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United States securities and exchange commission logo
August 28, 2023
Stephen Herbert
Chief Executive Officer
Rezolve AI Limited
3rd Floor, 80 New Bond Street
London, W1S 1SB
United Kingdom
Re: Rezolve AI Limited
Amendment No. 1 to
Registration Statement on Form F-4
Filed August 10,
2023
File No. 333-272751
Dear Stephen Herbert:
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 July
14, 2023 letter.
Amendment No. 1 to Registration Statement on Form F-4
Risk Factors
Risks Relating to Rezolve's Business and Industry
We expect to rely on a limited number of customers for a significant
portion of our near-term
revenue., page 64
1. We note your response
to prior comment 21 and reissue it, in part. Please describe the
material terms of your
agreement with Radio Group, including the term and any material
termination provisions.
For example, we note that Radio Group is permitted to terminate
the marketing agreement
"subject to notice and certain other provisions." Please identify
the "certain other
provisions."
Stephen Herbert
FirstName
Rezolve AILastNameStephen Herbert
Limited
Comapany
August 28, NameRezolve
2023 AI Limited
August
Page 2 28, 2023 Page 2
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Statements, page 98
2. At the forefront of your pro forma financial statements, please
highlight conditions that
will prevent the business combination from being consummated.
Specifically, your
disclosure should highlight the satisfaction or waiver conditions of
Nasdaq. Discuss what
redemptions have taken place to date and how you plan to satisfy
Nasdaq requirements.
Unaudited Pro Form Condensed Combined Statement of Operations, page 104
3. It appears your pro forma net (loss) income assuming maximum
redemptions does not add
up when footed across. Similarly, it appears the amount of pro forma
income (loss) before
taxes assuming no redemptions does not sum when footed down. Please
revise
accordingly.
Note 2 - Unaudited pro forma condensed combined balance sheet adjustments, page
106
4. We note your response to comment 7 and the disclosure to footnote (a).
If you do not
have the funds available to pay for the transaction costs, you should
clearly disclose this in
your filing. Also, if you intend to raise the funds by issuing equity,
in a separate
adjustment give pro forma effect to this issuance. Disclose in a
footnote the details of this
issuance including the number of shares that will be issued and the
estimated price per
share.
5. We note the revised disclosure in footnote (b) and your response to
comments 8 and 9.
Please clearly disclose in this footnote and elsewhere, as applicable,
that the Charter
Limitation in the Armada Charter prohibits Armada from closing the
Business
Combination since your net tangible assets are less than $5,000,001
immediately prior to
and upon consummation of the business combination. Further, clarify
that a third-party
financing would be in the form of an issuance of equity, as an
issuance of debt would have
no net effect on net tangible assets since it would increase both
assets and liabilities.
6. We note your response to comments 12 and 13 and the revised disclosure
in footnote (o).
In this regard, we note fees disclosed in Note (o) do not equal
adjustments made in the pro
forma financial statements. Tell us why or revise accordingly. Also,
disclose the terms of
each equity issuance, including how much cash has been raised to date.
Each equity
issuance should be discussed in plain English and have its own
footnote, providing readers
with clarity and ease of understanding.
Business of Rezolve Limited, page 212
7. We note your response to prior comment 18 and reissue it, in part. We
note that you
currently only derive revenues via the sale of radio advertisements
and transaction fees on
ticket sales. In order to provide investors with a better
understanding of your business,
please balance your disclosure here and elsewhere as appropriate with
equally prominent
disclosure of your current operations. Additionally, please disclose
when you expect to
commercialize your commerce and engagement platform.
Stephen Herbert
Rezolve AI Limited
August 28, 2023
Page 3
Rezolve's Management's Discussion and Analysis of Financial Conditions and
Results of
Operations, page 227
8. We note your response to comment 20. Given that Mr. Schwenk is ANY's
director of
marketing (marking is ANY's only source of revenue), and the sole
shareholder of Radio
Group, we are not persuaded by your assertion that Radio Group is not
a related party.
Please revise the disclosure to explain your relationship with Radio
Group and disclose all
related party transactions in accordance with ASC 850-10-50. Disclose
the amounts of
related party transactions on the face of the balance sheet, statement
of comprehensive
income, and statement of cash flows in accordance with Rule 4-08(k) of
Regulation S-X.
9. You disclose and discuss EBITDA and Adjusted EBTIDA prior to
disclosing and
discussing the comparable GAAP measure. Please disclose and discuss
the comparable
GAAP measure, net income (loss), with equal or greater prominence.
Refer to Item
10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the Compliance
and Disclosure
Interpretations for Non-GAAP Financial Measures.
2. Basis of presentation and summary of significant accounting policies
2.1 Basis of presentation, page F-9
10. We note your response to comment 28. In this regard:
Tell us why the draft financial information presented in your
February 15, 2023 letter,
are significantly different from the financial information in this
filing. Your response
should address both quantitative and qualitative factors.
Tell us if the facts and circumstances noted in your February 7, 15,
and March 1,
2023 letters, have remained the same, including the timeline as to
the disposition of
the China business.
Tell us if you have continued to fund the China business in 2023 and
when you plan
to seize funding that business.
