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United States securities and exchange commission logo
June 4, 2021
Alex Slusky
Chief Executive Officer
Vector Acquisition Corp
One Market Street
Steuart Tower, 23rd Floor
San Francisco, CA 94105
Re: Vector Acquisition
Corp
Draft Registration
Statement on Form S-4
Submitted May 10,
2021
CIK 0001819994
Dear Mr. Slusky:
We have reviewed your draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Vector Acquisition Corporation / Rocket Lab USA, Inc. Confidential Draft
Registration
Statement on Form S-4 Submitted May 10, 2021
General
1. It appears that Vector
(Delaware) will be issuing shares to the PIPE investors and those
securities will then be
exchanged for shares of Rocket Lab in the registered offering.
Please explain the
impact of this arrangement on the restrictions attached to the shares
issued privately. In
your response, please address the availability of Rule 152 to separate
the private issuance
from the registered exchange of the PIPE shares and why you believe
you have met the
requirements of Section 4(a)(2) for transactions "not involving a public
offering." See
generally Rule 152 and Securities Act Sections Compliance and Disclosure
Alex Slusky
FirstName LastNameAlex
Vector Acquisition Corp Slusky
Comapany
June 4, 2021NameVector Acquisition Corp
June 4,
Page 2 2021 Page 2
FirstName LastName
Interpretations 134.02, 134.03, and 139.25.
Letter to Vector Acquisition Corporation Shareholders, page i
2. Please explain why the Director Proposal is conditioned on the
Domestication Proposal
not being approved at the annual general meeting.
Questions and Answers about the Transactions, page xii
3. Please add a new Q&A to disclose and quantify the interests each of
the registrant s
sponsor, current officers and directors. Please disclose and quantify
the return they will
receive on their initial investment based in the $4 billion valuation
assigned to Rocket
Lab. Also, provide similar disclosure in the Summary at page 15 and
elsewhere, including
page 114, about the return these parties will receive on their initial
investment, including
the price paid to acquire the securities and the current value as of
the most recent
practicable date.
Background to the Business Combination, page 103
4. Refer to the last paragraph on page 105. Please disclose the
background to this initial
valuation. For example, disclose whether Rocket Lab had established a
minimum
expected pre-transaction equity value, and if not, describe in greater
detail how Vector
reached a $3.984 billion valuation of Rocket Lab.
5. Refer to the last paragraph on page 106. Please disclose what
precipitated this increase in
the minimum expected pre-transaction equity value from that described
in the last
paragraph on page 105.
6. Refer to the first paragraph on page 107. Please expand this
disclosure to better describe
in greater detail the Vector board's affirmative consideration
of Morgan Stanley s role
as financial advisor to Rocket Lab. Describe in detail the
potential conflict, why the
board believed there was a perceived benefit of engaging Morgan
Stanley as a lead
placement agent for the Pipe Financing and what factors it considered
that enabled it to
conclude that such benefits outweighed the potential risks that might
arise from such
conflict.
Certain Rocket Lab Projected Financial Information, page 112
7. We note the projections provided by Rocket Lab's management and used
as your basis to
support the satisfaction of the 80% test. Please address the
following:
We note projected revenues for 2022 are $176 million and you apply
a compound
annual growth rate of 87%. Please explain to us and in your
filing, how this estimate
was determined, given the current scheduled backlog for 2022 is
only $54.8 million.
Please explain in your filing how the "unlevered free cash flow"
metric is useful, as it
appears to exclude key capital required to achieve the revenue
amounts projected.
Provide disclosure of the expected capital expenditures and
increases in working
capital that will be required to achieve the revenues and Adjusted
EBITDA
Alex Slusky
FirstName LastNameAlex
Vector Acquisition Corp Slusky
Comapany
June 4, 2021NameVector Acquisition Corp
June 4,
Page 3 2021 Page 3
FirstName LastName
presented.
Your disclosure states the board concluded that it was
appropriate to base the 80%
satisfaction test on both quantitative and qualitative factors.
Please disclose the
relative weighting that was applied to quantitative factors vs.
qualitative factors.
8. Please revise the assumptions described on page 113 to provide greater
detail and quantify
where possible. For example, but without limitation:
quantify the existing customer backlog and explain why it
supports the projected
revenue growth;
quantify the efficient scaling of manufacturing and launch
operations, the
expected cost reductions and clearly state whether such
scaling and expected cost
reductions constitute material departures from past performance
and cost reductions;
quantify each of the variables described in the last 4 bullet
points on page 113, e.g.
growth in demand, expansion of addressable market, further
penetration and third-
party forecasts and explain whether such assumptions represent a
material departure
from past performance or whether, alternatively, they are
consistent with past trends;
and
if the response to the preceding point is that the assumptions
regarding these last four
variables are not consistent with such past performance, explain
both narratively and
quantitatively why such assumptions are justified.
9. We note the risk factor disclosure on pages 28 to 46 that appears to
outline substantial
uncertainty regarding the future prospects of Rocket Lab and its
ability to earn a profit.
For example, but without limitation, we note the following disclosure:
"We experienced net losses of $30 million and $55 million in 2019
and 2020,
respectively. We expect to continue to incur net losses for the
next several years and
we may not achieve or maintain profitability in the future." (page
29)
The RASR contract accounts for approximately 24% of our
backlog. Given the
uncertainty surrounding future government spending and the right
of U.S.
government customers to terminate our contracts for convenience,
there can be no
assurance that the remaining backlog for this contract will
ultimately be recognized in
revenues. (page 31)
For the year ended December 31, 2020, our top five customers
together accounted
for approximately 76% of our revenues. At December 31, 2020, our
top five backlog
customers together accounted for approximately 74% of our backlog.
