United States securities and exchange commission logo
March 15, 2021
Ken Suslow
Chief Executive Officer
Sandbridge Acquisition Corp
1999 Avenue of the Stars, Suite 2088
Los Angeles, CA 90067
Re: Sandbridge
Acquisition Corp
Draft Registration
Statement on Form S-4
Submitted February
16, 2021
CIK No. 0001816708
Dear Mr. Suslow:
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.
Draft Registration Statement on Form S-4 submitted February 16, 2021
Market and Industry Data, page ii
1. Please revise the
section titled Market and Industry Data to clearly state that you are liable
for the information
included in your registration statement. Please also remove the
statements that
"Sandbridge cannot assure you of the accuracy and completeness of such
information" and "you
should be aware that any such market, industry and other similar
data may not be
reliable."
Questions and Answers for Stockholders of Sandbridge
Q: May our Sponsor and the other initial stockholders purchase public
shares or warrants prior to
the Special Meeting?, page vii
Ken Suslow
FirstName
SandbridgeLastNameKen Suslow
Acquisition Corp
Comapany
March NameSandbridge Acquisition Corp
15, 2021
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2. Disclose how you will notify securityholders of the entry into any
such arrangements
referenced herein.
Q: What is Owlet?, page viii
3. We note your disclosure here and throughout the registration statement
that Owlet
"designs and sells products and services that empower parents with
technology and data to
proactively monitor the health and wellness of their children from
conception to
kindergarten." However, we also note that your Owlet Smart Sock "fits
babies 0 to 18
months" according to Owlet's website and your "Smart Sock Plus"
appears to still be in
development. Please revise your statement to clarify the current age
groups your products
are able to monitor or otherwise advise.
Structure of Business Combination, page 14
4. To facilitate understanding, please include an organizational chart
depicting the
organizational structure of the entities involved both before and
after the consummation of
the transactions.
Conditions to the Completion of the Business Combination, page 17
5. Please amend your disclosure to identify each condition that is
subject to being waived.
Please make conforming changes to your Conditions to Closing of the
Business
Combination discussion beginning on page 103.
Interests of Sandbridge's Directors and Officers in the Business Combination,
page 19
6. We note that founder shares were transferred to your "independent
directors." In addition,
to disclosing the transfer please include additional disclosure here
and on page 94
explaining that Mr. Toubassy, Mr. De Sole and Mr. Goss
are your independent directors and that they may have a conflict of
interest in determining
whether a particular business is an appropriate business with which to
effectuate your
initial business combinations vis-a-vis their receipt of founder
shares.
7. Please quantify the out-of-pocket expenses incurred by your Sponsor,
executive officers,
directors, and their respective affiliates as of a recent practicable
date.
Comparative Per Share Data, page 28
8. Please also provide the equivalent pro forma per share data required
by Item 3(f) of Part
I.A. of the Form S-4 in addition to pro forma per share information.
Background of the Business Combination, page 89
9. We note your disclosure throughout this section that, "Sandbridge and
its advisors
continued to review documents provided in a virtual data room opened
by Owlet" and
"Sandbridge Board met with its advisors to discuss the proposed
business combination
Ken Suslow
FirstName
SandbridgeLastNameKen Suslow
Acquisition Corp
Comapany
March NameSandbridge Acquisition Corp
15, 2021
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with Owlet." Please revise your disclosure to clarify and clearly
describe the specific
"advisors" who participated in each meeting or discussion. In
addition, please disclose the
"third-party consulting firm" you engaged to assist in evaluating
Owlet's addressable
market.
10. Please revise to clarify how the transaction structure and
consideration evolved during the
negotiations between the parties, including proposals and
counter-proposals made during
the course of those negotiations. For example, elaborate how the
transaction structure and
valuations changed from the November 1, 2020 LOI that included an
earnout provision
with respect to a portion of the founder shares to the "multiple
revised drafts of the LOI"
that were traded between Sandbridge and Owlet from November 1, 2020 to
November 3,
2020. To the extent the valuation was changed please disclose such
change along with the
reasons for such change.
