Jennifer,
Hope you had a good weekend. As you've no doubt seen, the Division of Corporation Finance's first-round comment letter on the Form S-4 (File No. 333-294817; CIK 0001948372) came through today. Not unexpected given the April 28 filing date, but the clock is now running.
I wanted to get ahead of this quickly and propose a division of labor between our teams — Calderwood & Harkness on the Skybridge/target side and Ashland Burke on the Pinnacle/SPAC side — for drafting the response letter and preparing Amendment No. 1. Details below.
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**1. Comment Letter Summary**
The letter contains 15 substantive comments spanning the following areas:
- **Pro forma financial presentation** — Comments on the pro forma capitalization tables, including the redemption scenario assumptions (no-redemption vs. maximum redemption with backstop), treatment of the 5,000,000 earnout shares, the public warrants (10,000,000) and private placement warrants (8,000,000) at the $11.50 exercise price, and the Sponsor forfeiture mechanics (500,000 base forfeiture; additional 500,000 if redemptions exceed 75% of public shares).
- **Risk factors** — Requests for enhanced disclosure around redemption risk and the $200,000,000 minimum cash condition, dilution from warrants and earnout, and the Velthryn backstop arrangement (up to 5,000,000 shares at $10.25/share with the 10% incentive share kicker).
- **Business description (Skybridge)** — Requests for additional detail on SBF's revenue model (FY 2024 revenue of $87.3M, ARR of $94.6M, EBITDA of $14.1M; FY 2023 revenue of $61.8M, EBITDA of $6.2M), customer concentration, and regulatory environment (money transmitter licensing, payment processor registrations).
- **Material agreements disclosure** — Comments on the summarization of the PIPE subscription agreements ($150M total — Hargrove $60M, Stonewall $40M, Meridian $25M, Canfield $25M), the backstop/non-redemption agreement with Velthryn, the Sponsor Support Agreement (voting, forfeiture, transfer restrictions), and the earnout agreement terms (Tranche 1: VWAP ≥ $12.50 within 24 months; Tranche 2: VWAP ≥ $15.00 within 36 months).
- **Tax disclosure** — Comments on the Section 368(a)(1)(A) reorganization opinion and the Section 367(b) domestication tax consequences, plus a request for clarity on tax treatment of PIPE shares and earnout shares.
- **Domestication disclosure** — Comments on the Cayman-to-Delaware domestication mechanics and shareholder consequences.
- **Valuation / fairness opinion** — A comment on Whitfield Royce & Co.'s fairness opinion methodology, including the implied multiples (~5.15× FY2024 revenue; ~4.76× FY2024 ARR).
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**2. Proposed Allocation of Responsibilities**
**Calderwood & Harkness (Skybridge / target side):**
- All comments relating to Skybridge's business description, operations, and financial data - Regulatory and licensing disclosure (money transmission, fintech regulatory matters) - IP and technology description comments - Material contracts disclosure for Skybridge-side contracts, including the Velthorn Commerce Bank credit facility ($18.5M outstanding under the Credit Agreement dated March 22, 2023; $25M revolving facility, to be repaid at closing) - Tax-related comments — we will coordinate with Leonard Cross here at C&H (tax) and Martin Cho at Cedarhurst Advisory Group for the Section 368(a) and Section 367(b) analysis - Skybridge financial statements — we will coordinate with Helen Marchetti (engagement partner) at Graystone Thornton LLP - Risk factors related to Skybridge's business and regulatory posture - Earnout agreement disclosure details
