United States securities and exchange commission logo
August 18, 2021
Gary Matthews
Chief Executive Officer
Seven Oaks Acquisition Corp.
445 Park Avenue, 17th Floor
New York, NY 10022
Re: Seven Oaks
Acquisition Corp.
Registration
Statement on Form S-4
Filed July 20, 2021
File No. 333-258030
Dear Mr. Matthews:
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 July 20, 2021
Certain Defined Terms, page iii
1. Please define "wallet
share" and "white-labeling" or add additional detail on these terms in
the appropriate areas
of your prospectus.
Questions and Answers about the Business Combination and the Special
Meeting
Q: What equity stake will current Seven Oaks Stockholders and Boxed
stockholders hold in New
Boxed..., page 4
2. Please revise here or
elsewhere, as appropriate, to disclose all possible sources and extent
of dilution that
shareholders who elect not to redeem their shares may experience in
connection with the
business combination. Provide disclosure of the impact of each
significant source of
dilution, including the amount of equity held by founders,
Gary Matthews
Seven Oaks Acquisition Corp.
August 18, 2021
Page 2
convertible securities, including warrants retained by redeeming
shareholders, at each of
the redemption levels detailed in your sensitivity analysis, including
any needed
assumptions.
As a related matter, it appears that underwriting fees remain constant
and are not adjusted
based on redemptions. Revise your disclosure to disclose the effective
underwriting fee
on a percentage basis for shares at each redemption level presented in
your sensitivity
analysis related to dilution.
3. Revise your disclosure here or elsewhere, as appropriate, to show the
potential impact of
redemptions on the per share value of the shares owned by
non-redeeming shareholders by
including a sensitivity analysis showing a range of redemption
scenarios, including
minimum, maximum and interim redemption levels.
"Directors and officers of Seven Oaks have potential conflicts of interest...",
page 37
4. Please revise to quantify the aggregate dollar amount and describe the
nature of what the
Sponsor and its affiliates have at risk that depends on completion of
a business
combination. Include the current value of securities held, Earnout
Shares, loans extended,
fees due, and out-of-pocket expenses for which the Sponsor and its
affiliates are awaiting
reimbursement. Provide similar disclosure for the company s officers
and directors, if
material. Separately, your amended and restated certificate of
incorporation (exhibit 3.1)
waived the corporate opportunities doctrine. Please address this
potential conflict of
interest and whether it impacted your search for an acquisition
target.
5. We note your statement on page 38 that "[t]hese financial interests of
the Initial
Stockholders may have influenced their decision to approve the
Business Combination."
Please revise to highlight the risk that your Sponsor will benefit
from the completion of a
business combination and may be incentivized to complete an
acquisition of a less
favorable target company or on terms less favorable to shareholders
rather than liquidate.
Risk Factors, page 37
6. Please highlight the material risks to public warrant holders,
including those arising from
differences between private and public warrants. Clarify whether
recent common stock
trading prices exceed the threshold that would allow the company to
redeem public
warrants. Clearly explain the steps, if any, the company will take to
notify all
shareholders, including beneficial owners, regarding when the warrants
become eligible
for redemption.
"The underwriter has a potential conflict of interest ...", page 51
FirstName LastNameGary Matthews
7. We note that part of the IPO underwriting fee was deferred and
conditioned on completion
Comapany
of a NameSeven Oaks Acquisition
business combination. Corp. the aggregate fees payable to
Jones and the
Please quantify
Augustunderwriters
18, 2021 Pageof 2the IPO that are contingent on completion of the
business combination.
FirstName LastName
Gary Matthews
FirstName
Seven OaksLastNameGary Matthews
Acquisition Corp.
Comapany
August 18, NameSeven
2021 Oaks Acquisition Corp.
August
Page 3 18, 2021 Page 3
FirstName LastName
Background of the Business Combination, page 92
8. We note that you considered over 50 potential acquisition targets,
including signing 18
non-disclosure agreements, reviewing materials in 10 data rooms,
conducting discussions
with over a dozen investment banking, private equity and advisory
firms regarding your
search for an initial business combination. Please provide additional
detail on how
management was introduced to each company, including the methodology
by which you
selected 50 potential acquisition targets and how you ultimately pared
the group to five
active deals. Also, provide additional detail to describe the process
utilized to evaluate
these five active deals that were considered by the Board at the
February 10, 2021 Seven
Oaks Board meeting and describe the information gathered, how and by
whom it was
evaluated, the negotiations which occurred, and any offers that were
made or received.
