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United States securities and exchange commission logo
June 8, 2023
Zachary Wang
Chief Executive Officer
Aurora Technology Acquisition Corp.
4 Embarcadero Center
Suite 1449
San Francisco, CA 94105
Re: Aurora Technology
Acquisition Corp.
Registration
Statement on Form S-4
Filed May 12, 2023
File No. 333-271890
Dear Zachary Wang:
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 S-4 filed May 12, 2023
Summary of the Proxy Statement/Prospectus
Organizational Structure, page 7
1. Please include a
diagram depicting the organizational structure of New DIH and its
subsidiaries
immediately after the consummation of the business combination and include
the ownership interests
held by the existing DIH equity holders, ATAK public
shareholders, Maxim
(pursuant to the success fee), the sponsor and any affiliates.
Zachary Wang
FirstName LastNameZachary Wang
Aurora Technology Acquisition Corp.
Comapany
June 8, 2023NameAurora Technology Acquisition Corp.
June 8,
Page 2 2023 Page 2
FirstName LastName
Sponsor Support Agreement, page 8
2. We note that the Sponsor and certain members and affiliates of the
Sponsor entered into
the sponsor support agreement pursuant to which the sponsor parties
agreed to, among
other things, waive their redemption rights. Please describe any
consideration provided in
exchange for this agreement.
Interests of Certain Persons in the Business Combination, page 15
3. We note your disclosure that the Sponsor and ATAK s officers and
directors will lose
their entire investment in ATAK and will not be reimbursed for any
loans extended, fees
due or out-of-pocket expenses if an initial business combination is
not consummated by
August 9, 2023. Please quantify the aggregate dollar amount and
describe the nature of
what the Sponsor and ATAK's officers and directors 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 ATAK s
officers and directors are awaiting reimbursement.
4. You disclose that from February 2023 to May 2023, ATAK issued
unsecured promissory
notes to the Sponsor, with an aggregate principal amount equal to
$830,000 for the
purpose of making extension payments and providing ATAK with
additional working
capital. However, on page 106, you disclose that ATAK issued notes
equal to
$1,235,000. Please revise your disclosure to address this discrepancy.
Certain Other Interests in the Business Combination, page 16
5. We note that Maxim Group LLC was an underwriter for the initial public
offering of the
SPAC and it is advising on the business combination transaction with
the target
company. Please tell us, with a view to disclosure, whether you have
received notice, or
any other indication, from Maxim or any other firm engaged in
connection with your
initial public offering that it will cease involvement in your
transaction and how that may
impact your deal or the deferred underwriting compensation owed for
the SPAC s initial
public offering.
Questions and Answers about the Proposals
Q. What happens if a substantial number of the Public Shareholders vote in
favor of the Business
Combination Proposal...?, page 23
6. Your disclosure in footnote 9 indicates that the additional dilution
sources includes the
payment of the extension amendment redemptions. Please clarify whether
this
encompasses all transaction expenses. In this regard, we note you
disclose on page 73 that
you expect the aggregate transaction expenses are expected to be
approximately $24.1
million and that the "the per-share value of shares held by
non-redeeming shareholders
will reflect our obligation to pay the transaction expenses."
Zachary Wang
FirstName LastNameZachary Wang
Aurora Technology Acquisition Corp.
Comapany
June 8, 2023NameAurora Technology Acquisition Corp.
June 8,
Page 3 2023 Page 3
FirstName LastName
Risk Factors
Risks Related to ATAK, the Business Combination and New DIH
Notwithstanding the foregoing, these provisions of the ATAK Warrant Agreement
do not apply
to suits brought to enforce any liability or duty, page 71
7. We note your disclosure that the ATAK Warrant Agreement provides that
any action,
proceeding or claim against ATAK arising out of or relating in any way
to the ATAK
Warrant Agreement, "including under the Securities Act," will be
brought and enforced in
the courts of the State of New York or the United States District
Court for the Southern
District of New York. Please revise your prospectus disclosure
consistent with that
provided in the Warrant Agreement as filed in Exhibit 4.6, which
provides in Section 9.3
that "the federal district courts of the United States of America"
shall be the exclusive
form for the resolution of any complaint asserting a cause of action
arising under the
Securities Act or the rules and regulations promulgated thereunder.
The provision of the Proposed Certificate of Incorporation to be in effect
following the Business
Combination requiring exclusive venue..., page 77
8. With respect to your disclosure regarding the federal district courts
of the United States
serving "the sole and exclusive forum for the resolution of any
complaint against any
person in connection with any offering of the Company s securities,
asserting a cause of
action arising under the Securities Act," consistent with Section 7.8
of your proposed
Amended and Restated Certificate of Incorporation revise your
disclosure here and on
pages 117 and 215 to clarify that the federal district courts of the
United States of America
will be "the sole and exclusive forum for the resolution of any
complaint asserting a cause
of action arising under the Securities Act."
