United States securities and exchange commission logo
December 15, 2023
Raluca Dinu
Chief Executive Officer
GigCapital5, Inc.
1731 Embarcadero Rd., Suite 200
Palo Alto, CA 94303
Re: GigCapital5, Inc.
Amendment No. 5 to
Registration Statement on Form S-4
Filed November 24,
2023
File No. 333-269760
Dear Raluca Dinu:
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 June 5, 2023
letter.
Amendment No.5 to Form S-4 filed on November 24, 2023
Q: What equity stake will current GigCapital5 public stockholders, the
Sponsor and former QT
Imaging equityholders hold...?, page 13
1. Please revise to
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 investors at each of the redemption levels detailed
in your sensitivity
analysis. For example, we refer to your disclosure on page 50 relating
to the securities that
QT Imaging will issue to Yorkville as consideration for the Pre-Paid
Advance prior to the
closing of the business combination. With reference to the Stock
Subscription
Agreements, SEPA/Yorkville Financing, September and November Non-
Redemption Agreements,
and any other recent financings, please address the need to
update these tables,
including the additional potential dilution section. Please also revise
Raluca Dinu
FirstName LastNameRaluca Dinu
GigCapital5, Inc.
Comapany15,
December NameGigCapital5,
2023 Inc.
December
Page 2 15, 2023 Page 2
FirstName LastName
your disclosure, where appropriate, to include the definition of the
Pre-Advance
Closing.
Unaudited Pro Forma Financial Statements , page 156
2. With reference to the Net Tangible Assets Test disclosed on page 147,
we note that
Scenario 4 and 8 have net tangible assets less than $5,000,001. Please
address the
appropriateness of reflecting such scenarios.
3. We have the following comments on your calculations of net tangible
assets on pages 147
and 148:
We note that pro forma cash adjustment related to the Yorkville
Financing
as reflected in Note B5 and your pro forma financial statements is
$9,005,000. Please
confirm that the associated transaction costs are reflected in the
incremental
transaction costs incurred line item. If not, please address the
need to only reflect the
$9,005,000 proceeds in your calculation of net tangible assets;
and
With reference to the terms of the November 23, 2023
Non-Redemption Agreements,
please address how you are reflecting the cash payment by
GigCapital5 with cash
from its trust account in a per share amount equal to the
redemption price less $2.50
per share. Please also confirm that your pro forma financial
statements reflect these
payments.
4. With reference to your tabular presentation of the pro forma shares of
the combined
Company on pages 153 and 154, please address the following:
Expand footnote 5 to clarify and explain how you determined the
693,675 shares
related to the Conversion of QT Imaging Convertible Notes;
With reference to your disclosures on page 148, address the need
to
present the 1,200,000 share of combined company stock will be
issued in connection
with the Stock Subscription Agreement; and
With reference to the SEPA agreement, please address the need to
include shares to
be issued as consideration for the pre-paid advance.
5. With regard to Notes B2 through B5, please ensure that your textual
disclosures identify
the balance sheet line items impacted by the adjustment and provide
sufficiently detailed
information to clearly tie such information to actual pro forma
adjustments that are
reflected in the pro forma financial statements. In addition, ensure
that each adjustment in
the pro forma financial statements are appropriately labeled,
particularly adjustments B2,
B4 and B5.
6. We have the following comments regarding Notes B2, B3 and B4:
With regard to Notes B2 and B3, expand your disclosures to
quantify the proceeds
received and discuss the related conversion terms. Disclose the
deemed price per
share paid for the Combined Company shares to be issued at
conversion;
With regard to Note B4, please disclose the deemed conversion
price per share for the
Senior Secured Convertible Notes and the per share subscription
price for the Stock
Subscription Agreements;
Raluca Dinu
FirstName LastNameRaluca Dinu
GigCapital5, Inc.
Comapany15,
December NameGigCapital5,
2023 Inc.
December
Page 3 15, 2023 Page 3
FirstName LastName
It appears that the deemed conversion price and per share
subscription price are
substantially below the redemption price. If so, this fact should
be disclosed and
discussed throughout the filing, including under risk factors, as
these prices seem
to indicate the redemption price exceeds the fair value of shares
currently being
issued. Address this comment as it relates to the Senior Secured
Convertible Notes
discussed in Notes B2 and B3; and
Address the need to include the impact, if any, of these new
agreements on your
presentation of Additional Potential Dilution tables presented on
page 14 as well as
your other applicable prospectus disclosure.
