United States securities and exchange commission logo
November 19, 2020
Patrick McCaney
Chief Executive Officer
Oaktree Acquisition Corp.
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Re: Oaktree Acquisition
Corp.
Registration
Statement on Form S-4
Filed October 23,
2020
File No. 333-249622
Dear Mr. McCaney:
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 October 23, 2020
Summary of the Proxy Statement/Prospectus, page 1
1. Rather than only
providing a cross-reference, please disclose summary risk factors and
material U.S. federal
income tax considerations in the Summary.
2. We note that Hims
engages service providers, including physicians through the Affiliated
Medical Groups and
partner pharmacies, to provide its telemedicine and prescription
services. Please revise
the Company Overview to clearly describe the company's
relationship with the
Affiliated Medical Groups for the provision of its telemedicine
services and partner
pharmacies for its prescription services, the arrangements governing
these relationships,
and the regulatory landscape applicable to the company's business
Patrick McCaney
FirstName LastNamePatrick
Oaktree Acquisition Corp. McCaney
Comapany 19,
November NameOaktree
2020 Acquisition Corp.
November
Page 2 19, 2020 Page 2
FirstName LastName
model. Please also provide more information regarding the
non-prescription products
provided by the company. As currently drafted there is no discussion
of the mechanics of
the business or its operations in this section.
Quorum and Vote of OAC Shareholders, page 11
3. It appears you have not included the disclosure required by Item 3(h)
of Part I.A. of Form
S-4 comparing the percentage of outstanding shares entitled to vote
held by directors,
executive officers and their affiliates, and the vote required for
approval of the proposed
transaction. Please revise or advise.
Risk Factors, page 27
4. Please include information regarding the conflict of interest that may
be posed by the
post-closing incentive bonus that may be awarded to certain Hims
employees, including
members of management, after the closing of the business combination
in the risk factors
section, where appropriate.
We operate in highly competitive markets..., page 32
5. We note your disclosure on page 223 that some state and federal
regulatory authorities
have lowered some of the barriers to the practice of telehealth in
order to make remote
healthcare services more accessible in response to COVID-19. Although
you state that it
is unclear whether these changes will have a long-term impact on the
adoption of
telehealth services by the general public or legislative and
regulatory authorities, please
expand your disclosure to include a discussion of this competitive
risk here or under an
appropriate heading.
We depend on a number of other companies to perform..., page 40
6. We note the risk factor detailing Hims' dependence on the Affiliated
Medical Groups and
the company's partner pharmacies. Please revise your disclosure to
name those Affiliated
Medicals Groups and/or partner pharmacies that are material to the
company's business on
an individual basis, disclose the material terms of such agreements
and file
such agreements as exhibits. In this regard we note your mention of
Ochsner Health and
Mount Sinai Health System on page 217. See Item 601(b)(10) of
Regulation S-K.
The unaudited pro forma financial information included elsewhere in this proxy
statement/prospectus...., page 63
7. We note the business combination will be accounted for as a reverse
recapitalization with
no goodwill or other intangible assets recorded. Please revise this
risk factor to properly
describe the accounting methodology for the transaction as no purchase
consideration will
be allocated to goodwill.
Patrick McCaney
FirstName LastNamePatrick
Oaktree Acquisition Corp. McCaney
Comapany 19,
November NameOaktree
2020 Acquisition Corp.
November
Page 3 19, 2020 Page 3
FirstName LastName
Governing Documents Proposal D- Approval of Other Changes in Connection with
Adoption of
the Proposed Governing Documents, page 130
8. We note that your forum selection provision identifies the Court of
Chancery of the State
of Delaware as the exclusive forum for certain litigation, including
any "derivative
action." Please disclose whether this provision applies to actions
arising under the
Exchange Act. In this regard, we note that Section 27 of the Exchange
Act creates
exclusive federal jurisdiction over all suits brought to enforce any
duty or liability created
by the Exchange Act or the rules and regulations thereunder. If this
provision does not
apply to actions arising under the Exchange Act, please also ensure
that the exclusive
forum provision in the governing documents states this clearly.
Information About Hims, page 205
9. Please ensure that the text on all graphics included in this section,
including footnotes, is
legible. By way of example, we refer to the sourcing information on
page 207.
Our Competitive Advantage, page 212
10. We note your statement that Hims believes "existing healthcare
incumbents will find it
difficult to replicate" its value proposition. Because it does not
appear that your
technology is patented, please clarify why this is the case.
Our Business Model, page 215
11. Please revise your disclosure to provide more detailed information
regarding the non-
prescription products sold by Hims. Please ensure the disclosure
explains how such
products are developed and commercialized, and any applicable
regulations.
Marketing, page 217
12. The purpose of your registration statement is not to serve as
marketing materials for your
business or interface. The graphics on pages 219-220 and 227-231 do
not appear to
provide nor enhance relevant and meaningful disclosure that investors
can use to make an
informed investment decision. Please remove them.
