United States securities and exchange commission logo
April 6, 2022
Michael Blend
Chief Executive Officer
System1, Inc.
4235 Redwood Avenue
Marina Del Rey, CA 90066
Re: System1, Inc.
Amendment No. 1 to
Registration Statement on Form S-1
Filed April 1, 2022
File No. 333-262608
Dear Mr. Blend:
We have reviewed your amended 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.
Amendment No. 1 to Registration Statement on Form S-1 filed April 1,
2022
Cover Page
1. For each of the
securities being registered for resale, please revise the cover page to
disclose the price that
the selling securityholders paid for such securities or warrants
overlying such
securities.
2. Please revise the cover
page to disclose the exercise price(s) of the warrants compared to
the market price of the
underlying security. If the warrants are out the money, please
disclose the likelihood
that warrant holders will not exercise their warrants. Provide
similar disclosure in
the prospectus summary, risk factors, MD&A and use of proceeds
section and disclose
that cash proceeds associated with the exercises of the warrants are
dependent on the stock
price. As applicable, describe the impact on your liquidity and
update the discussion
on the ability of your company to fund your operations on a
Michael Blend
FirstName LastNameMichael Blend
System1, Inc.
Comapany
April NameSystem1, Inc.
6, 2022
April 26, 2022 Page 2
Page
FirstName LastName
prospective basis with your current cash on hand.
3. We note the significant number of redemptions of your Class A common
stock in
connection with your business combination and that the shares being
registered for resale
will constitute a considerable percentage of your public float. We
also note that all of the
shares being registered for resale were purchased by the selling
securityholders for prices
considerably below the current market price of the Class A common
stock. Please revise
the cover page to highlight the significant negative impact sales of
shares on this
registration statement could have on the public trading price of the
Class A common
stock.
Risk Factors, page 5
4. Include an additional risk factor highlighting the negative pressure
potential sales of
shares pursuant to this registration statement could have on the
public trading price of the
Class A common stock. To illustrate this risk, disclose the purchase
price of the securities
being registered for resale and the percentage that these shares
currently represent of the
total number of shares outstanding. Additionally, revise the risk
factor on page 39 that
notes that future sales of your securities could cause the market
price of your Class A
common stock and warrants to drop significantly. In this regard, this
disclosure should be
updated given that this prospectus is facilitating those sales.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
70
5. Please revise your MD&A overview to reflect the fact that this
offering involves the
potential sale of a substantial portion of shares for resale and
discuss how such sales could
impact the market price of the company s common stock. Your
discussion should
highlight the fact that Cannae Holdings, LLC, Christopher Phillips,
Stanley Blend, Lone
Star Friends Trust and Trasimene Trebia, LP, collectively beneficial
owners of over 97%
your outstanding shares, will be able to sell all of their shares for
so long as the
registration statement of which this prospectus forms a part is
available for use.
General
6. Revise your prospectus to disclose the price that each selling
securityholder paid for the
securities being registered for resale. Highlight any differences in
the current trading
price, the prices that the selling securityholders acquired their
shares and warrants, and the
price that the public securityholders acquired their shares and
warrants. Disclose that
while the selling securityholders may experience a positive rate of
return based on the
current trading price, the public securityholders may not experience a
similar rate of return
on the securities they purchased due to differences in the purchase
prices and the current
trading price. Please also disclose the potential profit the selling
securityholders will earn
based on the current trading price. Lastly, please include appropriate
risk factor
Michael Blend
System1, Inc.
April 6, 2022
Page 3
disclosure.
Please contact Mitchell Austin, Staff Attorney, at (202) 551-3574 or
Larry Spirgel, Office
Chief, at (202) 551-3815 with any questions.
Sincerely,
FirstName LastNameMichael Blend
Division of
Corporation Finance
Comapany NameSystem1, Inc.
Office of
Technology
April 6, 2022 Page 3
cc: Steven B. Stokdyk, Esq.
FirstName LastName