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United States securities and exchange commission logo
March 13, 2022
Mostafa Ronaghi, Ph.D.
Chief Executive Officer
Dynamics Special Purpose Corp.
2875 El Camino Real
Redwood City, CA, 94061
Re: Dynamics Special
Purpose Corp.
Registration
Statement on Form S-4
Filed February 14,
2022
File No. 333-262707
Dear Dr. Ronaghi:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed February 14, 2022
Cover Page
1. Disclose if the SPAC
s sponsors, directors, officers or their affiliates will participate in the
PIPE Investment.
2. Please revise this
section to disclose the post-business combination voting power of (i)
DYNS's sponsor and its
affiliates as well as (ii) DYNS's current public stockholders.
Market and Industry Data, page ii
3. Your statements
regarding information in the document provided by third-party sources,
or based on information
from third-party sources, inappropriately implies you are not
Mostafa Ronaghi, Ph.D.
FirstName LastNameMostafa Ronaghi, Ph.D.
Dynamics Special Purpose Corp.
Comapany
March NameDynamics Special Purpose Corp.
13, 2022
March2 13, 2022 Page 2
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FirstName LastName
responsible for the disclosure in the prospectus. Revise to clarify
you are responsible for
all disclosure in the prospectus.
Questions and Answers About The Proposals, page ix
4. Please add a question and answer that highlights the business
combination consideration,
including the relative equity ownership percentage split and the
contingency
consideration. Also, please include the post transaction equity value
of the combined
company and the value of equity to be issued to the Senti
shareholders.
5. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
sensitivity analysis
showing a range of redemption scenarios, including minimum, maximum
and interim
redemption levels.
6. We note that certain shareholders agreed to waive their redemption
rights. Please describe
any consideration provided in exchange for this agreement.
7. Please add a question and answer that discloses all possible sources
and extent of dilution
that shareholders who elect not to redeem their shares may experience
in connection with
the business combination. Provide disclosure of the impact of each
significant source of
dilution, including the amount of equity held by founders, at
different redemption levels.
8. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
9. Please revise your disclosures here and on page 200 to quantify the
number of shares that
will have registration rights following the consummation of the
Business Combination.
Q: What is a Non-Redemption Agreement?, page xiii
10. Please disclose whether any Non-Redemptions Agreements were entered
into with
affiliates or interested parties.
Summary of the Proxy Statement/Prospectus
The Parties
Senti, page 2
11. Please revise the summary disclosure concerning Senti to highlight the
going concern
determinations.
Interests of the Sponsor and DYNS's Directors and Officers in the Business
Combination, page 9
12. Please quantify the aggregate dollar amount and describe the nature of
what the sponsor
and its affiliates have at risk that depends on completion of a
business combination.
Include the current value of securities held, loans extended, fees
due, and out-of-pocket
Mostafa Ronaghi, Ph.D.
Dynamics Special Purpose Corp.
March 13, 2022
Page 3
expenses for which the sponsor and its affiliates are awaiting
reimbursement. Provide
similar disclosure for the company s officers and directors, if
material.
Risk Factors, page 22
13. Please disclose the material risks to unaffiliated investors presented
by taking Senti public
through a merger rather than an underwritten offering. These risks
could include, for
example, the absence of due diligence conducted by an underwriter that
would be subject
to liability for any material misstatements or omissions in a
registration statement.
We may be unable to acquire or in-license any relevant third-party intellectual
property rights...,
page 58
14. Please revise to disclose which of Senti's product candidates and
technologies are subject
to march-in rights.
New Senti s amended and restated bylaws designate the Court of Chancery of
the State of
Delaware..., page 93
15. We note that the New Senti s amended and restated bylaws will
contain a forum selection
provision that identifies the U.S. federal district courts as the
exclusive forum for actions
arising under the Securities Act. Please also state that investors
cannot waive compliance
with the federal securities laws and the rules and regulations
thereunder. In that regard, we
note that Section 22 of the Securities Act creates concurrent
jurisdiction for federal and
state courts over all suits brought to enforce any duty or liability
created by the Securities
Act or the rules and regulations thereunder. Please also ensure the
disclosure on page 340
is consistent with the disclosure here.