Our customers
could experience a downturn in their business or find themselves
in financial
difficulties, which could result in their ceasing or reducing
their use of our services or
becoming unable to pay for services they had contracted to buy.
(page 32)
In responding to the preceding comment, please advise what
consideration, if any, Rocket
Lab gave to these and other disclosed risks and their impacts on the
assumptions
referenced in the preceding comment, e.g. whether such acknowledged
risks resulted in
more conservative assumptions and/or forecasts or had no impact on
these assumptions or
the ultimate forecasts.
Alex Slusky
FirstName LastNameAlex
Vector Acquisition Corp Slusky
Comapany
June 4, 2021NameVector Acquisition Corp
June 4,
Page 4 2021 Page 4
FirstName LastName
10. Please provide Rocket Lab s basis for seven years of projections as
opposed to a shorter
period, especially in light of the risk factor disclosure referenced
in the preceding
comment. In addition, please disclose whether, and if so, how,
Vector's board of directors
weighted the projections contained in the latter part of the seven
years for purposes of its
determination to approve the transactions and recommend approval by
shareholders.
11. Refer to the disclosure in the last full paragraph on page 112. Please
tell us the basis for
your apparent belief that you can limit your obligation to update your
prospectus in this
manner. In particular, these assertions do not appear consistent with
the requirements of
Item 408 of Regulation C and your proposed use of the prospectus over
a period of time in
connection with a continuous offering of shares pursuant to the
exchange offer.
U.S. Federal Income Tax Considerations, page 147
12. We note the statements in this section that the disclosure is a
discussion of material federal
income tax considerations of the domestication and two mergers. It
appears from the
exhibit index that there is no a tax opinion. The prospectus should
provide a brief, clear
and understandable summary of the material tax aspects of the
domestication and mergers
and the required Item 601(b)(8) tax opinion provided by counsel should
state clearly the
tax consequences. Please file a tax opinion as an exhibit and clarify
whether the tax
disclosure is intended to constitute such opinion or whether counsel
will be providing a
separate long form tax opinion. Alternatively, please explain why a
tax opinion is not
required to be filed. Refer to Item 601(b)(8) of Regulation S-K and
Section III of Staff
Legal Bulletin No. 19.
Customers, page 194
13. Disclosure here indicates that [o]ur launch services have been used
by more than 20
organizations. Please disclose the percentage of business accounted
for by government
versus private sector customers.
Our Growth Strategy, page 194
14. Revise the first two bullet points on page 194 to explain the cited
growth strategies. For
example, explain what is meant by the phrase [e]xploit Electron s
time-to-market
leadership and flight heritage in small satellite launch to move up
the value chain and the
phrase [e]xpand our addressable launch market with the development
of the Neutron
launch vehicle , which will address large commercial and
government constellation
launch opportunities
15. The last bullet point on page 194 references further penetrat[ing]
available market for
on-orbit management of previously launched satellites. Please revise
to provide investors
with a sense of the size of the available market.
Alex Slusky
FirstName LastNameAlex
Vector Acquisition Corp Slusky
Comapany
June 4, 2021NameVector Acquisition Corp
June 4,
Page 5 2021 Page 5
FirstName LastName
Rocket Lab's Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Key Metrics and Select Financial Data, page 206
16. We note your disclosure of a Contract Value Per Launch metric which
appears to
represent payments received, regardless of whether they are
recognizable as
revenue. Please expand your disclosure to include revenue per launch
and cost per
launch to provide a more balanced presentation.
Comparison of the Years Ended December 31, 2019 and December 31, 2020
Cost of Revenues, page 211
17. Please expand your disclosure to address the reasons why Cost of
Revenues as a
percentage of sales increased in 2020.
Selling Stockholders and Related Information, page 237
18. We note the risk factor disclosure on page 60 regarding the potential
impact of large sales
by current stockholders on the stock market price of the
post-combination entity. With a
view towards disclosure, please advise what risks may exist with
respect to the board s
effort to continue incentivizing its key executive officers should
such officers sell
significant amounts of their existing holdings via this resale
registration statement.
Exclusive Jurisdiction of Certain Actions, page 255
19. Disclosure in the second paragraph of this section indicates that
the Proposed
Certification of Incorporation require[s] that, unless New Rocket Lab
consents in writing
to the selection of an alternative forum, the federal district courts
of United States shall be
the sole and exclusive forum for resolving any action asserting a
claim arising under the
Securities Act. 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 revise
the disclosure to state
that there is uncertainty as to whether a court would enforce this
provision. Please make
conforming revisions elsewhere in the prospectus where applicable.
Financial Statements, page F-1
20. Please provide updated interim financial information with your next
amendment. Refer
to Rule 8-08 of Regulation S-X for guidance.
Alex Slusky
Vector Acquisition Corp
June 4, 2021
Page 6
You may contact Kevin Stertzel at 202-551-3723 or John Cash at
202-551-3768 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Perry Hindin at 202-551-3444 or Jay Ingram at 202-551-3397 with any
other questions.
FirstName LastNameAlex Slusky Sincerely,
Comapany NameVector Acquisition Corp
Division of
Corporation Finance
June 4, 2021 Page 6 Office of
Manufacturing
FirstName LastName