11. We note that Citigroup is entitled to deferred underwriting
commissions upon
consummation of your initial business combination for services
rendered in connection
with your IPO and we note from your IPO registration statement on Form
S-1 filed
August 24, 2020, that Citigroup agreed to waive their rights to
their deferred underwriting commission held in the trust account in
the event you do not
complete your initial business combination. In addition, we note your
disclosure that
Citigroup was Sandbridge's capital markets advisor. Please disclose
these facts, where
appropriate, throughout your registration statement. Additionally,
please include a risk
factor discussing the potential conflict of interest stemming from
Citi s interest in the
consummation of the merger transaction.
Sandbridge Board's Reasons for Approval of the Business Combination, page 93
12. We note your disclosure that there are "certain closing conditions
that are not within
Sandbridge s control." Please revise your disclosure to identify the
specific conditions
outside of your control.
Satisfaction of 80% Test, page 97
13. Please discuss the qualitative and quantitative factor your Board
relied upon in greater
detail, including Owlet's competitive positioning.
Expenses, page 118
14. We note you disclosure on page 21 that your estimated transaction fees
and expenses are
$35 million. Please revise your disclosure here to quantify the
anticipated expenses in
connection with the business combination.
Unaudited Pro Forma Condensed Combined Financial Information
Note 3. Adjustments to Unaudited Pro Forma Condensed Combined Financial
Information
Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations,
page 147
Ken Suslow
FirstName
SandbridgeLastNameKen Suslow
Acquisition Corp
Comapany
March NameSandbridge Acquisition Corp
15, 2021
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15. We note in adjustment (BB) the references to FF liabilities and PSAC
common stock. This
adjustment does not appear to relate to Owlet or Sandbridge. Please
revise or advise.
Information Related to Owlet, page 160
16. Please provide objective support for your statement that you believe
there to be a $81
billion market opportunity for your current and pipeline products by
2025.
Connected Ecosystem Pipeline, page 162
17. Please expand your disclosure to explain what you mean when you state,
"dynamic soothing technology." In addition, please clarify whether any
of the technology
or features you discuss for your future pipeline actually exists,
either in completed form or
in a prototype. To the extent it is not developed at all, please
revise your disclosure to
clearly describe the current status of each of your planned adjacent
products.
Our Market Opportunity, page 163
18. On page 163 and elsewhere throughout this section, you reference
"lifetime value ( LTV ). Please expand this disclosure to
explain how you estimate LTV
and explain in greater detail what this term means and how it is
calculated.
Our Competitive Advantages, page 164
19. For all statements regarding industry leadership, please disclose the
metric upon which
each statement is based. We note, for example, your references to
being a "pioneer in the
connected nursery" and a "Leading Technology and Brand."
Our Growth Strategies, page 164
20. Please identify the third-party who conducted the survey of 306
parents. In addition,
please identify how the parents were selected, including whether or
not they were existing
users of your product. Furthermore, clarify the specific type of
service or product (e.g. the
Owlet Smart Sock, another product, telehealth, etc.) parents indicated
interest in
purchasing when you state "parents...would pay $20 or more per month."
Proprietary Data Advantage, page 165
21. We note your disclosure that 1.5 million parents have downloaded your
application.
Please include the number of active users of your application as of a
recent date.
Clinical Research Involving Our Products
Supraventricular Tachycardia Study, page 166
22. We note your reference to the study of data collected from 100,949
infants wearing
your Owlet Smart Sock device resulted in a "2.5% cumulative incidence"
of
tachyarrhythmia based off of "suspected episodes." We also note your
study of "[t]wo
Ken Suslow
FirstName
SandbridgeLastNameKen Suslow
Acquisition Corp
Comapany
March NameSandbridge Acquisition Corp
15, 2021
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large, population-based studies previously estimated the prevalence of
SVT in infants to
be between 0.10% and 0.25%." Please revise your disclosure to quantify
the number of
infants studied in these large population-based studies. In addition,
we note your
disclosure elsewhere that the "Owlet Smart Sock is not a medical
device." Please update
your disclosure here to describe the medical monitoring device used in
the large
population studies and clarify that the data from The Journal of
Pediatrics was generated
from the Owlet Smart Sock, which is not currently a FDA approved
device.
Intellectual Property, page 177
23. We note that you plan to file the Kalay Service and License Agreement
with ThroughTek
Co. Ltd. as Exhibit 10.23. Please disclose the material terms of this
agreement here
instead of the Manufacturing section.
