sec-comment-response-letter.docx

1046-00001 · Helix Bio Therapeutics Inc · SEC Filings

sec-comment-response-letter.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP One Federal Street, 42nd Floor Boston, MA 02110 Telephone: (617) 854-7000 Facsimile: (617) 854-7001 www.calderwoodharkness.com

May 10, 2023

Via EDGAR and Sundial Data Systems

Division of Corporation Finance Office of Life Sciences U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549

Dear Ladies and Gentlemen of the Staff:

Re: Pinnacle Venture Acquisition Corp. Registration Statement on Form S-4 Filed April 7, 2023 File No. 333-271498 CIK No. 0001893742

Calderwood & Harkness LLP writes on behalf of our client, Pinnacle Venture Acquisition Corp. ("PVAC" or the "Company"), in response to the comment letter from the Staff (the "Staff") of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the "Commission") dated April 28, 2023 (the "Comment Letter") regarding the above-referenced Registration Statement on Form S-4 (the "Registration Statement"). The Registration Statement relates to the proposed business combination (the "Business Combination") among PVAC, Pinnacle Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of PVAC ("Merger Sub"), and Helix Bio Therapeutics Inc. ("HBT"), pursuant to the Business Combination Agreement dated March 22, 2023 (the "BCA").

Concurrently with the submission of this response letter, PVAC is filing Amendment No. 1 to the Registration Statement ("Amendment No. 1"), which reflects the revisions described herein and certain other updates. For the Staff's convenience, each comment from the Comment Letter is set forth below in bold, followed by the Company's response. References to page numbers are to the pages of the proxy statement/prospectus included in Amendment No. 1 unless otherwise noted. Capitalized terms used but not defined herein have the meanings assigned to them in the Registration Statement, as amended by Amendment No. 1.

The responses set forth below have been prepared based on information provided to us by PVAC, HBT, and their respective financial advisors. We have endeavored to address each of the Staff's comments fully and to describe the nature and location of each corresponding revision in Amendment No. 1.

Comment 1 — Cover Page / Summary: Dilution from Sponsor Founder Shares and Public Warrants

The Staff notes that the cover page and summary section do not adequately disclose the potential dilutive impact of the Sponsor's founder shares and the outstanding public warrants on the shares to be received by non-redeeming public shareholders and PIPE investors. Please revise the disclosure to quantify the dilutive effect of (a) the 1,250,000 Class B founder shares held by Pinnacle Venture Sponsor LLC (after giving effect to the agreed forfeiture of 375,000 shares, resulting in 875,000 retained founder shares) and (b) the 2,500,000 public warrants exercisable at $11.50 per share.

Response:

The Company acknowledges the Staff's comment and appreciates the Staff's attention to this matter. In response, the Company has revised the cover page and the Summary section of the proxy statement/prospectus included in Amendment No. 1 to include a prominent tabular presentation quantifying the potential dilutive impact of the Sponsor's retained founder shares and the outstanding public warrants on the post-closing equity capitalization of the combined company (to be renamed "Helix Biosciences, Inc." or "HBIO" at closing).

Specifically, the revised disclosure now presents the post-closing capitalization of HBIO on both an undiluted basis and a fully diluted basis, as set forth below:

Post-Closing Capitalization — Undiluted Basis:

The undiluted presentation reflects the intermediate redemption scenario described in the Company's response to Comment 3 below, in which approximately 2,814,390 public shares are redeemed. The cover page and Summary section now include corresponding undiluted tables for the no-redemption and maximum redemption scenarios as well.

Post-Closing Capitalization — Fully Diluted Basis:

As illustrated by the tables above, the exercise in full of all 2,500,000 public warrants at their $11.50 per share exercise price would result in public warrant holders owning approximately 20.7% of the fully diluted shares outstanding, with a corresponding proportional reduction in the ownership percentage of each other holder category. In particular, the ownership percentage of former HBT equityholders would decrease from 44.1% on an undiluted basis to 33.2% on a fully diluted basis, and the ownership percentage of non-redeeming PVAC public shareholders would decrease from 24.1% to 18.1%.

The revised disclosure further notes that the Sponsor's forfeiture of 375,000 founder shares, representing 30% of the original 1,250,000 Class B founder shares issued to Pinnacle Venture Sponsor LLC, was specifically negotiated as a term of the BCA to reduce the dilutive impact on HBT equityholders and PIPE investors. In the absence of such forfeiture, the Sponsor would have retained 1,250,000 shares, representing approximately 13.8% of undiluted shares outstanding (as compared to 9.7% after giving effect to the forfeiture).

In addition, the revised cover page and Summary section now include a narrative explanation that the 875,000 retained Sponsor shares were originally acquired for nominal consideration of approximately $25,000 in the aggregate (or approximately $0.029 per share), compared to the $10.00 per share price paid by PVAC public shareholders in the IPO and the $10.00 per share price to be paid by the PIPE investors. The disclosure explains that this significant differential between the Sponsor's per-share acquisition cost and the per-share price paid by public shareholders and PIPE investors represents a material source of potential dilution and economic misalignment, and that investors should carefully consider this disparity in evaluating the Business Combination.

The foregoing revisions appear on pages 1 through 3 (cover page) and pages 18 through 22 (Summary section) of Amendment No. 1.

Comment 2 — Earnout Milestones Disclosure

The Staff notes that the description of the earnout milestones on pages 72 and 118 of the Registration Statement lacks sufficient specificity regarding the stock price triggers and measurement periods. Please revise to clearly describe each tranche, including the applicable stock price thresholds, the trading-day measurement methodology, and the duration of the earnout period.

Response:

The Company acknowledges the Staff's comment. In response, the Company has revised the disclosure in Amendment No. 1 to provide enhanced detail regarding the two-tranche earnout structure set forth in Article II of the BCA. The revised disclosure, which now appears in both the Summary section, the section entitled "Proposal No. 1 — The Business Combination Proposal," and the notes to the unaudited pro forma condensed combined financial statements, describes the earnout milestones as follows:

Tranche 1: 250,000 additional shares of HBIO common stock shall be issuable to former HBT equityholders if the volume-weighted average closing price of HBIO common stock, as reported on the Nasdaq Capital Market (or such other national securities exchange on which the HBIO common stock is then listed), equals or exceeds $14.00 per share for any 20 trading days within any 30 consecutive trading-day period during the 36-month period commencing on the closing date of the Business Combination (anticipated to be on or about June 20, 2023) and ending on the third anniversary thereof (the "Earnout Period").

Tranche 2: 250,000 additional shares of HBIO common stock shall be issuable to former HBT equityholders if the volume-weighted average closing price of HBIO common stock, as reported on the applicable national securities exchange, equals or exceeds $16.00 per share for any 20 trading days within any 30 consecutive trading-day period during the same 36-month Earnout Period.

The total number of earnout shares issuable under both tranches is 500,000 shares. As provided in Section 2.07 of the BCA, the two tranches are independent of one another: Tranche 2 may be triggered without Tranche 1 having been previously triggered, and Tranche 1 may be triggered without Tranche 2 having been previously triggered. If both stock price thresholds are achieved during the Earnout Period, all 500,000 earnout shares will be issued. If only one threshold is achieved, only the corresponding 250,000-share tranche will be issued. If neither threshold is achieved prior to the expiration of the Earnout Period, no earnout shares will be issued and the right to receive such shares will terminate.

The revised disclosure further clarifies that the earnout shares are to be allocated pro rata among the former HBT equityholders based on their relative proportionate share of the aggregate merger consideration shares (i.e., each former HBT equityholder's percentage of the 4,000,000 merger consideration shares). The issuance, allocation, and distribution of earnout shares are governed by the provisions of Article II of the BCA dated March 22, 2023, a copy of which is filed as Exhibit 2.1 to the Registration Statement.

Additionally, in response to this comment, the Company has added a new risk factor in the section entitled "Risk Factors — Risks Related to the Business Combination" addressing the uncertainty as to whether the stock price thresholds required for the earnout tranches will be achieved and, if achieved, the resulting dilution to shareholders. The risk factor discloses that the issuance of up to 500,000 additional earnout shares would increase the fully diluted share count from 11,560,610 (assuming exercise of all public warrants but no earnout) to 12,060,610, representing incremental dilution of approximately 4.1% on a fully diluted basis.

The foregoing revisions appear on pages 20–21 (Summary), pages 72–74 (Business Combination Proposal), pages 43–44 (Risk Factors), and pages 108–110 (Notes to Unaudited Pro Forma Condensed Combined Financial Information) of Amendment No. 1.

Comment 3 — Presentation of Redemption Scenarios

Please revise your disclosure to present multiple redemption scenarios, including a no-redemption scenario, a maximum redemption scenario, and an intermediate scenario reflecting actual or estimated redemption levels, so that investors can assess the range of potential outcomes, including the impact on per share value, ownership percentages, and satisfaction of the minimum cash condition.

Response:

The Company acknowledges the Staff's comment and has made substantial revisions to Address No. 1 in response. Specifically, the Company has added a new tabular presentation in the section entitled "Unaudited Pro Forma Condensed Combined Financial Information" and has included a corresponding summary table in the Summary section of the proxy statement/prospectus. The revised disclosure presents three distinct redemption scenarios, each setting forth the cash available to the combined company, shares outstanding by holder category, ownership percentages, and implied per-share book value. The three scenarios are as follows:

No Redemption Scenario

Under the no-redemption scenario, all 5,000,000 Class A public shares initially sold in PVAC's IPO remain outstanding and no public shareholders exercise their redemption rights. The key financial parameters under this scenario are as follows:

• Trust account proceeds available (no redemptions): $51,247,813.55

• Plus PIPE proceeds: $20,000,000.00

• Total gross cash available: $71,247,813.55

• Less estimated transaction expenses: ($6,000,000.00)

• Net cash available to combined company: $65,247,813.55

• Minimum cash condition under BCA §7.03(c) ($30,000,000): Satisfied

Under this scenario, total undiluted shares outstanding would be 11,875,000, comprised of: 4,000,000 shares to former HBT equityholders (33.7%); 5,000,000 non-redeeming public shares (42.1%); 2,000,000 PIPE shares (16.8%); and 875,000 Sponsor shares (7.4%).

Maximum Redemption Scenario

Under the maximum redemption scenario, the maximum number of PVAC public shares are redeemed while still satisfying the BCA §7.03(c) minimum cash condition of $30,000,000 in Available Cash (as defined in the BCA) at closing. The calculation of the maximum permissible redemption level is as follows:

• Minimum Available Cash required at closing: $30,000,000.00

• Plus estimated transaction expenses to be paid from cash at closing: $6,000,000.00

• Less PIPE proceeds: ($20,000,000.00)

• Minimum required trust proceeds after redemptions: $16,000,000.00

• Pre-redemption trust account balance: $51,247,813.55

• Maximum amount available for redemptions: $51,247,813.55 − $16,000,000.00 = $35,247,813.55

• Per-share redemption price (approximate): $10.25

• Maximum number of shares redeemable: $35,247,813.55 ÷ $10.25 ≈ 3,438,811 shares

• Remaining public shares after maximum redemption: 5,000,000 − 3,438,811 = 1,561,189 shares

Under this scenario, net cash available to the combined company would be approximately $30,000,000 (reflecting the minimum cash condition constraint). Total undiluted shares outstanding would be 8,436,189, comprised of: 4,000,000 shares to former HBT equityholders (47.4%); 1,561,189 non-redeeming public shares (18.5%); 2,000,000 PIPE shares (23.7%); and 875,000 Sponsor shares (10.4%).

The revised disclosure notes that if redemptions were to exceed the level described above (i.e., if the remaining Available Cash after giving effect to redemptions, PIPE proceeds, and transaction expenses were to fall below $30,000,000), the minimum cash condition under BCA §7.03(c) would not be satisfied. In such event, HBT would not be obligated to consummate the Business Combination, and PVAC could be required to extend its deadline for completing a business combination or proceed toward liquidation of the trust account and dissolution, in each case subject to the terms of PVAC's amended and restated certificate of incorporation.