9. We note that on January 29, 2021 there was a presentation with Boxed
management.
Please disclose all parties that were present at this meeting and
whether there were any
presentation materials prepared and presented in connection with this
meeting. We also
note that on June 3, 2021, Jones ultimately provided the Seven Oaks
Board with an
assessment on the valuation methodology for Boxed. Finally, we note
the investor
presentations filed as exhibit 99.2 to Form 8-K on June 14, 2021.
Please clarify whether
these presentations, or any other reports or presentations referred to
in the prospectus,
were provided by third parties. In this regard, we note that if a
report, opinion or appraisal
materially related to the transaction has been received from an
outside party and referred
to in the prospectus, your disclosure must provide the information
required by Item
1015(b) of Regulation M-A with respect to such report, opinion or
appraisal. In addition,
any written materials contained or used in the report, opinion or
appraisal, as well as the
consent of the outside party, must be filed as exhibits to the Form
S-4. Please refer to
Items 4(b) and 21(c) of Form S-4.
10. Please expand the disclosure in this section to include a more
detailed description of the
negotiations which occurred in order to establish the core terms of
the business
combination. Please address the substance of the parties' multiple
conversations and
discussions that resulted in the changes to the core terms, as well as
any key points of
disagreement and how they were resolved. For example, we note your
initial term sheet
valued Boxed's business at $750.0 million and that on June 3, 2021
Seven Oaks' board
reviewed valuation methodology. Please provide a summary for these
valuations.
Seven Oaks' Board of Directors' Reasons for the Approval of the Business
Combination, page 96
11. None of the factors discussed here appear to pertain to the
consideration to be paid as part
of the transaction. Explain if the Board took this factor into account
in recommending the
transaction.
Gary Matthews
FirstName
Seven OaksLastNameGary Matthews
Acquisition Corp.
Comapany
August 18, NameSeven
2021 Oaks Acquisition Corp.
August
Page 4 18, 2021 Page 4
FirstName LastName
Business of New Boxed, page 178
12. We note statements that appear to be based on studies such as "our Net
Promoter Score of
69, based on a survey of over 6,000 users we conducted in the first
quarter of 2021" and
"Boxed customers expressed a 92% overall online customer satisfaction,
while many of
our peers had customer satisfaction levels ranging from 77-83%."
Please provide the
source for any market and industry data included in your disclosure.
To the extent any
data relates to publications, surveys or reports commissioned by you
for use in connection
with this registration statement, please file consents of such third
parties pursuant
to Rule 436 of the Securities Act as exhibits to our registration
statement or tell us why
you believe you are not required to do so.
Our Industry and Opportunity, page 179
13. Please provide a source for the statements made in this section. For
example, statements
such as "Boxed currently operates in the rapidly growing market for
online groceries, a
$106.0 billion total addressable market, with an expected CAGR of 19%
from 2020 to
2025" and "[o]nline grocery in the United States remains
underpenetrated relative to other
peer economies, representing only 10% of total U.S. grocery sales
compared to 14% share
in the United Kingdom and 20% share in China," and "[t]he penetration
rate in the U.S. is
expected to more than double to 21% by 2025" should be tied to a
source. To the extent
that any statement in this section is based on management's beliefs,
please revise to state
as much.
14. We note the chart at the top of page 180. Please revise so that the
text is legible.
Business of New Boxed
Our Industry and Opportunity, page 180
15. Please clearly label your Aeon software development and licensing
contract, here and
throughout your filing, as a related party transaction.
B2C Customers
Boxed Up, page 183
16. Please revise to quantify the number of Boxed Up memberships.
Who We Serve, page 183
17. We note that you have categorized a certain number of American
households in each of
your four distinct customer groups. Please state how you calculated
these numbers and
provide any limits to achieving growth in each of these customer
groups.
Gary Matthews
FirstName
Seven OaksLastNameGary Matthews
Acquisition Corp.
