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United States securities and exchange commission logo
July 2, 2021
Richard J. Hendrix
Chief Executive Officer
Live Oak Acquisition Corp. II
40 S Main Street, #2550
Memphis, TN 38103
Re: Live Oak
Acquisition Corp. II
Registration
Statement on Form S-4
Filed June 8, 2021
File No. 333-256880
Dear Mr. Hendrix:
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 filed June 8, 2021
Summary Term Sheet, page 7
1. We note that you have
attached a copy of the Business Combination Agreement and Plan
of Reorganization as an
annex to the proxy statement/prospectus. Please incorporate the
agreement by reference
into the proxy statement/prospectus by means of a statement to
that effect, as
required by Item 4(c) of Form S-4.
Summary of the Proxy Statement/Prospectus, page 26
2. We note the information
as to the trading price of your securities on page 17 and the fair
market value of
Navitas' common stock on page 229. Please present this information in
comparative columnar
format as required by Item 3(g) of Form S-4. Please also present
the disclosures
required by Items 3(h), (i), and (k) of Form S-4.
Richard J. Hendrix
FirstName LastNameRichard
Live Oak Acquisition Corp. IIJ. Hendrix
Comapany
July 2, 2021NameLive Oak Acquisition Corp. II
July 2,2 2021 Page 2
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FirstName LastName
3. We note that certain shareholders agreed to waive their redemption
rights, as described
under the subheading "Sponsor Letter Amendment" on page 31. Please
describe any
consideration provided in exchange for this agreement.
4. 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.
Risk Factors, page 43
5. Please disclose the material risks to unaffiliated investors presented
by taking Navitas
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.
6. We note Navitas loan agreement, described on page 67, contains
restrictive covenants
that may require a mandatory prepayment if Navitas merges with other
companies or
carries out certain change of control transactions. Please disclose
whether the proposed
business combination will trigger a prepayment and, if so, disclose
the amount and
potential material consequences.
Unaudited Pro Forma Condensed Combined Financial Information, page 107
7. We note the equity capitalization summary of the pro forma ownership
of Class A
common stock of the surviving corporation following the business
combination and the
PIPE financing in note 4 on page 115. Please revise footnote (2) to
disclose the vesting
terms for the Earnout Shares to the Eligible Navitas Equityholders.
Please comply with
this comment throughout the filing whenever this table is presented.
8. Refer to note 5(i) on page 116. It appears that transaction costs that
are not offering costs,
such as the costs reflected as an adjustment to retained earnings in
the pro forma balance
sheet, should be reflected as expenses in the pro forma statement of
operations for the year
ended December 31, 2020 as a non-recurring item.
9. Refer to notes 5(m) and 6(a) on page 116. Please address the
following:
Clarify the accounting for all earnout shares, including shares
issuable to employee
and non-employee equityholders;
Clarify how you estimated the fair value of all earnout shares;
Disclose the amount of any additional unrecognized compensation
expense related to
the earnout shares and the time periods when the expenses will be
recorded;
Provide a sensitivity analysis that quantifies the potential
impact that a change in the
per share market price of the post combination company s common
stock could have
on the pro forma balance sheet and pro forma statement of
operations related to the
earnout shares recorded as liabilities; and
More fully explain the nature and potential impact of the stamp
duty.
Richard J. Hendrix
FirstName LastNameRichard
Live Oak Acquisition Corp. IIJ. Hendrix
Comapany
July 2, 2021NameLive Oak Acquisition Corp. II
July 2,3 2021 Page 3
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FirstName LastName
10. Refer to note 6(c) on page 117. Please calculate all pro forma net
loss per share amounts
based on the weighted average shares outstanding during each period.
In addition, please
quantify all instruments not included in the calculations of pro forma
loss per share
because they are anti-dilutive.
The Business Combination, page 124
11. Revise your disclosure 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.
12. Please disclose all possible sources and extent of dilution that
shareholders who elect not
to redeem their shares may experience in connection with the business
combination.
Provide disclosure of the impact of each significant source of
dilution, including the
amount of equity held by founders, convertible securities, including
warranties retained by
redeeming shareholders, at each of the redemption levels detailed in
your sensitivity
analysis, including any needed assumptions.
13. It appears that underwriting fees for your initial public offering
remain constant and are
not adjusted based on redemptions. Revise your disclosure to disclose
the effective
underwriting fee on a percentage basis for shares at each redemption
level presented in
your sensitivity analysis. Please also quantify the aggregate deferred
underwriting fees
payable to Jefferies and BofA Securities that are contingent on
completion of the business
combination.
14. Please quantify the value of warrants, based on recent trading prices,
that may be retained
by redeeming stockholders assuming maximum redemptions and identify
any material
resulting risks.
