United States securities and exchange commission logo
May 18, 2021
Ron Zwanziger
Chief Executive Officer, Chairman and Director
LumiraDx Limited
c/o Ocorian Trust (Cayman) Limited
PO Box 1350, Windward 3, Regatta Office Park
Grand Cayman KY1-1108
Cayman Islands
Re: LumiraDx Limited
Draft Registration
Statement on Form F-4
Submitted April 20,
2021
CIK 0001685428
Dear Mr. Zwanziger:
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 F-4
Cover Page
1. Please revise the
prospectus cover page and the Prospectus Summary to disclose the
expected ownership
percentages in the combined company of CAH's public stockholders,
the Sponsor, LumiraDx's
directors, executive officers and their affiliates, and LumiraDx's
other current
stockholders. Please also include the voting power in the combined company
that will be held by
each group and explain the difference between LumiraDx's common
shares and ordinary
shares.
Ron Zwanziger
FirstName LastNameRon Zwanziger
LumiraDx Limited
Comapany
May NameLumiraDx Limited
18, 2021
May 18,
Page 2 2021 Page 2
FirstName LastName
Market and Industry Data, page iv
2. We note your disclosure on page iv indicating that industry and market
data could prove
to be inaccurate, certain information in the prospectus cannot be
verified with complete
certainty and that LumiraDx does not know all of the assumptions that
were used in
preparing the forecasts that appear in the prospectus. These
statements may imply an
inappropriate disclaimer of responsibility with respect to such
information. Please either
delete these statements or specifically state that you are liable for
such information.
Questions and Answers About the Proposals and the Special Meeting
Did the CAH board of directors obtain a third-party valuation or fairness
opinion in determining
whether or not to proceed with the Merger?, page viii
3. CAH's registration statement for its initial public offering states
that in the event it seeks
to complete your initial business combination with a company that is
affiliated with
CAH's sponsors, officers or directors, it will obtain a fairness
opinion. We further note
that CAH's sponsor's members include partners and employees of
Covington Associates,
LLC. Disclosure throughout the prospectus, including on page x,
indicates that Covington
Associates has longstanding relationships with both LumiraDx's
founders and with
LumiraDx itself. Please revise the response to this question, as well
as the disclosure
under the "CAH's Board of Directors' Reasons for Approval of the
Merger" heading on
page 3, to explain why CAH's board of directors did not obtain a
third-party valuation or
fairness opinion in light of its sponsor's relationship with LumiraDx.
In your revisions,
please also state whether CAH's board of directors took any measures,
including the
formation of an independent committee of the board, to ensure that it
was able to
independently determine LumiraDx's fair market value.
Information About the Companies, page 1
4. Please revise your disclosure in this section, as well as in the
"Business of LumiraDx"
section, where appropriate, to discuss details of the test strip
recall in January 2021
referenced on page 41 of the prospectus.
CAH's Board of Directors' Reasons for Approval of the Merger, page 3
5. We note your statement on page 4 indicating that LumiraDx is now
delivering "among the
best performing assays" in the market at the POC. Please revise your
disclosure to provide
the basis for this statement, particularly in light of your disclosure
on page 41 regarding
recalls of test strips.
6. We note your statement that CAH's Board assessed that LumiraDX can
address an over
$50 billion global market opportunity with the Platform. Please revise
your disclosure to
include the source that provided this market opportunity assessment.
Please also provide
us with the analysis that supports this statement.
Ron Zwanziger
FirstName LastNameRon Zwanziger
LumiraDx Limited
Comapany
May NameLumiraDx Limited
18, 2021
May 18,
Page 3 2021 Page 3
FirstName LastName
Related Agreements
Sponsor Agreement, page 6
7. Your disclosure in this section indicates that "certain existing
stockholders of CAH", in
addition to the sponsor, have agreed to vote in favor of the proposals
presented in the
prospectus. Please revise to quantify what percentage of CAH's
outstanding shares are
covered by the Sponsor Agreement. Please also revise to disclose what
percentage of the
CAH public shares must be redeem in order for the sponsor to forfeit a
percentage of the
CAH founder shares and clarify whether the percentage of public shares
redeemed
directly corresponds to the percentage that would be forfeited (e.g.
if 40% of the CAH
public shares are redeemed, 40% of the CAH founder shares will be
forfeited).
Registration Rights Agreement, page 7
8. Please revise your disclosure to clarify what percentage of LumiraDx's
outstanding shares
following the Merger will have registration rights.
Implications of Being an Emerging Growth Company, page 9
9. Your disclosure indicates that you have elected not to opt out of such
extended transition
period, which means that when a standard is issued or revised and it
has different
application dates for public or private companies, you can adopt the
new or revised
standard at the time private companies adopt the new or revised
standard. However, on
pages 69 (Risk Factors) and 225 (MD&A), you disclose that the company
has irrevocably
elected not to avail itself of this extended transition period and as
a result, will adopt new
and revised accounting standards on the relevant dates on which
adoption of such
standards is required by the IASB. Please revise to clarify which of
these positions you
have taken and present consistently throughout the filing.
Comparative Per Share Data, page 16
10. With reference to the pro forma total shareholders' equity amounts and
basic and diluted
outstanding shares reflected on pages 194 and 195, please assess the
accuracy of the
combined pro forma and pro forma equivalent book value per share
amounts of $4.74 and
$4.07.