Related Agreements
Amended and Restated Registration Rights Agreement and Lock-Up Agreement, page
96
9. We note that you will enter into an amended and restated registration
rights agreement
which will require New DIH to register the resale under the Securities
Act certain
securities of New DIH that are held by the parties to the agreement.
Please revise to
disclose the amount of shares of Class A Common Stock which will be
subject to this
registration rights agreement.
Background of the Business Combination, page 97
10. You disclose that on December 10, 2022, DIH and ATAK executed a letter
of intent and
the parties proceeded to complete due diligence and to negotiate the
terms of the Business
Combination Agreement until it was executed on February 26, 2023.
However, you have
not provided any details regarding the terms negotiated by the
parties. Please expand your
disclosure to include a detailed description of the negotiations from
the letters of intent
and surrounding the material terms of the Business Combination
Agreement, including
Zachary Wang
FirstName LastNameZachary Wang
Aurora Technology Acquisition Corp.
Comapany
June 8, 2023NameAurora Technology Acquisition Corp.
June 8,
Page 4 2023 Page 4
FirstName LastName
quantitative information where applicable. Also identify the
representatives or members
of management who participated in the negotiations and when those
meetings and
discussions took place. Your revised disclosure should ensure that
investors are able to
understand how the terms of the letter of intent evolved during
negotiations.
11. We note that between July and October 2022, ATAK submitted a
non-binding letter of
intent. Please revise your disclosure to summarize the terms of this
offer including the
initial valuation attributed to the transaction and any analyses that
were utilized to
determine such valuation.
12. We note that Maxim introduced ATAK to DIH on July 6, 2022. Please
disclose how
ATAK's board considered any related conflict of interest in
negotiating and
recommending the business combination and include risk factor
disclosure highlighting
the potential conflicts of interests involving Maxim due to its roles
as underwriter for
ATAK's initial public offering and advisor to DIH. In this regard, we
note your disclosure
on page 108 indicating that in addition to the $7.1 million deferred
underwriting fees
Maxim will receive from ATAK in connection with the business
combination, it will also
be entitled to a success fee of $8.0 million from DIH.
Opinion of ATAK's Company's Financial Advisor
Comparable Public Company Analysis, page 100
13. You disclose that the EV / 2023E Revenue multiples of such comparable
public
companies were approximately 5.1x, and this multiple was multiplied by
the "2023E pro
forma sales of DIH" to obtain an Enterprise value, and that the "Net
Debt" was then
removed from Enterprise Value to obtain an Implied Equity Value using
this analysis of
$284.1M. Please disclose the financial projections and related
assumptions used in this
analysis, such "2023E pro forma sales of DIH" and the "net debt" of
DIH.
Discounted Cash Flow Analysis, page 102
14. We note your disclosure that Newbridge reviewed a financial model of
DIH with
historical numbers and future financial projections (including
potential revenue growth,
EBITDA and net income / cash flow margins) provided by DIH s
management team, and
that Newbridge performed a DCF Analysis of the estimated future
unlevered free cash
flows attributable to DIH for the fiscal years of 2023 through 2032 in
reliance on such
DIH management projections. Please disclose the DIH management
projections and
related assumptions that were shared with Newbridge and that underlie
the DCF analysis.
Additionally, considering the term of the projections provided by DIH
management to
Newbridge, please explain the basis of the projections beyond year
three and if the
forecasts reflect more than simple assumptions about growth rates. It
should be clear from
your disclosure how the projected growth rates are sustainable over
the selected period of
time, and why assuming such growth rates are reasonable. Further
clarify what
consideration the ATAK Board gave to the speculative nature of
the discounted cash flow analysis through 2032 and the projections
through the same
Zachary Wang
Aurora Technology Acquisition Corp.
June 8, 2023
Page 5
extended period. Refer to Item 1015(b)(6) of Regulation M-A, as
contemplated by Part I,
Item 4(b) of Form S-4.
Fees and Expenses, page 103
15. We note that $100,000 of the Newbridge fee is payable upon the
consummation of the
Business Combination. Revise to clarify whether that portion of the
fees is conditioned on
the completion of the transaction.
