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United States securities and exchange commission logo
January 24, 2023
Len Liptak
Chief Executive Officer
ProSomnus, Inc.
5860 West Las Positas Blvd., Suite 25
Pleasanton, California, 94588
Re: ProSomnus, Inc.
Registration
Statement on Form S-1
Filed January 9,
2023
File No. 333-269156
Dear Len Liptak:
We have limited our review of your registration statement to
those issues we have
addressed in our 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.
Form S-1 filed January 9, 2023
Cover Page
1. For each of the
securities being registered for resale, disclose the price that each of the
selling security
holders paid for such securities.
2. Disclose the exercise
price of the warrants compared to the market price of the underlying
Common Stock. 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 prospective basis with your
current cash on hand.
Len Liptak
FirstName
ProSomnus,LastNameLen Liptak
Inc.
Comapany
January 24,NameProSomnus,
2023 Inc.
January
Page 2 24, 2023 Page 2
FirstName LastName
3. We note the significant number of redemptions of your 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 some
of the shares being
registered for resale were purchased by the selling securityholders
for prices considerably
below the current market price of the Common Stock. Highlight the
significant negative
impact sales of shares on this registration statement could have on
the public trading price
of the Common Stock.
Risk Factors, page 17
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
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. Also disclose that even though the
current trading price
is significantly below the SPAC IPO price, the private investors have
an incentive to sell
because they will still profit on sales because of the lower price
that they purchased their
shares than the public investors.
Management s Discussion and Analysis of Financial Condition and Results of
Operations of
ProSomnus
Proposed Business Combination Transaction, page 58
5. We note your disclosure of the "Proposed Business Combination
Transaction" of
Lakeshore and ProSomnus. We also note your reference to a section
titled "Selected
Historical Combined Financial Information of ProSomnus." Please update
this section to
reflect the current state of your business's operations and financial
position, as your
proposed business combination has been successfully completed.
Overview, page 60
6. In light of the significant number of redemptions and the unlikelihood
that the company
will receive significant proceeds from exercises of the warrants
because of the disparity
between the exercise price of the warrants and the current trading
price of the Common
Stock, expand your discussion of capital resources to address any
changes in the
company s liquidity position since the business combination. We also
note that you will
likely need to raise additional capital through the sale of equity or
borrowings. Please
discuss the effect of this offering on the company s ability to
raise additional capital.
7. Please expand your discussion here 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 HealthpointCapital Partners II, LP, a
beneficial owner of 41.5% of
your outstanding shares, will be able to sell all of its shares for so
long as the registration
statement of which this prospectus forms a part is available for use.
Len Liptak
ProSomnus, Inc.
January 24, 2023
Page 3
Liquidity and Capital Resources, page 65
8. We note your disclosure on pages 66 and 67 of multiple contractual
obligations that are
conditioned "upon completion of a successful business combination" or
"upon completion
of a successful transaction." Please update your disclosure of all of
these obligations now
that the business combination has been completed.
General
9. 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 Sponsor, private placement investors, PIPE
investors and other
selling securityholders acquired their shares and warrants, and the
price that the public
securityholders acquired their shares and warrants. Disclose that
while the Sponsor,
private placement investors, PIPE investors and other 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
disclosure.
10. Please revise to update your disclosures throughout the filing and
address areas that
appear to need updating or that present inconsistencies. Non-exclusive
examples of areas
where disclosure should be updated are as follows:
On page 36, you state that "Following the consummation of the
Business
Combination, we intend to file and maintain an effective
registration statement under
the Securities Act covering such securities. The registration of
these securities will
permit the public resale of such securities. The registration and
availability of such a
significant number of securities for trading in the public market
may have an adverse
FirstName LastNameLen Liptakprice of our securities post-Business
Combination." This
effect on the market
Comapany statement
NameProSomnus,
should beInc.
updated given that this prospectus is
facilitating registration of
January 24,those
2023 sales.
Page 3
FirstName LastName
Len Liptak
FirstName
ProSomnus,LastNameLen Liptak
Inc.
Comapany
January 24,NameProSomnus,
2023 Inc.
January
Page 4 24, 2023 Page 4
FirstName LastName
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.
Please contact Jordan Nimitz at 202-551-5831 or Margaret Schwartz at
202-551-7153
with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Industrial
Applications and
Services
cc: Peter Strand, Esq.