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United States securities and exchange commission logo
December 11, 2023
Anthony Ang
Director
K Wave Media Ltd.
PO Box 309, Ugland House
Grand Cayman, KY1-1104
Cayman Islands
Re: K Wave Media Ltd.
Draft Registration
Statement on Form F-4
Submitted November
13, 2023
CIK No. 0002000756
Dear Anthony Ang:
We have reviewed your
draft registration statement and have the following comments.
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 a comment applies 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 this
letter and your amended
draft registration statement or filed registration statement, we may
have additional comments.
Draft Registration Statement on Form F-4 submitted November 13, 2023
Cover Page
1. Please include the
"Calculation of Registration Fee" table on the cover page as Exhibit
107 to the registration
statement. Refer to Form F-4 and Item 601(b)(107) of Regulation
S-K.
Letter to the Stockholders of Global Star Acquisition Inc., page i
2. Please expand your
discussion of the ownership of PubCo following the Business
Combination to disclose
the percentage ownership interest that will be held by each of the
Global Star public
shareholders (not including the Sponsor), the Sponsor, and K Enter's
shareholders, assuming
both a minimum and maximum redemption scenario, as well as
Anthony Ang
FirstName LastNameAnthony Ang
K Wave Media Ltd.
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the exercise and conversion of all securities. To the extent that any
shareholder or group
of shareholders will own a percentage of interests such that they will
have a controlling
interest in PubCo, please identify such shareholder(s) and disclose
the extent of control.
3. We note your statement that K Enter "own[s] approximately...86.9%...of
GLST Common
Stock as of the record date" and is expected to vote such GLST Common
Stock in favor of
the Reincorporation Merger Proposal and the Acquisition Merger
Proposal. Please
confirm that K Enter owns 86.9% of GLST's outstanding Common Stock, as
this appears
inconsistent with the beneficial ownership table on page 224. We may
have additional
comments.
4. In this section you refer to "Global Star Acquisition Inc." as "we",
"our" and "Company".
But you also use these terms to refer to "K Enter" in the sections
"Business of K Enter"
(e.g., "our" on page 143) and "Management's Discussion and Analysis of
Financial
Condition and Results of Operations of K Enter." For consistency and
clarification,
please replace these references wherever they occur in these sections
with the entity's
name to which they refer.
Notice of Stockholder Meeting, page v
5. In your instructions to Global Star shareholders for redeeming their
public shares, you
state, "If redemption takes place after consummation of the Merger, it
is shares of PubCo
Common Stock that will be redeemed." This may be read to imply that
these shareholders
could still exercise their redemption rights following the Business
Combination, which
conflicts with your disclosure elsewhere that holders of public shares
must elect to redeem
prior to two business days before the Special Meeting. Please remove
this statement or
provide additional context to clarify its meaning.
Use of Certain Terms, page 3
6. With a view towards consistency, please revise throughout to use terms
as they are
defined in this section or in their respective disclosure sections.
For example, we note
interchangeable use of "Merger," "Business Combination," and "Proposed
Business
Combination" throughout, as well as use of the undefined "Sponsor
Shares" rather than
the defined "Founder Shares" in places.
Questions and Answers About the Business Combination and the Special Meeting,
page 5
7. Please supplement this section with a question and answer related to
the additional $50
million PIPE financing contemplated in the negotiations between Global
Star and K Enter.
Discuss the expected use of the proceeds of this financing, whether
there have been any
discussions to date with potential PIPE investors, the potential
dilutive impacts to public
shareholders, and whether the PIPE financing is a condition to
closing.
Anthony Ang
FirstName LastNameAnthony Ang
K Wave Media Ltd.
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Q: What vote is required to approve the Proposals?, page 7
8. In light of the Sponsor's and Initial Stockholders' commitment to vote
their shares in favor
of certain proposals, please disclose the requisite percentage of
Global Star's public shares
that would need to be voted in favor of each proposal in order to
approve it.