Intermediate Scenario (Illustrative Actual Redemptions)

The intermediate scenario utilizes illustrative assumptions consistent with the range of redemption levels observed in recent de-SPAC transactions in the life sciences and broader SPAC market. For purposes of this scenario, the Company has assumed that 50% of public shares (2,500,000 shares) are redeemed at the approximate per-share redemption price of $10.25 per share:

• Trust account proceeds after 50% redemption: $51,247,813.55 − (2,500,000 × $10.25) = $25,623,906.78 (approximate)

• Plus PIPE proceeds: $20,000,000.00

• Total gross cash available: $45,623,906.78

• Less estimated transaction expenses: ($6,000,000.00)

• Net cash available to combined company: $39,623,906.78

• Minimum cash condition under BCA §7.03(c) ($30,000,000): Satisfied

Under this scenario, total undiluted shares outstanding would be 9,375,000, comprised of: 4,000,000 shares to former HBT equityholders (42.7%); 2,500,000 non-redeeming public shares (26.7%); 2,000,000 PIPE shares (21.3%); and 875,000 Sponsor shares (9.3%).

Each of the three scenarios presented above shows: (i) the aggregate cash available to the combined company after giving effect to redemptions, PIPE proceeds, and estimated transaction expenses; (ii) the number of shares outstanding by holder category; (iii) the ownership percentage of each holder category on both an undiluted and fully diluted basis; and (iv) the implied per-share book value of HBIO common stock at closing.

In addition, the revised disclosure regarding the minimum cash condition of $30,000,000 under BCA §7.03(c) has been cross-referenced throughout the proxy statement/prospectus, including in the Summary, the Risk Factors section, the section describing the BCA, and the Unaudited Pro Forma Condensed Combined Financial Information. This cross-referencing is intended to ensure that shareholders can readily identify and understand the significance of the minimum cash condition in the context of their redemption decisions.

The foregoing revisions appear on pages 19–22 (Summary), pages 76–78 (Business Combination Proposal — Minimum Cash Condition), pages 99–112 (Unaudited Pro Forma Condensed Combined Financial Information), and pages 38–39 (Risk Factors) of Amendment No. 1.

Comment 4 — Background of the Transaction

The disclosure in the "Background of the Transaction" section does not provide sufficient detail regarding the process by which PVAC identified and selected HBT as the target for the business combination. Please revise to provide a more detailed chronology, including: the number of potential targets considered; the basis for selecting HBT; the material terms discussed during negotiations; the roles of each party's financial advisors; and the dates of key board meetings and approvals.

Response:

The Company acknowledges the Staff's comment. In response, the Company has substantially expanded the section entitled "Background of the Transaction" in Amendment No. 1. The revised section now provides a detailed chronological narrative of the target identification process, the evaluation and selection of HBT, the negotiation of the BCA and ancillary transaction agreements, and the board approval process. The key elements of the expanded disclosure are summarized below.

Target Search Process. Following the closing of PVAC's IPO on August 16, 2021 (in which PVAC raised $50,000,000 through the sale of 5,000,000 units at $10.00 per unit, with the IPO proceeds deposited in a trust account at Grandview Trust Company, N.A.), PVAC's management team — led by Derek Holroyd, Chief Executive Officer and Director, and Samantha Briggs, Chief Financial Officer and Director — commenced a systematic search for business combination targets. PVAC's search focused primarily on the life sciences and healthcare sectors, consistent with the business strategy described in PVAC's IPO prospectus. PVAC's financial advisor, Birchwood Partners LLC (Graham Hollis, Managing Director, serving as the lead engagement professional), assisted PVAC's management in identifying, evaluating, and screening potential targets.

Scope of Target Evaluation. Over the period from September 2021 through December 2022, PVAC evaluated approximately 30 potential target companies, encompassing clinical-stage biotechnology companies, medical device companies, and healthcare services businesses at varying stages of development and commercialization. For each potential target, PVAC's management and Birchwood Partners conducted a preliminary assessment of the target's technology or service platform, competitive positioning, management team, capital structure, and potential fit with PVAC's stated investment criteria. In most cases, the evaluation did not proceed beyond an initial screening phase. In several cases, PVAC conducted preliminary discussions with the target's management team or financial advisor but did not proceed to a letter of intent. The revised disclosure describes the general industries and stages of the targets evaluated without identifying rejected targets by name, consistent with confidentiality obligations.

Introduction to HBT. In late Q4 2022, Birchwood Partners introduced PVAC to Helix Bio Therapeutics Inc., a clinical-stage biotechnology company headquartered at 450 Kendall Street, Suite 800, Cambridge, Massachusetts 02142. HBT is focused on the development of next-generation gene-editing therapies for rare monogenic diseases. HBT's lead product candidate, HBT-301, is being developed for the treatment of Friedreich's ataxia and was, at the time of introduction, in Phase 1b clinical trials at two clinical sites in the United States. HBT's second product candidate, HBT-502, is being developed for the treatment of Wilson's disease and was in the preclinical stage. Calvert & Wren Advisory LLC (Rachel Dominguez, Senior Managing Director) served as financial advisor to HBT and facilitated the introduction on behalf of HBT.

Preliminary Discussions and Due Diligence. Between late November 2022 and late January 2023, PVAC's management team and Birchwood Partners held multiple introductory meetings with HBT's management team, led by Dr. Priya Nandakumar, Founder, Chair and Chief Executive Officer of HBT, and Dr. James Whitfield, Co-Founder and Chief Scientific Officer of HBT. During these meetings, the parties discussed HBT's clinical pipeline, intellectual property estate, competitive landscape, capital requirements, and organizational structure. PVAC's management also reviewed preliminary financial and scientific data provided by HBT through a virtual data room maintained by HBT and Calvert & Wren Advisory.

Letter of Intent. On January 30, 2023, PVAC and HBT executed a non-binding Letter of Intent (the "LOI"), establishing the framework for a potential de-SPAC business combination at an implied enterprise value of $40,000,000 for HBT. The LOI contemplated a forward merger structure in which a newly formed subsidiary of PVAC would merge with and into HBT, with HBT surviving as a wholly owned subsidiary of PVAC (which would be renamed "Helix Biosciences, Inc." upon closing). The LOI further contemplated that the aggregate merger consideration payable to HBT equityholders would consist of 4,000,000 shares of PVAC Class A common stock at a deemed value of $10.00 per share. The LOI included customary exclusivity and standstill provisions for a period of 60 days. At or around the time of the LOI execution, Calderwood & Harkness LLP (Sandra Tung, Partner, as the responsible attorney) was engaged as counsel to HBT in connection with the proposed transaction, and Hargrove Slater & Dunn LLP (Nathan Dorsey, Partner, serving as lead attorney) continued in its existing role as counsel to PVAC.

Negotiation of the BCA and Ancillary Agreements. From early February through mid-March 2023, the parties and their respective legal and financial advisors engaged in extensive due diligence and negotiation of the definitive BCA and related transaction documents. The key terms negotiated during this period included:

• The aggregate merger consideration of 4,000,000 shares at $10.00 per share deemed value (representing an implied enterprise value of $40,000,000 for HBT);

• The two-tranche earnout structure (described in the response to Comment 2 above), which was proposed by HBT's advisors as a mechanism to bridge valuation differences between the parties and to provide additional upside to HBT equityholders in the event of post-closing stock price appreciation;

• The Sponsor's agreement to forfeit 375,000 of its 1,250,000 Class B founder shares at closing, representing a negotiated concession to reduce dilution to HBT equityholders and PIPE investors;

• The minimum cash condition under BCA §7.03(c), requiring that Available Cash at closing (defined as the sum of trust proceeds remaining after redemptions plus PIPE proceeds, minus transaction expenses) equal at least $30,000,000, which was a condition insisted upon by HBT as a closing condition to ensure that the combined company would have sufficient capital to continue funding HBT's clinical programs;

• The PIPE financing commitments, pursuant to which Brindoval Capital Management, LP committed to purchase 1,500,000 shares at $10.00 per share ($15,000,000) and Lakepoint Health Opportunities Fund, LP committed to purchase 500,000 shares at $10.00 per share ($5,000,000), for aggregate PIPE commitments of $20,000,000; and

• The post-closing lock-up arrangements applicable to the Sponsor, HBT equityholders, and PIPE investors.

Formation of Merger Sub. On February 14, 2023, Pinnacle Merger Sub Inc. was incorporated in the State of Delaware for the sole purpose of effectuating the forward merger contemplated by the BCA.

PVAC Board Approval. On March 20, 2023, the PVAC Board of Directors — consisting of Derek Holroyd, Samantha Briggs, Robert Tannenbaum (independent director), and Julia Greenfield (independent director) — held a meeting at which the Board received a detailed presentation from Birchwood Partners regarding the proposed Business Combination, including a summary of its financial analyses, and received the fairness opinion of Birchwood Partners LLC (described in the response to Comment 7 below). Following discussion and deliberation, the PVAC Board unanimously approved the BCA and the transactions contemplated thereby, and recommended that PVAC's shareholders approve the Business Combination Proposal, the Charter Amendment Proposal, and the other proposals to be set forth in the proxy statement/prospectus.

HBT Board Approval. On March 21, 2023, the HBT Board of Directors — consisting of Dr. Priya Nandakumar, Dr. James Whitfield, Catherine Alcott, Marcus Leung, and Dr. Elena Vasquez — held a meeting at which the Board received a presentation from Calvert & Wren Advisory regarding the financial terms of the proposed Business Combination and from Calderwood & Harkness regarding the legal terms and conditions of the BCA. Following extensive discussion and deliberation, the HBT Board unanimously approved the BCA and the transactions contemplated thereby.

Execution of the BCA. On March 22, 2023, the BCA was executed by and among PVAC, Merger Sub, and HBT, and publicly announced via a Current Report on Form 8-K filed by PVAC with the Commission on the same date.

The revised disclosure further describes the material factors considered by each board in reaching its decision to approve the Business Combination, including: the implied enterprise value of $40,000,000 for HBT and the negotiation thereof; the fairness opinion delivered to the PVAC Board by Birchwood Partners LLC; HBT's clinical pipeline, including the Phase 1b status of HBT-301 and the preclinical status of HBT-502; HBT's intellectual property portfolio, including the Exclusive License Agreement with the Regents of Graystone University; the availability of PIPE financing commitments totaling $20,000,000; projected dilution analyses under various redemption scenarios; risks related to shareholder redemptions and the minimum cash condition; the competitive landscape for gene-editing therapies in the rare disease space; and the experience and qualifications of HBT's management team and scientific personnel.

The foregoing revisions appear on pages 56–70 of Amendment No. 1.

Comment 5 — Pro Forma Financial Statements

Please revise the unaudited pro forma condensed combined financial statements to (a) present separate columns for HBT's historical financial data and PVAC's historical financial data; (b) clearly identify and quantify each pro forma adjustment; (c) present the pro forma adjustments in connection with the multiple redemption scenarios requested above; and (d) ensure consistency with the audited financial statements of HBT for fiscal years 2021 and 2022 as audited by Whitmore & Gaines LLP and the audited financial statements of PVAC as audited by Prescott Townsend & Associates LLP.

Response:

The Company acknowledges the Staff's comment and has made extensive revisions to the unaudited pro forma condensed combined financial information in Amendment No. 1 to address each element of the Staff's comment.