7. In the second paragraph of Note B4, you reference Early Investor
Consideration
Shares. Please explain the nature of these shares, the context in
which they were issued
and their underlying accounting. Address the need to discuss these
shares elsewhere in the
filing as we see no other reference.
8. With regard to Note B6, and with reference to the terms of the
non-redemption
agreements, please expand your disclosures to indicate how you are
accounting for the
shares of QT Imaging Common stock that will be issued to the NRA
stockholders. Tell us
the authoritative literature you are relying on.
9. For Notes C1, C2, C3 and C4, please quantify the amount of the cash
settlement of the
Working Capital Notes and where such adjustment is included your pro
forma balance
sheet. In this regard, we do not see any associated adjustments to
your cash and cash
equivalents line item.
10. With reference to Note J3, we note that the fair value of the Merger
Consideration Earnout
shares increased substantially from the amount presented in the prior
amendment. With
reference to the changed terms of the earnout agreement, your current
revenues, projected
revenues and the probability of obtaining regulatory including FDA
clearances, and
probabilities of other Triggering Events related to the open angle
scanner, please provide
us details and expand your disclosures to provide the underlying
assumptions to support
your $49.9M earnout liability and the basis for such recognition.
11. With reference to the terms of the Yorkville financing agreement,
please explain how you
are accounting for, and presenting in your pro forma financial
statements, the 1,000,000
share of QTH Holdings to be issued upon completion of the Business
Combination. In this
regard, you indicate the issuance is consideration for the Pre-Paid
Advance.
12. With regard to Note 3. Loss per share, please address the need revise
this information for
the impact that the Stock Subscription Agreements, Yorkville
Financing, September and
November Non-Redemption Agreements, and any other recent financings
had on your pro
forma weighted average share calculation as well as your outstanding
or potential shares
of the Combined Company common stock equivalents that were excluded
from the
computation of pro forma diluted loss per share. For clarity, please
consider presenting the
related material pro forma shares issued and pro forma potential
shares separately for each
transaction.
Raluca Dinu
GigCapital5, Inc.
December 15, 2023
Page 4
13. On page F-68, you disclose that (i) QT Imaging's Working Capital Note was
amended to
increase the principal amount to $705,000 and (ii) QT Imaging entered
into a Securities
Purchase Agreement for a Bridge Loan in the aggregate amount of $1
million. Please tell
us how you reflected such transactions in the pro forma financial
statements.
14. With reference to the terms of the November 23, 2023 Non-Redemption
Agreement,
address the need to reflect the impact of this agreement in your pro
forma financial
statements.
QT Imaging Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Comparison of the nine months ended September 30, 2023 and 2022, page 308
15. You indicate that revenue decreased by $671,490 to $35,404 for the nine
months ended
September 30, 2023 from $706,894 for the nine months ended September 30,
2022. The
decrease in revenue was primarily attributable to the sale of two QT
Breast Scanners in
2022 as compared with no scanners sold in 2023. Please expand your
disclosures to fully
address why no scanners were sold in 2023.
Background of the Business Combination, page 363
16. We note your disclosure on page 374 that GigCapital5 and QT Imaging met
with potential
financing sources that could provide access to capital for the combined
company in June
2023 and entered into a non-binding term sheet with Yorkville on July 27,
2023. Please
expand your disclosure to clarify who selected the potential financing
sources and disclose
whether the investor has a relationship with the GigCapital5, the
Sponsor, QT Imaging or
their affiliates. Please also disclose the material terms and the
evolution of the negotiation
of such key terms in the term sheet and standby equity purchase
agreement.
Please contact Christie Wong at 202-551-3684 or Jeanne Baker at
202-551-3691 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Conlon Danberg at 202-551-4466 or Jane Park at 202-551-7439 with any
other
questions.
Sincerely,
FirstName LastNameRaluca Dinu Division of
Corporation Finance
Office of
Industrial Applications and
Comapany NameGigCapital5, Inc.
Services
December 15, 2023 Page 4
cc: Jeffrey C. Selman, Esq.
FirstName LastName