The ATAK Board's Reasons for the Approval of the Business Combination, page 103
16. You disclose before reaching its decision, the ATAK Board reviewed the
results of the
due diligence conducted by ATAK s management and advisors, including
the reviews of
certain projections provided by DIH. Please disclose any DIH
projections and related
assumptions that the Board considered in making its decision. Please
also disclose how
the DIH projections considered by the ATAK Board compare with the
financial model of
DIH with financial projections relied upon by Newbridge in performing
its DCF analysis.
Certain Material United States Federal Income Tax Considerations, page 127
17. We note your disclosure that the Domestication should qualify as an F
Reorganization
within the meaning of Section 368(a)(1)(F) of the Code. Your
disclosure further indicates
that if the Domestication qualifies as an F Reorganization, U.S.
Holders of your securities
should not recognize gain or loss for U.S. federal income tax purposes
on the
Domestication, except in certain circumstances pursuant to Section
367(b) of the
Code. As a result, it appears that the tax consequences are material
to shareholders.
Please revise your disclosures to identify tax counsel and file a
related opinion or provide
us an analysis explaining why it is not necessary to do so. See Item
601(b)(8) of
Regulation S-K and Section III of Staff Legal Bulletin 19 (Oct. 14,
2011).
Unaudited Pro Forma Condensed Combined Financial Information, page 140
18. You disclose under the bullet "Assuming Maximum Redemptions" that there
is no
minimum net tangibles assets required upon consummation of the merger.
We note that in
your Amended and Restated Articles of Association filed as Exhibit 3.1,
you disclose in
section 37.5(c) that in no event will the Company redeem its public
shares in an amount
FirstName LastNameZachary Wang
that would cause the Company's net tangible assets to be less than
$5,000,001 upon
Comapany NameAurora
consummation of aTechnology Acquisition Corp.
business combination. Please reconcile your
disclosure here with that
provided in
June 8, 2023 Page 5your Articles of Association.
FirstName LastName
Zachary Wang
FirstName LastNameZachary Wang
Aurora Technology Acquisition Corp.
Comapany
June 8, 2023NameAurora Technology Acquisition Corp.
June 8,
Page 6 2023 Page 6
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Information
Notes to Unaudited Pro Forma Condensed Combined Financial Information, page 146
19. We note DIH has not historically operated as a standalone business and
has functioned as
part of the business of DIH Technology Ltd, or Parent. In addition,
DIH s historical
combined financial statements have been prepared on a carve-out
basis. Please tell us
how you considered the autonomous entity adjustments pursuant to Rule
11-02(a)(6)(ii) of
Regulation S-X.
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, page 147
20. Please revise adjustment d) to clearly show each adjusted amount to
the pro form
condensed combined balance sheet on page 144. Refer to Rule
11-02(a)(8) of Regulation
S-X.
21. We note adjustment l) represents the reclassification of the parent
s net investment in DIH
into DIH s common stock, no par value per share. Please revise the
disclosure describing
the nature of adjustment l) to show how each adjustment amount
presented on page
144 was derived.
Information about ATAK, page 149
22. Revise your disclosure to state the amount in the trust account as of
the most recent
practicable date. In this regard, we note that you disclose here that
there is approximately
$58.3 million in the trust account. However, on page 21 you disclose
that approximately
$59.1 million remains in the trust account as of April 30, 2023.
Business of DIH
Our Strategy, page 164
23. You disclose that the global rehabilitation care market is estimated
to be over $100 billion
and is extremely reliant upon manual therapies, with therapists
payroll costing more than
$50 billion. You further disclose that such "a manually dominant
approach results in
unproven and non-desirable outcomes" due to a lack of intensity,
integration,
standardization and optimization throughout the weeks or months of
long intervention
processes. Please revise to disclose the source of your estimation of
the global
rehabilitation market, and provide support for your statement that "a
manually dominant
approach results in unproven and non-desirable outcomes" or revise to
characterize as
your belief and disclose the basis for your belief. In this regard, we
note that you have a
risk factor on page 47 that discloses that the health benefits of your
products have not yet
been substantiated by long-term large randomized clinical data.
Zachary Wang
FirstName LastNameZachary Wang
Aurora Technology Acquisition Corp.
Comapany
June 8, 2023NameAurora Technology Acquisition Corp.
June 8,
Page 7 2023 Page 7
FirstName LastName
Intellectual Property, page 178
24. You disclose that you have 20 active patent families and patents,
including 18 registered
patents in the US and that you believe "protecting [y]our intellectual
property is crucial to
[y]our business." If patent protection is a material aspect of your
business, please disclose
whether these patent or pending patent applications are owned or
licensed, the type of
patent protection, the expiration dates, and applicable jurisdictions,
as well as the core
patent families such patent and/or patent applications relate for any
such material patent
and whether there are any contested proceedings or third-party claims.