(a) Separate Columns for Historical Financial Data. The pro forma financial statements in Amendment No. 1 now present separate columns for: (i) HBT historical financial data, derived from the audited financial statements of HBT for the fiscal years ended December 31, 2021 and December 31, 2022, as audited by Whitmore & Gaines LLP (Leonard Brixton, engagement partner, PCAOB ID No. 00742); (ii) PVAC historical financial data, derived from the audited financial statements of PVAC for the fiscal year ended December 31, 2022 and the period from inception (March 9, 2021) through December 31, 2021, as audited by Prescott Townsend & Associates LLP (Deborah Kline, engagement partner, PCAOB ID No. 01138); (iii) pro forma transaction accounting adjustments; and (iv) the pro forma combined totals. The columnar format enables investors to clearly identify the historical operating results and financial position of each constituent entity and to distinguish historical financial data from the effects of the pro forma adjustments.

(b) Pro Forma Adjustments. Each pro forma adjustment is now clearly identified, labeled, and quantified in the accompanying notes to the pro forma financial statements. The key pro forma adjustments reflected in Amendment No. 1 are as follows:

1. Issuance of Merger Consideration Shares. Issuance of 4,000,000 shares of PVAC Class A common stock (to be redesignated as HBIO common stock at closing) to former HBT equityholders at a deemed value of $10.00 per share, representing aggregate merger consideration of $40,000,000. This adjustment is reflected as an increase to stockholders' equity and the elimination of HBT's historical equity accounts.

2. Release of Trust Account Funds. Release of funds held in trust at Grandview Trust Company, N.A.: the pre-redemption trust account balance is $51,247,813.55, consisting of IPO proceeds of $50,000,000 plus accrued interest of $1,247,813.55 earned on trust-held U.S. government securities and money market funds. This adjustment reclassifies trust account investments from restricted assets to unrestricted cash and cash equivalents.

3. Redemption of Public Shares. The pro forma financial statements present the effect of public share redemptions under each of the three scenarios described in the Company's response to Comment 3 above:

• No-redemption scenario: No shares redeemed; $0 cash outflow.

• Maximum redemption scenario: Approximately 3,438,811 shares redeemed at approximately $10.25 per share, resulting in a cash outflow of approximately $35,247,813.55.

• Intermediate scenario (illustrative 50% redemption): Approximately 2,500,000 shares redeemed at approximately $10.25 per share, resulting in a cash outflow of approximately $25,623,906.78.

4. Receipt of PIPE Proceeds. Total PIPE proceeds of $20,000,000, consisting of: (x) 1,500,000 shares to be purchased by Brindoval Capital Management, LP at $10.00 per share ($15,000,000); and (y) 500,000 shares to be purchased by Lakepoint Health Opportunities Fund, LP at $10.00 per share ($5,000,000). This adjustment is reflected as an increase to cash and stockholders' equity.

5. Payment of Estimated Transaction Expenses. Total estimated transaction expenses of $6,000,000, itemized as follows:

6. Sponsor Share Forfeiture. Forfeiture by Pinnacle Venture Sponsor LLC of 375,000 Class B founder shares. This adjustment has no cash impact and is reflected solely as a reduction in the outstanding share count and a corresponding adjustment to stockholders' equity.

7. Elimination of Deferred Underwriting Liability. Elimination of PVAC's historical deferred underwriting liability of $1,750,000, which is settled upon closing through payment to Birchwood Partners LLC as described in item (5) above. This adjustment is reflected as a reduction to liabilities and a corresponding charge to stockholders' equity.

8. Reclassification of Trust Account Investments. Reclassification of the trust account balance from "Investments held in Trust Account" (a restricted current or non-current asset on PVAC's historical balance sheet) to unrestricted cash and cash equivalents, net of any redemption payments.

(c) Multiple Redemption Scenario Presentation. The pro forma financial statements now include three separate pro forma adjustment columns and three separate pro forma combined columns, corresponding to the no-redemption, maximum redemption, and intermediate (illustrative) redemption scenarios. This presentation enables investors to observe the effects of varying levels of public share redemptions on the combined company's pro forma financial position and capitalization.

(d) Consistency with Audited Financial Statements. The Company confirms that all historical financial data presented in the pro forma financial statements is derived from and consistent with the audited financial statements of HBT and PVAC included in the Registration Statement. Key HBT historical figures incorporated in the pro forma financial statements include: fiscal year 2022 revenue of $2,100,000 (derived entirely from collaboration and licensing arrangements); fiscal year 2022 net loss of ($18,400,000); and cash and cash equivalents as of December 31, 2022 of $9,700,000. Updated auditor consents from both Whitmore & Gaines LLP and Prescott Townsend & Associates LLP have been filed as Exhibits 23.1 and 23.2, respectively, to Amendment No. 1.

The foregoing revisions appear on pages 99–112 of Amendment No. 1.

Comment 6 — Risk Factors Related to HBT's Clinical-Stage Operations

The risk factor disclosures do not adequately address risks specific to HBT's clinical-stage business, including the early stage of its product candidates, its limited revenue history, its dependence on key intellectual property licenses, and the uncertainty of future funding requirements. Please revise to include more specific and detailed risk factors that address these matters.

Response:

The Company acknowledges the Staff's comment. In response, the Company has revised and substantially expanded the "Risk Factors" section of the proxy statement/prospectus in Amendment No. 1 to include the following new or enhanced risk factors addressing the specific matters identified by the Staff. Each risk factor is set forth under the sub-heading "Risks Related to HBT's Business and Operations."

Early-Stage Product Candidates and Uncertainty of Clinical Development. The revised disclosure includes a risk factor addressing the early-stage nature of HBT's product candidates. HBT's lead candidate, HBT-301, is being developed for the treatment of Friedreich's ataxia and is currently in Phase 1b clinical trials. HBT's second candidate, HBT-502, is being developed for the treatment of Wilson's disease and is in the preclinical stage of development. Neither HBT-301 nor HBT-502 has received regulatory approval from the U.S. Food and Drug Administration (the "FDA") or any other regulatory authority, and there can be no assurance that clinical trials of either product candidate will demonstrate safety and efficacy sufficient to support the submission of regulatory filings or the eventual receipt of marketing approval. HBT has no approved products and may never generate revenue from product sales. The revised risk factor further notes that clinical development is a lengthy, expensive, and uncertain process, that many product candidates fail during clinical trials, and that the results of early-stage clinical trials may not be predictive of results in later-stage trials.

Limited Revenue and History of Losses. The revised disclosure includes a risk factor noting that HBT generated only $2,100,000 in revenue during fiscal year 2022, all of which was derived from collaboration and licensing arrangements rather than product sales. HBT reported a net loss of ($18,400,000) for fiscal year 2022 and has been in a net loss position in every fiscal year since its inception (HBT was incorporated in the State of Delaware on June 12, 2018). HBT's accumulated deficit as of December 31, 2022 exceeded $47,000,000. As of December 31, 2022, HBT had only $9,700,000 in cash and cash equivalents. The risk factor discloses that the combined company will require substantial additional capital beyond the proceeds of the Business Combination and the PIPE financing to fund ongoing operations and continue the clinical development of HBT-301 and HBT-502.

Dependence on Key intellectual Property Licenses. The revised disclosure includes a risk factor addressing HBT's dependence on licensed intellectual property. Specifically, HBT's lead gene-editing platform technology underlying HBT-301 is licensed from the Regents of Graystone University pursuant to the Exclusive License Agreement dated September 14, 2019 (License No. GU-2019-0914-HBT) (the "Graystone License"). The Graystone License grants HBT an exclusive, worldwide license under certain patent rights and know-how related to CRISPR-based gene-editing technology for the development and commercialization of therapeutic products for the treatment of Friedreich's ataxia and certain other specified rare diseases. The Graystone License contains provisions requiring HBT to obtain the written consent of the Regents of Graystone University in connection with any change of control of HBT, including the Business Combination. The Company discloses that such consent was formally requested by HBT on February 28, 2023 and that the parties expect to obtain such consent prior to the anticipated closing date; however, the risk factor cautions that any failure to obtain such consent, or any failure by HBT to maintain the Graystone License in good standing or to comply with its terms (including diligence milestones, royalty obligations, and reporting requirements), could materially impair HBT's ability to develop and commercialize HBT-301 and could have a material adverse effect on the combined company's business, financial condition, and results of operations.

Dependence on Collaboration Partners. The revised disclosure includes a risk factor addressing the risks associated with HBT's collaboration arrangements. HBT's HBT-502 preclinical program is subject to the Collaboration and Option Agreement with Meridian Pharmaceuticals Inc. dated March 8, 2021 (MPI-COA-2021-0308) (the "Meridian Collaboration Agreement"), pursuant to which Meridian Pharmaceuticals has an option to obtain an exclusive license to develop and commercialize HBT-502 outside the United States upon the achievement of certain development milestones. The risk factor notes that termination of the Meridian Collaboration Agreement by Meridian Pharmaceuticals, or any adverse modification of its terms, could adversely affect the development timeline and funding of the HBT-502 program. The risk factor further notes that collaboration and licensing revenues may fluctuate significantly from period to period and are dependent on the maintenance and performance of existing collaboration arrangements.

Future Capital Requirements and Potential for Additional Dilution. The revised disclosure includes a risk factor addressing the combined company's anticipated future capital requirements. Based on the intermediate redemption scenario, net cash available to the combined company at closing is estimated at approximately $39,623,906.78. After accounting for HBT's existing cash of $9,700,000 and HBT's historical annual cash burn rate (net cash used in operating activities of approximately $16,200,000 in fiscal year 2022), the combined company's aggregate cash resources at closing would provide an estimated cash runway of approximately 24–30 months. Given HBT's historical annual net losses and the capital-intensive nature of clinical-stage biotechnology development, the combined company may need to raise additional capital within approximately 18–24 months of closing through equity offerings, debt financings, or additional collaboration and licensing arrangements. Any future equity issuances could result in further dilution to the shareholders of the combined company. There can be no assurance that such additional capital will be available on acceptable terms, or at all.

Small Employee Base and Key Personnel Risk. The revised disclosure includes a risk factor noting that HBT currently has approximately 85 full-time employees and is highly dependent on the continued services of certain key personnel, particularly Dr. Priya Nandakumar, Founder, Chair and Chief Executive Officer, and Dr. James Whitfield, Co-Founder and Chief Scientific Officer. Dr. Nandakumar has served as a principal inventor on several of HBT's key patent applications and is the primary architect of HBT's corporate strategy. Dr. Whitfield leads HBT's research and development activities and oversees the design and execution of clinical trial protocols for HBT-301. The loss of either Dr. Nandakumar or Dr. Whitfield, or the inability to attract and retain additional qualified scientific, clinical, and managerial personnel, could materially and adversely affect the combined company's ability to execute its business strategy and develop its product candidates.

Real Property Lease Obligations. The revised disclosure includes a risk factor addressing HBT's significant real property lease obligation. HBT's sole office and laboratory facility is located at 450 Kendall Street, Suite 800, Cambridge, MA 02142. The facility is leased from Kendall Square Properties Trust pursuant to a 10-year lease agreement commencing January 1, 2020 and expiring December 31, 2029 (with one five-year renewal option). The annual base rent under the lease is $1,140,800 (based on 18,400 rentable square feet at $62.00 per square foot), subject to annual escalations of 3.0%. The risk factor notes that this lease represents a significant fixed cost obligation for a pre-commercial company and that HBT's ability to reduce its operating costs in the event of financial difficulty may be constrained by this obligation.

High Redemption Risk. The revised disclosure includes a risk factor addressing the risk that actual redemptions by PVAC public shareholders may be significantly higher than anticipated. The risk factor notes that the actual level of redemptions is uncertain, that recent de-SPAC transactions in the broader market have experienced redemption rates exceeding 80% in certain cases, and that high redemptions reduce the cash available to the combined company at closing. If the available cash after giving effect to redemptions, PIPE proceeds, and transaction expenses falls below the $30,000,000 minimum cash condition under BCA §7.03(c), HBT is not obligated to consummate the Business Combination. In such event, PVAC would need to seek an alternative business combination target or proceed toward liquidation and dissolution. Even if the minimum cash condition is satisfied, high redemptions would result in the combined company having less capital available for operations and clinical development, potentially accelerating the need for additional financing.

