United States securities and exchange commission logo
December 22, 2020
Kyle Armbrester
Chief Executive Officer
Signify Health, Inc.
800 Connecticut Avenue
Norwalk, CT 06854
Re: Signify Health,
Inc.
Amendment No. 1 to
Draft Registration
Statement on Form S-1
Submitted December
7, 2020
CIK No. 0001828182
Dear Mr. Armbrester:
We have reviewed your amended 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. Unless we note otherwise, our references to prior comments are
to comments in our
November 16, 2020 letter.
Amendment No. 1 to Draft Registration Statement on Form S-1 submitted
December 7, 2020
Risk Factors, page 26
1. Please update your risk
factor disclosure by relocating risks that could apply generally to
any company or offering
of securities to the end of the risk factor section under the
caption General Risk
Factors. Refer to Item 105 of Regulation S-K and SEC Release
No. 33-10825.
Kyle Armbrester
FirstName LastNameKyle Armbrester
Signify Health, Inc.
Comapany22,
December NameSignify
2020 Health, Inc.
December
Page 2 22, 2020 Page 2
FirstName LastName
Unaudited Pro Forma Consolidated Financial Information, page 91
2. You disclose that the holders of LLC Units will have the right to
require Cure TopCo,
LLC to redeem all or a portion of their LLC Units for newly issued
shares of Class A
common stock or a cash payment. Please revise to clearly disclose
here, as well as within
the Capitalization and Dilution tables, the impact of these two
alternatives. In
addition, tell us how you considered presenting two pro forma
scenarios to show the
different alternatives for LLC unit redemption.
Industry trends and market opportunity, page 138
3. We note your revised disclosure that, "[i]ndustry reports estimate the
current addressable
market for value-based payor programs is at least $300 billion" and
"[a]ccording to the
Health Care Payment Learning & Action Network, in 2018, approximately
$400 billion of
provider spending flowed through value-based payment models." In
addition, we also note
your disclosure that "value-based payments have grown dramatically
over the past ten
years and are widely expected to eventually represent the majority of
healthcare spending
in the United States." Please update your disclosure to explain the
$100 billion decrease in
value-based payor program and provide additional basis for why you
believe the value-
based payment market will grow or otherwise explain this
inconsistency.
4. We note your response to prior comment 5 regarding our request for you
to describe the
material assumptions and describe the types of sources your management
analyzed for
you to arrive at various figures. Please disclose the "recent studies"
you reference or
provide additional material details on the types of sources related to
your statement that
"approximately 60% to 70% of total U.S. health spending, is expected
to be tied to quality
and value by 2025 through the adoption of new payment models focused
on value."
Employees and human capital resources, page 164
5. We note your updated disclosure on page 165 and your statement that
you view human
capital-related initiatives as an ongoing priority. Please
revise to describe the specific
measures or objectives that management focuses on in managing the
business, such as
measures or objectives that address the development, attraction and
retention of
personnel. Refer to Item 101(c)(2)(ii) of Regulation S-K and SEC
Release No. 33-10825.
Certain Relationships and Related Party Transactions, page 183
6. We note your prior disclosure that certain related parties purchased
Series B preferred
units. In addition, we note your updated disclosure that in October
2020 you repurchased
$54.0 million in Series B preferred units. Please include disclosure
here or otherwise
advise whether or not the repurchase involved a related party.
Kyle Armbrester
FirstName LastNameKyle Armbrester
Signify Health, Inc.
Comapany22,
December NameSignify
2020 Health, Inc.
December
Page 3 22, 2020 Page 3
FirstName LastName
Condensed Combined-Consolidated Financial Statements for the nine months ended
September
30, 2020
Note 12. Fair Value Measurements, page F-26
7. Regarding the valuation of customer equity appreciation rights, please
revise to disclose
how you determined the fair value of your common stock and your
stock's volatility that
were used in the Monte Carlo valuation method.
Note 14. Member s Equity, page F-27
8. Reference the disclosure that the grant date fair value of awards of
Class B Common Units
are estimated based on a Monte Carlo option pricing simulation. Please
revise to also
disclose how you determine the grant date fair value of awards of
Class B Common
Units.
9. For the valuation of Class B and Class C Common Unit equity based
awards, please revise
to disclose how you determined the underlying fair value of the common
units in
determining the fair value of the equity based awards.
10. Once you have an estimated offering price or range, please explain to
us the reasons for
any differences between the recent valuations of your common stock
leading up to the
initial public offering and the estimated offering price. This
information will help facilitate
our review of your accounting for equity issuances including stock
compensation and
customer equity appreciation rights.
You may contact Kristin Lochhead at 202-551-3664 or Kevin Vaughn at
202-551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jason L. Drory at 202-551-8342 or Mary Beth Breslin at 202-551-3625
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Shane Tintle, Esq.