See Item
101(h)(4)(vii) of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of DIH
Supply Chain and Inflation, page 182
25. We note that you have experienced supply chain disruptions. Revise to
discuss known
trends or uncertainties resulting from mitigation efforts undertaken,
if any. Explain
whether any mitigation efforts introduce new material risks, including
those related to
product quality, reliability, or regulatory approval of products.
26. Please further discuss how supply chain disruptions have and are
expected to materially
affect your outlook or business goals. Specify whether these
challenges have materially
impacted your results of operations or capital resources and quantify,
to the extent
possible, how your sales, profits, and/or liquidity have been
impacted.
Results of Operations
Comparison of the Years Ended March 31, 2022 and 2021
Revenue, page 188
27. We note from your disclosure that you have direct sales in the United
States, Germany,
Switzerland and Netherlands. Please revise your discussion of revenues
for annual and
interim periods to quantify how the changes in foreign exchange rates
impact the
revenues. In addition, quantify and describe the extent to the
increase of revenue was
attributable to changes in prices or to changes in the volume of the
devices you sold.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of DIH
Liquidity and Capital Resources, page 189
28. Please file copies of the lines of credit and long-term debt and
amendments that are
currently in place as exhibits to your registration statement or tell
us why you believe you
are not required to do so. Refer to Item 601(b)(10) of Regulation S-K.
In addition, please
expand your disclosure here to describe the material terms of the
agreements.
Zachary Wang
FirstName LastNameZachary Wang
Aurora Technology Acquisition Corp.
Comapany
June 8, 2023NameAurora Technology Acquisition Corp.
June 8,
Page 8 2023 Page 8
FirstName LastName
Cash Flows
Net Cash Provided by / (Used in) Operating Activities, page 190
29. Your discussion of net cash flows used in operating activities merely
describes the items
identified on the face of the statement of cash flows. Please revise
your discussion of
operating cash flow to address material changes in the underlying
driver. Refer to SEC
Release No. 33-8350 for guidance.
Executive and Director Compensation, page 197
30. Please revise to disclose the compensation items tabulated in the "All
Other
Compensation" column. See Item 402(n)(2)(ix) of Regulation S-K.
Notes to Interim Condensed Combined Financial Statements, page F-34
31. We note DIH acquired the SafeGait 360 and SafeGait Active smart
mobility trainer
systems from Gorbel in October 2022. We also note you accounted the
acquisition as an
asset acquisition. Please tell us the purchase amount of acquisition;
and to the extent it is
material, disclose the purchase amount of the acquisition and describe
the related
accounting policy to support your accounting as an asset acquisition.
Notes to Combined Financial Statements, page F-51
32. We note from the disclosure on page 42 that DIH s historical
combined financial
statements have been prepared on a carve-out basis. Please expand your
footnotes to the
interim and annual financial statements to describe certain expenses,
if any, incurred on
DIH s behalf by its parent or affiliates, and the allocation methods
used along with
management s assertion that the method of allocation is reasonable.
Refer to SAB Topic
1B.1.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation, page F-52
33. Expand your disclosure to clarify the entities included in the
Combined Financial
Statements. The common control relationship of the Company and DIH
Hong Kong is
currently disclosed; however, it is unclear whether these entities and
their subsidiaries
are combined in the presentation of the financial statements or if
other entities are also
included.
13. Income Taxes, page F-72
34. Considering DIH has historically existed and functioned as part of the
business of DIH
Technology Ltd, or the Parent and DIH s historical combined
financial statements have
been prepared ono a carve-out basis, please disclose whether you
calculated the tax
provision on the separate return basis. To the extent it is not on the
separate return basis,
disclose the allocation method and why you believe your allocation
method is appropriate.
Zachary Wang
Aurora Technology Acquisition Corp.
June 8, 2023
Page 9
Refer to SAB Topic 1B.1.
General
35. 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 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.
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 Steve Lo, Staff Accountant, at (202) 551-3394 or Shannon
Buskirk,
Staff Accountant, at (202) 551-3717 if you have questions regarding comments on
the financial
statements and related matters. Please contact Anuja A. Majmudar,
Attorney-Adviser, at (202)
551-3844 or Kevin Dougherty, Attorney-Adviser, at (202) 551-3271 with any other
questions.
Sincerely,
FirstName LastNameZachary Wang
Division of
Corporation Finance
Comapany NameAurora Technology Acquisition Corp.
Office of Energy &
Transportation
June 8, 2023 Page 9
cc: Ilan Katz
FirstName LastName