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United States securities and exchange commission logo
August 3, 2021
Andrew McBride
Chief Financial Officer
Gores Metropoulos II, Inc.
6260 Lookout Road
Boulder, CO 80301
Re: Gores Metropoulos
II, Inc.
Registration
Statement on Form S-4
Filed July 7, 2021
File No. 333-257726
Dear Mr. McBride:
We have reviewed your 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.
Registration Statement on Form S-4 Filed July 7, 2021
General
1. Please highlight the
material risks to public warrant holders, including those arising from
differences between
private and public warrants, when discussing the interest of certain
persons in the business
combination. Clarify whether recent common stock trading prices
exceed the threshold
that would allow the company to redeem public warrants. Please
also disclose in an
appropriate section the steps, if any, the company will take to notify all
shareholders, including
beneficial owners, regarding when the warrants become eligible
for redemption.
2. We note your
disclosure, including on page 63, that your Public Stockholders will
experience dilution.
Revise your disclosure to show the potential impact of redemptions
on the per share value
of the shares owned by non-redeeming shareholders by including a
Andrew McBride
Gores Metropoulos II, Inc.
August 3, 2021
Page 2
sensitivity analysis showing a range of redemption scenarios,
including the redemption
levels provided on pages 176 and 177, as well as the maximum
redemption allowable
under the Current Company Certificate, given that Sonder may waive the
$500 million
Closing Cash condition. Please also:
Disclose all possible sources and extent of dilution that
shareholders who elect not to
redeem their shares may experience in connection with the
business combination.
Provide disclosure of the impact of each significant source of
dilution, including the
amount of equity held by founders, convertible securities,
including warrants retained
by redeeming shareholders, at each of the redemption levels
detailed in your
sensitivity analysis, including any needed assumptions;
Quantify the value of warrants, based on recent trading prices,
that may be retained
by redeeming stockholders assuming maximum redemptions and
identify any
material resulting risks; and
Revise your disclosure to disclose the effective underwriting
fee on a percentage
basis for shares at each redemption level presented in your
sensitivity analysis related
to dilution. In this regard we note that it appears that
underwriting fees remain
constant and are not adjusted based on redemptions.
Letter to Stockholders of Gores Metropoulos II, Inc., page i
3. Please disclose the estimated number of shares of common stock and
special voting
common stock to be issued in the business combination. See Item 1 of
Form S-4.
Summary
Sonder, page 35
4. Please revise your Summary to disclose Sonder's history of revenues
and net losses since
inception, as well as its accumulated deficit as of a recent date.
Refer to Instruction to
Item 503(a) of Regulation S-K for guidance. Please also quantify
Sonder's history of net
losses on page 63.
The Business Combination
Consideration to Sonder Stockholders in the Business Combination, page 39
5. Briefly summarize the material terms of the earn out, including its
triggers at various price
thresholds for your Common Shares and the period of time that it will be
in effect, as well
as the material impacts on Public Stockholders of the earn out and any
Earn Out Shares.
FirstName LastNameAndrew McBride
Please also disclose the ownership percentages of Public Stockholders
and Sonder
Comapany NameGores
Stockholders Metropoulos
in the II, Inc. Company in the event that all
Earn Out Shares are
Post-Combination
Augustissued.
3, 2021 Page 2
FirstName LastName
Andrew McBride
FirstName LastNameAndrew
Gores Metropoulos II, Inc. McBride
Comapany
August NameGores Metropoulos II, Inc.
3, 2021
August
Page 3 3, 2021 Page 3
FirstName LastName
Sonder Solicitation of Written Consents
Record Date; Sonder Stockholders Entitled to Consent, page 53
6. We note your disclosure that as of April 29, 2021, there were
105,490,345 shares
outstanding of Sonder capital stock eligible to consent with respect
to the Sonder
Proposal. Please either revise or explain as your enumerated list
identifying various
securities which this figure "consist[s] of" indicates there may have
been as many
as 157,468,179 shares outstanding.
Interests of Certain Persons in the Business Combination
Interests of the Company Initial Stockholders and the Company's Other Current
Officers and
Directors, page 54
7. It appears that the sponsor and certain directors may receive
additional securities pursuant
to an antidilution adjustment based on the PIPE Investment. Please
quantify the number
and value of securities the sponsor and certain directors may receive.
In addition, disclose
the ownership percentages in the company before and after the PIPE
Investment to
highlight dilution to public stockholders.
8. Please disclose whether the sponsor and its affiliates can earn a
positive rate of return on
their investment, even if other SPAC shareholders experience a
negative rate of return in
the post-business combination company.
9. Please quantify the aggregate dollar amount and describe the nature of
what the sponsor
and its affiliates have at risk that depends on completion of a
business combination.
Include the current value of securities held, loans extended, fees
due, and out-of-pocket
expenses for which the sponsor and its affiliates are awaiting
reimbursement. Provide
similar disclosure for the company s officers and directors, if
material. Please also
disclose whether you will pay your Sponsor or its affiliates any
finder's fee, consulting
fee, or other compensation in connection with this transaction in
light of your disclosure
on pages 253 and 374.
Risk Factor Summary
Risks Related to the Company and the Business Combination, page 64
10. Please highlight the risk that the sponsor will benefit from the
completion of a business
combination and may be incentivized to complete an acquisition of a
less favorable target
company or on terms less favorable to shareholders rather than
liquidate.
Risk Factors, page 71
11. Disclose the material risks to unaffiliated investors presented by
taking the company
public through a merger rather than an underwritten offering. These
risks could include
the absence of due diligence conducted by an underwriter that would be
subject to liability
for any material misstatements or omissions in a registration
statement.
