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United States securities and exchange commission logo
July 29, 2020
Trevor Bezdek
Co-Chief Executive Officer
GoodRx Holdings, Inc.
233 Wilshire Blvd., Suite 990
Santa Monica, CA 90401
Re: GoodRx Holdings,
Inc.
Draft Registration
Statement on Form S-1
Submitted July 2,
2020
CIK: 0001809519
Dear Mr. Bezdek:
We have reviewed your draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Summary Consolidated Financial and Operating Data
Non-GAAP Financial Measures, page 15
1. Refer to footnote (1).
Explain to us why it is appropriate to characterize cash bonuses
paid to employees as
financing related expenses.
2. Regarding the cash
bonuses included in adjustments (1) and (2), explain to us why the
exclusion of cash
compensation does not result in a Non-GAAP performance measure that
is misleading. Refer to
the guidance in Question 100.01 of the Division s Non-GAAP
Compliance & Disclosure
Interpretations ( CD&Is ).
Trevor Bezdek
FirstName LastNameTrevor Bezdek
GoodRx Holdings, Inc.
Comapany
July NameGoodRx Holdings, Inc.
29, 2020
July 29,
Page 2 2020 Page 2
FirstName LastName
Risk Factors
"We rely on a limited number of industry participants", page 23
3. You state that your three largest PBM partners accounted for 60% of
your revenue in
2018, 55% of your revenue in 2019 and 50% of your revenue in the first
quarter of 2020.
Please disclose the percentage amount of revenue that is individually
attributable to
Navitus, MedImpact and Optum. Discuss the material terms of your
agreements with
these PBMs, including any termination provisions. Finally, tell us
whether you intend to
file the agreements with the PBMs as exhibits. See Item 601(b)(10) of
Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview, page 76
4. We note the Consumer Cumulative Savings chart highlighting $20
billion+ in consumer
savings. Please revise your disclosure to explain how the amount saved
by consumers
impacts revenue. Specifically, please tell us whether the amount saved
is directly
correlated with the amount of revenue the company generates and
whether there are any
known trends regarding that correlation over the time period
presented.
5. Your contracts with Pharmacy Benefit Managers "provide for fees that
can be a
percentage of the fees that the PBM charges to the pharmacy or a fixed
fee per
transaction." Please quantify the percentage of your prescription
transactions revenue that
is attributable to contracts consisting of fixed fee arrangements
versus percentage of fee
arrangements. Discuss any trends or uncertainties related to your fee
arrangements.
Key Financial and Operating Metrics, page 80
6. Please discuss the extent to which monthly active users, which is
defined as unique
consumers who have used a GoodRx code to purchase a prescription in a
given calendar
month, may be counted more than once when measured on a quarterly
basis. In this
regard, discuss whether returning customers with prescriptions that
extend beyond one
calendar month are counted as a unique consumer in each month they
fill a prescription.
Also discuss how unique consumers with multiple prescriptions are
counted.
7. You state that a survey you conducted indicated that approximately
36%, 36%, 23% and
4% of your consumers had commercial insurance, Medicare, no insurance
and Medicaid,
respectively. Discuss any trends or uncertainties related to the mix
of customers with
public health insurance coverage such as Medicare and Medicaid and
customers with
private health insurance.
8. You disclose that over 80% of transactions for your prescription
offering have come from
repeat activity. Describe how you measure repeat activity and how you
calculated this
statistic. Please tell us what consideration you gave to disclosing
the repeat activity
separately for each fiscal year presented or each quarter for which
you present monthly
active customers.
Trevor Bezdek
GoodRx Holdings, Inc.
July 29, 2020
Page 3
Government Regulation, page 116
9. We note your disclosure that you may use third-party service providers
to collect and
process potentially sensitive customer data. In addition, you disclose
on page 43 that you
rely on third parties for critical aspects of your business. Please
revise your disclosure to
discuss the third party agreements you have and provide the material
terms of those
agreements.
