. Please describe how you accounted for the
settlement in the pro
forma financial statements and how the shares of common stock issued
to settle the
liability were valued.
Notes to the Unaudited Pro Forma Condensed Combined Financial Information
Note 4. Pro Forma Adjustments, page 122
14. Refer to the second paragraph at the top of page 123 regarding pro
forma basic and diluted
earnings per share. Please clarify that the pro forma per share
amounts are based on the
New Mobix Labs's shares assuming the Transaction occurred on January
1, 2022. Your
Dr. Jiong Ma
FirstName LastNameDr. Jiong Ma
Chavant Capital Acquisition Corp.
Comapany
May 9, 2023NameChavant Capital Acquisition Corp.
May 9,
Page 4 2023 Page 4
FirstName LastName
current disclosure refers to Mobix Labs, rather than New Mobix Labs.
In this regard, the
pro forma basic and diluted earnings per share are based on both the
outstanding shares of
Chavant and Mobix Labs, as adjusted for the issuance of New Mobix Labs
securities in
the Transaction as described in Note 5 on page 124. Please revise
accordingly.
15. Refer to Adjustment 4(E)(1). Please clarify for the "No Redemption"
scenario, that
856,042 shares and value thereof are still classified as shares
subject to possible
redemption, while such number of shares and redemption value are
considered to have
been redeemed under the "Maximum Redemption" scenario. In this regard,
also provide a
separate adjustment for the 96,991 shares redeemed in January 2023 as
an adjustment to
Chavant's December 31, 2022 historical balance sheet.
Note 5. Loss Per Share, page 124
16. Refer to the last paragraph on page 124 and the table on page 125.
Please expand the
table to reflect all dilutive securities, including the Working
Capital Loans, Equity
Incentive Plan and Employee Stock Purchase Plan as outlined in the
second table on page
22.
Proposal No. 1 - The Transaction Proposal
The Background of the Transaction, page 132
17. Your charter waived the corporate opportunities doctrine. Please
address this potential
conflict of interest and whether it impacted your search for an
acquisition target.
18. We note your disclosure on F-16 that Roth Capital Partners, LLC and
Craig-Hallum
Capital Group LLC, as Chavant s IPO underwriters, are entitled to a
marketing fee of $2.8
million upon the consummation of the business combination. Please
describe what
additional services they performed after the IPO.
19. We note your disclosure on page 137 that Dr. Ma provided an update to
the Chavant
Board regarding potential targets since the termination of exclusivity
with Mobix Labs on
May 31, 2022. Please revise to elaborate on the potential targets
considered during the
termination period.
20. We note your disclosures on pages 140 and 141 that Chavant determined
that Company B
and Company C did not represent a better business combination
opportunity for Chavant
than Mobix Labs. Please elaborate on the reasons Chavant did not
pursue transaction with
Company A, Company B and Company C.
21. We note your disclosure regarding the November 4, 2022 discussion.
Please elaborate on
the modifications to the employment arrangements discussed.
22. We note there were ongoing negotiations regarding the termination fee.
Please revise to
disclosure the amount of termination fee discussed.
Chavant's Board of Directors' Reasons for the Approval of the Transaction, page
144
Dr. Jiong Ma
FirstName LastNameDr. Jiong Ma
Chavant Capital Acquisition Corp.
Comapany
May 9, 2023NameChavant Capital Acquisition Corp.
May 9,
Page 5 2023 Page 5
FirstName LastName
23. We note your disclosure that Chavant s board considered certain
projections provided by
Mobix Labs. Please revise to clarify whether this refers to the August
2022 forecast
described on page 148 or if it refers to one or more of the other
forecasts described in
The Background of the Transaction section. Further, please
revise to discuss if the
Chavant board s recommendation includes consideration of Mobix Labs
s oral business
update in March 2023, as discussed on page 143, that Mobix Labs
expects revenues for
the year ending September 30, 2023 to be materially less favorable
than the revenues
reflected in the August 2022 forecast. If it did not, please discuss
why not.
Comparable Public Company Analysis, page 147
24. It appears that the numbers 1,2,3 after the title Enterprise
Value/2023E Revenue and
the number 5 in 7.2x5 for Mobix Labs represent footnotes.
Please advise or revise.
Certain Unaudited Prospective Financial Information of Mobix Labs, page 150
25. We note your disclosure that the financial projections reflect
estimates and assumptions.
Please revise to describe such estimates, matters and assumptions with
greater
specificity and quantify where practicable. Please disclose any other
information to
facilitate investor understanding of the basis for and limitations of
these projections.
Clearly describe the basis for projecting this growth and the factors
or contingencies that
would affect such growth ultimately materializing.
26. Please revise to clarify whether the projections provided were based
on an expected
closing date on the transaction. In that regard, we note your risk
factor disclosure on page
59. Please also quantify the expected proceeds from the transaction
that underlie the
projections.
27. Please clarify whether the projections provided here reflect the March
2023 oral update.
Certain Agreements Related to the Business Combination
PIPE Subscription Agreement, page 172
28. Please revise to disclose if ACE SO4 Holdings Limited is an affiliate
of Chavant, its
sponsor, directors or officers.
Material U.S. Federal Income Tax Considerations, page 176
29. We note the disclosure that it is intended that the Domestication and
Merger will qualify
as a reorganization within the meaning of Section 368(a) of the Code.
