United States securities and exchange commission logo
August 27, 2021
John Merris
Chief Executive Officer
Solo Brands, Inc.
1070 S. Kimball Ave. Ste 121
Southlake, TX 76092
Re: Solo Brands, Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted August
10, 2021
CIK 0001870600
Dear Mr. Merris:
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.
Draft Registration Statement submitted August 10, 2021
General
1. Please revise your
discussion of the Tax Receivable Agreement to state clearly that you
expect the arrangement
to reduce the cash provided by the tax savings that would
otherwise have been
available to Solo Brands for other uses and that the arrangement
confers significant
economic benefits to the TRA Participants by redirecting cash flows to
them at the expense of
the rest of your shareholders. Further, please revise to provide
prominent and complete
disclosure of the arrangement as a principal topic in the
prospectus summary. We
expect to find this disclosure well before the single bullet point
on page 9 and the brief
ensuing disclosure on page 11.
John Merris
FirstName LastNameJohn Merris
Solo Brands, Inc.
Comapany
August 27, NameSolo
2021 Brands, Inc.
August
Page 2 27, 2021 Page 2
FirstName LastName
Unaudited Pro Forma Consolidated Financial Information, page 75
2. Consistent with your response to prior comment 1, please prominently
disclose in your
discussion of the Tax Receivable Agreement herein you expect that the
amount of cash
payments required under the agreement may be substantial. In addition,
expand your
disclosure in pro forma adjustment 1(b) to briefly describe for
investors how you will
account for subsequent changes in the measurement of the obligation
based on the factors
denoted in the bullet points under Basis Adjustments within the
prospectus section on
Certain Relationships and Related Party Transactions, including the
anticipated duration
of such payments.
3. We note that following the completion of the organizational
transactions, although you
will have a minority economic interest in Holdings, you will have the
sole voting interest
in, and control the management of, Holdings, and therefore will
consolidate the financial
results of Holdings, reporting a non-controlling interest related to
the LLC Interests held
by the Continuing LLC Owners. Please disclose herein and prominently
in your
prospectus how you will consolidate and recognize the assets and
liabilities of Solo Stove
Holdings, LLC and the non-controlling interests in your audited
financial statements. In
this regard, describe whether you will account for the reorganization
as a transaction
between entities under common control or under the purchase method of
accounting, and
reference the accounting literature relied upon.
4. Please ensure that the "Solo Brands, Inc. pro forma" columns within
the pro forma
financial statements reflect your post-offering capital structure. For
instance, we note that
the pro forma balance sheet currently depicts Class A-1 and A-2 units
which appear to
apply to your intermediate predecessor, and does not appear to include
a line item for
Class A and Class B common shares. Additionally within the Notes
related to the
Offering, provide disclosure as to how you allocated Net income (loss)
to noncontrolling
interests for the periods presented.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
83
5. We note your response to prior comment 8. Please amend to provide an
analysis of
amounts reported in your financial statements. We also note your
continued combined
presentation of the results for the predecessor, intermediate
successor and successor
periods, which should be supplemental to the analysis of amounts
reported in your
financial statements. You responded that the combined presentation
is incrementally
more useful to the investor," as the different accounting bases do
"not have a material
impact, unless otherwise noted, on the comparability of [y]our results
of operations."
Please submit an analysis to support your belief that the different
bases of accounting for
the predecessor, intermediate successor, and successor did not have a
material impact on
your combined results of operations, and specifically identify the
instances alluded to in
"unless otherwise noted." In addition, please provide a similar
analysis for your non-
John Merris
Solo Brands, Inc.
August 27, 2021
Page 3
GAAP measures from comment 6 highlighting any material amounts.
You may contact Heather Clark, Staff Accountant, at (202) 551-3624 or
Mark Rakip,
Accounting Branch Chief, at (202) 551-3573 if you have questions regarding
comments on the
financial statements and related matters. Please contact Sergio Chinos, Staff
Attorney, at (202)
551-7844 or Jay Ingram, Legal Branch Chief, at (202) 551-3397 with any other
questions.
Sincerely,
FirstName LastNameJohn Merris
Division of
Corporation Finance
Comapany NameSolo Brands, Inc.
Office of
Manufacturing
August 27, 2021 Page 3
cc: Ian D. Schuman
FirstName LastName