Our People and Culture, page 220
13. Please explain how the "Affiliated Medical Groups" are affiliated with
Hims & Hers
where this term is defined on page 220 and in the Selected Definitions
section of the
document.
Intellectual Property, page 221
14. We note that the disclosure on page 221 regarding intellectual
property does not discuss
patents; however, the risk factor starting on page 50 references
patents and patent
Patrick McCaney
FirstName LastNamePatrick
Oaktree Acquisition Corp. McCaney
Comapany 19,
November NameOaktree
2020 Acquisition Corp.
November
Page 4 19, 2020 Page 4
FirstName LastName
protection. Please revise your intellectual property disclosure to
clearly describe on an
individual basis any material patents or pending patent applications
held by Hims,
including the type of patent protection granted, the expiration of
each, and the jurisdiction
of each patent, or clarify in your disclosure that no patents are held
at this time.
Hims' Management's Discussion and Analysis of Financial Condition and Results
of Operations
Key Business Metrics, page 237
15. We note your statement that Hims relies on selling its products
through wholesale
partnerships, and that its Wholesale Revenue increased by 2,124% from
the six months
ended June 30, 2019 to the six months ended June 30, 2020 primarily
due to the fact that it
began selling products to a new wholesale partner in March 2020. To
the extent you
believe Wholesale Revenue for the fiscal year ended December 31, 2020
will become a
material portion of overall revenue, please disclose the name of this
new wholesale
partner and file the agreement governing the relationship as an
exhibit to the prospectus.
See Item 601(b)(10)(ii)(b) of Regulation S-K.
Hims Management s Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources , page 245
16. You disclose on page 40 that you are currently in the process of
opening an affiliated
pharmacy dedicated to your operations, which will subject you to
extensive federal, state,
and local regulation. Please revise your disclosure to discuss the
expected cash
requirement to fully open and operate your pharmacy in accordance with
applicable laws
and regulations. Refer to Item 303(a)(1) and (2) of Regulation S-K.
Indebtedness, page 247
17. Please file the loan agreements with Silicon Valley Bank and
TriplePoint Venture Growth
as exhibits to the registration statement.
Fair Value of Common Stock, page 251
18. Please expand your critical accounting policy disclosures to provide
high level details
regarding the methodologies and approaches used to value your common
stock including
the nature of the material assumptions involved. Please discuss the
results of the third
party valuations and whether these corroborated any internal
valuations performed.
Finally, provide additional detail regarding the extent to which
recent sales of preferred
stock and/or common stock in arms-length transactions represented
significant inputs to
provide investors with context of the extent to which your estimates
were complex and
subjective.
Certain Relationships and Related Person Transactions
Policies and Procedures for Related Party Transactions, page 284
19. Please revise your disclosure regarding related party transactions to
provide information
Patrick McCaney
FirstName LastNamePatrick
Oaktree Acquisition Corp. McCaney
Comapany 19,
November NameOaktree
2020 Acquisition Corp.
November
Page 5 19, 2020 Page 5
FirstName LastName
pursuant to the threshold set in Item 404(d)(1) of Regulation S-K
applicable to smaller
reporting companies, where the amount involved exceeds the lesser of
$120,000 or one
percent of the average of the smaller reporting company's total assets
at year end for the
last two completed fiscal years.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-46
20. Please revise to describe the typical period over which you satisfy
your performance
obligation to provide consultation services. Refer to ASC
606-10-50-12.
Note 8. Fair Value Measurements, page F-53
21. We note that the inputs to the BSM option-pricing model include the
estimated fair value
of the total equity value and that changes in the fair value of the
underlying Preferred
Stock would result in directionally similar impacts to the fair value
measurement. Please
revise to also include quantitative information about these
significant unobservable inputs
or tell us why such disclosure is not required. Refer to ASC
820-10-50-2(bbb).
Exhibits
22. You have indicated that Exhibit 2.1, the Agreement and Plan of Merger,
which is also
included as Annex A, has certain information omitted as indicated by
brackets and
asterisks. However, we are unable to locate any such redactions in
Annex A. Please
advise.
23. Please file the employment agreements with Messrs. Dudum, Lee and
Henrich and
Ms. Waters as exhibits to the registration statement. See Item
601(b)(10) of Regulation S-
K.
24. Please file an opinion as to the material tax consequences of the
domestication and the
merger. Refer to Item 601(b)(8) of Regulation S-K and Section III. of
Staff Legal Bulletin
No. 19.
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.
Patrick McCaney
Oaktree Acquisition Corp.
November 19, 2020
Page 6
You may contact Tracey McKoy at 202-551-3772 or Kevin Kuhar at
202-551-3662 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Laura Crotty at 202-551-7614 or Christine Westbrook at 202-551-5019
with any other
questions.
Sincerely,
FirstName LastNamePatrick McCaney
Division of
Corporation Finance
Comapany NameOaktree Acquisition Corp.
Office of Life
Sciences
November 19, 2020 Page 6
cc: Peter Seligson, Esq.
FirstName LastName