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United States securities and exchange commission logo
March 16, 2023
Karan Puri
Chief Executive Officer
Vahanna Tech Edge Acquisition I Corp.
1230 Avenue of the Americas, 16 th Floor
New York, NY 10020
Re: Vahanna Tech Edge
Acquisition I Corp.
Form S-4 filed
February 14, 2023
File No. 333-269747
Dear Karan Puri:
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.
Form S-4 filed February 14, 2023
How Do Redemptions Affect The Value Of My New Roadzen Ordinary Shares,
page xiv
1. Please revise to
disclose 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, convertible securities, including warrants
retained by redeeming
shareholders, at each of the redemption levels detailed in your
sensitivity analysis,
including any needed assumptions.
2. Please quantify the
value of warrants, based on recent trading prices, that may be retained
by redeeming
stockholders assuming maximum redemptions and identify any material
resulting risks.
Information about the Parties to the Business Combination, page 1
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FirstName LastNameKaran Puri I Corp.
Vahanna Tech Edge Acquisition
Comapany
March NameVahanna Tech Edge Acquisition I Corp.
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3. Please revise to disclose the fiscal year-end for New Roadzen
post-merger for financial
reporting purposes.
Summary, page 1
4. Please revise to clarify the timing and factors to be considered in
considering whether the
registrant will remain a BVI company or redomicile to Delaware.
5. Please clarify if the sponsor and its affiliates can earn a positive
rate of return on their
investment, even if other SPAC shareholders experience a negative rate
of return in the
post-business combination company.
Organizational Structure, page 14
6. Please revise your diagrams illustrating the anticipated structure of
Vahanna just prior to
the consummation of the merger on page 14 and the diagram illustrating
the expected
structure of Vahanna upon consummation of the merger on page 16 to
show the relative
ownership of voting and economic interests of each group of
shareholders.
A substantial portion of our revenue is derived from a relatively small number
of clients ranging
from insurers, reinsurers, OEMs, and, page 37
7. You disclose on page 37 that a small number of clients have accounted
for a significant
portion of your revenue, including on OEM customer that accounted for
more than 25% of
total revenue from the Indian market. If material, identify any
material customer and
provide additional disclosure describing the terms of your
relationship with any such
customer including any contractual or other arrangements that are in
place to the extent
material so that shareholders may better assess the reliability of
these revenues. If any
such contract exists, please explain to us in your response letter why
you determined it
was not required to be filed as an exhibit pursuant to Item 601(b)(10)
of Regulation S-K.
Vahanna may redeem your unexpired warrants prior to their exercise at a time
that is
disadvantageous to you, thereby making your warrants, page 87
8. Please clarify whether recent common stock trading prices exceed the
threshold that
would allow you to redeem public warrants. Additionally, please
explain the steps, if any,
you will take to notify all shareholders, including beneficial owners,
regarding when the
warrants become eligible for redemption.
Unaudited Pro Forma Combined Financial Information, page 105
9. We note that your pro forma combined financial information presents
the combination of
financial information of Vahanna and Roadzen after giving effect to
the reverse
recapitalization between Roadzen and Vahanna, Roadzen s assumed
acquisitions of
Global Insurance Management Limited ( GIM ) and National
Automobile Club ( NAC ),
and the contemplated PIPE investment. We also note your disclosure on
page 50 that the
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FirstName LastNameKaran Puri I Corp.
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Comapany
March NameVahanna Tech Edge Acquisition I Corp.
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acquisitions of GIM and NAC are expected to be completed prior to the
closing of the
merger. In order to more accurately represent the sequence of these
transactions, and to
more clearly show the impact of each of these transactions, please
revise your pro forma
combined financial information beginning on page 109 to present the
assumed
acquisitions of GIM and NAC separately from the reverse
recapitalization and
contemplated PIPE investment. For instance, please revise your filing
to present your pro
forma combined financial information in a columnar format in the
following order:
historical financial statements of Roadzen,
historical financial statements of GIM,
historical financial statements of NAC,
transaction accounting adjustments for the acquisitions of GIM
and NAC,
pro forma combined Roadzen, GIM and NAC,
historical financial statements of Vahanna,
transaction accounting adjustments for the reverse
recapitalization assuming
minimum redemptions,
pro forma combined assuming minimum redemption,
additional pro forma adjustments for the reverse
recapitalization assuming maximum
redemptions, and
pro forma combined assuming maximum redemptions.