Q: Will I experience dilution as a result of the Business Combination?, page 9
9. We note your presentation of the equity ownership percentages of
various shareholder
groups following the Business Combination under minimum and maximum
redemption
scenarios. Please supplement this table and related disclosure
elsewhere to show scenarios
assuming minimum, maximum, and interim redemptions along with the
exercise or
conversion of all securities, including warrants, and any other
sources of dilution. Ensure
that all possible sources and extent of dilution that shareholders who
elect not to redeem
their shares may experience in connection with the Business
Combination are disclosed
including, but not limited to, the potential PIPE investment and
promissory note payment
conversions. We further note that the ownership percentages in this
table do not currently
align with those in the chart on page 16. Please ensure that your
disclosure regarding
dilution potential is consistent throughout the proxy
statement/prospectus.
10. Please revise your disclosure here and elsewhere throughout your proxy
statement/prospectus as appropriate to show the potential impact of
redemptions on the
per share value of shares owned by non-redeeming shareholders by
including a sensitivity
analysis showing a range of redemption scenarios, including minimum,
maximum, and
interim redemption levels.
11. Please confirm whether redeeming shareholders will retain their Global
Star warrants,
which will automatically convert to PubCo warrants. If so, please
quantify the value of
such warrants, based on recent trading prices, that may be retained by
redeeming
shareholders assuming maximum redemptions and identify any material
resulting risks.
Q: Is there a deadline for the Business Combination..., page 11
12. We note your disclosure that, in exchange for depositing monthly
extension payments into
the trust account, the Sponsor will receive an unsecured promissory
note payable upon
consummation of a business combination. Please revise your disclosure
here and
elsewhere as appropriate to provide additional details about such
promissory note,
including its amount, maturity date, and whether it will be
convertible.
Summary of the Proxy Statement/Prospectus
The Parties to the Business Combination
K Enter Holdings Inc., page 15
13. Please disclose in this section that, although K Enter expects to
consummate the equity
purchases for each of the Seven Korean Entities, only the completed
acquisitions of Play
Company and Solaire Partners are conditions to closing under the
Merger Agreement, as
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FirstName LastNameAnthony Ang
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stated on page 87. Please discuss how the inability to consummate
purchases of the
remaining entities could impact the Business Combination and an
investment in PubCo's
securities, and add appropriate risk factor disclosure.
Post-Business Combination Structure and Impact on the Public Float, page 16
14. We note your post-Business Combination organizational chart provided
on page 16.
Please additionally provide charts demonstrating the pre-Business
Combination structure
and ownership of Global Star and K Enter, as well as a chart depicting
the structure of the
organization following the anticipated acquisitions of the Seven
Korean Entities.
Anticipated Accounting Treatment, page 20
15. On pages 20, 146 and 172 you state the accounting treatment of the
Business Combination
was determined under International Financial Reporting Standards,
specifically IFRS 2. It
appears the Business Combination is between Global Star and K Enter
and both of these
entities are accounted for using U.S. GAAP. Please explain to us why
you believe IFRS is
applicable instead of U.S. GAAP. In connection with this, in some
places you disclose
"New K Enter" is the entity merging with Global Star. Please clarify
the specific entity
that is merging with Global Star and clearly state the order the
respective merger
transactions (i.e., Global Star/K Enter and K Enter/Play Company)
occur.
16. You disclose on pages 20 and 172 the acquisition of Play Company by K
Enter will be
accounted for in accordance with IFRS 3. It appears K Enter is not a
business pursuant to
IFRS 3. Accordingly, it appears the transaction should be accounted
for in accordance
with IFRS 2. Please advise.
Interests of Certain Persons in the Business Combination, page 21
17. Please quantify the aggregate dollar amount and, to the extent not
already listed, describe
the nature of what the Sponsor, its affiliates, and the directors and
officers of Global Star
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
any of the foregoing parties are awaiting reimbursement.
18. We note your disclosure of K Enter common stock held by Global Star's
officers and
directors. Please supplement your disclosure here and in the
discussion of conflicts of
interest elsewhere to highlight all material interests in the
transaction held by the Sponsor
and its affiliates as well as Global Star's officers and directors,
including those that arise
due to an interest in or affiliations with K Enter and/or any of the
Seven Korean Entities.