The foregoing revisions appear on pages 34–54 of Amendment No. 1.

Comment 7 — Fairness Opinion

Please revise the disclosure regarding the fairness opinion delivered to the PVAC Board by Birchwood Partners LLC to describe the material financial analyses underlying the opinion and to disclose any material relationships between Birchwood Partners and the parties to the transaction, including compensation.

Response:

The Company acknowledges the Staff's comment. In response, the Company has revised and expanded the disclosure in Amendment No. 1 regarding the fairness opinion delivered by Birchwood Partners LLC to the PVAC Board of Directors.

Fairness Opinion. The revised disclosure now provides that Birchwood Partners LLC (Graham Hollis, Managing Director, serving as the lead engagement professional) delivered its written opinion to the PVAC Board of Directors on March 20, 2023. The opinion stated that, as of such date and subject to the assumptions, qualifications, limitations, and conditions set forth therein, the merger consideration of $40,000,000 in implied enterprise value (consisting of 4,000,000 shares of PVAC Class A common stock at a deemed value of $10.00 per share) payable by PVAC to the equityholders of HBT in the Business Combination was fair, from a financial point of view, to the holders of PVAC's Class A ordinary shares (other than Pinnacle Venture Sponsor LLC and its affiliates). The fairness opinion was one of several factors considered by the PVAC Board in reaching its determination to approve the BCA and was not the sole determinative factor.

Material Financial Analyses. The revised disclosure summarizes the material financial analyses performed by Birchwood Partners in connection with rendering its opinion, including:

• Comparable Public Company Analysis. Birchwood Partners analyzed certain publicly available financial and market information for a selected group of publicly traded clinical-stage gene therapy companies that Birchwood Partners deemed relevant for comparison purposes. The selected companies included firms focused on gene-editing and gene therapy approaches for rare and orphan diseases with lead product candidates in Phase 1 or Phase 2 clinical development. The analysis examined enterprise values as multiples of projected research and development spending, pipeline value metrics, and implied market capitalizations, among other financial metrics.

• Precedent De-SPAC Transactions. Birchwood Partners reviewed a selected set of de-SPAC business combination transactions involving clinical-stage biotechnology target companies completed during the period from January 2020 through February 2023. The analysis considered implied enterprise values, trust sizes, PIPE commitments, and the resulting pro forma capitalization of the combined entities.

• discounted Cash Flow Analysis. Birchwood Partners performed a discounted cash flow analysis based on management projections provided by HBT, which included projected revenue, operating expenses, capital expenditures, and cash flows over a multi-year forecast period. The analysis applied a range of discount rates reflecting the risk profile of clinical-stage biotechnology companies and a terminal value methodology based on probability-weighted scenario analysis reflecting the potential outcomes of HBT's clinical development programs.

The revised disclosure includes a summary of the ranges of implied enterprise values derived from each analytical methodology and notes that no single analysis was determinative; rather, Birchwood Partners considered the totality of its analyses in rendering its opinion.

Material Relationships and Compensation. The revised disclosure now prominently discloses the following material relationships between Birchwood Partners and the parties to the transaction, as well as the compensation payable to Birchwood Partners:

• Birchwood Partners served as the lead underwriter in PVAC's IPO and is entitled to receive a deferred underwriting commission of 3.5% of the gross IPO proceeds, payable upon the consummation of a business combination. Based on gross IPO proceeds of $50,000,000, the deferred underwriting commission payable to Birchwood Partners is $1,750,000.

• In addition to the deferred underwriting commission, Birchwood Partners is entitled to receive a $500,000 advisory fee for financial advisory services rendered in connection with the Business Combination.

• The total compensation payable to Birchwood Partners is therefore $2,250,000 ($1,750,000 deferred underwriting commission plus $500,000 advisory fee), substantially all of which is contingent upon the closing of the Business Combination.

• Birchwood Partners also served as the placement agent for the PIPE financing and may receive customary placement agent fees in connection therewith (which are included in the $500,000 advisory fee).

• The contingent nature of substantially all of Birchwood Partners' compensation creates a potential conflict of interest, as Birchwood Partners has a financial incentive for the Business Combination to be consummated. The PVAC Board was aware of this potential conflict and considered it, among other factors, in evaluating the fairness opinion and in approving the Business Combination.

These relationships and the associated potential conflicts of interest are now prominently disclosed in both the summary of the fairness opinion and the section entitled "Interests of Certain Persons in the Business Combination — Financial Advisor Compensation and Conflicts."

The foregoing revisions appear on pages 82–90 of Amendment No. 1.

Comment 8 — Interests of PVAC's Sponsor, Directors, and Officers

Please enhance the disclosure regarding the interests of PVAC's Sponsor, officers, and directors in the Business Combination that may differ from or be in addition to the interests of PVAC's public shareholders. Quantify the economic interests of the Sponsor.

Response:

The Company acknowledges the Staff's comment. In response, the Company has revised and substantially enhanced the disclosure in the section entitled "Interests of Certain Persons in the Business Combination" in Amendment No. 1 to quantify the economic interests of the Sponsor and to provide greater detail regarding the interests of PVAC's officers, directors, and Sponsor that may differ from or be in addition to the interests of PVAC's public shareholders.

Sponsor's Economic Interests. The revised disclosure now provides the following quantified analysis of the Sponsor's economic interests:

• Pinnacle Venture Sponsor LLC (the "Sponsor"), managed by Derek Holroyd and Samantha Briggs, originally acquired 1,250,000 Class B founder shares for a total purchase price of approximately $25,000 in the aggregate (approximately $0.02 per share).

• Pursuant to the BCA, the Sponsor has agreed to forfeit 375,000 of its 1,250,000 Class B founder shares at the closing of the Business Combination. After giving effect to this forfeiture, the Sponsor will retain 875,000 shares, which will convert into shares of HBIO common stock on a one-for-one basis at closing.

• At a deemed value of $10.00 per share (consistent with the per-share value paid by public shareholders in the IPO and by PIPE investors), the Sponsor's 875,000 retained shares have an implied aggregate value of $8,750,000, representing a return of approximately 350 times (350×) the Sponsor's initial investment of approximately $25,000.

• Even at a significantly lower market price, the Sponsor's shares would retain meaningful value. For example, at a hypothetical market price of $2.00 per share, the Sponsor's 875,000 shares would have an aggregate market value of $1,750,000, still representing a return of approximately 70× the Sponsor's initial investment. By contrast, PVAC public shareholders who do not redeem their shares and who purchased in the IPO at $10.00 per unit would experience a loss of $8.00 per share, or 80%, under the same scenario.

Unique Incentive to Approve the Business Combination. The revised disclosure emphasizes that if the Business Combination is not consummated and PVAC is unable to complete an alternative business combination within the applicable time period, PVAC's trust account will be liquidated and the IPO proceeds returned to public shareholders on a pro rata basis. In such event, the Sponsor's Class B founder shares would be entirely worthless, as they are not entitled to participate in any distribution of trust account proceeds upon liquidation. Accordingly, the Sponsor has a unique and powerful economic incentive to approve the Business Combination — an incentive that is not shared by PVAC's public shareholders, who have the right to redeem their shares for a pro rata share of the trust account and thereby recover substantially all of their initial investment regardless of whether the Business Combination is consummated.

Interests of Officers and Directors. The revised disclosure now specifically identifies the following additional interests:

• Derek Holroyd, Chief Executive Officer and Director of PVAC, serves as a Managing Member of the Sponsor and therefore has a direct personal financial interest in the Sponsor's retained shares and the consummation of the Business Combination.

• Samantha Briggs, Chief Financial Officer and Director of PVAC, also serves as a Managing Member of the Sponsor and has the same direct personal financial interest.

• Robert Tannenbaum and Julia Greenfield serve as independent directors of PVAC. Neither Mr. Tannenbaum nor Ms. Greenfield holds a direct equity interest in the Sponsor. However, the revised disclosure acknowledges that each independent director may have reputational interests in the successful consummation of a business combination, and that such reputational considerations may influence their judgment in evaluating the proposed Business Combination.

Lock-Up Provisions. The revised disclosure further notes that the Sponsor's shares will be subject to a 12-month post-closing lock-up period, during which the Sponsor may not sell, transfer, or otherwise dispose of its shares. The lock-up is subject to an early release provision that permits transfers beginning 150 days after closing if the closing price of HBIO common stock equals or exceeds $12.00 per share for any 20 trading days within any 30 consecutive trading-day period.

No Outstanding Promissory Notes or Advances. The revised disclosure confirms that PVAC has no outstanding promissory notes payable to the Sponsor, and that the Sponsor has not made any working capital loans or advances to PVAC, other than as previously disclosed in the Registration Statement.

The foregoing revisions appear on pages 91–96 of Amendment No. 1.

We believe that the revisions reflected in Amendment No. 1, as described in this response letter, are fully responsive to each of the Staff's comments set forth in the Comment Letter dated April 28, 2023. We have endeavored to provide comprehensive, specific, and prominent disclosure on each of the matters raised by the Staff, and we believe that the proxy statement/prospectus as amended provides investors with the information necessary to make an informed decision regarding the Business Combination.

We would welcome the opportunity to discuss any of the foregoing responses with the Staff at the Staff's convenience. If the Staff has any questions or further comments regarding this response letter or Amendment No. 1, please do not hesitate to contact the undersigned, Sandra Tung, at (617) 854-7112 or Ryan Kowalski at (617) 854-7248.

In light of PVAC's approaching deadline for completing a business combination under its amended and restated certificate of incorporation and the importance of providing PVAC's public shareholders with timely proxy materials, PVAC respectfully requests that the Staff accelerate the effectiveness of the Registration Statement as amended at the earliest practicable date.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Sandra Tung, Partner One Federal Street, 42nd Floor Boston, MA 02110 Telephone: (617) 854-7112

Email: stung@calderwoodharkness.com

cc:

Derek Holroyd, Chief Executive Officer, Pinnacle Venture Acquisition Corp. Samantha Briggs, Chief Financial Officer, Pinnacle Venture Acquisition Corp. Nathan Dorsey, Partner, Hargrove Slater & Dunn LLP Dr. Priya Nandakumar, Chief Executive Officer, Helix Bio Therapeutics Inc. Oliver Mackenzie, Calderwood & Harkness LLP

Holder Category	Shares	Percentage
Former HBT equityholders	4,000,000	44.1%
Non-redeeming PVAC public shareholders	2,185,610	24.1%
PIPE investors	2,000,000	22.1%
Sponsor (net of 375,000 share forfeiture)	875,000	9.7%
Total undiluted shares outstanding	9,060,610	100.0%
Holder Category	Shares	Percentage
Former HBT equityholders	4,000,000	33.2%
Non-redeeming PVAC public shareholders	2,185,610	18.1%
PIPE investors	2,000,000	16.6%
Sponsor (net of 375,000 share forfeiture)	875,000	7.3%
Public warrant holders (assuming full exercise at $11.50/share)	2,500,000	20.7%
Earnout shares (assuming all tranches triggered)	500,000	4.1%
Total fully diluted shares outstanding	12,060,610	100.0%
Expense Category	Amount
Deferred underwriting commission — Birchwood Partners LLC	$1,750,000
Advisory fee — Birchwood Partners LLC	$500,000
Advisory fee — Calvert & Wren Advisory LLC	$750,000
Legal fees — Calderwood & Harkness LLP (estimated)	$1,200,000
Legal fees — Hargrove Slater & Dunn LLP (estimated)	$950,000
D&O tail insurance premium — Ridgepoint Specialty Insurance Company	$485,000
SEC filing fees, printing, proxy solicitation, and miscellaneous costs	$365,000
Total estimated transaction expenses	$6,000,000

