United States securities and exchange commission logo
September 15, 2021
R. Steven Hicks
Chief Executive Officer
Capstar Special Purpose Acquisition Corp.
405 West 14th Street
Austin, TX 78701
Re: Capstar Special
Purpose Acquisition Corp.
Registration
Statement on Form S-4
Filed August 10,
2021
File No. 333-258693
Dear Mr. Hicks:
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 August 10, 2021
Market and Industry Data, page iii
1. Your statements
regarding information in the document provided by third-party sources,
or based on information
from third-party sources, inappropriately implies you are not
responsible for the
disclosure in the prospectus. Revise to clarify you are responsible for
all disclosure in the
prospectus.
Summary of the Proxy Statement/Prospectus, page 22
2. Please revise the
Summary disclosure concerning Gelesis to highlight the going concern
determinations
referenced on page 192.
3. Please revise the
disclosure on page 23 to explain briefly how the de novo classification
R. Steven Hicks
FirstName LastNameR.
PurposeSteven HicksCorp.
Capstar Special Acquisition
Comapany 15,
September NameCapstar
2021 Special Purpose Acquisition Corp.
September
Page 2 15, 2021 Page 2
FirstName LastName
differs from the PMA and 510(k) pathways as it relates to
determinations concerning
safety and efficacy.
Summary Risk Factors, page 29
4. Disclose the material risks to unaffiliated investors presented by
taking the company
public through a merger rather than an underwritten offering. These
risks could include
the absence of due diligence conducted by an underwriter that would be
subject to liability
for any material misstatements or omissions in a registration
statement.
Background to the Business Combination, page 98
5. With reference to the disclosure on page 100, please revise to discuss
who introduced you
to Gelesis and the individuals and parties who were involved in the
initial communications
and negotiations.
6. Please substantially revise to discuss the preliminary discussions
and negotiations
concerning material terms of the business combination, particularly as
it relates to
valuation of Gelesis. For instance, and without limitation, we note
that Background
section is silent with respect to the valuations discussed/proposed
during the February 25
to April 15 timeframe. Please be sure to indicate which party first
presented a valuation
figure and discuss each counterproposal so that investors can
understand how this term
was negotiated and whether the valuation moved materially during this
period. Discuss
the basis or bases presented in support of each valuation proposed.
7. Please revise to discuss and explain the financial model or models
developed by each
party or the parties. Discuss all material inputs and assumptions
underlying the model or
models. Disclose forecasts that Gelesis or advisors presented to CPSR
s management or
Board, or advise. In this regard, we note that the implied equity
value ascribed to Gelelis
is based on forecasted revenue and gross profit.
8. Revise to discuss the material terms negotiated during the PIPE
Financing so that
investors can understand the issues that mattered to the parties and
how the proposed
terms changed during the course of the negotiations.
The Board's Reasons for the Business Combination, page 105
9. Please revise the disclosure on page 106 to explain how the peer sets
were developed.
Explain the bases that the Board used to determine that the six
identified companies were
the most comparable to Gelesis. Explain whether the Board considered
the valuations of
any companies in the weight management industry.
10. Present the market capitalization, enterprise value, implied valuation
multiples and other
relevant financial measures for each of the six peer companies so that
investors can
understand how Gelesis represented an attractive valuation relative to
this peer set. Also,
clarify the rationale and basis for using projected 2023 revenue,
projected 2023 gross
profit and the 2.2x and 3.4x multiples.
R. Steven Hicks
Capstar Special Purpose Acquisition Corp.
September 15, 2021
Page 3
Interests of CPSR's Directors and Executive Officers in the Business
Combination, page 108
11. Please expand your disclosure here to quantify the aggregate dollar
amount and describe
the nature of what the CPSR sponsor and its affiliates have at risk
that depends on
completion of a business combination. Include the current value of
securities held, loans
extended, fees due, out-of-pocket expenses and other items for which
the sponsor and its
affiliates are awaiting reimbursement. Provide similar disclosure for
the company s
officers and directors, if material. Further, please clarify if the
CPSR sponsor and its
affiliates can earn a positive rate of return on their investment,
even if other CPSR
shareholders experience a negative rate of return in the post-business
combination
company. Please also highlight this information in your Questions and
Answers and/or
Summary discussion.