For example, we note that a Managing Member of the Sponsor is also a
co-founder and
director of K Enter. Please clarify how the Global Star board
considered such conflicts in
negotiating and recommending the Business Combination.
Anthony Ang
FirstName LastNameAnthony Ang
K Wave Media Ltd.
Comapany11,
December NameK
2023 Wave Media Ltd.
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Page 5 11, 2023 Page 5
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19. It appears that Global Star's charter waived the corporate
opportunities doctrine. Please
address this potential conflict of interest and whether it impacted
Global Star's search for
an acquisition target.
Recommendations of the Global Star's Board of Directors to the..., page 22
20. You state in this section that, "The Global Star board of directors
did not obtain a fairness
opinion on which to base its assessment," which conflicts with
disclosure elsewhere and
the inclusion of EverEdge's opinion in the proxy statement/prospectus.
Please revise your
disclosure accordingly.
Risk Factors, page 22
21. Please revise to provide a summary of the risk factors here. Refer to
Item 3 of Form F-4.
Risk Factors
Risk Factors Relating to K Enter Holdings Inc.'s Business and Industry, page 24
22. Many of the risk factors in this section reference risks that appear
applicable to any
company operating in this industry. For example, you note that you
"may experience
substantial fluctuations in [y]our operating results and growth rate,"
but you do not give
any examples of why and how your business could experience such
fluctuations.
Similarly you note that your international operations expose you to
risks, but you do not
discuss which operations you consider to be international and the
risks you face.
These are just examples. Please revise the risk factors in this
section to explain
specifically how and to what extent these risks have impacted the
historical operations of
the Seven Korean Entities and ensure they are tailored to the
businesses of such entities.
23. We note your indication that references to "we," "us," and "our" in
this section refer to K
Enter, but given K Enter's limited business operations to date, many
of the operational and
industry risk factors in this section appear to be applicable to the
Seven Korean Entities
instead. Please revise your disclosure to clarify which particular
entity(ies) the disclosure
is referencing as opposed to using terms such as "we." It also appears
that this section is
drafted assuming completion of the business combination. Where you
discuss risk factors
relating to historical operations, please revise the disclosure so it
does not suggest these
are the current operations of K Enter. As K Enter is a recently formed
company with no
operational history, consider including a separate section discussing
the risks relating to
the Seven Korean Entities. Additionally, please ensure that the risk
factors are tailored to
reflect the current businesses of the Seven Korean Entities. For
example, it is unclear how
your statement on page 41 that, "A substantial portion of our revenue
comes from the
distribution of music..." aligns with the discussion of the business
activities of the Seven
Korean Entities beginning on page 132.
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FirstName LastNameAnthony Ang
K Wave Media Ltd.
Comapany11,
December NameK
2023 Wave Media Ltd.
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Inflation may cause our investment and development costs..., page 26
24. We note your risk factor indicating that inflation has impacted your
business. Please
update this risk factor if recent inflationary pressures have
materially impacted operations
and the specific entity(ies) that has been impacted. In this regard,
identify the types of
inflationary pressures the entity(ies) is facing and how its business
has been affected.
If our electronic data is compromised...
Despite our security measures, our information technology..., page 35
25. Your risk factors describe security breaches and cybersecurity risks
and risks of data loss
due to security breaches as a material risk. Since cybersecurity and
cyber-attacks are a
potential risk, please also disclose in an appropriate place the
nature of the board's role in
overseeing your cybersecurity risks, including in connection with the
company's third
party providers. Please also confirm the accuracy of the statement
that your data is stored
electronically in locations around the United States, as you disclose
in the first sentence.
Risk Factors Relating to the Business Combination, page 57
26. Disclose the material risks to unaffiliated investors presented by
taking the company
public through a merger rather than an underwritten offering. These
risks may include 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.