Revise the disclosure in the filing to clearly, in plain English,
discuss the reason(s)
FirstName LastNameStephen Herbertto what you stated in your February 7,
2023 letter.
for the Demerger, similar
Comapany NameRezolve
Tell AI Limited as to whether the transactions with the
China business
us your consideration
August 28, should be reported
2023 Page 3 as related party transactions.
FirstName LastName
Stephen Herbert
FirstName
Rezolve AILastNameStephen Herbert
Limited
Comapany
August 28, NameRezolve
2023 AI Limited
August
Page 4 28, 2023 Page 4
FirstName LastName
2.7 Revenue recognition, page F-12
11. We note in your response to comment 31 you state, "ANY has the entire
discretion in
establishing the price, as stipulated in 3.3 of the Marketing
Agreement." However,
section 3.3 of the Marketing Agreement states, "Once a year, the radio
price lists are
coordinated between ANY and the respective radio society. ANY will
submit a proposal
for this. The respective parties will exchange views on this and reach
a consensus within
one week." Please explain this apparent contradiction between your
response and
the agreement.
12. We note your response to comment 31. Regarding your contracts with
advertisers, please
tell us:
the terms;
who signs the agreements with the advertiser;
who do the advertisers believe is providing the service; and
if Radio Group has any rights regarding what advertisements are
aired and when they
are aired.
Also, please provide us with an example of a typical contract with an
advertiser.
13. We note on page 64 "[t]he terms and conditions of the marketing
agreement with Radio
Group permit Radio Group to terminate the Company s ability to sell
customers radio
advertisements on a Radio Group radio station at any time." In light
of this, if Radio
Group were to terminate the marketing agreement, tell us how this
would affect your
relationship with your customers, the advertisers.
14. We note on page 227 that you derive revenue through "[t]he sale of
radio advertisements
in our German subsidiary Any Lifestyle Marketing GmbH ( ANY ) to a
single customer,
Radio Group GmbH and its related companies." However, on page F-12 you
state
"ANY s customers include national advertisers, retailers and
merchants." It appears there
is a contradiction in your disclosure as to who is your costumer.
Please explain.
2.17 Shareholders' deficit and reserves, page F-15
15. We note your response to comment 32 and your new disclosure on page
F-16. Given the
significance of the future stock compensation expense to your
financial statements, please
include similar disclosure at the forefront of your MD&A. Also, tell
us your
consideration as to whether this expense should be reflected in your
pro forma financial
statements.
14. Expenses and other Non-operating (income) expense, net, page F-30
16. We note your response to comment 35. However, since non-compete
arrangements are
related to your business operations, we continue to believe a share
based payment for a
non-compete agreement should be included in operating expenses. Please
revise
accordingly.
Stephen Herbert
Rezolve AI Limited
August 28, 2023
Page 5
15. Business Combinations, page F-32
17. We note from your response to comment 36 that Peter Vesco has power of
attorney over
ANY. Please tell us why Peter Vesco held the power of attorney rather
than Rezolve, and
why you attribute Peter Vesco s power to Rezolve.
18. We note from your response to comment 36 that Peter Vesco chairs a
weekly executive
meeting with ANY management, and they comprise the decision-making
group .
Further you stated that no decision-making is made without Peter Vesco
s approval.
Please elaborate on ANY s management s involvement in
decision-making, and whether
ANY s management is required to approve decisions regarding
activities that most
significantly affect the economic performance of ANY. Refer to ASC
810-10-25-38A.
19. We note from your response to comment 20 that the decision-making
authority for ANY
rests with Dan Wagner and Peter Vesco, which appears to contradict
your response to
comment 36. Please clarify.
20. We note from your response to comment 36 that Rezolve will be the
beneficial owner of
revenues and income of ANY and that you are obligated to fund losses
in ANY. Please
explain more clearly Rezolve s economic rights in, and obligations
to, ANY, and the
sources for such rights and/or obligations. In addition, explain to us
more clearly how
they represent variable interests in ANY. In this regard, to the
extent you have a service
contract with ANY, provide us your analysis of ASC 810-10-25-38J and
55-37 in
determining whether the service contract represents a variable
interest.
21. It appears that you filed the May 24, 2023 purchase agreement for the
equity interests.
Please provide us with the agreement(s) on or around August 30, 2021,
that gave rise to
Peter Vesco s power of attorney and also defined the consideration
ANY is obligated to
pay Rezolve for its services. Provide us with any amendments to the
agreements that
defined the rights and obligations of the parties.
22. Please explain to us the reason for the acquisition of the equity
interests of ANY in
February 2022, the subsequent loss of the equity interests in December
2022, and potential
re-acquisition of the equity interests in 2023, in light of your
reported controlling financial
interest since August 2021.
General
FirstName LastNameStephen Herbert
Comapany
23. NameRezolve
Please update your AI Limited
filing to include the financial statements of Armand
Acquisition Corp.
AugustI28,
for 2023
the nine
Pagemonths
5 ended June 30, 2023.
FirstName LastName
Stephen Herbert
FirstName
Rezolve AILastNameStephen Herbert
Limited
Comapany
August 28, NameRezolve
2023 AI Limited
August
Page 6 28, 2023 Page 6
FirstName LastName
You may contact Inessa Kessman, Senior Staff Accountant, at (202)
551-3371 or Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact Kyle
Wiley, Staff
Attorney, at (202) 344-5791 or Matthew Crispino, Staff Attorney, at (202)
551-3456 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Gerry Williams