CALDERWOOD & HARKNESS LLP One Federal Street, 42nd Floor Boston, MA 02110 Telephone: (617) 854-7000 Facsimile: (617) 854-7001 www.calderwoodharkness.com
May 10, 2023
Via EDGAR and Sundial Data Systems
Division of Corporation Finance Office of Life Sciences U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549
Dear Ladies and Gentlemen of the Staff:
Re: Pinnacle Venture Acquisition Corp. Registration Statement on Form S-4 Filed April 7, 2023 File No. 333-271498 CIK No. 0001893742
Calderwood & Harkness LLP writes on behalf of our client, Pinnacle Venture Acquisition Corp. ("PVAC" or the "Company"), in response to the comment letter from the Staff (the "Staff") of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the "Commission") dated April 28, 2023 (the "Comment Letter") regarding the above-referenced Registration Statement on Form S-4 (the "Registration Statement"). The Registration Statement relates to the proposed business combination (the "Business Combination") among PVAC, Pinnacle Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of PVAC ("Merger Sub"), and Helix Bio Therapeutics Inc. ("HBT"), pursuant to the Business Combination Agreement dated March 22, 2023 (the "BCA").
Concurrently with the submission of this response letter, PVAC is filing Amendment No. 1 to the Registration Statement ("Amendment No. 1"), which reflects the revisions described herein and certain other updates. For the Staff's convenience, each comment from the Comment Letter is set forth below in bold, followed by the Company's response. References to page numbers are to the pages of the proxy statement/prospectus included in Amendment No. 1 unless otherwise noted. Capitalized terms used but not defined herein have the meanings assigned to them in the Registration Statement, as amended by Amendment No. 1.
The responses set forth below have been prepared based on information provided to us by PVAC, HBT, and their respective financial advisors. We have endeavored to address each of the Staff's comments fully and to describe the nature and location of each corresponding revision in Amendment No. 1.
Comment 1 — Cover Page / Summary: Dilution from Sponsor Founder Shares and Public Warrants
The Staff notes that the cover page and summary section do not adequately disclose the potential dilutive impact of the Sponsor's founder shares and the outstanding public warrants on the shares to be received by non-redeeming public shareholders and PIPE investors. Please revise the disclosure to quantify the dilutive effect of (a) the 1,250,000 Class B founder shares held by Pinnacle Venture Sponsor LLC (after giving effect to the agreed forfeiture of 375,000 shares, resulting in 875,000 retained founder shares) and (b) the 2,500,000 public warrants exercisable at $11.50 per share.
Response:
The Company acknowledges the Staff's comment and appreciates the Staff's attention to this matter. In response, the Company has revised the cover page and the Summary section of the proxy statement/prospectus included in Amendment No. 1 to include a prominent tabular presentation quantifying the potential dilutive impact of the Sponsor's retained founder shares and the outstanding public warrants on the post-closing equity capitalization of the combined company (to be renamed "Helix Biosciences, Inc." or "HBIO" at closing).
Specifically, the revised disclosure now presents the post-closing capitalization of HBIO on both an undiluted basis and a fully diluted basis, as set forth below:
Post-Closing Capitalization — Undiluted Basis:
The undiluted presentation reflects the intermediate redemption scenario described in the Company's response to Comment 3 below, in which approximately 2,814,390 public shares are redeemed. The cover page and Summary section now include corresponding undiluted tables for the no-redemption and maximum redemption scenarios as well.
Post-Closing Capitalization — Fully Diluted Basis:
As illustrated by the tables above, the exercise in full of all 2,500,000 public warrants at their $11.50 per share exercise price would result in public warrant holders owning approximately 20.7% of the fully diluted shares outstanding, with a corresponding proportional reduction in the ownership percentage of each other holder category. In particular, the ownership percentage of former HBT equityholders would decrease from 44.1% on an undiluted basis to 33.2% on a fully diluted basis, and the ownership percentage of non-redeeming PVAC public shareholders would decrease from 24.1% to 18.1%.
The revised disclosure further notes that the Sponsor's forfeiture of 375,000 founder shares, representing 30% of the original 1,250,000 Class B founder shares issued to Pinnacle Venture Sponsor LLC, was specifically negotiated as a term of the BCA to reduce the dilutive impact on HBT equityholders and PIPE investors. In the absence of such forfeiture, the Sponsor would have retained 1,250,000 shares, representing approximately 13.8% of undiluted shares outstanding (as compared to 9.7% after giving effect to the forfeiture).
In addition, the revised cover page and Summary section now include a narrative explanation that the 875,000 retained Sponsor shares were originally acquired for nominal consideration of approximately $25,000 in the aggregate (or approximately $0.029 per share), compared to the $10.00 per share price paid by PVAC public shareholders in the IPO and the $10.00 per share price to be paid by the PIPE investors. The disclosure explains that this significant differential between the Sponsor's per-share acquisition cost and the per-share price paid by public shareholders and PIPE investors represents a material source of potential dilution and economic misalignment, and that investors should carefully consider this disparity in evaluating the Business Combination.
The foregoing revisions appear on pages 1 through 3 (cover page) and pages 18 through 22 (Summary section) of Amendment No. 1.
Comment 2 — Earnout Milestones Disclosure
The Staff notes that the description of the earnout milestones on pages 72 and 118 of the Registration Statement lacks sufficient specificity regarding the stock price triggers and measurement periods. Please revise to clearly describe each tranche, including the applicable stock price thresholds, the trading-day measurement methodology, and the duration of the earnout period.
Response:
The Company acknowledges the Staff's comment. In response, the Company has revised the disclosure in Amendment No. 1 to provide enhanced detail regarding the two-tranche earnout structure set forth in Article II of the BCA. The revised disclosure, which now appears in both the Summary section, the section entitled "Proposal No. 1 — The Business Combination Proposal," and the notes to the unaudited pro forma condensed combined financial statements, describes the earnout milestones as follows:
Tranche 1: 250,000 additional shares of HBIO common stock shall be issuable to former HBT equityholders if the volume-weighted average closing price of HBIO common stock, as reported on the Nasdaq Capital Market (or such other national securities exchange on which the HBIO common stock is then listed), equals or exceeds $14.00 per share for any 20 trading days within any 30 consecutive trading-day period during the 36-month period commencing on the closing date of the Business Combination (anticipated to be on or about June 20, 2023) and ending on the third anniversary thereof (the "Earnout Period").
Tranche 2: 250,000 additional shares of HBIO common stock shall be issuable to former HBT equityholders if the volume-weighted average closing price of HBIO common stock, as reported on the applicable national securities exchange, equals or exceeds $16.00 per share for any 20 trading days within any 30 consecutive trading-day period during the same 36-month Earnout Period.
The total number of earnout shares issuable under both tranches is 500,000 shares. As provided in Section 2.07 of the BCA, the two tranches are independent of one another: Tranche 2 may be triggered without Tranche 1 having been previously triggered, and Tranche 1 may be triggered without Tranche 2 having been previously triggered. If both stock price thresholds are achieved during the Earnout Period, all 500,000 earnout shares will be issued. If only one threshold is achieved, only the corresponding 250,000-share tranche will be issued. If neither threshold is achieved prior to the expiration of the Earnout Period, no earnout shares will be issued and the right to receive such shares will terminate.
The revised disclosure further clarifies that the earnout shares are to be allocated pro rata among the former HBT equityholders based on their relative proportionate share of the aggregate merger consideration shares (i.e., each former HBT equityholder's percentage of the 4,000,000 merger consideration shares). The issuance, allocation, and distribution of earnout shares are governed by the provisions of Article II of the BCA dated March 22, 2023, a copy of which is filed as Exhibit 2.1 to the Registration Statement.
Additionally, in response to this comment, the Company has added a new risk factor in the section entitled "Risk Factors — Risks Related to the Business Combination" addressing the uncertainty as to whether the stock price thresholds required for the earnout tranches will be achieved and, if achieved, the resulting dilution to shareholders. The risk factor discloses that the issuance of up to 500,000 additional earnout shares would increase the fully diluted share count from 11,560,610 (assuming exercise of all public warrants but no earnout) to 12,060,610, representing incremental dilution of approximately 4.1% on a fully diluted basis.
The foregoing revisions appear on pages 20–21 (Summary), pages 72–74 (Business Combination Proposal), pages 43–44 (Risk Factors), and pages 108–110 (Notes to Unaudited Pro Forma Condensed Combined Financial Information) of Amendment No. 1.
Comment 3 — Presentation of Redemption Scenarios
Please revise your disclosure to present multiple redemption scenarios, including a no-redemption scenario, a maximum redemption scenario, and an intermediate scenario reflecting actual or estimated redemption levels, so that investors can assess the range of potential outcomes, including the impact on per share value, ownership percentages, and satisfaction of the minimum cash condition.
Response:
The Company acknowledges the Staff's comment and has made substantial revisions to Address No. 1 in response. Specifically, the Company has added a new tabular presentation in the section entitled "Unaudited Pro Forma Condensed Combined Financial Information" and has included a corresponding summary table in the Summary section of the proxy statement/prospectus. The revised disclosure presents three distinct redemption scenarios, each setting forth the cash available to the combined company, shares outstanding by holder category, ownership percentages, and implied per-share book value. The three scenarios are as follows:
No Redemption Scenario
Under the no-redemption scenario, all 5,000,000 Class A public shares initially sold in PVAC's IPO remain outstanding and no public shareholders exercise their redemption rights. The key financial parameters under this scenario are as follows:
• Trust account proceeds available (no redemptions): $51,247,813.55
• Plus PIPE proceeds: $20,000,000.00
• Total gross cash available: $71,247,813.55
• Less estimated transaction expenses: ($6,000,000.00)
• Net cash available to combined company: $65,247,813.55
• Minimum cash condition under BCA §7.03(c) ($30,000,000): Satisfied
Under this scenario, total undiluted shares outstanding would be 11,875,000, comprised of: 4,000,000 shares to former HBT equityholders (33.7%); 5,000,000 non-redeeming public shares (42.1%); 2,000,000 PIPE shares (16.8%); and 875,000 Sponsor shares (7.4%).
Maximum Redemption Scenario
Under the maximum redemption scenario, the maximum number of PVAC public shares are redeemed while still satisfying the BCA §7.03(c) minimum cash condition of $30,000,000 in Available Cash (as defined in the BCA) at closing. The calculation of the maximum permissible redemption level is as follows:
• Minimum Available Cash required at closing: $30,000,000.00
• Plus estimated transaction expenses to be paid from cash at closing: $6,000,000.00
• Less PIPE proceeds: ($20,000,000.00)
• Minimum required trust proceeds after redemptions: $16,000,000.00
• Pre-redemption trust account balance: $51,247,813.55
• Maximum amount available for redemptions: $51,247,813.55 − $16,000,000.00 = $35,247,813.55
• Per-share redemption price (approximate): $10.25
• Maximum number of shares redeemable: $35,247,813.55 ÷ $10.25 ≈ 3,438,811 shares
• Remaining public shares after maximum redemption: 5,000,000 − 3,438,811 = 1,561,189 shares
Under this scenario, net cash available to the combined company would be approximately $30,000,000 (reflecting the minimum cash condition constraint). Total undiluted shares outstanding would be 8,436,189, comprised of: 4,000,000 shares to former HBT equityholders (47.4%); 1,561,189 non-redeeming public shares (18.5%); 2,000,000 PIPE shares (23.7%); and 875,000 Sponsor shares (10.4%).
The revised disclosure notes that if redemptions were to exceed the level described above (i.e., if the remaining Available Cash after giving effect to redemptions, PIPE proceeds, and transaction expenses were to fall below $30,000,000), the minimum cash condition under BCA §7.03(c) would not be satisfied. In such event, HBT would not be obligated to consummate the Business Combination, and PVAC could be required to extend its deadline for completing a business combination or proceed toward liquidation of the trust account and dissolution, in each case subject to the terms of PVAC's amended and restated certificate of incorporation.
Intermediate Scenario (Illustrative Actual Redemptions)