The Business Combination Background to the Business Combination, page 145
15. We note you completed your initial public offering on December 7,
2020, and held an
introductory meeting with Navitas on December 20, 2020. Please revise
to describe how
Navitas was identified as a potential target and by whom, and how the
initial negotiations
were started and by whom. Please also describe any negotiation and
marketing
processes regarding the PIPE financing, including who selected
potential investors, what
relationships they have to the other parties (i.e., LOKB, your
sponsor, Navitas, its
affiliates, and the placement agents), and how the terms of the PIPE
transactions were
determined. Disclose if your sponsor, directors, officers, or their
affiliates will participate
in the private placement.
The Business Combination Certain Navitas Projected Financial Information,
page 154
16. We note your statement on page 155, "The projections were prepared by,
and are the
responsibility of, Navitas and LOKB management." Please revise to
describe clearly the
Richard J. Hendrix
FirstName LastNameRichard
Live Oak Acquisition Corp. IIJ. Hendrix
Comapany
July 2, 2021NameLive Oak Acquisition Corp. II
July 2,4 2021 Page 4
Page
FirstName LastName
reasons why the financial projections were prepared and to clarify
that you are responsible
for the information included in the registration statement.
17. Describe fully the material assumptions underlying your financial
projections and the
limitations of the projections. We note assumptions contained in the
analyst materials
included as exhibits to your Form 8-K filed on June 23, 2021, for
example those outlined
by CFO Todd Glickman.
18. We note you have provided more than three years of financial
projections. Please explain
how the basis for the projections beyond year three is reasonable; for
example, whether
these forecasts reflect more than simple assumptions about growth
rates. Clearly describe
the factors or contingencies that would affect your projected revenue
growth ultimately
materializing.
19. We note references to projections throughout the negotiating process
described on pages
147-50. Please advise whether there are multiple "sets" of projections
with different
underlying assumptions, including in connection with the PIPE
financing. If so, consider
the need to disclose these projections and why they were prepared to
make the
presentation of the projections included in your filing materially
complete.
The Business Combination Interests of Certain Persons in the Business
Combination, page 157
20. Please revise to describe and quantify all the interests for each
person individually.
Please ensure that the information is consistent with the beneficial
ownership information
on page 255. Specifically quantify the aggregate dollar amount and
describe the nature of
what the sponsor and its affiliates 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 LOKB s officers and
directors, if
material. Include a description or cross-reference to the
change-in-control benefits
described on page 228.
21. We note that Jefferies and BofA Securities performed additional
services after your initial
public offering and part of the underwriting fee was deferred and
conditioned on
completion of a business combination. Please quantify the aggregate
fees payable to each
firm that are contingent on completion of the business combination.
Proposal No. 1 The Business Combination Proposal, page 169
22. Please revise to clarify whether shareholders are being requested to
approve the PIPE
financing and, if so, present this as a separate proposal.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Navitas Overview, page 186
23. Please revise the phrase, "we have partnered with over 90% of major
mobile OEMs," to
clarify its meaning and scope.
Richard J. Hendrix
FirstName LastNameRichard
Live Oak Acquisition Corp. IIJ. Hendrix
Comapany
July 2, 2021NameLive Oak Acquisition Corp. II
July 2,5 2021 Page 5
Page
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Navitas
Results of Operations, page 189
24. We note your risk factor on page 62 indicates that fluctuations in
foreign exchange rates
against the U.S. dollar could result in changes in reported revenues
and operating results
due to the foreign exchange impact of translating these transactions
into U.S. dollars.
Please enhance your discussions of results of operations for each
period presented to
quantify the impact of changes in revenues and expenses due to foreign
currency
translations, to the extent material.
Liquidity and Capital Resources, page 191
25. 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-combination company due
to the amount of cash redemptions.
Critical Accounting Policies and Estimates
Share-Based Compensation, page 194
26. Please disclose and discuss changes in the estimated fair value of
your common stock
during the periods presented. Please address material differences
between the valuations
used to determine the fair value of your common stock relative to the
fair value implied by
the current merger transaction.
Information about Navitas Company Overview, page 198
27. Please balance disclosure of Navitas' competitive strengths and market
opportunities with
disclosure that the company has yet to operate at a profit level.
Clarify the extent to which
Navitas' products are in development stage or early-stage
commercialization, including
material hurdles to full-scale production and marketing.
28. In light of Navitas' dependence on Gallium, specifically describe the
company's sources of
supply of this raw material, together with any risks resulting from
dependence on one or a
limited number of suppliers. Please expand or revise related risks
factors as appropriate.
Information about Navitas Competitive Strengths, page 199
29. We note the statement, "Navitas has achieved a market-leading position
in GaN power ICs
by surmounting key challenges to commercialization, resulting in a
best-in-class GaN IC
solutions and a patented, multi-year advantage." Please revise to
substantiate this
statement and similar assertions elsewhere, for example on page 96,
"we believe we are a
clear leader in the GaN space."