16. We note that the Delaware Court of Chancery forum provision will not
apply to any
causes of action arising under the Securities Act or the Exchange Act
or any other claim
for which the federal courts have exclusive jurisdiction. Please also
ensure that the
exclusive forum provision in the governing documents states this
clearly, or tell us how
you will inform investors in future filings that the provision does
not apply to any actions
arising under the Securities Act or Exchange Act. Please also ensure
the disclosure on
page 340 is consistent with the disclosure here.
The Sponsor and DYNS's officers and directors own DYNS Common Stock that will
be
worthless..., page 94
17. Please revise this risk factor to more clearly state that because the
sponsor will benefit
from the completion of a business combination and may be incentivized to
complete an
FirstName LastNameMostafa Ronaghi, Ph.D.
acquisition of a less favorable target company or on terms less
favorable to
Comapany NameDynamics
shareholders Special
rather than Purpose
liquidate. Corp.also highlight this risk in
the Summary of the
Please
March Proxy Statement/Prospectus.
13, 2022 Page 3
FirstName LastName
Mostafa Ronaghi, Ph.D.
FirstName LastNameMostafa Ronaghi, Ph.D.
Dynamics Special Purpose Corp.
Comapany
March NameDynamics Special Purpose Corp.
13, 2022
March4 13, 2022 Page 4
Page
FirstName LastName
Background of the Business Combination, page 110
18. Please revise the background section to provide additional detail
regarding the three
other potential targets" and to clarify the extent of the negotiations
with the three other
potential targets that you ultimately did not pursue. To the extent
that any preliminary
proposals were submitted, please disclose all material proposal terms,
including
transaction structure, valuation, and equity split distribution.
19. Please identify the individuals and/or parties who participated in the
meetings and
discussions described throughout this section. By way of example only,
please identify
each of the individuals who participated in the diligence discussions
with Senti from July
19, 2021 to July 29, 2021 and the experts and third-party consultants
referenced on page
116.
20. We note your disclosure on page 111 that "[i]ndependently, members of
DYNS's
management team heard about Senti from calls with people in their
network." Please
disclose, if known, the dates of such conversations and the
individuals involved.
21. Please revise your disclosure in this section to clearly describe how
DYNS formulated
equity value of Senti equal to $240,000,000. Please also revise to
clarify whether this
valuation was subject to any negotiation between the parties.
22. Please revise to explain in greater detail the materials reviewed in
the data room and the
"financial analysis conducted by DYNS s management team" referenced
on page
124.
23. You disclose that on September 3, 2021, you, Senti, J.P. Morgan,
Morgan Stanley, BofA
Securities began discussing the proposed PIPE financing and on
September 22, 2021,
began marketing an investment in the PIPE financing. Please disclose
who selected the
PIPE investors, the identity of the PIPE investors, and any material
relationships between
the PIPE investors and the sponsor, the Companies and their
affiliates.
The Board's Reasons for Approval of the Business Combination, page 122
24. We note your disclosure that the board of directors did not obtain a
third-party valuation
or fairness opinion. Please describe the substantive factors
considered by the board of
directors and management in determining that the business combination
is "fair" to
stockholders, as disclosed on page 11.
25. Please describe in greater detail all material analyses the board
relied upon in evaluating
the financial aspects of the business combination. If there were any
analyses that did not
support the fairness of the transaction, please include appropriate
disclosure. Please also
revise to clarify whether your board of directors reviewed a
comparable company
analysis. We note your statements on page 113 regarding public
comparables. To the
extent that your board of directors reviewed a comparable company
analysis, please
include this analysis in the prospectus.
Mostafa Ronaghi, Ph.D.
FirstName LastNameMostafa Ronaghi, Ph.D.
Dynamics Special Purpose Corp.
Comapany
March NameDynamics Special Purpose Corp.