The intermediate scenario utilizes illustrative assumptions consistent with the range of redemption levels observed in recent de-SPAC transactions in the life sciences and broader SPAC market. For purposes of this scenario, the Company has assumed that 50% of public shares (2,500,000 shares) are redeemed at the approximate per-share redemption price of $10.25 per share:
• Trust account proceeds after 50% redemption: $51,247,813.55 − (2,500,000 × $10.25) = $25,623,906.78 (approximate)
• Plus PIPE proceeds: $20,000,000.00
• Total gross cash available: $45,623,906.78
• Less estimated transaction expenses: ($6,000,000.00)
• Net cash available to combined company: $39,623,906.78
• Minimum cash condition under BCA §7.03(c) ($30,000,000): Satisfied
Under this scenario, total undiluted shares outstanding would be 9,375,000, comprised of: 4,000,000 shares to former HBT equityholders (42.7%); 2,500,000 non-redeeming public shares (26.7%); 2,000,000 PIPE shares (21.3%); and 875,000 Sponsor shares (9.3%).
Each of the three scenarios presented above shows: (i) the aggregate cash available to the combined company after giving effect to redemptions, PIPE proceeds, and estimated transaction expenses; (ii) the number of shares outstanding by holder category; (iii) the ownership percentage of each holder category on both an undiluted and fully diluted basis; and (iv) the implied per-share book value of HBIO common stock at closing.
In addition, the revised disclosure regarding the minimum cash condition of $30,000,000 under BCA §7.03(c) has been cross-referenced throughout the proxy statement/prospectus, including in the Summary, the Risk Factors section, the section describing the BCA, and the Unaudited Pro Forma Condensed Combined Financial Information. This cross-referencing is intended to ensure that shareholders can readily identify and understand the significance of the minimum cash condition in the context of their redemption decisions.
The foregoing revisions appear on pages 19–22 (Summary), pages 76–78 (Business Combination Proposal — Minimum Cash Condition), pages 99–112 (Unaudited Pro Forma Condensed Combined Financial Information), and pages 38–39 (Risk Factors) of Amendment No. 1.
Comment 4 — Background of the Transaction
The disclosure in the "Background of the Transaction" section does not provide sufficient detail regarding the process by which PVAC identified and selected HBT as the target for the business combination. Please revise to provide a more detailed chronology, including: the number of potential targets considered; the basis for selecting HBT; the material terms discussed during negotiations; the roles of each party's financial advisors; and the dates of key board meetings and approvals.
Response:
The Company acknowledges the Staff's comment. In response, the Company has substantially expanded the section entitled "Background of the Transaction" in Amendment No. 1. The revised section now provides a detailed chronological narrative of the target identification process, the evaluation and selection of HBT, the negotiation of the BCA and ancillary transaction agreements, and the board approval process. The key elements of the expanded disclosure are summarized below.
Target Search Process. Following the closing of PVAC's IPO on August 16, 2021 (in which PVAC raised $50,000,000 through the sale of 5,000,000 units at $10.00 per unit, with the IPO proceeds deposited in a trust account at Grandview Trust Company, N.A.), PVAC's management team — led by Derek Holroyd, Chief Executive Officer and Director, and Samantha Briggs, Chief Financial Officer and Director — commenced a systematic search for business combination targets. PVAC's search focused primarily on the life sciences and healthcare sectors, consistent with the business strategy described in PVAC's IPO prospectus. PVAC's financial advisor, Birchwood Partners LLC (Graham Hollis, Managing Director, serving as the lead engagement professional), assisted PVAC's management in identifying, evaluating, and screening potential targets.
Scope of Target Evaluation. Over the period from September 2021 through December 2022, PVAC evaluated approximately 30 potential target companies, encompassing clinical-stage biotechnology companies, medical device companies, and healthcare services businesses at varying stages of development and commercialization. For each potential target, PVAC's management and Birchwood Partners conducted a preliminary assessment of the target's technology or service platform, competitive positioning, management team, capital structure, and potential fit with PVAC's stated investment criteria. In most cases, the evaluation did not proceed beyond an initial screening phase. In several cases, PVAC conducted preliminary discussions with the target's management team or financial advisor but did not proceed to a letter of intent. The revised disclosure describes the general industries and stages of the targets evaluated without identifying rejected targets by name, consistent with confidentiality obligations.
Introduction to HBT. In late Q4 2022, Birchwood Partners introduced PVAC to Helix Bio Therapeutics Inc., a clinical-stage biotechnology company headquartered at 450 Kendall Street, Suite 800, Cambridge, Massachusetts 02142. HBT is focused on the development of next-generation gene-editing therapies for rare monogenic diseases. HBT's lead product candidate, HBT-301, is being developed for the treatment of Friedreich's ataxia and was, at the time of introduction, in Phase 1b clinical trials at two clinical sites in the United States. HBT's second product candidate, HBT-502, is being developed for the treatment of Wilson's disease and was in the preclinical stage. Calvert & Wren Advisory LLC (Rachel Dominguez, Senior Managing Director) served as financial advisor to HBT and facilitated the introduction on behalf of HBT.
Preliminary Discussions and Due Diligence. Between late November 2022 and late January 2023, PVAC's management team and Birchwood Partners held multiple introductory meetings with HBT's management team, led by Dr. Priya Nandakumar, Founder, Chair and Chief Executive Officer of HBT, and Dr. James Whitfield, Co-Founder and Chief Scientific Officer of HBT. During these meetings, the parties discussed HBT's clinical pipeline, intellectual property estate, competitive landscape, capital requirements, and organizational structure. PVAC's management also reviewed preliminary financial and scientific data provided by HBT through a virtual data room maintained by HBT and Calvert & Wren Advisory.
Letter of Intent. On January 30, 2023, PVAC and HBT executed a non-binding Letter of Intent (the "LOI"), establishing the framework for a potential de-SPAC business combination at an implied enterprise value of $40,000,000 for HBT. The LOI contemplated a forward merger structure in which a newly formed subsidiary of PVAC would merge with and into HBT, with HBT surviving as a wholly owned subsidiary of PVAC (which would be renamed "Helix Biosciences, Inc." upon closing). The LOI further contemplated that the aggregate merger consideration payable to HBT equityholders would consist of 4,000,000 shares of PVAC Class A common stock at a deemed value of $10.00 per share. The LOI included customary exclusivity and standstill provisions for a period of 60 days. At or around the time of the LOI execution, Calderwood & Harkness LLP (Sandra Tung, Partner, as the responsible attorney) was engaged as counsel to HBT in connection with the proposed transaction, and Hargrove Slater & Dunn LLP (Nathan Dorsey, Partner, serving as lead attorney) continued in its existing role as counsel to PVAC.
Negotiation of the BCA and Ancillary Agreements. From early February through mid-March 2023, the parties and their respective legal and financial advisors engaged in extensive due diligence and negotiation of the definitive BCA and related transaction documents. The key terms negotiated during this period included:
• The aggregate merger consideration of 4,000,000 shares at $10.00 per share deemed value (representing an implied enterprise value of $40,000,000 for HBT);
• The two-tranche earnout structure (described in the response to Comment 2 above), which was proposed by HBT's advisors as a mechanism to bridge valuation differences between the parties and to provide additional upside to HBT equityholders in the event of post-closing stock price appreciation;
• The Sponsor's agreement to forfeit 375,000 of its 1,250,000 Class B founder shares at closing, representing a negotiated concession to reduce dilution to HBT equityholders and PIPE investors;
• The minimum cash condition under BCA §7.03(c), requiring that Available Cash at closing (defined as the sum of trust proceeds remaining after redemptions plus PIPE proceeds, minus transaction expenses) equal at least $30,000,000, which was a condition insisted upon by HBT as a closing condition to ensure that the combined company would have sufficient capital to continue funding HBT's clinical programs;
• The PIPE financing commitments, pursuant to which Brindoval Capital Management, LP committed to purchase 1,500,000 shares at $10.00 per share ($15,000,000) and Lakepoint Health Opportunities Fund, LP committed to purchase 500,000 shares at $10.00 per share ($5,000,000), for aggregate PIPE commitments of $20,000,000; and
• The post-closing lock-up arrangements applicable to the Sponsor, HBT equityholders, and PIPE investors.
Formation of Merger Sub. On February 14, 2023, Pinnacle Merger Sub Inc. was incorporated in the State of Delaware for the sole purpose of effectuating the forward merger contemplated by the BCA.
PVAC Board Approval. On March 20, 2023, the PVAC Board of Directors — consisting of Derek Holroyd, Samantha Briggs, Robert Tannenbaum (independent director), and Julia Greenfield (independent director) — held a meeting at which the Board received a detailed presentation from Birchwood Partners regarding the proposed Business Combination, including a summary of its financial analyses, and received the fairness opinion of Birchwood Partners LLC (described in the response to Comment 7 below). Following discussion and deliberation, the PVAC Board unanimously approved the BCA and the transactions contemplated thereby, and recommended that PVAC's shareholders approve the Business Combination Proposal, the Charter Amendment Proposal, and the other proposals to be set forth in the proxy statement/prospectus.
HBT Board Approval. On March 21, 2023, the HBT Board of Directors — consisting of Dr. Priya Nandakumar, Dr. James Whitfield, Catherine Alcott, Marcus Leung, and Dr. Elena Vasquez — held a meeting at which the Board received a presentation from Calvert & Wren Advisory regarding the financial terms of the proposed Business Combination and from Calderwood & Harkness regarding the legal terms and conditions of the BCA. Following extensive discussion and deliberation, the HBT Board unanimously approved the BCA and the transactions contemplated thereby.
Execution of the BCA. On March 22, 2023, the BCA was executed by and among PVAC, Merger Sub, and HBT, and publicly announced via a Current Report on Form 8-K filed by PVAC with the Commission on the same date.
The revised disclosure further describes the material factors considered by each board in reaching its decision to approve the Business Combination, including: the implied enterprise value of $40,000,000 for HBT and the negotiation thereof; the fairness opinion delivered to the PVAC Board by Birchwood Partners LLC; HBT's clinical pipeline, including the Phase 1b status of HBT-301 and the preclinical status of HBT-502; HBT's intellectual property portfolio, including the Exclusive License Agreement with the Regents of Graystone University; the availability of PIPE financing commitments totaling $20,000,000; projected dilution analyses under various redemption scenarios; risks related to shareholder redemptions and the minimum cash condition; the competitive landscape for gene-editing therapies in the rare disease space; and the experience and qualifications of HBT's management team and scientific personnel.
The foregoing revisions appear on pages 56–70 of Amendment No. 1.
Comment 5 — Pro Forma Financial Statements
Please revise the unaudited pro forma condensed combined financial statements to (a) present separate columns for HBT's historical financial data and PVAC's historical financial data; (b) clearly identify and quantify each pro forma adjustment; (c) present the pro forma adjustments in connection with the multiple redemption scenarios requested above; and (d) ensure consistency with the audited financial statements of HBT for fiscal years 2021 and 2022 as audited by Whitmore & Gaines LLP and the audited financial statements of PVAC as audited by Prescott Townsend & Associates LLP.
Response:
The Company acknowledges the Staff's comment and has made extensive revisions to the unaudited pro forma condensed combined financial information in Amendment No. 1 to address each element of the Staff's comment.
(a) Separate Columns for Historical Financial Data. The pro forma financial statements in Amendment No. 1 now present separate columns for: (i) HBT historical financial data, derived from the audited financial statements of HBT for the fiscal years ended December 31, 2021 and December 31, 2022, as audited by Whitmore & Gaines LLP (Leonard Brixton, engagement partner, PCAOB ID No. 00742); (ii) PVAC historical financial data, derived from the audited financial statements of PVAC for the fiscal year ended December 31, 2022 and the period from inception (March 9, 2021) through December 31, 2021, as audited by Prescott Townsend & Associates LLP (Deborah Kline, engagement partner, PCAOB ID No. 01138); (iii) pro forma transaction accounting adjustments; and (iv) the pro forma combined totals. The columnar format enables investors to clearly identify the historical operating results and financial position of each constituent entity and to distinguish historical financial data from the effects of the pro forma adjustments.
