Filing identity and period
Important mismatch: The supplied filing is Oaktree Acquisition Corp.’s Form 10-Q, not a filing for Hims & Hers Health, Inc. It covers the period from Oaktree’s April 9, 2019 inception through June 30, 2019; it does not report Hims & Hers financial results.
Business context and financial results
Oaktree was a newly formed blank-check company seeking a business combination, with an intended focus on industrial and consumer sectors. It had not commenced operations by June 30, 2019. Its activity and expenses related to formation and preparation for its IPO.
- Revenue: None; the company expected no operating revenue before a business combination.
- Net loss: $16,606, consisting of general and administrative expenses. Basic and diluted loss per share was reported as $(0.00).
- Cash flow: No cash at June 30. Net cash used in operating activities was zero, as the loss was offset by accrued expenses and accounts payable.
- Assets and liquidity: $536,322 of deferred offering costs; no cash. Current liabilities were $527,928, including $56,883 advanced by a related party. Shareholders’ equity was $8,394.
- Debt: No working capital loan borrowings were outstanding at June 30.
- Margins and operating cash generation: Not meaningful for this pre-operating company.
Material changes and subsequent events
No comparable prior-year operating period is presented; this was the company’s first reporting period. After quarter-end, on July 22, 2019, Oaktree completed an IPO of 20,125,000 units at $10 each, raising $201.25 million gross, and a private placement of warrants raising approximately $6.03 million gross. It placed $201.25 million in a trust account. Offering costs were approximately $11.8 million, including about $7.04 million of deferred underwriting commissions payable only if a business combination is completed. The underwriters exercised the over-allotment option in full.
Outlook, risks, and contingencies
- Oaktree had 24 months from the July 22, 2019 IPO closing—through July 22, 2021—to complete a business combination. If it did not, it would wind up and redeem public shares under the stated terms.
- There was no assurance a business combination would be completed. A proposed transaction was subject to shareholder redemption rights and other stated conditions.
- The sponsor agreed to cover certain third-party claims that reduce trust funds, subject to exceptions and limitations described in the filing.
- The company agreed to pay its sponsor $10,000 monthly for administrative support beginning with the IPO’s effective date, until a business combination or liquidation.
- Management reported disclosure controls as effective and no material change in internal control over financial reporting during the period. The filing reported no legal proceedings and no material changes to previously disclosed risk factors.
Important facts for an investor to verify
- Confirm the intended issuer: this filing is for Oaktree Acquisition Corp., not Hims & Hers Health, Inc.
- Check the post-quarter IPO and trust-account disclosures against the subsequent filings, including trust restrictions and redemption terms.
- Review the business-combination deadline, sponsor indemnity limitations, deferred underwriting fee, and potential dilution from founder shares and warrants.
- Do not treat this inception-period loss or balance sheet as Hims & Hers operating performance.