Proposal No. 1 - The Reincorporation Merger Proposal
Material U.S. Federal Income Tax Consequences of The Business Combination, page
74
27. You state that the discussions under "U.S. Federal Income Tax
Consequences of the
Business Combination to U.S. Holders" and "U.S. Federal Income Tax
Consequences of
the Acquisition Merger to U.S. Holders of K Enter Common Stock"
constitute the
opinions of Nelson Mullins and Loeb & Loeb, respectively. Accordingly,
it appears that
counsel intend to file a short-form tax opinion and the disclosure in
the prospectus serves
as the tax opinion. Additionally, we note the statements that the
Reincorporation Merger
and Acquisition Merger "should" qualify as reorganizations and that
shareholders "should
not recognize gain or loss." Please revise to have each counsel
provide a firm opinion as
to the qualification of the mergers as reorganizations under Section
368 of the Code. If
counsel are unable to provide this opinion, please revise your
disclosure to explain why
counsel cannot give a firm opinion and describe the degree of
uncertainty in the opinion.
Refer to Section III.C.4 of Staff Legal Bulletin No. 19.
Proposal No. 2 - The Acquisition Merger Proposal
Lock-Up Agreement, page 88
28. Please define the terms used in this section, including "Purchaser
Ordinary Shares,"
"Purchaser Warrants," and "Target Holders," so that it is clear which
persons' and entities'
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FirstName LastNameAnthony Ang
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shares will be locked up following the closing of the Business
Combination. Quantify the
number and percentage of PubCo shares that will be subject to Lock-Up
Agreements.
Background of the Business Combination, page 91
29. Please comprehensively revise your disclosure in this section to
provide more detail on the
negotiations among Global Star, K Enter, and the Seven Korean
Entities. For example,
this section as drafted provides little disclosure regarding K Enter's
acquisitions of the
Seven Korean Entities, which, given K Enter's limited operating
history, seem to be
the key driver of the Business Combination. Please discuss the
background and
negotiation of these acquisitions, including any involvement of Global
Star; how this
process influenced Global Star's decision to pursue a recently formed
holding company
rather than an operating company with revenues; diligence conducted on
the Seven
Korean Entities; and the process of arriving at a $610 million
valuation for K
Enter. Additionally, we note that K Enter was introduced as a
potential target entity by its
director, who is also a Managing Member of Global Star's Sponsor,
shortly after its
formation. Please disclose the date that Global Star first had contact
with K Enter and why
the director chose to introduce Global Star to K Enter at that time.
We note that K Enter
was not formed until January 4, 2023, and the agreements to acquire
the Seven Korean
Entities were not executed until April 2023, all of which took place
during the
negotiations of the merger agreement between Global Star and K Enter.
Please explain
any involvement of Global Star in the formation of K Enter or the
negotiations of the
agreements between K Enter and the Seven Korean Entities.
30. Please revise your disclosure to discuss, in chronological order as
appropriate, all
meetings, presentations (including financial models, projections, or
forecasts), and other
activities that transpired between Global Star and K Enter beginning
with the date of the
first contact between Global Star and K Enter through the execution of
the Merger
Agreement on June 15, 2023. Disclose in further detail the parties
involved and the topics
covered at each meeting, as well as a complete description of the
negotiations relating to
the material terms of the transactions. In this regard, we note your
disclosure on page 94
that weekly calls between Global Star and K Enter took place beginning
in early April
2023.
31. We note your reference to certain "financial modeling assumptions"
included in the virtual
data room reviewed by Global Star, as well as the presentation of
"financial analyses"
and the fairness opinion based on K Enter projections to Global Star's
Board of Directors
on June 14, 2023. Please clearly disclose information regarding all
financial projections
and forecasts that were considered in negotiating the Business
Combination, including the
preparing and receiving parties, underlying assumptions and
limitations, and any
variations between sets.
32. Please provide information about the KPMG valuation report referenced
on page 93
required by Item 1015(b) of Regulation M-A. Additionally, please
clarify whether the
KPMG report is "K Enter's valuation report" referenced in the last
paragraph on page 93
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FirstName LastNameAnthony Ang
K Wave Media Ltd.
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and discussed at length on page 158. If not, please also provide the
information required
by Item 1015(b) with respect to this additional valuation report.
Refer to Item 4(b) of
Form F-4.
33. Please identify the "ancillary agreements" referenced on page 93 that
were negotiated
between June 7, 2023 and June 14, 2023, and elaborate on the
negotiation of the material
terms of such agreements.