(b) Pro Forma Adjustments. Each pro forma adjustment is now clearly identified, labeled, and quantified in the accompanying notes to the pro forma financial statements. The key pro forma adjustments reflected in Amendment No. 1 are as follows:
1. Issuance of Merger Consideration Shares. Issuance of 4,000,000 shares of PVAC Class A common stock (to be redesignated as HBIO common stock at closing) to former HBT equityholders at a deemed value of $10.00 per share, representing aggregate merger consideration of $40,000,000. This adjustment is reflected as an increase to stockholders' equity and the elimination of HBT's historical equity accounts.
2. Release of Trust Account Funds. Release of funds held in trust at Grandview Trust Company, N.A.: the pre-redemption trust account balance is $51,247,813.55, consisting of IPO proceeds of $50,000,000 plus accrued interest of $1,247,813.55 earned on trust-held U.S. government securities and money market funds. This adjustment reclassifies trust account investments from restricted assets to unrestricted cash and cash equivalents.
3. Redemption of Public Shares. The pro forma financial statements present the effect of public share redemptions under each of the three scenarios described in the Company's response to Comment 3 above:
• No-redemption scenario: No shares redeemed; $0 cash outflow.
• Maximum redemption scenario: Approximately 3,438,811 shares redeemed at approximately $10.25 per share, resulting in a cash outflow of approximately $35,247,813.55.
• Intermediate scenario (illustrative 50% redemption): Approximately 2,500,000 shares redeemed at approximately $10.25 per share, resulting in a cash outflow of approximately $25,623,906.78.
4. Receipt of PIPE Proceeds. Total PIPE proceeds of $20,000,000, consisting of: (x) 1,500,000 shares to be purchased by Brindoval Capital Management, LP at $10.00 per share ($15,000,000); and (y) 500,000 shares to be purchased by Lakepoint Health Opportunities Fund, LP at $10.00 per share ($5,000,000). This adjustment is reflected as an increase to cash and stockholders' equity.
5. Payment of Estimated Transaction Expenses. Total estimated transaction expenses of $6,000,000, itemized as follows:
6. Sponsor Share Forfeiture. Forfeiture by Pinnacle Venture Sponsor LLC of 375,000 Class B founder shares. This adjustment has no cash impact and is reflected solely as a reduction in the outstanding share count and a corresponding adjustment to stockholders' equity.
7. Elimination of Deferred Underwriting Liability. Elimination of PVAC's historical deferred underwriting liability of $1,750,000, which is settled upon closing through payment to Birchwood Partners LLC as described in item (5) above. This adjustment is reflected as a reduction to liabilities and a corresponding charge to stockholders' equity.
8. Reclassification of Trust Account Investments. Reclassification of the trust account balance from "Investments held in Trust Account" (a restricted current or non-current asset on PVAC's historical balance sheet) to unrestricted cash and cash equivalents, net of any redemption payments.
(c) Multiple Redemption Scenario Presentation. The pro forma financial statements now include three separate pro forma adjustment columns and three separate pro forma combined columns, corresponding to the no-redemption, maximum redemption, and intermediate (illustrative) redemption scenarios. This presentation enables investors to observe the effects of varying levels of public share redemptions on the combined company's pro forma financial position and capitalization.
(d) Consistency with Audited Financial Statements. The Company confirms that all historical financial data presented in the pro forma financial statements is derived from and consistent with the audited financial statements of HBT and PVAC included in the Registration Statement. Key HBT historical figures incorporated in the pro forma financial statements include: fiscal year 2022 revenue of $2,100,000 (derived entirely from collaboration and licensing arrangements); fiscal year 2022 net loss of ($18,400,000); and cash and cash equivalents as of December 31, 2022 of $9,700,000. Updated auditor consents from both Whitmore & Gaines LLP and Prescott Townsend & Associates LLP have been filed as Exhibits 23.1 and 23.2, respectively, to Amendment No. 1.
The foregoing revisions appear on pages 99–112 of Amendment No. 1.
Comment 6 — Risk Factors Related to HBT's Clinical-Stage Operations
The risk factor disclosures do not adequately address risks specific to HBT's clinical-stage business, including the early stage of its product candidates, its limited revenue history, its dependence on key intellectual property licenses, and the uncertainty of future funding requirements. Please revise to include more specific and detailed risk factors that address these matters.
Response:
The Company acknowledges the Staff's comment. In response, the Company has revised and substantially expanded the "Risk Factors" section of the proxy statement/prospectus in Amendment No. 1 to include the following new or enhanced risk factors addressing the specific matters identified by the Staff. Each risk factor is set forth under the sub-heading "Risks Related to HBT's Business and Operations."
Early-Stage Product Candidates and Uncertainty of Clinical Development. The revised disclosure includes a risk factor addressing the early-stage nature of HBT's product candidates. HBT's lead candidate, HBT-301, is being developed for the treatment of Friedreich's ataxia and is currently in Phase 1b clinical trials. HBT's second candidate, HBT-502, is being developed for the treatment of Wilson's disease and is in the preclinical stage of development. Neither HBT-301 nor HBT-502 has received regulatory approval from the U.S. Food and Drug Administration (the "FDA") or any other regulatory authority, and there can be no assurance that clinical trials of either product candidate will demonstrate safety and efficacy sufficient to support the submission of regulatory filings or the eventual receipt of marketing approval. HBT has no approved products and may never generate revenue from product sales. The revised risk factor further notes that clinical development is a lengthy, expensive, and uncertain process, that many product candidates fail during clinical trials, and that the results of early-stage clinical trials may not be predictive of results in later-stage trials.
Limited Revenue and History of Losses. The revised disclosure includes a risk factor noting that HBT generated only $2,100,000 in revenue during fiscal year 2022, all of which was derived from collaboration and licensing arrangements rather than product sales. HBT reported a net loss of ($18,400,000) for fiscal year 2022 and has been in a net loss position in every fiscal year since its inception (HBT was incorporated in the State of Delaware on June 12, 2018). HBT's accumulated deficit as of December 31, 2022 exceeded $47,000,000. As of December 31, 2022, HBT had only $9,700,000 in cash and cash equivalents. The risk factor discloses that the combined company will require substantial additional capital beyond the proceeds of the Business Combination and the PIPE financing to fund ongoing operations and continue the clinical development of HBT-301 and HBT-502.
Dependence on Key intellectual Property Licenses. The revised disclosure includes a risk factor addressing HBT's dependence on licensed intellectual property. Specifically, HBT's lead gene-editing platform technology underlying HBT-301 is licensed from the Regents of Graystone University pursuant to the Exclusive License Agreement dated September 14, 2019 (License No. GU-2019-0914-HBT) (the "Graystone License"). The Graystone License grants HBT an exclusive, worldwide license under certain patent rights and know-how related to CRISPR-based gene-editing technology for the development and commercialization of therapeutic products for the treatment of Friedreich's ataxia and certain other specified rare diseases. The Graystone License contains provisions requiring HBT to obtain the written consent of the Regents of Graystone University in connection with any change of control of HBT, including the Business Combination. The Company discloses that such consent was formally requested by HBT on February 28, 2023 and that the parties expect to obtain such consent prior to the anticipated closing date; however, the risk factor cautions that any failure to obtain such consent, or any failure by HBT to maintain the Graystone License in good standing or to comply with its terms (including diligence milestones, royalty obligations, and reporting requirements), could materially impair HBT's ability to develop and commercialize HBT-301 and could have a material adverse effect on the combined company's business, financial condition, and results of operations.
Dependence on Collaboration Partners. The revised disclosure includes a risk factor addressing the risks associated with HBT's collaboration arrangements. HBT's HBT-502 preclinical program is subject to the Collaboration and Option Agreement with Meridian Pharmaceuticals Inc. dated March 8, 2021 (MPI-COA-2021-0308) (the "Meridian Collaboration Agreement"), pursuant to which Meridian Pharmaceuticals has an option to obtain an exclusive license to develop and commercialize HBT-502 outside the United States upon the achievement of certain development milestones. The risk factor notes that termination of the Meridian Collaboration Agreement by Meridian Pharmaceuticals, or any adverse modification of its terms, could adversely affect the development timeline and funding of the HBT-502 program. The risk factor further notes that collaboration and licensing revenues may fluctuate significantly from period to period and are dependent on the maintenance and performance of existing collaboration arrangements.
Future Capital Requirements and Potential for Additional Dilution. The revised disclosure includes a risk factor addressing the combined company's anticipated future capital requirements. Based on the intermediate redemption scenario, net cash available to the combined company at closing is estimated at approximately $39,623,906.78. After accounting for HBT's existing cash of $9,700,000 and HBT's historical annual cash burn rate (net cash used in operating activities of approximately $16,200,000 in fiscal year 2022), the combined company's aggregate cash resources at closing would provide an estimated cash runway of approximately 24–30 months. Given HBT's historical annual net losses and the capital-intensive nature of clinical-stage biotechnology development, the combined company may need to raise additional capital within approximately 18–24 months of closing through equity offerings, debt financings, or additional collaboration and licensing arrangements. Any future equity issuances could result in further dilution to the shareholders of the combined company. There can be no assurance that such additional capital will be available on acceptable terms, or at all.
Small Employee Base and Key Personnel Risk. The revised disclosure includes a risk factor noting that HBT currently has approximately 85 full-time employees and is highly dependent on the continued services of certain key personnel, particularly Dr. Priya Nandakumar, Founder, Chair and Chief Executive Officer, and Dr. James Whitfield, Co-Founder and Chief Scientific Officer. Dr. Nandakumar has served as a principal inventor on several of HBT's key patent applications and is the primary architect of HBT's corporate strategy. Dr. Whitfield leads HBT's research and development activities and oversees the design and execution of clinical trial protocols for HBT-301. The loss of either Dr. Nandakumar or Dr. Whitfield, or the inability to attract and retain additional qualified scientific, clinical, and managerial personnel, could materially and adversely affect the combined company's ability to execute its business strategy and develop its product candidates.
Real Property Lease Obligations. The revised disclosure includes a risk factor addressing HBT's significant real property lease obligation. HBT's sole office and laboratory facility is located at 450 Kendall Street, Suite 800, Cambridge, MA 02142. The facility is leased from Kendall Square Properties Trust pursuant to a 10-year lease agreement commencing January 1, 2020 and expiring December 31, 2029 (with one five-year renewal option). The annual base rent under the lease is $1,140,800 (based on 18,400 rentable square feet at $62.00 per square foot), subject to annual escalations of 3.0%. The risk factor notes that this lease represents a significant fixed cost obligation for a pre-commercial company and that HBT's ability to reduce its operating costs in the event of financial difficulty may be constrained by this obligation.
High Redemption Risk. The revised disclosure includes a risk factor addressing the risk that actual redemptions by PVAC public shareholders may be significantly higher than anticipated. The risk factor notes that the actual level of redemptions is uncertain, that recent de-SPAC transactions in the broader market have experienced redemption rates exceeding 80% in certain cases, and that high redemptions reduce the cash available to the combined company at closing. If the available cash after giving effect to redemptions, PIPE proceeds, and transaction expenses falls below the $30,000,000 minimum cash condition under BCA §7.03(c), HBT is not obligated to consummate the Business Combination. In such event, PVAC would need to seek an alternative business combination target or proceed toward liquidation and dissolution. Even if the minimum cash condition is satisfied, high redemptions would result in the combined company having less capital available for operations and clinical development, potentially accelerating the need for additional financing.