Comapany
August 18, NameSeven
2021 Oaks Acquisition Corp.
August
Page 5 18, 2021 Page 5
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Boxed, page 193
18. We note that your Key Performance Indicators are presented on a last
twelve months
basis. To provide additional context for investors, please discuss and
quantify, if possible,
the impact of COVID-19 on your metrics for the periods presented. For
guidance,
consider the Division of Corporation Finance's Disclosure Guidance
Topics Nos. 9 & 9A,
available on our website.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Boxed
Comparison of Three Months Ended March 31, 2021 and 2020
Net Revenue, page 198
19. Please tell us, and revise your discussion to the extent material, any
impact to retail sales
for the three months ended March 31, 2021 due to your B2C customers.
Cost of Sales and Gross Profit, page 199
20. Please revise your discussion, both here and for the year ended
December 31, 2020, to
address the specific underlying factors contributing to the period
over period change in
Cost of Sales. Instances where you identify multiple contributing
factors for a change in a
specific line item, please quantify each material factor to allow
investors to assess the
significance of each contributing factor. Refer to Item 303 of
Regulation S-K.
Beneficial Ownership of Securities, page 227
21. Please disclose the Sponsor and its affiliates total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
Material U.S. Federal Income Tax Considerations, page 250
22. In addition to the disclosure you have provided in this section
regarding the exercise of
redemption rights, please include a discussion of the federal income
tax consequences of
the merger. In this regard, we note the Agreement and Plan of Merger,
filed as exhibit
2.1, provides that the merger is intended to constitute a
reorganization within the
meaning of Section 368(a) of the Internal Revenue Code. Please also
include a tax
opinion from counsel as appropriate or tell us why you are not
required to do so. Refer to
Item 4(a)(6) of Form S-4 and Section III.A. of Staff Legal Bulletin
19.
Gary Matthews
FirstName
Seven OaksLastNameGary Matthews
Acquisition Corp.
Comapany
August 18, NameSeven
2021 Oaks Acquisition Corp.
August
Page 6 18, 2021 Page 6
FirstName LastName
Giddy Inc. (d/b/a Boxed) Financial Statements
1. Description of Business and Summary of Significant Accounting Policies
Revenue Recognition
(d) Revenue Disaggregation, page F-53
23. We note you provide disaggregated revenue by sales channel, both here
and in the notes to
your annual Financial Statements. Please tell us your consideration of
further
disaggregating revenue, such as by your core product categories, type
of customer, type of
contract (sales or service), and source of goods (3rd party as
compared to white label
goods). Refer to ASC 606-10-50-5 and ASC 606-10-55-89 through 91.
Also, refer to
ASC 280-10-50-40, as it relates to disclosure of revenues by
product/service category.
12. Related Party Transactions, page F-63
24. We note your disclosure regarding your agreement with AEON. Please
revise to also
include the affiliation of your current Director of the Company with
AEON.
General
25. Please clarify if the Sponsor and its affiliates can earn a positive
rate of return on their
investment, even if other SPAC shareholders experience a negative rate
of return in the
post-Business Combination company.
26. Please expand your disclosure regarding the Sponsor s ownership
interest in the target
company. Disclose the approximate dollar value of the interest based
on the transaction
value and recent trading prices as compared to the price paid.
27. We note that your Initial Stockholders entered into a letter
agreement, pursuant to which
they agreed to waive their redemption rights with respect to their
shares in connection
with the completion of a business combination. Please describe any
consideration
provided in exchange for this agreement.
28. Quantify the value of warrants, based on recent trading prices, that
may be retained by
redeeming stockholders assuming maximum redemptions and identify any
material
resulting risks.
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.
Gary Matthews
Seven Oaks Acquisition Corp.
August 18, 2021
Page 7
You may contact Abe Friedman at (202) 551-8298 or Rufus Decker at (202)
551-3769 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Cara Wirth at (202) 551-7127 or Jennifer L pez at (202) 551-3792 with
any other
questions.
Sincerely,
FirstName LastNameGary Matthews
Division of
Corporation Finance
Comapany NameSeven Oaks Acquisition Corp.
Office of Trade &
Services
August 18, 2021 Page 7
cc: David A. Sakowitz
FirstName LastName