CORRESP 1 filename1.htm

 

 

401 9th Street, NW

Washington, D.C. 20004-2128

+1.202.508.8000

 

May 2, 2023

 

Via EDGAR  

 

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549  

 

Attention: Catherine De Lorenzo and David Link, Division of

Corporation Finance, Office of Real Estate & Construction

 

Re:Kingswood Acquisition Corp. 
 Preliminary Proxy Statement on Schedule 14A 
 Filed April 24, 2022 
 File No. 001-39700  

 

Dear Ladies and Gentlemen:

 

On behalf of our client, Kingswood Acquisition Corp. (the “Company”), we submit this letter setting forth the responses of the Company to the comments provided by the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) in its comment letter dated April 28, 2023 (the “Comment Letter”) with respect to Company’s preliminary proxy statement on Schedule 14A (the “Preliminary Proxy”).

 

For your convenience, we have reproduced below in italics the text of the Comment Letter, followed by the Company’s response. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Preliminary Proxy.

 

Preliminary Proxy Statement on Schedule 14A

 

General

 

1.We previously reviewed the preliminary proxy statement filed in October 2022 and issued a comment letter on October 17, 2022 regarding the Committee on Foreign Investment in the United States (CFIUS). Your response to this comment was submitted on October 20, 2022. In addressing this with a view toward disclosure, please tell us whether your sponsor is, is controlled by, or has substantial ties with a non-U.S. person. If so, also include risk factor disclosure that addresses how this fact could impact your ability to complete your initial business combination. For instance, discuss the risk to investors that you may not be able to complete an initial business combination with a U.S. target company should the transaction be subject to review by a U.S. government entity, such as the CFIUS, or ultimately prohibited. Disclose that as a result, the pool of potential targets with which you could complete an initial business combination may be limited. Further, disclose that the time necessary for government review of the transaction or a decision to prohibit the transaction could prevent you from completing an initial business.

 

SHEARMAN.COM

Shearman & Sterling LLP is a limited liability partnership organized in the United States under the laws of the state of Delaware, which laws limit the personal liability of partners.

 

 

 

 

Securities and Exchange Commission

Division of Corporation Finance

May 2, 2023

Page 2

 

Company Response

 

The Company acknowledges the Staff’s comment and respectfully informs the Staff that the Sponsor is controlled by, or has substantial ties with, non-U.S. persons domiciled in the United Kingdom.

 

The Company intends to include in its revised Preliminary Proxy and/or the definitive proxy related thereto, and if appropriate, any definitive proxy and/or registration statement to be filed with the Commission in connection with its initial business combination, the language below highlighting the risks to investors that we may not be able to complete an initial business combination with a U.S. target company should the transaction be subject to review by a U.S. government entity, such as the Committee on Foreign Investment in the United States (CFIUS). The Company also notes that a similar risk factor was included in its annual report on Form 10-K filed with the Commission on April 17, 2023.

 

“If we were considered to be a “foreign person,” we might not be able to complete an initial business combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment regulations or review by a U.S. government entity, such as the Committee on Foreign Investment in the United States (“CFIUS”).

 

Our Sponsor is controlled by, or has substantial ties with non-U.S. persons domiciled in the United Kingdom. Acquisitions and investments by non-U.S. Persons in certain U.S. business may be subject to rules or regulations that limit foreign ownership. CFIUS is an interagency committee authorized to review certain transactions involving investments by foreign persons in U.S. businesses that have a nexus to critical technologies, critical infrastructure and/or sensitive personal data in order to determine the effect of such transactions on the national security of the United States. Were we considered to be a “foreign person” under such rules and regulations, any proposed business combination between us and a U.S. business engaged in a regulated industry or which may affect national security could be subject to such foreign ownership restrictions, CFIUS review and/or mandatory filings.

 

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Securities and Exchange Commission

Division of Corporation Finance

May 2, 2023

Page 3

 

If our potential initial business combination with a U.S. business falls within the scope of foreign ownership restrictions, we may be unable to consummate an initial business combination with such business. In addition, if our potential business combination falls within CFIUS’s jurisdiction, we may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS, or to proceed with the initial business combination without notifying CFIUS and risk CFIUS intervention, before or after closing the initial business combination. CFIUS may decide to block or delay our initial business combination, impose conditions to mitigate national security concerns with respect to such initial business combination or order us to divest all or a portion of a U.S. business of the combined company if we had proceeded without first obtaining CFIUS clearance. The potential limitations and risks may limit the attractiveness of a transaction with us or prevent us from pursuing certain initial business combination opportunities that we believe would otherwise be beneficial to us and our shareholders. As a result, the pool of potential targets with which we could complete an initial business combination may be limited and we may be adversely affected in terms of competing with other special purpose acquisition companies which do not have similar foreign ownership issues. Moreover, the process of government review, whether by CFIUS or otherwise, could be lengthy.

 

Because we have only a limited time to complete our initial business combination, our failure to obtain any required approvals within the requisite time-period may require us to liquidate. If we liquidate, our public stockholders may only receive their pro rata share of amounts held in the trust account, and our warrants will expire worthless. This will also cause you to lose any potential investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation in the combined company.”

 

We hope that the foregoing has been responsive to the Staff’s comments. Please direct any questions or comments regarding the foregoing to Bradley A. Noojin at +1.202.508.8151 and John W. Menke at +1.713.354.4878.

 

Very truly yours, 
   
/s/ Bradley A. Noojin 
   
cc:Michael Nessim 
 Kingswood Acquisition Corp. 

 

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