Hims & Hers Health, Inc. — Form 8-K Summary
Reporting date: January 20, 2021; filed January 26, 2021. The filing reports completion of the business combination between Oaktree Acquisition Corp. and Hims, Inc. Hims & Hers Health, Inc. became the surviving public company, and its Class A common stock and warrants began trading on the NYSE under HIMS and HIMS WS.
Business Context and Transaction
- Oaktree Acquisition Corp. domesticated from a Cayman Islands company into a Delaware corporation and changed its name to Hims & Hers Health, Inc.
- Rx Merger Sub merged with Hims, Inc., making Hims a wholly owned subsidiary of the public company.
- The transaction was approved by OAC shareholders on January 19, 2021 and closed on January 20, 2021.
- A PIPE investment issued 7.5 million Class A shares at $10.00 per share for aggregate gross proceeds of $75.0 million.
- Approximately $22.0 million of Hims Class A shares were repurchased and cancelled immediately before closing at $4.56 per share.
Capitalization, Financial Metrics and Liquidity
| Metric | Reported information |
|---|---|
| Class A common shares outstanding after closing | 181,487,235 |
| Class V common shares outstanding after closing | 8,377,623 |
| Warrants outstanding after closing | 10,608,958 |
| PIPE gross proceeds | $75.0 million |
| Pre-closing share repurchase | Approximately $22.0 million |
| Revenue, net income/loss, operating margin and cash flow | The filing text does not provide clear current-period values. |
| Debt and liquidity balances | The filing references loan agreements with Silicon Valley Bank and TriplePoint Venture Growth but does not provide clear outstanding balances, interest rates, maturities or liquidity metrics. |
| Dividends | No cash dividends have been paid; management does not anticipate dividends in the foreseeable future. |
The filing incorporates Hims historical financial statements through September 30, 2020 and pro forma information through September 30, 2020, but the supplied text does not reproduce the underlying revenue, profitability, cash flow, margin or balance-sheet data.
Material Changes Versus the Prior Comparable Period
- The company transitioned from a special purpose acquisition company structure to an operating public company.
- OAC’s ordinary shares, units and warrants were converted into New Hims securities.
- The CEO Group received high-vote Class V shares carrying 175 votes per share and approximately 90% of aggregate voting power immediately after closing.
- Former Hims equity awards and warrants were assumed or converted into comparable New Hims awards and warrants.
- Up to 16 million earn-out shares or equivalent awards were issued, subject to stock-price or sale-related vesting conditions.
- New Hims became a controlled company under NYSE rules and is not required to maintain a majority-independent board or an independent nominating function.
- KPMG was appointed as the independent registered public accounting firm for New Hims, replacing Withum, which had audited OAC.
Guidance, Outlook, Commentary and Risks
- The filing does not provide quantitative revenue, earnings or cash-flow guidance.
- Management identifies potential growth opportunities, including expansion into women’s health and other markets, but these statements are forward-looking and not quantified in the filing.
- Key risks include the limited operating history of New Hims, significant healthcare and governmental regulation, competitive and economic conditions, COVID-19 effects, execution of the business combination, transaction costs, legal proceedings and the ability to realize projected financial and market opportunities.
- The CEO Group’s approximately 90% voting control creates significant concentration of voting power and limits the influence of other shareholders.
- The company entered into indemnification agreements and executive change-in-control and severance arrangements. In specified circumstances, these arrangements may require salary, bonus, benefits and accelerated equity vesting payments.
- The Share Exchange Agreement provides tax-related indemnification to the CEO Group if the exchange is not treated as tax-free.
Most Important Facts for Investors to Verify
- Review the incorporated Hims historical financial statements and pro forma financial information for actual revenue, losses, cash flows, margins, debt and liquidity.
- Confirm the final post-closing capitalization, including earn-out shares, options, restricted stock units and warrants on a fully diluted basis.
- Assess the impact of the dual-class structure and the CEO Group’s approximately 90% voting control.
- Review the terms, covenants and balances under the Silicon Valley Bank and TriplePoint loan agreements.
- Evaluate the dilution and potential vesting obligations associated with the 16 million earn-out shares and executive equity awards.
- Review the incorporated risk factors, regulatory disclosures and any legal proceedings affecting the telehealth and healthcare businesses.
- Confirm the final accounting treatment of the merger, PIPE investment, share repurchase and transaction-related costs in subsequent financial filings.