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United States securities and exchange commission logo
September 7, 2021
Andrew McBride
Chief Financial Officer
Gores Metropoulos II, Inc.
6260 Lookout Road
Boulder, CO 80301
Re: Gores Metropoulos
II, Inc.
Amendment No. 1 to
Registration Statement on Form S-4
Filed August 19,
2021
File No. 333-257726
Dear Mr. McBride:
We have reviewed your amended 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.
Unless we note
otherwise, our references to prior comments are to comments in our
August 3, 2021 letter.
Amendment No. 1 to Registration Statement on Form S-4 Filed August 19,
2021
General
1. We reissue comment 2.
Please revise to include a sensitivity analysis in tabular format to
show the potential
impact of redemptions on the per share value of the shares owned by
non-redeeming
shareholders. Your analysis should include a range of redemption
scenarios, including
minimum, maximum and interim redemption levels. Please also
revise your discussion
of any limit on the total number of Public Shares that may be
redeemed to clarify
whether Sonder's ability to waive the $500 million Closing Cash
condition or other
circumstances, including but not limited to additional financing
transactions, might
allow you to redeem more shares than currently contemplated by your
"maximum redemption
scenario." In this regard we note your revised disclosure on page
Andrew McBride
FirstName LastNameAndrew
Gores Metropoulos II, Inc. McBride
Comapany 7,
September NameGores
2021 Metropoulos II, Inc.
September
Page 2 7, 2021 Page 2
FirstName LastName
130 indicating that more than 15 million Public Shares may be
redeemed. If so, revise
throughout your filing to reflect the maximum number of redemptions
allowable under
your Current Company Certificate, e.g. that you retain net tangible
assets in excess of
$5,000,000, and revise all of your references to a "maximum redemption
scenario" in
order to avoid potential investor confusion.
2. Please revise your summary and the dilution risk factor beginning on
page 109 to disclose
the cumulative amount of dilution from all possible sources that
shareholders who elect
not to redeem their shares may experience in connection with the
business combination.
Please also provide disclosure in connection with your tabular
sensitivity analysis 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, including any needed
assumptions.
3. We note your revision on page 111. Please also revise your summary to
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.
4. We note your revision on page 167 that the deferred underwriting fee
may represent up to
approximately 5.25% of the value of the cash remaining in the Trust
Account. Please
revise here and your summary to disclose the maximum aggregate
effective underwriting
fee on a percentage basis for shares at each redemption level
presented in your sensitivity
analysis related to dilution.
Letter to Stockholders of Gores Metropoulos II, Inc., page i
5. We note your revision in response to comment 3. Please revise to
address the apparent
discrepancy between your estimate of 217,666,300 shares of common
stock to be issued in
the business combination, excluding up to 14,500,000 Earn Out Shares
that may be issued
as contingent consideration, and your fee table which registers
243,768,315 shares of
common stock. Please make corresponding revisions with respect to your
special voting
common stock. If you may issue more shares than you currently
estimate, please also
quantify the range of shares that you may issue and disclose the
factors that will impact
the number of shares ultimately issued.
Summary
The Business Combination
Consideration to Sonder Stockholders in the Business Combination, page 40
6. We note your revision in response to comment 5. Please revise the
"Value of Earn Out
Shares" row in your table to reflect the aggregate value of these
shares at the then
applicable triggering event trading price. For example only, at
Triggering Event IV it
appears that the value of Earn Out Shares would be approximately
$198.2 million, not
approximately $161.9 million as currently disclosed. In this regard we
note that multiple
triggering events may be coincident, but that footnote (1) discloses
that these values are
Andrew McBride
Gores Metropoulos II, Inc.
September 7, 2021
Page 3
instead calculated at each successive triggering price. Please
similarly revise to
disclose "Aggregate Company Stock Consideration" and "Aggregate
Consideration"
consistent with the then applicable Common Share Price.
Special Meeting of the Stockholders of the Company...
Redemption Rights, page 144
7. We note your revisions that investors must identify the beneficial
holder of the shares
being redeemed. Please also either delete or revise the requirement
that holders of Public
Shares must "check the box on the enclosed proxy card marked
'Stockholder Certification'
if you are not acting in concert or as a 'group' (as defined in
Section 13d-3 of the
Exchange Act) with any other stockholder with respect to Public
Shares" in order to
properly exercise their redemption rights. In this regard we note that
your form of proxy
card attached as Exhibit 99.1 does not appear to include such a
Stockholder Certification.
We also note that neither your initial public offering, nor your
amended and restated
certificate of incorporation at the time of such offering, appear to
have required investors
to certify they were not acting in concert or as a "group" in order to
properly redeem their
Public Shares.
The Business Combination
Certain Engagements in Connection with the Business Combination..., page 166
8. We note your revision in response to comment 12. Please revise to
quantify the
transaction fee of 0.75% of the anticipated gross proceeds based on
your estimated $200
million PIPE Investment. Please also revise to clarify if both
Deutsche Bank and
Citigroup would each individually be entitled to a $1.5 million fee in
these circumstances,
and/or each at least $1.2 million at a minimum, as it appears. Please
separately disclose
the aggregate co-placement agent fee for all four agents to avoid
investor confusion.
