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United States securities and exchange commission logo
December 9, 2021
Anna Rudensj
General Counsel
Polestar Automotive Holding UK Ltd
Assar Gabrielssons V g 9
405 31 G teborg, Sweden
Re: Polestar Automotive
Holding UK Ltd
Registration
Statement on Form F-4
Filed November 12,
2021
File No. 333-260992
Dear Ms. Rudensj :
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 November 12, 2021
Cover Page
1. Please disclose
prominently on the prospectus cover page that you are not a Chinese
operating company but
an England and Wales holding company with operations
conducted by your
subsidiaries in China and that this structure involves unique risks to
investors. Provide a
cross-reference to your detailed discussion of risks facing the
company and the
offering as a result of this structure.
2. Provide prominent
disclosure about the legal and operational risks associated with being
based in or having the
majority of the company s operations in China. Your disclosure
should make clear
whether these risks could result in a material change in your operations
and/or the value of
your securities or could significantly limit or completely hinder your
ability to offer or
continue to offer securities to investors and cause the value of such
Anna Rudensj
FirstName LastNameAnna Rudensj
Polestar Automotive Holding UK Ltd
Comapany9,
December NamePolestar
2021 Automotive Holding UK Ltd
December
Page 2 9, 2021 Page 2
FirstName LastName
securities to significantly decline or be worthless. Your disclosure
should address how
recent statements and regulatory actions by China s government, such
as those related to
the use of variable interest entities and data security or
anti-monopoly concerns, has or
may impact the company s ability to conduct its business, accept
foreign investments, or
list on an U.S. or other foreign exchange. Your prospectus summary
should address, but
not necessarily be limited to, the risks highlighted on the prospectus
cover page.
3. Clearly disclose how you will refer to the holding company,
subsidiaries, and other
entities when providing the disclosure throughout the document so that
it is clear to
investors which entity the disclosure is referencing and which
subsidiaries or entities are
conducting the business operations. Refrain from using terms such as
we or our when
describing activities or functions of a subsidiary or other entities.
Disclose clearly the
entity (including the domicile) in which investors are purchasing
their interest.
Summary of the Proxy Statement/Prospectus, page 40
4. Provide a clear description of how cash is transferred through your
organization. Disclose
your intentions to distribute earnings or settle amounts owed under
your operating
structure. Quantify any cash flows and transfers of other assets by
type that have occurred
between the holding company and its subsidiaries, and direction of
transfer. Quantify any
dividends or distributions that a subsidiary has made to the holding
company and which
entity made such transfer, and their tax consequences. Similarly
quantify dividends or
distributions made to U.S. investors, the source, and their tax
consequences. Describe any
restrictions on foreign exchange and your ability to transfer cash
between entities, across
borders, and to U.S. investors. Describe any restrictions and
limitations on your ability to
distribute earnings from your businesses, including subsidiaries, to
the parent company
and U.S. investors as well as the ability to settle amounts owed under
any VIE, if any.
5. In your summary of risk factors, disclose the risks that your
corporate structure and being
based in or having the majority of the company s operations in China
poses to investors.
In particular, describe the significant regulatory, liquidity, and
enforcement risks with
cross-references to the more detailed discussion of these risks in the
prospectus. For
example, specifically discuss risks arising from the legal system in
China, including risks
and uncertainties regarding the enforcement of laws and that rules and
regulations in
China can change quickly with little advance notice; and the risk that
the Chinese
government may intervene or influence your operations at any time, or
may exert more
control over offerings conducted overseas and/or foreign investment in
China-based
issuers, which could result in a material change in your operations
and/or the value of
your securities. Acknowledge any risks that any actions by the Chinese
government to
exert more oversight and control over offerings that are conducted
overseas and/or foreign
investment in China-based issuers could significantly limit or
completely hinder your
ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless.
6. Disclose each permission that you or your subsidiaries are required to
obtain from Chinese
Anna Rudensj
FirstName LastNameAnna Rudensj
Polestar Automotive Holding UK Ltd
Comapany9,
December NamePolestar
2021 Automotive Holding UK Ltd
December
Page 3 9, 2021 Page 3
FirstName LastName
authorities to operate and issue these securities to foreign
investors. State whether you or
your subsidiaries, are covered by permissions requirements from the
China Securities
Regulatory Commission (CSRC), the Cyberspace Administration of China
(CAC) or any
other entity that is required to approve your or your subsidiaries
operations, and state
affirmatively whether you have received all requisite permissions and
whether any
permissions have been denied.