24. We note your disclosure throughout this section that you have patents
in certain foreign
countries. In addition, we note your disclosure that you "plan to
leverage [y]our connected
ecosystem of offerings to acquire market share globally, with a
heightened focus on
Europe, Asia, and Latin America." Please revise this section to
specifically identify all
material foreign jurisdictions where patents are granted or patent
applications are pending
and also include the patent expiration dates and expected expiration
dates for pending
patent applications for each material foreign jurisdiction.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Owlet
Critical Accounting Policies and Estimates, page 186
25. Please revise to provide a more robust discussion of your critical
accounting policies and
estimates focusing on the assumptions and uncertainties that underlie
your critical accounting estimates rather than largely duplicating the
accounting policy
disclosures in your financial statement footnotes. Please quantify,
where material, and
provide an analysis of the impact of critical accounting estimates on
your financial
position and results of operations for the periods presented. In
addition, please include a
qualitative and quantitative analysis of the sensitivity of reported
results to changes in
your assumptions, judgments and estimates, including the likelihood of
obtaining
materially different results if different assumptions were used.
Please refer to SEC Release
No. 34-48960.
Revenue Recognition, page 186
26. We note that amounts allocated to the implied right to software
services and the implied
right to receive future unspecified application upgrades, added
features, and bug fixes, are
recognized on a straight-line basis over the estimated usage period of
the underlying
hardware product. Please expand your disclosures to provide additional
insight regarding
the estimated usage period used.
Ken Suslow
FirstName
SandbridgeLastNameKen Suslow
Acquisition Corp
Comapany
March NameSandbridge Acquisition Corp
15, 2021
March6 15, 2021 Page 6
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FirstName LastName
27. Please help us better understand how you determined your performance
obligations
pursuant to 606-10-25-14. In regards to the implied right to software
performance
obligation, please better clarify what this right includes and how you
determined this
would represent a separate performance obligation. Please also better
explain the nature of
the embedded firmware and how this was determined to be essential to
the functionality of
the hardware.
Financial Statements of Owlet Baby Care Inc.
Note 1. Description of Organization and Summary of Significant Accounting
Policies
Revenue Recognition, page F-39
28. Please expand your revenue recognition disclosures to address the
following:
provide disaggregated revenue disclosures pursuant to ASC
606-10-50-5. Please refer
to the guidance in paragraphs 606-10-55-89 through 55-91;
provide disclosures related to your payment terms, including when
payment typically
is due, whether the consideration amount is variable, and whether
the estimate of
variable consideration is typically constrained in accordance with
paragraphs 606-10-
32-11 through 32-13. Refer to ASC 606-10-50-12(b);
provide the disclosures related to your remaining performance
obligations pursuant to
ASC 606-10-50-13 through 50-16; and
pursuant to ASC 606-10-50-20, please disclose the methods, inputs,
and assumptions
used for determining the transaction price and the amounts
allocated to performance
obligations.
29. We note that you capitalize incremental contract acquisition costs and
subsequently
amortize them over the expected benefit period unless the expected
benefit period is less
than 12 months for which you have elected to apply the practical
expedient in ASC 606 to
expense as incurred. If assets have been recognized related to these
costs in accordance
with paragraph 340-40-25-1, please provide the disclosures required by
ASC 340-40-50-1
through 50-6.
General
30. We note that your disclosure uses technical jargon. Please define or
explain any technical
terms the first time they are used such that they may be understood by
potential investors
who are unfamiliar with your products. For example only, please define
terms such as,
full stack," RFQ process," and "NRE quotes."
You may contact Nudrat Salik at 202-551-3692 or Lynn Dicker at
202-551-3616 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jason Drory at 202-551-8342 or Celeste Murphy at 202-551-3257 with any
other
questions.
Ken Suslow
Sandbridge Acquisition Corp
March 15, 2021
Page 7
Sincerely,
FirstName LastNameKen Suslow
Division of Corporation Finance
Comapany NameSandbridge Acquisition Corp
Office of Life Sciences
March 15, 2021 Page 7
cc: Emily J. Oldshue, Esq.
FirstName LastName