Andrew McBride
Gores Metropoulos II, Inc.
August 3, 2021
Page 4
The Business Combination
Certain Engagements in Connection with the Business Combination and Related
Transactions,
page 160
12. We note that both Deutsche Bank and Citigroup performed additional
services after the
IPO and part of the IPO underwriting fee was deferred and conditioned
on completion of a
business combination. Please also quantify the aggregate fees payable
to Deutsche Bank
and Citigroup for these additional services after the IPO, for example
in connection with
the Potential Private Placement, and disclose whether they are
contingent on completion
of the business combination.
Certain Financial Projections Provided to Our Board, page 169
13. On page 170 you describe various matters underlying the projections in
which Sonder's
management made significant assumptions with respect to general
business, economic,
market, regulatory and financial conditions. Please explain in more
detail the material
assumptions underlying the projections and the limitations of the
projections. In addition,
disclose whether your projections are in line with historic operating
trends, and if not,
address why the change in trends is appropriate or assumptions are
reasonable. In your
revised disclosure, please discuss how your projections compare to
actual annualized
experience for the quarter ended March 31, 2021.
14. We note that your projections are based on several non-GAAP measures.
Please revise
your disclosure to include a narrative discussion of how each of these
measures are
calculated.
Material U.S. Federal Income Tax Considerations of the Business Combination,
page 183
15. Please revise here and on page 60 to describe the federal income tax
consequences of the
entire transaction, including the merger, and not just the federal
income tax consequences
of redemptions, as the Public Stockholders will be making an
investment decision whether
or not to redeem their shares. See Item 4(a)(6) of Form S-4. In this
regard we note
disclosures throughout your prospectus that the parties only "intend"
the mergers to be
treated as a reorganization within the meaning of Section 368(a) of
the U.S. Tax Code. If
the merger will not be taxable to shareholders, please file a tax
opinion as an exhibit to the
registration statement. For guidance, please see Section III of Staff
Legal Bulletin No. 19,
which is available on our website.
Management of the Company
Conflicts
FirstNameofLastNameAndrew
Interest, page 248McBride
Comapany
16. NameGores
We note Metropoulos
your Current Company II, Certificate
Inc. waived the corporate
opportunities doctrine.
AugustPlease address
3, 2021 Page 4whether it impacted your search for an acquisition target.
FirstName LastName
Andrew McBride
FirstName LastNameAndrew
Gores Metropoulos II, Inc. McBride
Comapany
August NameGores Metropoulos II, Inc.
3, 2021
August
Page 5 3, 2021 Page 5
FirstName LastName
Sonder Management's Discussion and Analysis of Financial Condition and Results
of Operations
Non-GAAP Financial Measures
Adjusted Gross (Loss) Profit and Adjusted Gross Margin, page 303
17. We note your Landlord Payment adjustment is designed to reflect
abatements from real
estate owners at the time it is utilized rather than on a straight
line basis as required by
GAAP. Please tell us how you considered Question 100.04 of the
Non-GAAP
Compliance and Disclosure Interpretations in determining the propriety
of this adjustment.
18. Please tell us the types of expenses included in "operations and
support" in your
condensed consolidated statements of operations and explain to us why
these amounts
have not been included in your calculation of gross profit.
Executive Compensation
Summary Compensation Table, page 332
19. If material, please describe the terms of the COVID-19 related salary
reductions
referenced in footnote (1). Refer to Item 402(o) of Regulation S-K for
guidance.
Description of Securities
Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws
Provisions
Exclusive Forum, page 350
20. We note that the exclusive forum provision in the Amended and Restated
Bylaws attached
as Annex C provides that the federal district courts of the United
States will be the sole
and exclusive forum for the resolution of any complaint asserting a
cause of action arising
under the Securities Act. Please revise here and on page 110 to
address any uncertainty
about enforceability. In this regard we note that Section 22 of the
Securities Act creates
concurrent jurisdiction for federal and state courts over all suits
brought to enforce any
duty or liability created by the Securities Act or the rules and
regulations thereunder.
Beneficial Ownership of Securities
Beneficial Ownership of Company Securities, page 382
21. Please revise your beneficial ownership table to also include the
post-combination special
voting common stock, i.e. all "Post-Combination Company Stock." In
this regard we note
your disclosure on page 340 that the holders of Common Stock and
Special Voting
Common Stock will at all times vote together as one class on all
matters submitted to a
vote of stockholders. We also note that the Sonder Canada Exchangeable
Shares will be
exchangeable for Common Stock upon the completion of the First Merger,
that the
Special Voting Stock enables the holders of Exchangeable Shares to
exercise voting rights
prior to any exchange for Common Stock, and that the Special Voting
Stock must be
redeemed upon the occurrence of an exchange of Exchangeable Shares.
Andrew McBride
Gores Metropoulos II, Inc.
August 3, 2021
Page 6
22. Please disclose the sponsor and its affiliates total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
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.
You may contact William Demarest at (202) 551-3432 or Robert Telewicz
at (202) 551-
3438 if you have questions regarding comments on the financial statements and
related
matters. Please contact Christopher Dunham at (202) 551-3783 or Brigitte
Lippmann at (202)
551-3713 with any other questions.
Sincerely,
FirstName LastNameAndrew McBride
Division of
Corporation Finance
Comapany NameGores Metropoulos II, Inc.
Office of Real
Estate & Construction
August 3, 2021 Page 6
cc: James R. Griffin, Esq.
FirstName LastName