34. We note your statement on page 94 that the Global Star board "sought
advice from...due
diligence and valuation advisors," but there is no discussion of due
diligence advisors in
this section. Please ensure that all advisors and other third party
entities involved in the
development of the Business Combination are identified. In revising,
please provide
additional detail regarding the role of Xeno Investment Asia in the
Business
Combination.
Opinion of Global Star's Financial Advisor, page 96
35. Please disclose the projections for fiscal year 2023 to fiscal year
2027 that were used by
EverEdge in preparing its opinion, and include a discussion of the
material assumptions
and limitations underlying the projections. Please also indicate
whether the projections
assume that K Enter will complete the acquisitions of all Seven Korean
Entities.
36. Please provide all of the figures that were used to derive K Enter's
equity value range
under the discounted cash flow analysis, including unlevered free cash
flow, terminal
value, non-operating assets, and debt and debt equivalents. Please
also explain why a
growth rate of 5.1% was selected in estimating the terminal year
unlevered free cash flow
derived from K Enter's projections.
37. Please provide additional quantitative and qualitative information
regarding EverEdge's
analyses under the Guideline Public Traded Companies Method and
Guideline
Transaction Method to facilitate understanding of the equity value
ranges stated on page
100. For example, please disclose the multiples derived for each
comparable company and
explain why the average EV/EBITDA and EV/Revenue multiples were
applied to K
Enter's fiscal year 2025 EBITDA and fiscal year 2023 revenues,
respectively, to reach
equity value ranges. Identify all figures and amounts used in
calculating the equity value
ranges under the Guideline Public Traded Companies Method. Further,
please identify the
comparable transactions used in determining the equity value range
under the Guideline
Transaction Method.
38. We note the disclosure on pages 98 and 102 that the fairness opinion
from EverEdge was
prepared for the purpose of providing an opinion as to the fairness of
the consideration in
the Business Combination "...to the equity holders...of K Enter
Holdings Inc.'s shares."
Please clearly state whether the opinion extends to the fairness of
the transaction to the
holders of Global Star's shares, including public shareholders. If
this is not within the
scope of the opinion, please explain the consideration that the Global
Star board gave to
commissioning a fairness opinion that does not extend to its
shareholders.
Anthony Ang
FirstName LastNameAnthony Ang
K Wave Media Ltd.
Comapany11,
December NameK
2023 Wave Media Ltd.
December
Page 9 11, 2023 Page 9
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Proposal No. 3 - The Governance Proposals
Reasons
Governance Proposal C - Exclusive Forum, page 104
39. Please provide a more detailed description of the exclusive forum
provision in PubCo's
Amended and Restated Memorandum and Articles of Association, including
whether it
applies to Securities Act and/or Exchange Act claims and any
uncertainty about
enforceability, and add a risk factor regarding this provision. In
addition, we note that
page 104 characterizes the nature of this governance proposal as
"...remov[ing] the
Delaware exclusive forum provision in the Existing Charter and
adopt[ing] a Cayman
Islands exclusive forum...," while the Letter to Stockholders and
Notice of Meeting
characterize the proposal more narrowly as "...deleting the forum
selection provision
providing for concurrent jurisdiction...for claims arising under the
Securities Act." Please
revise for consistency.
Proposal No. 5 - The Incentive Plan Proposal
Overview, page 106
40. Please disclose the number of PubCo ordinary shares that will be
initially reserved for
issuance under the K Wave Media, Ltd. 2023 Equity Incentive Plan
following the
Business Combination. In this regard, we note your disclosure on page
106 that the initial
maximum number of shares that may be issued under the plan will be 10%
of outstanding
ordinary shares; however, on page 9, you state that "67.7% PubCo
Ordinary Shares" will
be reserved for issuance under the plan upon closing. Please explain
or reconcile this
disparity.
Proposal No. 6 - The Adjournment Proposal
Purpose of the Adjournment Proposal, page 114
41. As drafted, this section may suggest that Global Star's board
possesses the requisite power
to adjourn the Special Meeting in the event of insufficient votes for
certain proposals.