Richard J. Hendrix
FirstName LastNameRichard
Live Oak Acquisition Corp. IIJ. Hendrix
Comapany
July 2, 2021NameLive Oak Acquisition Corp. II
July 2,6 2021 Page 6
Page
FirstName LastName
Information about Navitas Intellectual Property, page 200
30. Please revise to disclose the duration of Navitas' patents.
Information about Navitas Competition, page 201
31. We note the projection here, "we will cross the cost-parity point with
silicon within 2
years," as well as market projections on page 196. Please balance
these with disclosure
regarding the risk that Navitas' projections may not be realized and
identify the material
assumptions upon which these projections are based.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
LOKB
Critical Accounting Policies
Net Income Per Common Share, page 207
32. You disclose on page 208 that net income per share, basic and diluted
for Class A
common stock for the three months ended March 31, 2021 is calculated
by dividing the
income from investments held in the Trust Account of approximately
$1,693,373, net of
applicable franchise taxes of approximately $50,000, by the weighted
average number of
shares of Class A common stock outstanding for the period. However,
you disclose on
page F-12 that net income per share, basic and diluted for Class A
common stock for the
three months ended March 31, 2021 is calculated by dividing the income
from
investments held in the Trust Account of approximately $37,000, net of
applicable
franchise taxes of approximately $50,000, by the weighted average
number of shares of
Class A common stock outstanding for the period. Please correct this
discrepancy.
Information about LOKB
Conflicts of Interest, page 220
33. Please revise the conflicts of interest discussion so that it
highlights all material interests
in the transaction held by the sponsor and LOKB s officers and
directors. This could
include fiduciary or contractual obligations to other entities as well
as any interest in, or
affiliation with, Navitas. In addition, please clarify how LOKB's
board considered those
conflicts in negotiating and recommending the business combination.
34. We note that your charter waived the corporate opportunities doctrine.
Please address this
potential conflict of interest and whether it impacted your search for
an acquisition target.
Beneficial Ownership of Securities, page 255
35. Please provide the information required by Item 201 of Regulation S-K
in relation to both
LOKB and Navitas' shares, including the number of holders.
36. Please disclose whether the sponsor will receive additional securities
pursuant to an anti-
dilution adjustment based on your additional financing activities; if
so, quantify the
Richard J. Hendrix
FirstName LastNameRichard
Live Oak Acquisition Corp. IIJ. Hendrix
Comapany
July 2, 2021NameLive Oak Acquisition Corp. II
July 2,7 2021 Page 7
Page
FirstName LastName
number and value of securities and disclose the ownership percentages
before and after
the additional financing to highlight dilution to public stockholders.
37. Please provide further information regarding the 409A valuations of
Navitas' stock
described on page 229, including why the initial valuation was revised
and what
explains the nearly five-fold increase between the second and third
valuations.
Experts, page 265
38. We note that Navitas engaged a new auditor to audit their financial
statements as of and
for the year ended December 31, 2020. Please provide the disclosures
required by Item
304 of Regulation S-K, including a letter from the former auditor
filed as an exhibit to the
registration statement agreeing or disagreeing with those disclosures.
Although we note
Navitas is the company being acquired, we also note the merger will be
accounted for as a
reverse recapitalization and that Navitas is the accounting acquirer
and predecessor.
Live Oak Acquisition II - Interim Financial Statements
Note 8 - Fair Value Measurements, page F-17
39. Based on the numbers of warrants outstanding and the tabular
disclosures related to
changes in the fair values of the Public Warrants and Private
Placement Warrants on page
F-18, it appears the fair values of the Public Warrants and Private
Placement Warrants
disclosed in the table on page F-17 have been transposed. Please
revise and ensure
disclosures are correct and consistent throughout the filing.
Live Oak Acquisition II - Annual Financial Statements
Note 8 - Stockholders' Equity, page F-36
40. You disclose on page F-36 that there were 1,115,768 shares of Class A
common stock
issued and outstanding, excluding 24,184,232 shares of Class A common
stock subject to
possible redemption as of December 31, 2020; however, your balance
sheets on pages F-2
and F-22, indicate there were 3,159,368 shares of Class A common stock
issued and
outstanding, excluding 22,140,632 shares of Class A common stock
subject to possible
redemption as of December 31, 2020. Please correct this discrepancy.
Signatures, page II-6
41. Please revise your signature page to have your principal accounting
officer or controller
sign the registration statement in their individual capacity. This
signature should appear
in the second signature block of the signature section. If someone has
signed in more than
one capacity, indicate each capacity in which they signed.
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.
Richard J. Hendrix
Live Oak Acquisition Corp. II
July 2, 2021
Page 8
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 Jeff Gordon at 202-551-3866 or Anne Mcconnell at
202-551-3709 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jennifer Angelini at 202-551-3047 or Sherry Haywood at 202-551-3345
with any other
questions.
Sincerely,
FirstName LastNameRichard J. Hendrix
Division of
Corporation Finance
Comapany NameLive Oak Acquisition Corp. II
Office of
Manufacturing
July 2, 2021 Page 8
cc: John Kupiec
FirstName LastName