7. Please disclose whether you are required to obtain any approvals to
offer securities to
foreign investors, whether you have received such approvals and the
consequences to you
and your investors if you do not receive or maintain the approvals,
inadvertently conclude
that such approvals are not required, or applicable laws, regulations,
or interpretations
change and you are required to obtain approval in the future.
8. Disclose that trading in your securities may be prohibited under the
Holding Foreign
Companies Accountable Act if the PCAOB determines that it cannot
inspect or fully
investigate your auditor, and that as a result an exchange may
determine to delist your
securities. If the PCAOB has been or is currently unable to inspect
your auditor, revise
your disclosure to so state.
Risk Factors, page 69
9. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to separately highlight the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your securities. Also,
given recent
statements by the Chinese government indicating an intent to exert
more oversight and
control over offerings that are conducted overseas and/or foreign
investment in China-
based issuers, acknowledge the risk that any such action could
significantly limit or
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless.
10. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China over data security, particularly for companies seeking to list
on a foreign exchange,
please revise your disclosure to explain how this oversight impacts
your business and your
offering and to what extent you believe that you are compliant with
the regulations or
policies that have been issued by the CAC to date.
11. Please expand your risk factor disclosure to discuss that the United
States Senate passed
the Accelerating Holding Foreign Companies Accountable Act, which, if
enacted, would
decrease the number of non-inspection years from three years to two,
thus reducing the
time period before your securities may be prohibited from trading or
delisted.
Reasons for the Business Combination, page 183
12. We note your disclosure on page 183 that for three years following the
closing, the Post-
Anna Rudensj
FirstName LastNameAnna Rudensj
Polestar Automotive Holding UK Ltd
Comapany9,
December NamePolestar
2021 Automotive Holding UK Ltd
December
Page 4 9, 2021 Page 4
FirstName LastName
Combination Company Board must be comprised of a majority of
independent directors.
Please revise to state that the Post-Combination Company may avail
itself of the
exemption available to controlled companies after the three year
period.
Certain Financial Projections Provided to the GGI Board, page 192
13. We note your disclosure that the financial projections are based on
numerous assumptions.
Please expand to disclose whether the projections are in line with
historic operating
trends. Address why the change in trends is appropriate or assumptions
are reasonable.
While you have a history of operating losses, the forecasts project
increasing total gross
profit. Clearly describe the basis for projecting this growth and the
factors or
contingencies that would affect such growth ultimately materializing.
Polestar's Management's Discussion and Analysis of Financial condition and
Results of
Operations
Critical accounting policies and estimates, page 304
14. We note that certain services and maintenance is included with the
sale of each Polestar
vehicle, and that residual approach is used to allocate the
transaction price to the
performance obligations associated with the sale of vehicle. Please
tell us how you met
one of the criteria in IFRS 15.79(c), including your consideration for
the maximum use of
observable inputs under IFRS 15.78. Also, expand your disclosure to
outline the reasons
for your use of this method and the amount of revenue recognized in
the periods presented
where the residual method is used.
Note (H), page 329
15. You state that your pro forma adjustments give effect to reflect the
approval of the
Warrant Amendment Proposal. Please revised your introductory paragraph
and Note 1 to
the pro forma financial information to include the approval of the
Warrant Amendment
Proposal in your assumption and your basis for doing so.
16. We note your disclosure on page B-15 and B-16 indicating that Class
C-2 Shares may be
converted for cash or to Class A Shares on a cashless basis, if held
by the Sponsor or any
of its Permitted Transferees. We also note that, if held by other
holders, Class C-2 Shares
have the same rights, preferences, privileges and restrictions as
Class C-1 Shares which
are classified as a liability. Please tell us how you determined that
GGI private warrants,
which will be exchanged for Class C-2 Share upon approval of the
warrant amendment
proposal, should be recorded in equity. Refer to paragraphs 16B and 26
of IAS 32.
Note (L.1), page 329
17. We note from your footnote disclosure that you recognized the Earn Out
Shares as a
financial liability measured at fair value in the pro forma balance
sheet and statement of
operations in accordance with IAS 32. However, while the estimated
valuation of the
financial liability of $1.3 billion as of June 30, 2021 has been
reflected on the pro forma
Anna Rudensj
FirstName LastNameAnna Rudensj
Polestar Automotive Holding UK Ltd
Comapany9,
December NamePolestar
2021 Automotive Holding UK Ltd
December
Page 5 9, 2021 Page 5
FirstName LastName
balance sheet with the corresponding charge against retained earnings,
we note no impact
to the pro forma statements of operations. Please explain why you
believe this
presentation is appropriate.
