Filing identity and reporting period
Important mismatch: The supplied filing is Oaktree Acquisition Corp.’s Form 10-Q for the quarter ended September 30, 2019—not a filing by Hims & Hers Health, Inc. The figures and disclosures below describe Oaktree, a newly formed blank-check company, and should not be attributed to Hims & Hers.
Oaktree was formed to pursue a business combination, with a stated focus on industrial and consumer sectors. It had not begun operations or generated operating revenue by September 30, 2019. The filing presents results for the three months ended September 30 and, separately, for inception on April 9 through September 30, 2019.
Financial performance and position
- Revenue and profit: No operating revenue. Third-quarter net income was $436,045, comprising $885,983 of trust-account interest income less $449,938 of general and administrative expenses. Inception-to-date net income was $419,439.
- Cash flow: From inception through September 30, operating cash use was $207,200; investing cash use was $201.25 million, reflecting the trust deposit; financing cash provided was $203.24 million. Ending operating cash was $1.78 million.
- Assets and liquidity: Total assets were $204.09 million, including $202.14 million in trust-account cash equivalents and marketable securities. Management reported approximately $922,000 of working capital and said available working capital and potential sponsor borrowing capacity were expected to meet needs through a business combination or one year from the filing.
- Liabilities and debt: Total liabilities were $8.23 million, including $1.04 million of current liabilities, $7.04 million of deferred underwriting commissions, and $150,000 of deferred legal fees. A $61,720 sponsor advance remained unpaid. No working-capital loans or long-term debt were outstanding.
- Margins: Not meaningful because the company had no operating revenue.
Changes, outlook, and risks
- The company completed its IPO on July 22, 2019, issuing 20.125 million units at $10 each for $201.25 million gross proceeds, and raised approximately $6.03 million through a sponsor private placement of warrants. The underwriters fully exercised the over-allotment option.
- Management expected increased public-company compliance and due-diligence costs. It planned to use funds outside the trust for operating expenses and to identify, evaluate, and negotiate a business combination. No specific target or transaction guidance was provided.
- Oaktree generally had 24 months from the IPO closing—through July 22, 2021—to complete a business combination. If it failed, it was required to redeem public shares using trust assets, subject to stated deductions and legal obligations; warrants could expire worthless.
- A transaction had to meet the filing’s trust-asset value and control conditions. Public shareholders could redeem shares, and the sponsor and affiliates were not obligated to provide any potential working-capital loans.
- The filing reported no material changes to previously disclosed risk factors, no legal proceedings, and no off-balance-sheet arrangements. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting.
Most important facts to verify
- Confirm the intended issuer: this filing is for Oaktree Acquisition Corp., not Hims & Hers Health, Inc.
- Verify the company’s business-combination status and applicable deadline; this filing states July 22, 2021.
- Check trust-account balances, redemption terms, and the deferred underwriting commission before assessing funds available for a transaction.
- Review sponsor-related obligations and potential conflicts, including the unpaid sponsor advance, founder shares, and sponsor warrants.