Description of the Transactions, page 106
10. We note your reference here, and in other sections of your filing, to
the PIPE investment
which is expected to close just prior to the completion of the merger.
We also note
disclosure on page 286 that this PIPE investment is contemplated prior
to the merger and
the actual amount may be greater or less than the target amount of
$58.9 million. Please
revise the relevant sections of your filing to clarify whether you
have any committed PIPE
investment amounts and whether the amount of the PIPE investment is
dependent upon
Vahanna Public Shareholder redemptions.
11. Please revise your disclosure describing the acquisition of GIM to
include the US dollar
equivalent of the total purchase price.
Basis of Pro Forma Presentation, page 107
12. We note your use of terminology such as directly attributable,
factually supportable and
expected to have a continuing impact when describing your pro forma
adjustments.
Please note that Article 11 of Regulation S-X was amended by SEC
Release No. 33-
10786, which revised the pro forma terminology and the basis for pro
forma adjustments.
Please revise your pro forma discussion to conform to the updated
guidance.
Transaction Adjustments, page 114
13. We note adjustment F, which reflects the fair value adjustment for the
purchases of GIM
and NAC. Please revise to disclose the date of each of these
historical amounts and
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FirstName LastNameKaran Puri I Corp.
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Comapany
March NameVahanna Tech Edge Acquisition I Corp.
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corresponding fair value adjustments. In addition, please tell us why
there are no fair
value adjustments for accounts receivable, net for both GIM and NAC.
14. Please revise the explanation to adjustment F that cash and cash
equivalents represents
historical amounts adjusted for distributions to refer to adjustment D
rather than
adjustment E.
15. We note that the explanation of adjustment J, which states it
represents the issuance of
68.3 million shares of the Company s common stock to Roadzen equity
holders as
consideration for the reverse recapitalization, does not appear to
correlate with the
corresponding adjustments to the unaudited pro forma condensed
combined balance sheet
on page 109. Please explain and revise as necessary.
Information about Roadzen, page 141
16. Please revise here and Summary to provide an overview of Roadzen,
Global Insurance
Management and National Automobile Club as well as the planned
operations and relative
sizes and geographic locations of the different lines of business.
Your revised disclosure
throughout the proxy statement/prospectus should clarify what you are
referring to when
you use "we" and reference separate businesses. As a non-exclusive
example, on page 73
you refer to "a portion of our business" when it appears you are
referring to Roadzen
without GIM and NAC. As the acquisitions of GIM and NAC are conditions
to closing of
the merger agreement, the narrative disclosure should explain clearly
the nature of the
target in the combined deSPAC transaction for which pro forma
financial information is
provided.
17. Additionally, revise here, Summary, Business, and Management's
Discussion and
Analysis to clarify the business intended to be conducted after the
deSPAC transaction.
For example, clarify the type of end customers who use the combined
company's
key products and their geographic locations. We note the following:
You use the term "telematics" but do not explain its use or the
extent to which
telematics is involved in a material portion of your revenues and
products and
services generating revenues from end-users;
We note the statement on page 149 that your platform allows you to
sell insurance
policies "from any insurer." Clarify the extent to which you
require and have uniform
or custom agreements with all insurance companies.
Clarify the approximate percentages of customers that are
insurance providers and
reinsurance providers.
Disclose the extent to which revenues from traditional insurance
brokerage services,
your platform or IaaS solution or other products and services
account for the majority
of your expenses and revenues. In this regard, we note the
statement on page 158 that
Roadzen generates "a majority of our revenues through commissions
and fees which
are a reflection of the total insurance policy premium."