Please revise to clarify that Global Star's shareholders are being
asked to adopt a proposal
that would allow such an adjournment. Additionally, please confirm
whether Global Star
would seek adjournment if there are insufficient votes to adopt the
Governance Proposals
and the Director Proposal, which are not referenced in this section.
Make conforming
revisions in the Letter to Stockholders and Notice of Meeting as
appropriate.
Business of K Enter, page 118
42. Please comprehensively revise this section so that investors clearly
understand the
businesses of each of the Seven Korean Entities, including the the
products and services
offered, revenue generated, revenue sources, and the contribution to
total revenue of the
combined company following the business combination. Please ensure
that the current
operational status of each of the businesses is discussed, as well as
any anticipated
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FirstName LastNameAnthony Ang
K Wave Media Ltd.
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changes in the foregoing following the business combination. Further,
where you discuss
the current industry in Korea, please ensure that it relates to the
specific industries in
which K Enter will operate following the business combination.
43. Please revise your disclosure to describe and distinguish between
current and future
business activities conducted by K Enter and each of the Seven Korean
Entities. When
discussing activities that are anticipated but not yet conducted,
please provide a timeline
and the status of developing such capacities. For example, you discuss
plans to "create
virtual concerts" on page 122 and the acquisition of IP rights for
"quality drama and film
content" on page 126, but the status and timing of these efforts is
unclear.
44. Please describe in greater detail the terms of material agreements
referenced in this section
and elsewhere throughout the proxy statement/prospectus and file each
agreement as an
exhibit to the registration statement. Refer to Item 601(b)(10) of
Regulation S-K. For
example, we note your disclosure on page 155 that K Enter has entered
into agreements
with production companies. Further, we note your disclosure that for
the years ended
December 31, 2022 and the six months ended June 30, 2023, certain
customers accounted
for 73.9% and 64.1%, respectively, of total Play Company revenue.
Please describe the
material terms of any arrangements with such customers and file any
agreements as
exhibits to the registration statement.
45. Please clarify whether any definitive agreement has been reached with
Prototype Group or
Monolith Studios regarding a partnership with First Virtual Lab and/or
K Enter.
Industry Background
3. Content Merchandising, page 122
46. On page 150 you disclose that Play Company's gross profit has
increased due to the
release of certain products for which Play Company has IP rights. You
also note that two
of Play Company's customers have accounted for a significant
percentage of total revenue
in the past two fiscal years. Please disclose the nature and duration
of Play Company's
material intellectual property rights and file any related agreement
(e.g., a licensing
agreement) as an exhibit to the registration statement. In the
alternative, please tell us why
you do not believe you are required to file the intellectual property
agreements or
customer agreements. Please add related risk factor disclosure, as
appropriate.
Capabilities and the Seven Korean Companies to be Acquired, page 132
47. You disclose closing of the stock purchase agreements for all of the
Seven Korean Entities
except for First Virtual Lab, Inc. was amended to January 5, 2024 or
such other date
designated by K Enter. Please tell us and disclose if this is the case
for First Virtual Lab as
well. For the other six Korean Entities (and First Virtual Lab as
appropriate), explain
whether closing could take place before the registration statement is
effective, and if so,
the basis for such.
Anthony Ang
FirstName LastNameAnthony Ang
K Wave Media Ltd.
Comapany11,
December NameK
2023 Wave Media Ltd.
December
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48. Please provide tabular disclosure or another clear method of
presentation regarding the
aggregate consideration to be paid for the acquisitions of the Seven
Korean Entities.
Include the aggregate purchase price and number of shares of K Enter
common stock to be
issued, as well as any unique provisions, such as the additional cash
consideration and
earn-out provisions under the Stock Purchase Agreement with Play
Company.
49. We note that the share purchase agreements for each of the Seven
Korean Entities close as
soon as the registration statement is declared effective. Given that
Global Star will not yet
have held the special meeting to approve the Business Combination
Proposals, please
explain whether there will be any impact on the acquisitions if the
shareholders do not
approve the proposals. Please also revise throughout to indicate that
the acquisitions of
the Seven Korean Entities will occur before the special meeting, to
the extent accurate.