13, 2022
March5 13, 2022 Page 5
Page
FirstName LastName
Material U.S. Federal Income Tax Considerations, page 144
26. We note your intention and expectation that the transaction qualify as
a reorganization
within the meaning of Section 368(a) of the U.S. Internal Revenue Code
of 1986, as
amended. Please revise your disclosure to more clearly state counsel's
tax opinion on
whether the transaction will qualify as a reorganization and include
appropriate risk factor
disclosure. In addition, please state in your disclosure that the
discussion is the opinion of
tax counsel and identify counsel. Refer to Sections III.B and C of
Staff Legal Bulletin 19.
Please also file a tax opinion as an exhibit to the filing or provide
us your analysis as to
why you do not believe such an opinion is required. Refer to Item
601(b)(8) of
Regulation S-K and, for guidance, Section III.A.2 of Staff Legal
Bulletin No. 19.
Conflicts of Interest, page 209
27. We note that J.P. Morgan served as the sole book running manager of
DYNS's initial
public offering and was engaged as a capital markets advisor in
connection with the
business combination, entitling it to receive $7,050,000 of deferred
underwriting fees.
Please disclose this conflict of interest in this section and
throughout the prospectus, as
appropriate.
28. We note your disclosure that your current charter modifies the
corporate opportunities
doctrine. Please address whether this conflict of interest impacted
your search for
a business combination target.
Executive Compensation, page 308
29. Please include a description of the material terms of Deborah
Knobelman's employee offer
letter, which you have filed as Exhibit 10.9. Refer to Item
18(a)(7)(ii) of Form S-4.
Beneficial Ownership, page 318
30. Please identify the natural person(s) with voting and/or dispositive
control of the shares
held by 8VC in footnote 10 to the beneficial ownership table.
General
31. Please revise the proxy statement/prospectus to ensure that all
acronyms and industry
terms are defined when first used. We note several uses of acronyms
that are never
defined and whose meaning is not clear from context. For example, in
your risk factor
disclosure on page 40 you use "CMO" and in the background section on
page 112 you use
"CDA." Refer to Rule 421(b) of the Securities Act of 1933.
32. Please remove the references throughout your prospectus to
"first-in-class" or "best-in-
class" product candidates as these descriptions imply an expectation
of regulatory
approval and are inappropriate given the length of time and
uncertainty with respect to
securing marketing approval.
Mostafa Ronaghi, Ph.D.
Dynamics Special Purpose Corp.
March 13, 2022
Page 6
Registration Statement on Form S-4 filed February 14, 2022
Unaudited Pro Forma Condensed Financial Information, page 153
33. Reference is made to note 4 on page 160. We note you indicate here and
elsewhere
within your filing that the exchange ratio is determined in accordance
with the terms of
the Merger Agreement. Please revise to expand upon how the exchange ratio
is
calculated under the terms of the agreement and/or cross-reference to
where such
information can be obtained within your filing.
34. Given that the merger will be accounted for as a reverse recapitalization
with Senti
BioSciences, Inc. as the accounting acquirer, it appears to us that the
expenses incurred by
Dynamics Special Purpose Corp of $7.4 million, disclosed in note 5(d) on
page
161 are transaction costs related to the merger that should be expensed
as incurred and
recorded in the pro forma statement of operations as a non-recurring
item. Please advise or
revise.
35. Reference is made to note 6(f) on page 163. Please tell us and expand
your disclosures to
include a note regarding how the amounts attributed to stock owned by
Sponsors and
public stockholders were derived. Your response should explain how this
calculation is
consistent with the guidance outlined within Rule 11-02(a)(9)(ii) of
Regulation S-X and
how it reconciles or relates to the historical weighted shares
outstanding disclosed on the
statement of operations elsewhere within your filing.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Ameen Hamady at 202-551-3891 or Wilson Lee at
202-551-3468 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Isabel Rivera at 202-551-3518 or Jeffrey Gabor at 202-551-2544 with any
other
questions.
Sincerely,
FirstName LastNameMostafa Ronaghi, Ph.D.
Division of
Corporation Finance
Comapany NameDynamics Special Purpose Corp.
Office of Real
Estate & Construction
March 13, 2022 Page 6
cc: Alan Denenberg
FirstName LastName