Explain whether the event management companies acquired by
Coverzen and
referenced on pages F-65 and F-98 will be a continuing part of
your business.
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Clarify the approximate amount of revenues attributed to
"underwriting solutions"
and telematics, claims management, and FNOL. State whether any
highlighted
offering does not account for a material amount of revenues or
expenses.
Address the challenges of operating in the US, UK/EU and India
as a newly merged
business, and summarize how the company intends to structure the
businesses--for
example, as independently operating subsidiaries in different
countries, as combined
operations with a centralized headquarters in India, or
otherwise.
Recent Developments, page 144
18. Please revise your discussion of the pending acquisition of NAC to
discuss how NAC
generates revenue.
Roadzen's Management's Discussion and Analysis of Financial Condition and
Results of
Operations, page 155
19. Please revise the Management s Discussion and Analysis ( MD&A )
section of your
filing to include a discussion of changes in financial position for
each of the periods
presented in your financial statements.
Our Business Model, page 156
20. Please revise to provide a basis for the statement that Roadzen is
"one of the first
companies to provide an end-to-end IaaS platform addressed towards
insurance for
mobility." In this regard, please avoid industry jargon and clarify
what you mean by "end-
to-end IaaS platform addressed towards insurance for mobility."
Similarly, please revise
to provide a basis for the statement that you "maintain better margins
compared
to competitors mainly due to this adopted B2B2C distribution
strategy."
Results of Operations, page 161
21. We note your disclosure that the increases in revenue and certain
expenses are partially
attributable to the July 1, 2021 acquisition of the Coverzen Entities.
In order to provide a
reader with greater perspective regarding the impact of this
acquisition, please revise your
disclosures beginning on page 161 and 163 to quantify the effect of
the Coverzen entities
on revenue and relevant expense categories for each period presented.
Please also discuss
any known trends associated with the Coverzen Entities that is likely
to impact future
earnings.
22. Please revise your discussion of revenue on pages 161 and 163 to
provide a more detailed
and disaggregated analysis of revenue along with a discussion of any
known trends likely
to impact future earnings. In preparing your revised disclosures,
please separately
quantify and discuss the different streams of revenue and consider
disclosing certain key
metrics that drive each of the different revenue streams such as the
number of new
contracts, renewal rates, gross premiums written, and usage-based
statistics using either
pay-per-vehicle or pay-per use, etc.
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Vahanna Tech Edge Acquisition
Comapany
March NameVahanna Tech Edge Acquisition I Corp.
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23. Please revise to provide period to period narrative discussion of the
GIM and NAC
companies.
Security Ownership of Certain Beneficial Owners, page 171
24. Please disclose the sponsor and its affiliates' total potential
ownership interest in the
combined company, assuming exercise of all securities.
Management of New Roadzen after the Merger, page 174
25. Please revise each biography to disclose directorships held during the
past five years as
required by Item 401(e)(2) of Regulation S-K.
The Merger
Unaudited Prospective Financial Information of Roadzen, page 183
26. Please revise to delete the statement on page 185 that investors
should "not rely on such
financial information in making a decision regarding the business
combination proposal"
as it is an inappropriate disclaimer to the investor's ability to rely
on the disclosure.
27. Please revise to further clarify the assumptions underlying the
increase in revenues from
$59 million in FY23 to $118 million in FY24. For example,
Approximately what percentage of revenues are projected in each of
India, US and
UK/EU by Roadzen, GIM and NAC?
To what extent does Roadzen "assume renewal of existing contracts"
at the same rate
as historical renewals?
With respect to the assumed 15.2% reduction in direct costs, what
assumptions
support the "better" brokerage commissions, higher unit prices and
increased
efficiencies? For example, do the assumptions involve assumed
capital expenditures
toward scaling and automation?
To what extent are the 2.8% and 8.5% margin improvements at GIM
and NAC
dependent on assumed increases in volume, and what factors were
considered in any
such assumptions?