Certain Financial Projections Provided to Our Board
Non-GAAP Measures Used in the Financial Projections, page 177
9. We note your response to our prior comment 14 and the revisions to your
disclosures.
Please clarify for us whether the measures of Adjusted Gross Profit
(Loss), Adjusted
Gross Margin, Property Level Costs, Property Level Profit (Loss) and
Property Level
Profit (Loss) Margin exclude projected costs classified as operations
and support costs in
the consolidated historical Sonder Holdings Inc. financial statements.
To the extent
operations and support costs have been excluded from these measures,
please expand your
FirstName LastNameAndrew McBride
disclosure to highlight the fact these costs have been excluded, their
importance to the
Comapany NameGores
ongoing Metropoulos
operations II, Inc. and the significance of these
costs compared to
of your business,
projected
September revenue
7, 2021 Page 3and profit measures.
FirstName LastName
Andrew McBride
FirstName LastNameAndrew
Gores Metropoulos II, Inc. McBride
Comapany 7,
September NameGores
2021 Metropoulos II, Inc.
September
Page 4 7, 2021 Page 4
FirstName LastName
Material Assumptions Underlying the Financial Projections, page 178
10. Please expand your disclosure to provide more detail regarding each of
the assumptions
and your basis for such assumptions. In your revised disclosure,
please consider
providing the actual assumptions used to prepare your projections
(e.g. number of live
units, contracted units, RevPar).
Sonder Performance for 2021 As Compared to the Financial Projections, page 180
11. We note your disclosure that annualized results for the quarters ended
March 31, 2021 and
June 30, 2021 have outperformed your financial projections. Please
expand your
disclosure to provide more context around this statement and elaborate
on what portions
of operations over or underperformed your financial projections. For
instance, we note
that annualized year over year revenue growth for 2021 has been
approximately 30%
compared to projected revenue growth of 50.6%. Additionally, please
revise your
disclosure to provide more information around how you have made this
comparison given
footnote 2 to your table on page 177 which seems to indicate that
projections were
prepared for three quarters of 2021 and not an entire year.
Material U.S. Federal Income Tax Considerations of the Business Combination,
page 192
12. We note your revisions in response to comment 15 and reissue the
comment. Please
revise here and on page 61 to disclose the material federal income tax
considerations for
Public Stockholders that elect not to redeem their shares. In this
regard we note that your
disclosure on page 199 relates to U.S. Holders of Sonder Stock. Please
also direct
Sonder's counsel to revise its opinion attached as Ex. 8.1 to opine on
the specific tax issue
on which counsel is opining, as a description of law is not
sufficient, as well as to explain
why it cannot give a "will" opinion and to describe the degree of
uncertainty in the
opinion. Refer to Section III of Staff Legal Bulletin No. 19 for
guidance.
Sonder Management's Discussion and Analysis of Financial Condition and Results
of Operations
Non-GAAP Financial Measures
Adjusted Gross Profit (Loss) and Adjusted Gross Margin, page 312
13. We note your response to prior comment 17 and continue to believe that
your Landlord
Payment adjustment results in presenting a non-GAAP measure that
substitutes
individually tailored recognition and measurement methods. Please
revise your non-
GAAP measure to remove this adjustment. Refer to Question 100.04 of
the Non-GAAP
Compliance and Disclosure Interpretations.
14. We note your response to prior comment 18. It appears that costs
related to guest-facing
functions and variable expenses associated with guest units would be
direct costs
necessary to generate revenue. Please clarify why you believe it is
appropriate to exclude
such costs from your calculation of gross profit.
Andrew McBride
FirstName LastNameAndrew
Gores Metropoulos II, Inc. McBride
Comapany 7,
September NameGores
2021 Metropoulos II, Inc.
September
Page 5 7, 2021 Page 5
FirstName LastName
Description of Securities
Warrants
Public Warrants, page 353
15. We note your revisions in response to comment 1. We also note that you
can redeem the
public warrants when the shares of Class A Stock are trading at a
price starting at $10.00.
Please revise to highlight the material risks to public warrant
holders of your ability to
redeem public warrants for Class A stock if the last reported sale
price equals or exceeds
$10.00 per share and clarify whether recent common stock trading
prices exceed this
threshold. Please further revise your discussion on the interest of
certain persons in the
business combination, including on pages 55 and 181, to address the
differences between
private and public warrants and the material risks therefrom. In this
regard we note that
your private warrants are not redeemable and may be exercised on a
"cashless basis,"
whereas public warrants are redeemable and may only be exercised on a
cashless basis if
you call the public warrants for redemption and require any holder to
exercise its public
warrants on a "cashless basis."
Exhibits
16. The consent of Deloitte & Touche LLP filed as Exhibit 23.2 references
their report dated
August 19, 2021, relating to the financial statements of Sonder
Holdings Inc.
However, their report relating to the financial statements of Sonder
Holdings Inc.,
appearing on page F-63 is dated July 6, 2021. Please obtain and file
an updated consent
from Deloitte & Touche LLP to correct for this discrepancy.
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,
Division of
Corporation Finance
Office of Real
Estate & Construction
cc: James R. Griffin, Esq.