**Ashland Burke & Thayer (Pinnacle / SPAC side):**
- All comments relating to PGAC's trust account ($312.6M balance as of March 31, 2025 at Glenridge National Bank), redemption mechanics, and Sponsor arrangements - Pro forma financial tables and capitalization — both the no-redemption scenario (~97,000,000 total shares) and the maximum-redemption-with-backstop scenario (~77,000,000 total shares) - Sponsor Support Agreement and forfeiture mechanics disclosure - PIPE subscription agreement summary disclosure — please coordinate with Rebecca Solano at Pemberton Zanthor on this - Backstop/non-redemption agreement disclosure (Velthryn; Richard Tsai) - Domestication mechanics and Cayman Companies Act disclosures — coordinate with Harborstone Corporate Services Ltd. - Pinnacle financial statements — coordinate with Samuel Norris (engagement partner) at Brindoval Tarvick LLP - Risk factors related to SPAC structure, redemptions, and dilution from warrants
**Joint / collaborative items:**
- Valuation-related comments (Whitfield Royce fairness opinion on the target side; PGAC board's consideration on the SPAC side) - Indemnification disclosure (cap of $45M, basket/deductible of $4.5M, R&W insurance with Clarendon Mutual — policy limit $45M, retention $4.5M) - Combined company governance — Amended and Restated Certificate of Incorporation and Bylaws of Skybridge Fintech Holdings, Inc. - 2025 Equity Incentive Plan and 2025 Employee Stock Purchase Plan disclosures - Post-closing board composition and management (Priya Chandrasekaran continuing as CEO; Jonathan Mercer's role; independent directors) - D&O tail policy (Marlowe Asset Management Specialty Insurance Co., policy VSI-DO-2025-88320, to be bound at closing)
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**3. Timeline**
Our target filing date for Amendment No. 1 is **Monday, June 2, 2025** — two weeks from today. That's tight but achievable if we stay disciplined. For context, here's the critical path we're working backward from:
| Milestone
Any slippage on the June 2 target risks pushing out the EGM date and potentially the closing itself, so I'd like to keep us locked in.
**Proposed internal deadlines:**
- **Thursday, May 22** — Both teams circulate initial drafts of their assigned response sections for internal review. - **Monday, May 26 or Tuesday, May 27** — Joint call to consolidate the full response letter and finalize the Amendment No. 1 markup.
I will circulate a shared comment-response matrix (spreadsheet format) by **end of day tomorrow (May 20)** assigning each comment a number, owner, and status tracker. That should keep us organized as drafts move around.
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**4. Financial Advisor and Auditor Coordination**
On our end, I will reach out to Gregory Fenton at Whitfield Royce regarding the valuation/fairness opinion comment. Can you coordinate with Rebecca Solano at Pemberton Zanthor on any PIPE-related disclosure comments and the deferred underwriting fee ($10.5M — 3.5% of the $300M IPO proceeds)?
We will also need updated consents from both audit firms — Graystone Thornton (Skybridge) and Brindoval Tarvick (Pinnacle) — for inclusion in Amendment No. 1. I'll handle the Graystone Thornton consent request; would appreciate it if your team could handle Brindoval Tarvick.
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**5. Nasdaq Listing Application**
Quick housekeeping item — the Nasdaq listing application was submitted May 5 and is still under review (combined company ticker: SBFT). Have you received any follow-up requests from Nasdaq on your end? This is obviously a mutual closing condition, so we want to stay ahead of it.
Also, Advantage Proxy Advisors will need the definitive proxy timeline locked down soon to begin preparation. Once we have confidence in the June 2 amendment filing date, I'll loop them in.
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**Next Steps**
Jennifer, can you confirm the proposed allocation works for the ABT team, or flag any items you'd prefer to reassign? Happy to be flexible — just want to make sure nothing falls through the cracks.
Once you and your team confirm a time preference for the joint call (May 26 or 27), I'll send a calendar invite with a dial-in.
James and William — you are copied here and please weigh in on the allocation if you have any thoughts or concerns.
Thanks, and talk soon.
Best,
**Naomi Petersen** Calderwood & Harkness LLP 125 Broad Street, 40th Floor New York, NY 10004 Direct: (212) 554-7138 Mobile: (917) 483-2264 Email: npetersen@calderwoodharkness.com
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