The foregoing revisions appear on pages 34–54 of Amendment No. 1.
Comment 7 — Fairness Opinion
Please revise the disclosure regarding the fairness opinion delivered to the PVAC Board by Birchwood Partners LLC to describe the material financial analyses underlying the opinion and to disclose any material relationships between Birchwood Partners and the parties to the transaction, including compensation.
Response:
The Company acknowledges the Staff's comment. In response, the Company has revised and expanded the disclosure in Amendment No. 1 regarding the fairness opinion delivered by Birchwood Partners LLC to the PVAC Board of Directors.
Fairness Opinion. The revised disclosure now provides that Birchwood Partners LLC (Graham Hollis, Managing Director, serving as the lead engagement professional) delivered its written opinion to the PVAC Board of Directors on March 20, 2023. The opinion stated that, as of such date and subject to the assumptions, qualifications, limitations, and conditions set forth therein, the merger consideration of $40,000,000 in implied enterprise value (consisting of 4,000,000 shares of PVAC Class A common stock at a deemed value of $10.00 per share) payable by PVAC to the equityholders of HBT in the Business Combination was fair, from a financial point of view, to the holders of PVAC's Class A ordinary shares (other than Pinnacle Venture Sponsor LLC and its affiliates). The fairness opinion was one of several factors considered by the PVAC Board in reaching its determination to approve the BCA and was not the sole determinative factor.
Material Financial Analyses. The revised disclosure summarizes the material financial analyses performed by Birchwood Partners in connection with rendering its opinion, including:
• Comparable Public Company Analysis. Birchwood Partners analyzed certain publicly available financial and market information for a selected group of publicly traded clinical-stage gene therapy companies that Birchwood Partners deemed relevant for comparison purposes. The selected companies included firms focused on gene-editing and gene therapy approaches for rare and orphan diseases with lead product candidates in Phase 1 or Phase 2 clinical development. The analysis examined enterprise values as multiples of projected research and development spending, pipeline value metrics, and implied market capitalizations, among other financial metrics.
• Precedent De-SPAC Transactions. Birchwood Partners reviewed a selected set of de-SPAC business combination transactions involving clinical-stage biotechnology target companies completed during the period from January 2020 through February 2023. The analysis considered implied enterprise values, trust sizes, PIPE commitments, and the resulting pro forma capitalization of the combined entities.
• discounted Cash Flow Analysis. Birchwood Partners performed a discounted cash flow analysis based on management projections provided by HBT, which included projected revenue, operating expenses, capital expenditures, and cash flows over a multi-year forecast period. The analysis applied a range of discount rates reflecting the risk profile of clinical-stage biotechnology companies and a terminal value methodology based on probability-weighted scenario analysis reflecting the potential outcomes of HBT's clinical development programs.
The revised disclosure includes a summary of the ranges of implied enterprise values derived from each analytical methodology and notes that no single analysis was determinative; rather, Birchwood Partners considered the totality of its analyses in rendering its opinion.
Material Relationships and Compensation. The revised disclosure now prominently discloses the following material relationships between Birchwood Partners and the parties to the transaction, as well as the compensation payable to Birchwood Partners:
• Birchwood Partners served as the lead underwriter in PVAC's IPO and is entitled to receive a deferred underwriting commission of 3.5% of the gross IPO proceeds, payable upon the consummation of a business combination. Based on gross IPO proceeds of $50,000,000, the deferred underwriting commission payable to Birchwood Partners is $1,750,000.
• In addition to the deferred underwriting commission, Birchwood Partners is entitled to receive a $500,000 advisory fee for financial advisory services rendered in connection with the Business Combination.
• The total compensation payable to Birchwood Partners is therefore $2,250,000 ($1,750,000 deferred underwriting commission plus $500,000 advisory fee), substantially all of which is contingent upon the closing of the Business Combination.
• Birchwood Partners also served as the placement agent for the PIPE financing and may receive customary placement agent fees in connection therewith (which are included in the $500,000 advisory fee).
• The contingent nature of substantially all of Birchwood Partners' compensation creates a potential conflict of interest, as Birchwood Partners has a financial incentive for the Business Combination to be consummated. The PVAC Board was aware of this potential conflict and considered it, among other factors, in evaluating the fairness opinion and in approving the Business Combination.
These relationships and the associated potential conflicts of interest are now prominently disclosed in both the summary of the fairness opinion and the section entitled "Interests of Certain Persons in the Business Combination — Financial Advisor Compensation and Conflicts."
The foregoing revisions appear on pages 82–90 of Amendment No. 1.
Comment 8 — Interests of PVAC's Sponsor, Directors, and Officers
Please enhance the disclosure regarding the interests of PVAC's Sponsor, officers, and directors in the Business Combination that may differ from or be in addition to the interests of PVAC's public shareholders. Quantify the economic interests of the Sponsor.
Response:
The Company acknowledges the Staff's comment. In response, the Company has revised and substantially enhanced the disclosure in the section entitled "Interests of Certain Persons in the Business Combination" in Amendment No. 1 to quantify the economic interests of the Sponsor and to provide greater detail regarding the interests of PVAC's officers, directors, and Sponsor that may differ from or be in addition to the interests of PVAC's public shareholders.
Sponsor's Economic Interests. The revised disclosure now provides the following quantified analysis of the Sponsor's economic interests:
• Pinnacle Venture Sponsor LLC (the "Sponsor"), managed by Derek Holroyd and Samantha Briggs, originally acquired 1,250,000 Class B founder shares for a total purchase price of approximately $25,000 in the aggregate (approximately $0.02 per share).
• Pursuant to the BCA, the Sponsor has agreed to forfeit 375,000 of its 1,250,000 Class B founder shares at the closing of the Business Combination. After giving effect to this forfeiture, the Sponsor will retain 875,000 shares, which will convert into shares of HBIO common stock on a one-for-one basis at closing.
• At a deemed value of $10.00 per share (consistent with the per-share value paid by public shareholders in the IPO and by PIPE investors), the Sponsor's 875,000 retained shares have an implied aggregate value of $8,750,000, representing a return of approximately 350 times (350×) the Sponsor's initial investment of approximately $25,000.
• Even at a significantly lower market price, the Sponsor's shares would retain meaningful value. For example, at a hypothetical market price of $2.00 per share, the Sponsor's 875,000 shares would have an aggregate market value of $1,750,000, still representing a return of approximately 70× the Sponsor's initial investment. By contrast, PVAC public shareholders who do not redeem their shares and who purchased in the IPO at $10.00 per unit would experience a loss of $8.00 per share, or 80%, under the same scenario.
Unique Incentive to Approve the Business Combination. The revised disclosure emphasizes that if the Business Combination is not consummated and PVAC is unable to complete an alternative business combination within the applicable time period, PVAC's trust account will be liquidated and the IPO proceeds returned to public shareholders on a pro rata basis. In such event, the Sponsor's Class B founder shares would be entirely worthless, as they are not entitled to participate in any distribution of trust account proceeds upon liquidation. Accordingly, the Sponsor has a unique and powerful economic incentive to approve the Business Combination — an incentive that is not shared by PVAC's public shareholders, who have the right to redeem their shares for a pro rata share of the trust account and thereby recover substantially all of their initial investment regardless of whether the Business Combination is consummated.
Interests of Officers and Directors. The revised disclosure now specifically identifies the following additional interests:
• Derek Holroyd, Chief Executive Officer and Director of PVAC, serves as a Managing Member of the Sponsor and therefore has a direct personal financial interest in the Sponsor's retained shares and the consummation of the Business Combination.
• Samantha Briggs, Chief Financial Officer and Director of PVAC, also serves as a Managing Member of the Sponsor and has the same direct personal financial interest.
• Robert Tannenbaum and Julia Greenfield serve as independent directors of PVAC. Neither Mr. Tannenbaum nor Ms. Greenfield holds a direct equity interest in the Sponsor. However, the revised disclosure acknowledges that each independent director may have reputational interests in the successful consummation of a business combination, and that such reputational considerations may influence their judgment in evaluating the proposed Business Combination.
Lock-Up Provisions. The revised disclosure further notes that the Sponsor's shares will be subject to a 12-month post-closing lock-up period, during which the Sponsor may not sell, transfer, or otherwise dispose of its shares. The lock-up is subject to an early release provision that permits transfers beginning 150 days after closing if the closing price of HBIO common stock equals or exceeds $12.00 per share for any 20 trading days within any 30 consecutive trading-day period.
No Outstanding Promissory Notes or Advances. The revised disclosure confirms that PVAC has no outstanding promissory notes payable to the Sponsor, and that the Sponsor has not made any working capital loans or advances to PVAC, other than as previously disclosed in the Registration Statement.
The foregoing revisions appear on pages 91–96 of Amendment No. 1.
We believe that the revisions reflected in Amendment No. 1, as described in this response letter, are fully responsive to each of the Staff's comments set forth in the Comment Letter dated April 28, 2023. We have endeavored to provide comprehensive, specific, and prominent disclosure on each of the matters raised by the Staff, and we believe that the proxy statement/prospectus as amended provides investors with the information necessary to make an informed decision regarding the Business Combination.
We would welcome the opportunity to discuss any of the foregoing responses with the Staff at the Staff's convenience. If the Staff has any questions or further comments regarding this response letter or Amendment No. 1, please do not hesitate to contact the undersigned, Sandra Tung, at (617) 854-7112 or Ryan Kowalski at (617) 854-7248.
In light of PVAC's approaching deadline for completing a business combination under its amended and restated certificate of incorporation and the importance of providing PVAC's public shareholders with timely proxy materials, PVAC respectfully requests that the Staff accelerate the effectiveness of the Registration Statement as amended at the earliest practicable date.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Sandra Tung, Partner One Federal Street, 42nd Floor Boston, MA 02110 Telephone: (617) 854-7112
Email: stung@calderwoodharkness.com
cc:
Derek Holroyd, Chief Executive Officer, Pinnacle Venture Acquisition Corp. Samantha Briggs, Chief Financial Officer, Pinnacle Venture Acquisition Corp. Nathan Dorsey, Partner, Hargrove Slater & Dunn LLP Dr. Priya Nandakumar, Chief Executive Officer, Helix Bio Therapeutics Inc. Oliver Mackenzie, Calderwood & Harkness LLP
Holder Category | Shares | Percentage
Former HBT equityholders | 4,000,000 | 44.1%
Non-redeeming PVAC public shareholders | 2,185,610 | 24.1%
PIPE investors | 2,000,000 | 22.1%
Sponsor (net of 375,000 share forfeiture) | 875,000 | 9.7%
Total undiluted shares outstanding | 9,060,610 | 100.0%
Holder Category | Shares | Percentage
Former HBT equityholders | 4,000,000 | 33.2%
Non-redeeming PVAC public shareholders | 2,185,610 | 18.1%
PIPE investors | 2,000,000 | 16.6%
Sponsor (net of 375,000 share forfeiture) | 875,000 | 7.3%
Public warrant holders (assuming full exercise at $11.50/share) | 2,500,000 | 20.7%
Earnout shares (assuming all tranches triggered) | 500,000 | 4.1%
Total fully diluted shares outstanding | 12,060,610 | 100.0%
Expense Category | Amount
Deferred underwriting commission — Birchwood Partners LLC | $1,750,000
Advisory fee — Birchwood Partners LLC | $500,000
Advisory fee — Calvert & Wren Advisory LLC | $750,000
Legal fees — Calderwood & Harkness LLP (estimated) | $1,200,000
Legal fees — Hargrove Slater & Dunn LLP (estimated) | $950,000
D&O tail insurance premium — Ridgepoint Specialty Insurance Company | $485,000
SEC filing fees, printing, proxy solicitation, and miscellaneous costs | $365,000
Total estimated transaction expenses | $6,000,000

CALDERWOOD & HARKNESS LLP

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