Please revise your
disclosures here to more clearly state counsel's tax opinion on
whether the transaction will
qualify as a reorganization. Also, state in your disclosure here that
the discussion is the
opinion of tax counsel and identify counsel. Whenever there is
significant doubt about the
tax consequences of the transaction, it is permissible for the tax
opinion to use should
rather than will, but counsel providing the opinion must explain
why it cannot give a
will opinion and describe the degree of uncertainty in the
opinion. Please refer to
Dr. Jiong Ma
FirstName LastNameDr. Jiong Ma
Chavant Capital Acquisition Corp.
Comapany
May 9, 2023NameChavant Capital Acquisition Corp.
May 9,
Page 6 2023 Page 6
FirstName LastName
Sections III.B and C of Staff Legal Bulletin 19.
Manufacturing and Operations, page 230
30. Please identify the raw materials used in your products.
31. We note your disclosure here and on page 65 that Plantronics B.V. has
accounted for
substantially all of your historical net revenue but on F-49 that two
customers accounted
for 86% and 73% of your revenue as of September 30, 2022 and September
30, 2021,
respectively. Please revise your filing to explain this apparent
discrepancy and discuss
any known trends or uncertainties regarding your significant
customers.
Mobix Labs' Executive Compensation, page 239
32. Refer to footnote two. Please revise to discuss your 2020 Key Employee
Stock Option
Plan or clarify whether footnote two should refer to your 2020 Key
Employee Equity
Incentive Plan, described on page 235, instead.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Mobix Labs, page 243
33. Refer to paragraphs five and four on pages 138 and 247, respectively.
We note your
disclosures that you reduced revenue and margin expectations due to,
in part, higher costs
associated with shipping and certain raw materials. Please revise to
discuss whether these
inflationary pressures have materially impacted your financial
condition and results of
operations. Identify the actions planned or taken, if any, to mitigate
further or continued
inflationary pressures.
COVID-19 and Supply Chain Disruptions, page 244
34. Please revise to discuss all material adverse COVID-19 and supply
chain disruptions
impacts here. We note, for example, the disclosures on pages 70 and
246 regarding
disruptions at your manufacturers and suppliers located in Vietnam,
Taiwan and China,
delays in your shipments and product launches, and decrease in product
sales. Please
enhance your disclosure to clarify whether supply chain disruptions
materially affect your
outlook or business goals. Further, revise to discuss known trends or
uncertainties
resulting from mitigation efforts undertaken as a result of your
supply chain disruptions,
including your disclosures that you are continuing to implement
operational measures to
minimize the turnaround time in fulfilling your orders. Explain
whether any mitigation
efforts introduce new material risks, including those related to
product quality and
reliability.
Liquidity and Capital Resources, page 249
35. We note your disclosure on F-69 that you issued additional convertible
notes having a
principal amount of $250,000 in January 2023. Please revise to discuss
this note.
Dr. Jiong Ma
FirstName LastNameDr. Jiong Ma
Chavant Capital Acquisition Corp.
Comapany
May 9, 2023NameChavant Capital Acquisition Corp.
May 9,
Page 7 2023 Page 7
FirstName LastName
36. We note your disclosure in your November 16, 2022 press release that
you signed a non-
binding term sheet with B. Riley Principal Capital II, LLC for a $100
million equity line
of credit to further support your growth strategy. To the extent this
agreement has been
executed and there are known uses of cash related to the business
combination, such as
this, please revise to discuss those uses and how it impacts the
capital that will be
available after the transaction.
Management of New Mobix Labs after the Transaction, page 275
37. Please briefly discuss the specific experience, qualifications,
attributes or skills that led to
the conclusion that the directors listed in this section should serve
as your director. Refer
to Item 401(e) of Regulation S-K.
38. Please describe the expected extent and nature of the role of the
board of directors in
overseeing cybersecurity risks, including in connection with your
information technology
and service providers.
Description of New Mobix Labs' Securities
Redemptions of Warrants for Cash, page 282
39. Please clarify whether recent ordinary share trading prices exceed the
threshold that would
allow you to redeem the public warrants.
Private Warrants, page 285
40. Please revise to clarify that the initial purchasers holds all of
Chavant s private placement
warrants.
Audited Financial Statements - Chavant Capital Acquisition Corp.
Note 5. Related Party Transactions
Promissory Note to Sponsor and Working Capital Loans, page F-15
41. Refer to the outstanding balance of $662,000 of Working Capital loans
at December
31, 2022. Please reconcile the working capital loan amounts of
$360,000 and $490,000
which aggregate $850,000 with the outstanding balance. Disclose the
amount of any
repayments or loan forgiveness during the period.
Note 6. Commitments and Contingencies
Business Combination Marketing Agreement, page F-16
42. Refer to the discussion of the 3.5% marketing fee payable to the
representatives of
$2.8 million upon the consummation of the Business Combination. Please
tell us where
you have reflected the deferred fee payable in the financial
statements given such
agreement arose in connection with your IPO.
General
Dr. Jiong Ma
Chavant Capital Acquisition Corp.
May 9, 2023
Page 8
43. Please disclose whether the aggregate number of shares of Class A Common
Stock or
Class B Common Stock equal to $235 million includes the anticipated
issuance of
964,912 shares of common stock of Mobix to be issued in the EMI
transaction.
44. We note that certain shareholders agreed to waive their redemption
rights. Please describe
any consideration provided in exchange for this agreement.
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 Beverly Singleton at 202-551-3328 or Jean Yu at
202-551-3305 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jenny O'Shanick at 202-551-8005 or Asia Timmons-Pierce at 202-551-3754
with any
other questions.
Sincerely,
FirstName LastNameDr. Jiong Ma
Division of
Corporation Finance
Comapany NameChavant Capital Acquisition Corp.
Office of
Manufacturing
May 9, 2023 Page 8
cc: John C. Ericson
FirstName LastName