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United States securities and exchange commission logo
December 15, 2021
Victoria Grace
Chief Executive Officer
Pivotal Holdings Corp
The Offices 4, One Central
Dubai World Trade Centre
Dubai, United Arab Emirates
Re: Pivotal Holdings
Corp
Amendment No. 2 to
Registration
Statement on Form F-4
Filed November 15,
2021
File No. 333-259800
Dear Ms. Grace:
We have reviewed your amended 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.
Unless we note
otherwise, our references to prior comments are to comments in our
October 28, 2021 letter.
Amendment No. 2 to Registration Statement on Form F-4
Cover Page
1. We note your response
to comment 1. Please provide an estimate of the current per-share
exchange ratio or tell
us why you are unable to do so.
Victoria Grace
FirstName LastNameVictoria Grace
Pivotal Holdings Corp
Comapany15,
December NamePivotal
2021 Holdings Corp
December
Page 2 15, 2021 Page 2
FirstName LastName
Risk Factors
"Swvl does not have written contractual arrangements in place with certain of
its historically
material customers", page 43
2. We note that your revised disclosure in response to comment 9 suggests
an increase in the
percentage of revenue derived from material customers without a
written contractual
arrangement. In this regard, we note your disclosure that TaaS
customers with non-
contractual arrangements "made up approximately. . .10% of Swvl's
revenue in . . . the
first half of fiscal year 2021." Please clarify whether you expect
such trend to continue in
the future and expand your disclosure to discuss the potential impact
on your results of
operations if the counterparties do not perform under such
arrangements, if material. In
this regard, we note your disclosure that while you are in the process
of entering into
definitive documentation to govern these relationships, there is "no
guarantee such
definitive documentation will ultimately be entered into, and there
are no assurances entry
into such definitive documentation would allow Swvl to enforce claims
against such
counterparties for actions taken prior to entry into such agreements."
"Uncertainties with respect to the legal systems in the jurisdictions . . .",
page 45
3. We note your amended disclosure in response to comment 10 that "Swvl
has reimbursed,
and expects to continue to reimburse, drivers for the costs of such
fines." Please quantify
the reimbursements for these expenses for the periods presented, if
material.
Background of the Business Combination, page 108
4. We note your response to comment 18, and your amended disclosure
throughout this
section. Where you discuss the topics considered at each meeting
generally, please amend
your disclosure to provide the specific issues or terms discussed by
the parties in
attendance. For example, you disclose on page 112 that the parties
discussed "the amount
of funds to be available to the post-combination company upon the
closing of the
transaction, a forfeiture of Sponsor's SPAC Class B Ordinary Shares
depending on the
size of the PIPE Financing, the voting and/or non-redemption
commitments anticipated to
be obtained from certain SPAC shareholders, the size of the board of
the combined
company and the duration of the restrictions on the transfer of the
combined company
shares held by certain Swvl shareholders and the Sponsor," and on page
117, that
discussion included "[t]he primary unresolved due diligence items at
the time included
anti-corruption, data privacy and cybersecurity, licensing, employment
and material
contract matters." Please disclose the specific minimum cash
requirements discussed, the
actual size of the board negotiated, the specific voting commitments,
etc.
5. We note your response to comment 25, but we are not persuaded by your
response.
Please provide us with a detailed legal analysis explaining why you
believe the identity
and compensation of the Consultant are not material to investors.
Please also provide us
with a more detailed legal analysis as to why the Consultant's
presentation does not fall
Victoria Grace
FirstName LastNameVictoria Grace
Pivotal Holdings Corp
Comapany15,
December NamePivotal
2021 Holdings Corp
December
Page 3 15, 2021 Page 3
FirstName LastName
within the purview of Item 4(b) of Form F-4. In this regard, we note
your response that
"none of these materials opined on the value of Swvl or the fairness
of the consideration
offered in the Business Combination or made any recommendations
whether SPAC
should or should not proceed with the Business Combination;" however,
Item 4(b) of
Form F-4 relates to a report, opinion, or appraisal "materially
relating to the transaction,"
and is not limited to fairness evaluations or recommendations to
proceed. Alternatively,
please amend your disclosure to identify the Consultant and quantify
the compensation
paid to the Consultant, and revise your disclosure to provide the
information required by
Item 4(b) and 21(c) of Form F-4.
6. We note your response to comment 21, and your amended disclosure that
"a preliminary
valuation [was] based on certain business and financial information
regarding Swvl's
business and future prospects and benchmarking various peer
companies." To provide
additional context to investors for the basis of the $1 billion
valuation of Swvl, please
amend your disclosure to clarify the "certain business and financial
information"
considered and disclose the various peer companies used for
benchmarking, including
their respective valuations.
Potential Purchases of SPAC Public Shares, page 136
7. We note your response to comment 32, including that the SPAC and
Company are in
discussions with a third party to potentially purchase securities and
"any such purchases
by Sponsor, SPAC s directors, officers or advisors or any of their
respective affiliates
would only be made in compliance with applicable law, including Rule
14e-5 of the
Exchange Act." Please provide us with a detailed legal analysis
describing the exception
to Rule 14e-5 under which these purchases could be made.