4. Content Investment, page 141
50. You state on page 142 that, "The revenues of Solaire Partners account
for approximately
1.3% of K Enter's total revenues in 2022," but it seems that the
acquisition of Solaire
Partners is not yet complete. Please revise or explain this statement.
The primary laws in Korea that may be applicable to K Enter..., page 144
51. Please expand your discussion of applicable laws to summarize the
material aspects of
each individual statute, regulation, or other authority and explain
its applicability and
potential impacts to K Enter and/or the Seven Korean Entities.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of K
Enter, page 146
52. Since this section is a discussion regarding K Enter, please move the
discussion of the
historical results of operations, cash flow and liquidity and capital
resources of Play
Company Co., Ltd. to the end of this section since the results of Play
Company are not
included in the results of K Enter at this time.
53. Here you show results of operations, cash flow information and
liquidity and capital
resources for the periods presented for Play Company in terms of U.S.
dollars but the
financial statements are denominated in Korean won. Please present
amounts here
consistent with the currency used in the financial statements. You may
supplement your
presentation here by showing the corresponding translated U.S. dollar
amount for each
Korean won amount presented for perspective.
Cash Flow, page 151
54. The disclosure here regarding operating activities of Play Company
appears to focus on
how the amount of operating cash was derived for each period as
already reported in the
statements of cash flows. Please provide a quantitative and
qualitative analysis that
explains the change in the reported amount of operating cash flows
from period to period,
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FirstName LastNameAnthony Ang
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December NameK
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including material changes in underlying individual items contributing
to the change.
Note merely citing changes in results, working capital accounts and
noncash items
reported in the statement of cash flows may not provide a sufficient
basis to understand
why the reported amount of operating cash changed between periods.
Refer to Item 5 of
Form 20-F, in particular the introductory paragraph thereof and
instructions 1 and 9 of
instructions to Item 5, section III.D of Release No. 33-6835, section
IV.B.1 of Release No.
33-8350 and Release No. 33-10890 for guidance.
55. Please discuss the operational reasons for the negative operating cash
flows for the fiscal
2023 interim period for Play Company and explain how the company
intends to meet
its cash requirements and maintain operations. Refer to instruction 1
to "Instructions to
Item 5" in Form 20-F and section IV.B.1 of Release No. 33-8350. Also
discuss if this
condition is a known trend pursuant to Item 5.D of Form 20-F and the
expectations
concerning this condition.
Unaudited Pro Forma Condensed Combined Financial Information
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 5 - Adjustments and Reclassifications to Unaudited Pro Forma Condensed
Combined
Balance Sheet as of June 30, 2023, page 195
56. In note (a) to Note 5.A, please explain to us and disclose how the
total expected shares of
K Enter common stock to be issued of 202,890 was determined.
Directors, Executive Officers, Executive Compensation and Corporate
Governance...
Conflicts of Interest, page 211
57. We note your disclosure that certain shareholders have agreed to waive
their redemption
rights. Please describe any consideration provided in exchange for
this agreement.
Security Ownership of Certain Beneficial Owners, page 224
58. Please additionally provide the beneficial ownership information
required by Item 403 of
Regulation S-K with respect to PubCo following the Business
Combination. Demonstrate
ownership amounts and percentages under varying redemption scenarios.
Refer to Item
18(a)(5)(ii) of Form F-4.
Description of PubCo's Securities
PubCo Warrants, page 233
59. We note your statement that, "The PubCo Warrants will have the same
terms as the GLST
Warrants." However, based upon the disclosure in this section compared
to the Warrant
Agreement between Global Star and Continental Stock Transfer & Trust
Company, it
appears that the price at which the warrants will become mandatorily
redeemable at the
option of PubCo is being lowered from $18.00 per share for any twenty
trading days
within a thirty trading day period to $16.50 per share for such
period. Please highlight this
as a difference between the PubCo warrants and Global Star warrants,
if accurate. Add
Anthony Ang
FirstName LastNameAnthony Ang
K Wave Media Ltd.
Comapany11,
December NameK
2023 Wave Media Ltd.
December
Page 13 11, 2023 Page 13
FirstName LastName
risk factor disclosure regarding any material risks to public warrant
holders and clearly
explaining the steps, if any, PubCo will take to notify all
shareholders, including
beneficial owners, regarding when the warrants become eligible for
redemption.