U.S. Federal Income Considerations, page 130
12. Please have counsel provide a tax opinion addressing the tax
consequences to U.S. holders
of CPSR common stock who exercise redemption rights and who hold
shares at the time
of the Business Combination. The tax opinion should address and
express a conclusion for
each material federal tax consequence. For additional guidance
concerning assumptions
and opinions subject to uncertainty, refer to Staff Legal Bulletin No.
19.
Information about Gelesis, page 165
13. Please revise to disclose the operating plan for the business in the
coming few years as
well as the intended uses of the proceeds raised through the merger
and PIPE financings.
State the principal purposes and the approximate amount intended to be
used for each
such purpose.
14. With reference to the risk factors on page 39, please revise to
identify the jurisdictions, as
applicable, where state medical boards have established rules or
interpreted existing rules
in a manner that limit or restrict the ability of Gelesis qualified
distributors to use
telehealth services in connection with providing patients with access
to Plenity.
15. We note the disclosure on page 169 that during the Beta Launch Gelesis
achieved a 90-
95% physician grant rate among people with a BMI 25-40 seeking a
prescription
through telehealth. Please revise to explain the term grant rate.
Disclose the grant rate
for patients with a BMI under and above this BMI range.
16. With reference to your disclosure on pages 178-179, please discuss
whether you have trial
results that extend beyond 24 weeks, and if not, whether any such
studies are planned.
FirstName LastNameR. Steven Hicks
Discuss, as applicable, whether the lack of longer term data impacts
commercialization of
Comapany NameCapstar
Plenity for the BMISpecial
of 25 Purpose Acquisition
40 indication Corp. longer term data
will be required to
and whether
receive
September 15, regulatory
2021 Page clearance/approval
3 for the additional indications
that you are targeting.
FirstName LastName
R. Steven Hicks
FirstName LastNameR.
PurposeSteven HicksCorp.
Capstar Special Acquisition
Comapany 15,
September NameCapstar
2021 Special Purpose Acquisition Corp.
September
Page 4 15, 2021 Page 4
FirstName LastName
Key Business Metrics, page 195
17. Please address the following:
You state that you define "members" as the number of consumers who
have begun
their weight loss journey with Plenity and that it includes the
cumulative number of
both recurring and non-recurring consumers as of the respective
reporting date. Tell
us how you considered providing a breakdown of recurring versus
non-recurring
members.
The sentence preceding the table indicates that all these metrics
are in thousands.
Tell us whether the number of members and number of units sold are
in thousands
like the dollar amounts. If not, please revise your presentation
accordingly.
Further, tell us how the cumulative members number of 32,900
thousand presented
here reconciles to your statement on page 169 that "over 50,000
members have
started their weight loss journey with Plenity sense its Beta
launch."
Revise your discussion of revenues within your Results of
Operations sections on
pages 200 and 202 to present a rate/volume analysis, providing us
with a
supplemental reconciliation between that disclosure and your
business metrics here.
Results of Operations, page 200
18. Revise your discussions of research and development expense to provide
a breakdown of
these expenses by the type of expense included. To the extent you
track your research and
development expense on a product candidate basis, separately quantify
such expenses by
product candidate. To the extent you do not track your research and
development
expenses on a product candidate basis, disclose that fact.
Exhibits
19. Please file the distribution agreements with Roman Health Pharmacy LLC
and
GoGoMeds as exhibits.
20. Please file the strategic partnership agreement with China Medical
System Holdings
Limited as an exhibit.
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.
R. Steven Hicks
Capstar Special Purpose Acquisition Corp.
September 15, 2021
Page 5
You may contact Frank Wyman at (202) 551-3660 and Kevin Vaughn at (202)
551-3494
if you have questions regarding comments on the financial statements and
related
matters. Please contact Jordan Nimitz at (202) 551-5831 or Joe McCann at (202)
551-6262 with
any other questions.
Sincerely,
FirstName LastNameR. Steven Hicks
Division of Corporation
Finance
Comapany NameCapstar Special Purpose Acquisition Corp.
Office of Life Sciences
September 15, 2021 Page 5
cc: Christopher S. Auguste
FirstName LastName