Liquidity and Capital Resources, page 116
10. We note you plan to move to a new facility in Santa Monica by the
fourth quarter 2020. If
material, please discuss the anticipated impact on your future
liquidity and results of
operations.
Certain Relationships and Related Party Transactions, page 139
11. You state that "as a result of this offering, most of the provisions
set forth in the amended
and restated stockholders agreement that apply to us will terminate."
Please revise your
disclosure to specifically state which provisions of the stockholder
agreement will survive
completion of this offering.
Services Agreement, page 140
12. You indicated that you did not pay any management fees to Silver Lake
Management
Company V, L.L.C., or SLMC under your services agreement with them.
Please make
clear whether SLMC rendered any services to you in 2018 and 2019 and
whether any
amounts are due to them or were waived by them.
Principal Stockholders, page 141
13. Please revise to identify the natural persons with voting and/or
dispositive control of the
shares held by Idea Men, LLC.
Financial Statements, page F-1
14. We note in your Explanatory Note that you have omitted your unaudited
financial
statements as of March 31, 2020 and for each of the three months ended
March 31, 2019
and 2020 "because they relate to historical periods that we believe will
not be required to
be included in the prospectus at the time of the contemplated offering."
Note that interim
financial information that will be included in the required financial
information of a longer
FirstName LastNameTrevor Bezdek
historical period, relate to that historical period. Please confirm that
you will include all
Comapany NameGoodRx
financial informationHoldings,
requiredInc.
by Regulation S-X in your first
publically filed registration
July 29,statement.
2020 Page 3
FirstName LastName
Trevor Bezdek
FirstName LastNameTrevor Bezdek
GoodRx Holdings, Inc.
Comapany
July NameGoodRx Holdings, Inc.
29, 2020
July 29,
Page 4 2020 Page 4
FirstName LastName
2. Summary of Significant Accounting Policies
Accounts Receivable and Allowance for Doubtful Accounts, page F-9
15. We note accounts receivable are recorded at the invoiced amount by
various customers
(primarily PBMs), net of an allowance for doubtful accounts. We also
note that the
Company generally invoices the PBMs for fills that occurred in the
preceding month.
Please separately disclose, as a contract asset, unbilled amounts that
you estimate as
revenue in the current month. Refer to ASC 606-10-45-3.
15. Stock-Based Compensation, page F-27
16. Please disclose the nature of any dividend equivalent rights and
indicate the stock awards
to which such rights may accrue. Also clarify your treatment of these
stock awards in the
calculation of earnings per share, in your policy note on page F-15.
We note your
disclosure on page 135.
16. Basic and Diluted Earnings Per Share
Numerator, page F-30
17. Please disclose how you determined the undistributed earnings to
participating securities
and identify the participating securities.
18. Subsequent Events
Events Subsequent to Original Issuance of the Consolidated Financial Statements
(Unaudited),
page F-33
18. Please disclose the fair value and vesting conditions of the options
to purchase 5.6 million
shares of stock granted prior to April 28, 2020. Similarly, disclose
the fair value of the
options to purchase 2.9 million shares of common stock granted between
April 28, 2020
and July 2, 2020. Regarding the stock options to purchase 0.6 million
shares of common
stock that vest upon continued service and the achievement of both
performance and
market conditions, disclose the per share prices necessary for
vesting. Also disclose the
total amount of compensation expense that you anticipate will be
recognized upon your
IPO.
General
19. Please identify the party who produced the commissioned survey that
you reference on
page 105. Provide a consent pursuant to Rule 436 under the Securities
Act.
20. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Trevor Bezdek
GoodRx Holdings, Inc.
July 29, 2020
Page 5
You may contact Kathryn Jacobson, Staff Accountant, at (202) 551-3365
or Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Matthew Derby, Staff
Attorney, at (202) 551-3334 or Jan Woo, Legal branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
FirstName LastNameTrevor Bezdek
Division of
Corporation Finance
Comapany NameGoodRx Holdings, Inc.
Office of Technology
July 29, 2020 Page 5
cc: Benjamin J. Cohen
FirstName LastName