Risks Related to Our Business and Operations Following the Merger
The ability of our U.S. subsidiaries to use net operating loss
carryforwards..., page 65
11. Please quantify your net operating loss carryforwards.
Proposal No. 1 -- The Merger Proposal
Closing Conditions, page 107
12. Please revise your disclosure in this section to identify which of the
conditions to closing
can be waived.
Ron Zwanziger
FirstName LastNameRon Zwanziger
LumiraDx Limited
Comapany
May NameLumiraDx Limited
18, 2021
May 18,
Page 4 2021 Page 4
FirstName LastName
Background of the Merger, page 110
13. Your disclosure on page 112 indicates that that CAH reviewed
LumiraDx's financial
information, comparable company valuation analyses and recent
arm's-length valuations,
among other items, in negotiating a $5-6 billion potential pre-money
equity value. Please
revise your disclosure in this section to provide more detail
regarding how CAH's
management determined that a value of $5-6 billion for LumiraDx was
supportable.
Please also revise, where appropriate, to disclose the "comparable
company valuation
analyses" and "recent arm's-length valuations" that CAH received,
including the valuation
in a round of financing that LumiraDx raised in the fall of 2020,
referred to on page
113. To the extent that the management or board of directors of CAH
relied on financial
information regarding LumiraDx which is not currently included in the
prospectus, please
revise to include this information.
14. Please revise this section, where appropriate, to disclose why
LumiraDx decided to delay
its traditional initial public offering in order to pursue potential
M&A alternatives,
including deSPAC transactions, as referenced on page 112.
Business of LumiraDx
Our Products, page 153
15. Please revise your disclosure in this section, or elsewhere in the
Business section, as
appropriate, to discuss which of your products currently generate
revenue and your
reliance on any key customers. For guidance, please refer to Item 4.B.
of Form 20-F,
incorporated into Item 14 of Form F-4.
D-Dimer Test, page 163
16. Please revise your description of "the method comparison" described on
page 163 to
disclose the purpose of the comparison and to explain the significance
of the findings
described in the results table and the paragraph that precedes the
table, including how the
LumiraDx D-Dimer test performed compared to the VIDAS Exclusion II
D-Dimer assay.
Strategic Partners and Manufacturing and Supply Agreements, page 171
17. Your disclosure elsewhere in the prospectus indicates that the NHS is
one of your key
customers. Please describe the terms of your agreement with NHS in
this section (or
elsewhere in Business, as appropriate) and file the agreement as an
exhibit to your
registration statement or advise. Please also revise the disclosure on
page 6 to clarify
whether the 29% and 17% customers referenced in that section are CVS
and NHS,
respectively.
Ron Zwanziger
FirstName LastNameRon Zwanziger
LumiraDx Limited
Comapany
May NameLumiraDx Limited
18, 2021
May 18,
Page 5 2021 Page 5
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Statements
Note 5. Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as
of
December 31, 2020, page 199
18. Please expand the information you have presented in 5(f) to indicate
how you determined
the 210,094,902 LMDX ordinary shares and 12,615,403 LMDC common shares
issued as
a result of the Subdivision.
19. Please tell us why pro forma adjustments 5(k) and 5(l) which reflect
fees that are deemed
to be direct and incremental costs of the mergers are not reflected as
pro forma
adjustments to your pro forma condensed combined statement of
operations. Refer
to Rule 11-02(a)(i)(6)(B) of Regulation S-X. Please also reconcile the
$1.5 million
referred to in the note 5(k) to the $3.099 million adjustment
reflected on the pro forma
balance sheet.
Note 6. Adjustments to Unaudited Pro Forma Condensed Combined Statement of
Operations for
the Year Ended December 31, 2020, page 200
20. Please expand Note 6(c) to disclose the number of shares issued by
LMDX and how the
deemed fair value was determined.
LumiraDX's Management's Discussion and Analysis if Financial Condition and
Results of
Operations
Comparison of the years ended December 31, 2019 and 2020 - Cost of sales, page
212
21. Please expand your disclosures to provide additional insight as to why
your $13.2 million
write down of inventory to net realizable value was necessary. Please
also expand your
critical accounting policy disclosures on page 224 to identify the
material assumptions
management utilized in determining the allowance for excess or
obsolete inventory. If a
potential for future write downs exist, please address such risk.
Description of LumiraDx's Securities
Transfer of LMDX Ordinary Shares, page 240
22. Please revise your disclosure in this section to describe the
circumstances that would
trigger a Mandatory Transfer.
Exhibits
23. Please file the offer letters referenced on page 134 as exhibits to
your registration
statement or tell us why they are not required to be filed.
24. Please file an opinion as to the material tax consequences of the
Merger. Refer to Item
601(b)(8) of Regulation S-K and Section III of Staff Legal Bulletin
No. 19.
Ron Zwanziger
LumiraDx Limited
May 18, 2021
Page 6
You may contact David Burton at 202-551-3626 or Jeanne Baker at
202-551-3691 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Alan Campbell at 202-551-4224 or Celeste Murphy at 202-551-3257 with
any other
questions.
Sincerely,
FirstName LastNameRon Zwanziger
Division of Corporation
Finance
Comapany NameLumiraDx Limited
Office of Life Sciences
May 18, 2021 Page 6
cc: Edwin M. O Connor
FirstName LastName