Financial Statements, page F-1
60. Please include the financial statements of the registrant "K Wave
Media Ltd" ("PubCo")
pursuant to Item 14(h) of Form F-4, audited as appropriate. Also
include these financial
statements in the pro forma information as appropriate pursuant to the
noted form item in
accordance with Rule 11 of Regulation S-X.
61. Please explain to us the basis for not including the historical
financial statements of the
"Seven Korean Entities" other than Play Company Co., Ltd. and pro
forma
information for these other entities in "Unaudited Pro Forma Condensed
Combined
Financial Information."
Financial Statements of Play Company for the Years Ended December 31, 2022 and
2021, page
F-60
62. We note from your tabular disclosure on page F-144, that reconciles
previous presentation
under K-GAAP to current presentation under IFRS, you made several
corrections of errors
to the December 31, 2021 financial statements in addition to
adjustments to transition to
IFRS. Please tell us what consideration you gave to labelling the face
of the financial
statements as "restated" due to these error corrections. Refer to the
guidance in paragraphs
41-49 of IAS 8.
Notes to Consolidated Financial Statements
For the Years Eded December 31, 2022 and 2021
Note 8. Income and Expenses
C. Expenses by nature, page F-91
63. Please tell us what "commissions paid" and "outsourcing fees"
represent. Include in your
response whether these are associated with your generation of revenue,
and if so, the type
of revenue to which these items relate, and how you considered the
guidance in
paragraphs B34-B38 of IFRS 15 with respect to them.
Item 21. Exhibits and Financial Statement Schedules, page II-1
64. Please file as an exhibit the consent of EverEdge PTE, Ltd required by
Item 601(b)(23) of
Regulation S-K. If additional reports, opinions, or appraisals are
filed as exhibits pursuant
to Item 4(b) of Form 20-F, file the requisite consents as well.
General
65. Please revise your disclosure throughout the proxy
statement/prospectus to consistently
reflect that K Enter is a recently formed holding company with limited
operations and that
Anthony Ang
K Wave Media Ltd.
December 11, 2023
Page 14
the acquisitions of the Seven Korean Entities have not yet been
consummated. In many
places throughout the filing, disclosure suggests that K Enter has
already developed
substantial business activities or acquired operating entities as
subsidiaries. For example,
you state on 120 that, "K Enter has numerous talented and experienced
creators...,"
and page 126 references "...our strong track records in Asian markets."
Please ensure that
statements applicable to K Enter versus those applicable to the Seven
Korean Entities are
distinguishable throughout.
66. Throughout the proxy statement/prospectus, you intermittently imply that
K Enter, rather
than K Wave, will be the publicly traded entity in which public
shareholders hold an
interest following the Business Combination. See, for example, the
statement on page 46
that "...investors will hold shares of our common stock..." and the
statement on page 155
that, "We expect our general and administrative expenses to increase...as
a result of
operating as a public company..." In other instances you reference Global
Star as the post-
Business Combination operating company. See, for example, the reference
to the
"financial results and prospects of Global Star" on page 59. Please
comprehensively revise
your disclosure throughout to consistently reflect the proposed structure
of the Business
Combination.
67. Please disclose whether there are rights of appraisal or similar rights
of dissenters with
respect to the Business Combination where appropriate, including the
"Summary of the
Proxy Statement/Prospectus" section. Refer to Item 18(a)(3) of Form 20-F.
68. Please file the agreements and opinions that are to be included as
Annexes A - F.
You may contact Amy Geddes at 202-551-3304 or Doug Jones at 202-551-3309
if you
have questions regarding comments on the financial statements and related
matters. Please
contact Rebekah Reed at 202-551-5332 or Erin Jaskot at 202-551-3442 with any
other questions.
Sincerely,
FirstName LastNameAnthony Ang
Division of
Corporation Finance
Comapany NameK Wave Media Ltd.
Office of Trade &
Services
December 11, 2023 Page 14
cc: Andy Tucker
FirstName LastName