18. Notwithstanding the above, please tell us and revise your disclosure
to explain why you
believe the issuance of earn out shares is probable for pro forma
presentation purposes.
Conversion or Redemption Rights, page 370
19. Please discuss whether any events would trigger the mandatory
conversion of Class B
Ordinary Shares into Class A shares.
Polestar Automotive Holding Limited
Note 1. Significant accounting policies and judgements
Segment reporting, page F-42
20. We note from disclosures provided elsewhere in the filing, you have
cars on the road in
fourteen markets across Europe, North America and China where you also
have
operations and subsidiaries. In this regard, please revise your
segment disclosures to
include geographic information about revenues and assets to the extent
that revenues
derived from foreign countries or assets located in foreign countries
are material. Refer to
IFRS 8.31 and 33.
Revenue Recognition, page F-43
21. We note your disclosure on page 280 indicating that, to deliver
aftermarket services to
your customers, you rely on the existing service contracts Volvo Cars
have with its service
and repair network members. Please tell us whether you recognize
revenue on a gross or
net basis for these aftermarket services and explain how you
considered the guidance in
paragraph B34-B38 of IFRS 15.
22. We note that you consider financial service providers as one of the
categories of
customers. Please revise to disclose the nature of the arrangements
you have with these
customers and revenue policy, if material. In this regard, please
clearly identify the nature
of the performance obligations specified in your contract.
23. For each type of sales contract identified on page F-44, please
provide the disclosures
required by IFRS 15.119, as applicable. Your disclosures should be
specific to each
arrangement and should avoid the use of generic boilerplate language.
Your revised
disclosure should include, but not be limited to, when you typically
satisfy your
performance obligations (e.g. shipment, upon delivery, as services are
rendered or upon
completion of service, etc.), significant payment terms, and any
performance obligations
to arrange for another party to transfer goods or services, as
applicable.
24. Please revise your revenue footnote to disclose the information
required by IFRS
15.126(c) with respect to the amounts allocated to your performance
obligations. In this
regard, we note from your disclosure on page 304 that you utilize an
expected cost-plus
Anna Rudensj
FirstName LastNameAnna Rudensj
Polestar Automotive Holding UK Ltd
Comapany9,
December NamePolestar
2021 Automotive Holding UK Ltd
December
Page 6 9, 2021 Page 6
FirstName LastName
margin approach for estimating certain services and maintenance
included with the sale of
each vehicle, and the residual approach is used to allocate the
transaction price to the
performance obligations associated with the sale of vehicle.
Intangible assets and goodwill, page F-49
25. You state that the acquired IP related to the PS1 and PS2 represents
foundational IP that is
leveraged across multiple functions of the Group. Please provide the
nature of the
acquired IP in more detail and tell us why you believe the
amortization of such assets
should be included in research and development expenses rather than in
cost of sales.
Note 4. Revenue, page F-59
26. We note that contract arrangements with fleet customers include volume
discounts and
repurchase rights, which are not included in other arrangements.
Please tell us your
consideration for providing disaggregated revenue by type of customer
pursuant to IFRS
15.114 and 115.
27. We note your contract liabilities table on page F-60. With respect to
your remaining
performance obligations, please include the disclosure required by
IFRS 15.120(b).
General
28. Your charter waived the corporate opportunities doctrine. Please
address this potential
conflict of interest and whether it impacted your search for an
acquisition target.
29. Please clarify how the company determined itself to be a pure play
EV company despite
the Polestar 1 utilizing a petrol combustion engine.
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 Eiko Yaoita Pyles at (202)-551-3587 or Jean Yu at
(202)-551-3305 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Bradley Ecker at (202)-551-4985 or Sherry Haywood at (202)-551-3345
with any other
questions.
Sincerely,
Anna Rudensj
Polestar Automotive Holding UK Ltd
December 9, 2021
FirstName
Page 7 LastNameAnna Rudensj
Comapany NamePolestar Automotive Holding UK Ltd
Division of Corporation
Finance
December 9, 2021 Page 7 Office of Manufacturing
FirstName LastName