To what extent are the "new contracts with higher margins" at GIM,
"newly signed
contracts" at NAC or assumptions about future contract pricing
material to the
projections? In this regard, please reconcile these assumptions
with the following
statement on page 38 regarding prices: "In the past, we have been
required to, and
may in the future be required to, reduce the average fixed fees
and/or commissions
charged for our products, or otherwise agree to materially less
favorable terms in
response to these pressures."
Background of the merger, page 194
28. Please expand your background discussion to provide more detailed
disclosure regarding
key negotiation considerations and how they changed over time.
Currently the background
disclosure references negotiation topics without providing details or
explaining their
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FirstName LastNameKaran Puri I Corp.
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Comapany
March NameVahanna Tech Edge Acquisition I Corp.
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significance or how they may have changed before being reflected in
the proposed initial
business combination. For example, the disclosure states that the
April 29, 2022 LOI was
for $1.1 billion in return for all equity interests of Roadzen.
However, it is unclear what
other key terms were involved. It is unclear whether the financial
data already included
business and financial information for GIM and NAC, and whether
executive positions
were assumed to be provided to Messrs. Malhotra, Pasricha and Kamboj.
Did the initial
offer anticipate a PIPE transaction? You reference "an acquisition
target" in the first
sentence on page 199 but it is unclear what the target was and how it
may have affected
the price and negotiations. Please identify the original terms as well
as how and why any
terms were revised over time. Please also identify the key persons who
took part in the
various negotiations.
29. Please revise the discussion of the December 14, 2021 introduction to
clarify the person(s)
who initiated the possibility of a transaction with Roadzen and the
day it was initiated.
Revise to disclose whether the board considered appointing an
independent committee to
consider the Roadzen transaction in light of Mr. Ramgopal's
relationship with Roadzen.
30. We note the statement on page 196 to the Vahanna Board of Directors
comparing the
"maturity of the business" and the extent of structural complexity
with respect to Target B,
Target C and Roadzen. Please revise to clarify how Roadzen's status as
not having
completed its significant acquisitions of GIM and NAC compared to the
relative maturity
and complexity of the other 2 transactions. Did the board make certain
assumptions with
respect to these acquisitions? If they were initially expected to be
completed before the
business combination, did the board change its assumptions?
31. It appears that the merger consideration initially assumed that the
GIM and NAC
"acquisitions were executed prior to the business combination." Revise
to clarify when the
GIM and NAC acquisitions were initiated and by whom, and clarify the
extent to which
parties from GIM and/or NAC participated in the negotiations.
Recommendation of the Vahanna Board of Directors and Reasons for the Merger,
page 203
32. We note the Guideline Precedent Comparable Transaction Analysis on
page 193 and the
fact that the Revenues Last Twelve Months are projected revenues of
the yet-to-be-
merged company, and that the multiples for the other 3 rows suggest a
value either not
meaningful or below the precedent comparables. Please revise to
clarify the extent to
which the Vahanna Board of Directors considered these not meaningful
and negative
comparables in making its recommendation.
Interests of Vahanna Directors and Executive Officers and the Sponsor in the
Merger, page 211
33. 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
expenses for which the sponsor and its affiliates are awaiting
reimbursement. Provide
similar disclosure for the company s officers and directors, if
material.
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Interests of Vahanna's Directors and Executive Officers, page 211
34. Please revise page 213 to further clarify Mr. Ramgopal's personal
relationship with
"certain" of Roadzen s executive officers and board members.
Deferred Underwriting Fees, page 233
35. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Please revise your disclosure to disclose the effective
underwriting fee (not
just the deferred underwriting fees) on a percentage basis for shares
at each redemption
level presented in your sensitivity analysis related to dilution.
