United States securities and exchange commission logo
April 14, 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 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.
Registration Statement on Form S-4 filed March 31, 2021
Comparative Per Share Data, page 31
1. We note your response
to comment 8. We remind you that the instructions to Item 3(f) of
Part I.A. of the Form
S-4 state that equivalent pro forma per share amounts shall be
calculated by
multiplying the pro forma income (loss) per share, pro forma book value per
share, and the pro
forma dividends per share amounts by the exchange ratio so that the
comparative per share
amounts are equated to the respective values for one share of the
company being acquired.
It is not clear how your equivalent pro forma per share amounts
comply with this
guidance given the exchange ratio of 2.05. For example, we note that
pro forma net loss per
share under the maximum redemption scenario was $0.07 per share
and the corresponding
equivalent pro forma per share amount was $0.10. Please advise or
revise your
calculations as necessary.
Ken Suslow
FirstName
SandbridgeLastNameKen Suslow
Acquisition Corp
Comapany
April NameSandbridge Acquisition Corp
14, 2021
April 214, 2021 Page 2
Page
FirstName LastName
Background of the Business Combination, page 93
2. We note your response to prior comment 9 and reissue in part. We note
you deleted your
prior disclosure regarding the fact that you engaged a third-party
consulting firm to assist
in evaluating Owlet s addressable market and the strength of its
brands through a
customer survey and a videoconference discussion with Owlet management
in connection
with your potential Business Combination. In addition, we note your
revised disclosure on
page F-14, that a third-party consultant provided market analyses to
you relating to
your potential business combination targets and is owed a fee of
approximately
$1,350,000, of which 90% is contingent upon the closing of the
transaction. Please
disclose the third-party consulting firm you engaged to assist in
evaluating Owlet's
addressable market and include disclosure regarding any material
contingent
compensation arrangements with the firm. Alternatively, please provide
your analysis supporting your conclusion that the third-party
consulting firm market
research disclosure is not material.
Unaudited Pro Forma Condensed Combined Financial Information
Other Related Events in Connection with the Business Combination, page 147
3. We note that 2,807,500 shares of New Owlet common stock will be
outstanding following
the closing but will remain subject to price-based performance vesting
terms. You note
that these shares have been treated as contingently recallable in the
pro forma financial
information. Please clarify in your disclosures how they have been
presented in the pro
forma financial information in order to be treated as contingently
recallable.
Note 4. Loss per Share, page 155
4. Please better clarify in the note how you computed the number of
weighted average shares
to use in your determination of pro forma net loss per share amounts.
Please specifically
address the following:
Please clarify how you determined the number of New Owlet weighted
average
shares that would be outstanding based on the applicable exchange
ratios for the
following: deemed conversion of Owlet s redeemable convertible
preferred stock and
unvested restricted shares of Owlet common stock; exchange of
Owlet common
stock; and conversion of Owlet s convertible promissory notes.
On page 148, you provide a table showing the pro forma shares of
New Owlet
common stock issued and outstanding after the Business
Combination, please better
clarify how the number of shares used in your determination of
pro forma loss per
share correspond to this table.
Please disclose the number of shares not included in your
determination of earnings
per share amounts for anti-dilution reasons.
Refer to Rule 11-02(a)(8) of Regulation S-X.
Ken Suslow
FirstName
SandbridgeLastNameKen Suslow
Acquisition Corp
Comapany
April NameSandbridge Acquisition Corp
14, 2021
April 314, 2021 Page 3
Page
FirstName LastName
Management s Discussion and Analysis of Financial Condition and Results of
Operations of
Owlet
Critical Accounting Policies and Estimates
Revenue Recognition, page 196
5. We note your disclosures related to Owlet Dream Lab as one of your
current product
offerings. Please tell us what consideration was given to also
addressing this product as
part of your revenue recognition disclosures.
Stock-based Compensation Expense, page 198
6. Please explain to us how you determined the fair value of the common
stock underlying
your recent equity issuances, including the stock options granted in
January 2021, and
how this reconciles to the valuations of your common stock as
indicated based on the
terms of the business combination transaction.
Financial Statements of Owlet Baby Care Inc.
Note 8. Line of Credit, page F-37
7. We note that you were not in compliance with a financial covenant
under the loan and
security agreement with Silicon Valley Bank as of December 31, 2020.
The amendment
to this agreement entered into in March 2021 included a waiver related
to this financial
covenant noncompliance. We also note that the term note payable to
Silicon Valley Bank
becomes cross defaulted with the financial covenants on the Silicon
Valley Revolver,
which appears to be under the loan and security agreement. In this
regard, please address
the following:
Please disclose the terms of the waiver including how long the
terms of the covenant
were specifically waived;
Please disclose the impact of the financial covenant noncompliance
on the term note
payable. Please tell us your basis for determining it was
appropriate to continue to
classify this debt amount as noncurrent. Refer to ASC
470-10-45-1; and
In your Liquidity and Capital Resources discussion in MD&A, please
disclose the
potential impact on your liquidity and capital resources if you
do not comply with
any remaining covenants and/or are unable to obtain a waiver of
compliance in the
future. Specifically, you should state whether noncompliance with
any remaining
covenants could lead to the acceleration of payments due under
any of your debt
arrangements. Please also disclose the actual ratios/amounts as
of each reporting date
for any material debt covenants for which it is reasonably likely
that you will not be
able to meet. See Sections I.D and IV.C of the SEC Interpretive
Release No. 33-8350.
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.
Ken Suslow
Sandbridge Acquisition Corp
April 14, 2021
Page 4
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.
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.
Sincerely,
FirstName LastNameKen Suslow
Division of
Corporation Finance
Comapany NameSandbridge Acquisition Corp
Office of Life
Sciences
April 14, 2021 Page 4
cc: Emily J. Oldshue, Esq.
FirstName LastName