View:
United States securities and exchange commission logo
December 26, 2023
Christopher Gaertner
Chief Financial Officer
DHC Acquisition Corp.
1900 West Kirkwood Blvd.
Suite 1400B
Southlake, TX 76092
Re: DHC Acquisition
Corp.
Amendment No.1 to
Registration Statement on Form S-4
Filed December 12,
2023
File No. 333-275058
Dear Christopher Gaertner:
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 November 14,
2023 letter.
Amendment No. 1 to Registration Statement on Form S-4
Interest of Certain Persons in the Business Combination, page 28
1. We note your response
to our prior comment 15. Please revise to include the aggregate
market value of the
7,736,268 DHC Founder Shares currently held by the sponsor.
Risks Relating to Ownership of New BEN s Common Stock Following the
Business
Combination
The market price and trading volume of New BEN Common Stock and New BEN
Public
Warrants may be highly volatile..., page 72
2. We understand that the
Citi Global Markets, Inc., the lead underwriter in your SPAC IPO
has waived the deferred
underwriting commissions that would otherwise be due to it upon
the closing of the
business combination. Please disclose how this waiver was obtained,
Christopher Gaertner
FirstName LastNameChristopher Gaertner
DHC Acquisition Corp.
Comapany26,
December NameDHC
2023 Acquisition Corp.
December
Page 2 26, 2023 Page 2
FirstName LastName
why the waiver was agreed to, and clarify the SPAC s current
relationship with Citi
Global Markets, Inc. Revise your pro forma financial information and
relevant disclosure
referring to the payment of deferred underwriting commissions.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 3. Adjustments to Unaudited Pro Forma Condensed Combined Financial
Information
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, page 205
3. We note in Footnote A, that you received $5.5 million in gross
proceeds from BEN's
issuance of 550,000 shares of New BEN common stock, which would appear
to represent
a fair value price of $1.00 per share. In Footnote B, you disclose
that you received $4.0
million in gross proceeds from the issuance of 1,826,484 shares of BEN
common stock,
which would appear to represent a fair value price of $2.19 per share.
Tell us and disclose
the reasons for the significant difference in fair value of your
common share between
these two issuances.
Consolidated Statements of Operations, page F-51
4. We have reviewed your response to prior comment 25. Please address the
following
items:
Your response indicates that additional expenses were incurred
during 2022 that were
extinguished in this transaction. Please tell us and disclose why
the counterparty
accepted $37,437 worth of your common stock to offset relatively
current accounts
payable of $586,000.
We note you issued 2,431,000 shares of common stock in this
transaction. As such, it
would appear that you valued your common shares at $0.015 per
share for this
transaction. Reconcile this fair value to your response to prior
comment 27 in which
you disclose that you obtained a valuation report that determined
the fair value of
your common stock in 2022 to be $0.10 per share in 2022. Disclose
this as well.
Notes to Unaudited Condensed Consolidated Financial Statements
Note C - Acquisitions, page F-76
5. We have reviewed your response to prior comment 27. Please address the
following
items:
Expand your disclosure to disclose the nature of the acquired
developed technology.
As noted in your response, clarify that this technology is not
ready for
commercialization. Further disclose if there are any licensing
agreements related to
this technology. In this regard, we note the disclosure in your
response that DM Lab
was founded by a professor in Korea University's Engineering
Department and DM
Lab has been funded by grants, loans and investors since its
inception. Further
disclose if there are any limitations that the technology must
remain in Korea.
We repeat our prior comment to explain in sufficient detail how
you determined the
Christopher Gaertner
FirstName LastNameChristopher Gaertner
DHC Acquisition Corp.
Comapany26,
December NameDHC
2023 Acquisition Corp.
December
Page 3 26, 2023 Page 3
FirstName LastName
Developed technology to be initially recognized at $17,678,370.
Your statement that,
"Given DM Lab had no revenue and minimal tangible assets, BEN
inferred the value
of the Developed Technology to be $17.4 million" does not appear
to sufficiently
address the comment.
Your response indicates that you obtained a valuation report
for the BEN Common
Stock in 2022 and 2023 of $0.10 per share and $1.00 per share,
respectively. Your
response also indicates that at the time of the asset purchase
agreement for DM Lab,
"the agreed upon value of $1.00 per share between the unrelated
parties approximates
the fair value at the date of sale." Please reconcile these two
statements as it appears
in one you relied upon a valuation report and the other you
approximated the fair
value internally.
Please explain and quantify the significant milestones that
occurred within the
Company between the 2022 valuation of $0.10 per share and the
fair value of $1.00
in 2023. In this regard, we note the Company did not generate any
revenue and the
Company appears to not have had any technology during this time.
Given the
Company had minimal operations during this time, explain how the
valuation expert
concluded that rises in valuations and transaction prices in the
private and public
markets for AI based enterprises directly impacted the valuation
of BEN.
We note you have revised the useful life of the Developed
technology intangible asset
from 15 years to 10 years. Further, we note you cite in your
response that DM Lab
has never generated revenue and the AI technology acquired was
not ready for
commercialization since it was made primarily to demonstrate the
AI technology's
capabilities. Given the current state of this AI technology, it
would appear that you
acquired a research and development asset. As such, please
explain your conclusion
to begin amortizing. Please advise or revise accordingly. Refer
to ASC 805 and ASC
350-30-35-17A through 35-20.
General
6. Tell us whether Citi Global Markets, Inc. was involved in the
preparation of any
disclosure that is included in the Form S-4 registration statement,
including any analysis
underlying disclosure in the registration statement. If so, clarify
their involvement,
whether they have retracted any work product associated with the
transaction, and the risk
of such withdrawal and reliance on their expertise. Further, please
clarify if Citi Global
Markets, Inc. claims no role in the SPAC s business combination
transaction and has
affirmatively disclaimed any responsibility for any of the disclosure
in this registration
statement.
7. Please tell us whether you are aware of any disagreements with Citi
Global Markets, Inc.
regarding the disclosure in your registration statement. Further,
please add risk factor
disclosure that clarifies that Citi Global Markets, Inc 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 the firm is waiving such fees
and disclaiming
responsibility for the Form S-4 registration statement. Clarify the
unusual nature of such a
Christopher Gaertner
DHC Acquisition Corp.
December 26, 2023
Page 4
fee waiver and the impact of it on the evaluation of the business
combination.
8. Disclose whether Citi Global Markets, Inc. provided you with any reasons
for the fee
waiver. If there was no dialogue and you did not seek out the reasons why
the firm 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 the
firm has performed all their obligations to obtain the fee and therefore
is gratuitously
waiving the right to be compensated.
Please contact Ryan Rohn at 202-551-3739 or Stephen Krikorian at
202-551-3488 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Austin Pattan at 202-551-6756 or Jan Woo at 202-551-3453 with any other
questions.
Sincerely,
FirstName LastNameChristopher Gaertner
Division of
Corporation Finance
Comapany NameDHC Acquisition Corp.
Office of
Technology
December 26, 2023 Page 4
cc: Kevin Cooper
FirstName LastName