Global Insurance Management Ltd Financial Statements
Note 13. Other income (expense) net, page F-123
36. Please tell us and revise your disclosure, where applicable, to
quantify and explain the
nature of the liabilities that were no longer required and were
written back and reflected as
miscellaneous income for each period presented. Additionally, please
also revise your
disclosure to describe the underlying reasons for the significant
fluctuation in foreign
exchange fluctuation (loss) gain from December 31, 2020 to December
31, 2021.
Note 14. Revenue, page F-140
37. Please revise your disclosure in the notes to the consolidated
financial statements, or
elsewhere in the document, to allow a reader to understand how each of
the revenue
streams described on pages F-115 through F-116 and F-131 through F-132
correlate to
each of the components of revenue as disclosed in the tables on pages
F-123 and F-140.
Please also revise your disclosure to describe the underlying reasons
for the significant
increase in income from distribution during the nine months ended
September 30, 2022 as
well as the significant increase in marketing expenses during this
same period.
Item 21. Exhibits and Financial Statement Schedules., page II-2
38. Please file all required exhibits. For example, it is unclear why you
do not file
compensation plans and arrangements with executive officers. It is
also unclear why you
do not file or incorporate by reference the BVI articles of
incorporation or file as an
exhibit a list of all subsidiaries.
General
39. Please disclose the sponsor s ownership interest in the target
company, if any. Disclose
the approximate dollar value of the interest based on the transaction
value and recent
trading prices as compared to the price paid.
40. We noted that Sheumack GMA provided a fairness opinion. Please
disclose:
The fees that Sheumack GMA will receive upon completion of the
business
combination and any amount that is contingent upon completion of
the transaction;
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Any additional services Sheumack GMA or its affiliates provided
in connection with
the transaction, the related fees, and whether those fees are
conditioned on the
completion of the transaction; and
Any services Sheumack GMA provided to the target of the
business combination or
affiliates of the parties.
41. We note that on pages II-3 and II-4 in Exhibit 8.1 of "Item 21.
Exhibits and Financial
Statement Schedules", you state that a tax opinion will be filed by
amendment. Therefore,
in the "Material U.S. Federal Income Tax Considerations" and the
"Questions and
Answers" sections, please state that you have received an opinion on
the material tax
consequences, identify counsel and identify the material tax
consequences counsel has
opined upon.
42. We notes that on pages 27, 105, etc. of the registration statement,
you disclosed that you
will be issuing an aggregate of $58.9 million of preferred shares of
Vahanna pursuant to a
PIPE transaction expected to close just prior to the completion of the
merger. Please
disclose material differences in the terms and price of securities
issued at the time of the
IPO as compared to the contemplated PIPE. Please further disclose if
the sponsor,
directors, officers or their affiliates will participate in the PIPE.
43. Additionally, please disclose:
Any discussions about the need to obtain additional financing for
the combined
company, including the above-mentioned PIPE, and the
negotiation/marketing
processes (e.g., who selected the potential PIPE investors; what
relationships did the
PIPE investors have to the company, the sponsors, the target and
its affiliates, and
the placement agent; and how were the terms of the PIPE
transactions determined);
and
Whether there were any valuations or other material information
about the Vahanna,
Roadzen, or the de-SPAC transaction provided to potential PIPE
investors that have
not been disclosed publicly.
44. We note the statement on page 44 to "specific functions in our base
product offering at the
request of a customer or group of customers." To provide context,
please revise in Risk
Factors, Business and where appropriate to clarify the specific
functions and the types of
customers that are provided such functions.
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 Ben Phippen at 202-551-3697 or John Spitz at
202-551-3484 if you
Karan Puri
Vahanna Tech Edge Acquisition I Corp.
March 16, 2023
Page 10
have questions regarding comments on the financial statements and related
matters. Please
contact Robert Arzonetti at 202-551-8819 or James Lopez at 202-551-3536 with
any other
questions.
Sincerely,
FirstName LastNameKaran Puri
Division of
Corporation Finance
Comapany NameVahanna Tech Edge Acquisition I Corp.
Office of Finance
March 16, 2023 Page 10
cc: Evan D Amico
FirstName LastName