Information about Swvl
Pricing, page 190
8. We note your disclosure on page 191 that your per rider revenue
generation has increased
over time. It is noted that to measure per rider revenue generation,
you calculate the per
rider revenue generated by all new riders in a given month and track
the per rider revenue
attributable to those specific riders in subsequent months. Please
tell us if per rider
revenue is calculated utilizing IFRS revenue or the non-IFRS measure,
gross sales. In
addition, please tell us your consideration of including new riders as
a metric.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Swvl
Factors Affecting Our Business and Results of Operations, page 201
9. We note "[n]ew riders in each of fiscal year 2019, fiscal year 2020
and the six months
ended June 30, 2021 accounted for approximately 18.2%, 15.5% and 25.1%
of our
revenue, respectively." Please tell us if your calculations are based
on IFRS revenue or
the non-IFRS measure, gross sales.
Victoria Grace
FirstName LastNameVictoria Grace
Pivotal Holdings Corp
Comapany15,
December NamePivotal
2021 Holdings Corp
December
Page 4 15, 2021 Page 4
FirstName LastName
10. We note your response to comment 47 and your amended disclosure on
page 201,
including that new riders include unique users taking their first ride
with Swvl. Please
clarify how you identify unique users, including if your method of
doing so could result in
your counting the same user as a unique user multiple times, and any
related risks.
Key Business and Non-IFRS Financial Measures, page 211
11. Please tell us how you distinguish between "bookings," "riders," and
"seats," and
whether these terms are utilized interchangeably.
Gross Sales, page 212
12. We note your disclosure that gross sales is a non-IFRS financial
measure which reflects
revenue adjusted to exclude the effects of end-user discounts and
promotions, sales
refunds, uncollected cash or sales waiver. Please tell us what
percentage of customers
utilize end-user discounts and promotions, sales refunds, uncollected
cash and sales
waivers and whether they are integral to your business model.
Gross Sales Less Captains Costs, page 213
13. Please tell us what is included in captain costs and why this
adjustment is useful and
important from an investor standpoint.
Reconciliation of Non-IFRS Measures
Reconciliation from Revenue to Gross Sales and Gross Sales Less Captain Costs,
page 214
14. We have read your response to comment 49 and it does not appear to
have addressed our
comment; therefore, it is being reissued. We note that your
presentation of gross revenue
excludes the impact of incentives which are reductions to your revenue
recorded under
IFRS 15. Please tell us how you determined that these adjustments do
not result in a
tailored recognition and measurement method. Refer to Question 100.04
of the Staff's
Compliance and Disclosure Interpretations on Non-GAAP Financial
Measures.
15. We have reviewed your response to comment 50 and note that it does not
appear to
address our comment; therefore, it is being reissued. Please revise to
reconcile gross sales
less captain costs to gross profit/loss which is the most directly
comparable IFRS measure,
as required by Item 10(e)(1)(i) of Regulation S-K.
Beneficial Ownership of Securities, page 270
16. We note your response to comment 52, including that the investment and
voting decisions
of DiGame Africa are made by a majority of the five directors on the
board of DiGame
Investment Company, and the investment and voting decisions of VNV
(Cyprus) Limited
are made by a majority of the five individuals that serve on the board
of VNV (Cyprus)
Limited. Please identify the five individuals for each of DiGame
Investment Company
Victoria Grace
Pivotal Holdings Corp
December 15, 2021
Page 5
and VNV (Cyprus) Limited that control the voting decisions of each
entity, respectively.
Note 7- Shareholders' Equity, page F-18
17. We note that you offered 34,500,000 Class A ordinary shares as part of
your initial public
offering of units, but show only 30,153,944 Class A ordinary shares
subject to possible
redemption in your balance sheet. Please tell us how you considered
the guidance in ASC
480-10-S99-3A, which requires securities that are redeemable for cash
or other assets to
be classified outside of permanent equity if they are redeemable (1)
at a fixed or
determinable price on a fixed or determinable date, (2) at the option
of the holder, or (3)
upon the occurrence of an event that is not solely within the control
of the issuer, in
concluding that all 34,500,000 Class A ordinary shares were not
required to be presented
outside of permanent equity and part of shares subject to possible
redemption. To the
extent you identify errors in your financial statements please explain
your consideration of
the guidance in ASC 250-10-45 for the correction of an error and
provide us
with a materiality analysis using ASC 250-10-S99-1.
Swvl Inc. and its subsidiaries
Notes to the consolidated financial statements
Note 2.19 Revenue recognition, page F-77
18. We note your response to comment 55 and your additional disaggregation
of revenue by
your offerings - business to business and business to consumer. Please
explain why you
did not also revise the notes to the financial statements for fiscal
year ended December 31,
2020. We note you updated your management s discussion and analysis
of financial
condition and results of operations for the fiscal year.
16. Revenue
16.1 Revenue reconciliations, page F-98
19. We note your response to comment 57 that "gross revenue" is an IFRS 15
term. Please
provide us with a detailed discussion of what "gross revenue"
represents and cite the
specific authoritative literature that supports gross revenue as an
IFRS measure.
Exhibit 23.1, page II-3
20. Please advise your independent registered public accounting firm to
provide an updated
auditor consent.
General
FirstName LastNameVictoria Grace
21. We note your revised disclosure on pages vii-viii in response to comment
58 and reissue
Comapany NamePivotal
the comment Holdings
in part. ClarifyCorp
whether recent common stock trading
prices exceed the
threshold
December thatPage
15, 2021 would
5 allow the company to redeem public warrants.
FirstName LastName
Victoria Grace
FirstName LastNameVictoria Grace
Pivotal Holdings Corp
Comapany15,
December NamePivotal
2021 Holdings Corp
December
Page 6 15, 2021 Page 6
FirstName LastName
You may contact Scott Stringer at (202) 551-3272 or Angela Lumley at
(202) 551-3398 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Katherine Bagley at (202) 551-2545 or Jennifer Lopez-Molina at (202)
551-3792 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services