424B3 1 d47481d424b3.htm 424B3 424B3
Table of Contents

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-249622

 

PROXY STATEMENT FOR

EXTRAORDINARY GENERAL MEETING OF OAKTREE ACQUISITION CORP.

PROSPECTUS FOR

33,619,270 SHARES OF CLASS A COMMON STOCK AND 9,720,833 WARRANTS OF OAKTREE ACQUISITION CORP. (AFTER ITS DOMESTICATION AS A CORPORATION INCORPORATED IN THE STATE OF DELAWARE, WHICH WILL BE RENAMED HIMS & HERS HEALTH, INC. IN CONNECTION WITH THE DOMESTICATION DESCRIBED HEREIN)

 

 

The board of directors of Oaktree Acquisition Corp., a Cayman Islands exempted company (“OAC”), has unanimously approved the transactions (collectively, the “Business Combination”) contemplated by that certain Agreement and Plan of Merger, dated September 30, 2020 (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among OAC, Rx Merger Sub, Inc., a Delaware corporation (“OAC Merger Sub”), and Hims, Inc., a Delaware corporation (“Hims”), a copy of which is attached to this proxy statement/prospectus as Annex A, including the domestication of OAC as a Delaware corporation (the “Domestication”). As described in this proxy statement/prospectus, OAC’s shareholders are being asked to consider a vote upon each of the Domestication and the Business Combination, among other items. As used in this proxy statement/prospectus, “New Hims” refers to OAC after giving effect to the consummation of the Domestication and the Business Combination.

In connection with the Domestication, on the Closing Date prior to the Effective Time (as defined below): (i) each issued and outstanding Class A ordinary share, par value $0.0001 per share (the “Class A ordinary shares”), and each issued and outstanding Class B ordinary share, par value $0.0001 per share (the “Class B ordinary shares”), of OAC will be converted into one share of Class A common stock, par value $0.0001 per share, of New Hims (the “New Hims Class A Common Stock”); (ii) each issued and outstanding whole warrant to purchase Class A ordinary shares of OAC will automatically represent the right to purchase one share of New Hims Class A Common Stock at an exercise price of $11.50 per share on the terms and conditions set forth in the warrant agreement, dated July 22, 2019, between OAC and Continental Stock Transfer & Trust Company, as warrant agent (the “OAC Warrant Agreement”); (iii) the governing documents of OAC will be amended and restated and become the certificate of incorporation and the bylaws of New Hims, copies of which are attached to this proxy statement/prospectus as Annex C and Annex D, respectively; and (iv) OAC’s name will change to “Hims & Hers Health, Inc.” In connection with clauses (i) and (ii) of this paragraph, each issued and outstanding unit of OAC that has not been previously separated into the underlying Class A ordinary shares of OAC and the underlying warrants of OAC prior to the Domestication will be cancelled and will entitle the holder thereof to one share of New Hims Class A Common Stock and one-third of one warrant representing the right to purchase one share of New Hims Class A Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions set forth in the OAC Warrant Agreement.

At the closing of the Business Combination (the “Closing”), promptly following the consummation of the Domestication and the Hims Recapitalization (as defined below), OAC Merger Sub will merge with and into Hims (the “Merger”), with Hims as the surviving company in the Merger and, after giving effect to the Merger, Hims will be a wholly-owned subsidiary of New Hims (the time that the Merger becomes effective being referred to as the “Effective Time”).

Immediately prior to the Effective Time, each share of Hims preferred stock and Hims Class F common stock will convert into Hims Class A common stock at the applicable then-effective conversion rate (the “Hims Recapitalization”). In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, based on an implied equity value of $1.6 billion, less up to $75 million of cash consideration to Hims stockholders at Hims’ election, plus the aggregate strike price of all Hims options and warrants outstanding and unexercised as of immediately prior to the Effective Time, (i) each share of Hims Class A Common Stock and Class V common stock, par value $0.000001, of Hims (“Hims Class V Common Stock”) and Hims restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised


Table of Contents

of New Hims Class A Common Stock (or, solely with respect to the Hims Class V Common Stock, New Hims Class V Common Stock (as defined below)), Earn Out Shares (as defined below) and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the Closing and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims equityholder will receive its applicable portion of the 16 million restricted shares of New Hims Class A Common Stock (or equivalent equity awards) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period on or prior to the date that is five years following the Effective Time and will also vest in connection with any Company Sale (as defined in the Merger Agreement) if the applicable thresholds are met in such Company Sale but subject to the same five-year deadline (the “Earn Out Shares”).

Subject to approval by OAC’s shareholders of the proposal to approve and adopt the Merger Agreement, the proposal to approve the change of OAC’s jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware and the proposals to approve material differences between OAC’s existing amended and restated memorandum and articles of association and the proposed new certificate of incorporation of New Hims and the proposed new bylaws of New Hims upon the Domestication, New Hims will adopt a dual class stock structure comparable to the one that will be in effect at Hims immediately prior to the Closing following the Hims Recapitalization, comprised of New Hims Class A Common Stock, which will carry one vote per share, and Class V common stock, par value $0.0001 per share, of New Hims, which will carry 175 votes per share (the “New Hims Class V Common Stock”). Upon the Closing, all stockholders of New Hims will hold only shares of New Hims Class A Common Stock, except for Andrew Dudum, the Chief Executive Officer and Co-Founder of Hims, including his affiliates and permitted transferees, who will hold shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock. Immediately following the Closing, and by virtue of his holdings of New Hims Class A Common Stock and New Hims Class V Common Stock, Mr. Dudum is expected to hold, directly or indirectly, approximately 90% of the voting power of the capital stock of New Hims on a fully-diluted basis. The New Hims Class V Common Stock will be entitled to dividends and will rank equally to the New Hims Class A Common Stock upon any liquidation. The New Hims Class V Common Stock is also subject to a “sunset” and conversion to New Hims Class A Common Stock if Mr. Dudum no longer (i) serves as the Chief Executive Officer of New Hims or in a board role, or (ii) transfers any shares of New Hims Class V Common Stock (except for permitted transfers). Upon conversion, each share of New Hims Class V Common Stock will convert into one share of New Hims Class A Common Stock. See “Description of New Hims Securities—Common Stock—New Hims Class V Common Stock—Mandatory Conversion.

This prospectus covers 33,619,270 shares of New Hims Class A Common Stock and 9,720,833 warrants to acquire shares of New Hims Class A Common Stock to be issued in connection with the Domestication, assuming that Oaktree Acquisition Holdings, L.P. (the “Sponsor”) surrenders and forfeits 25.0% of the Class B ordinary shares of OAC and 25.0% of the private placement warrants of OAC pursuant to the Sponsor Agreement, dated September 30, 2020, between OAC, the Sponsor and Hims, and a number of securities equal to such surrendered and forfeited Class B ordinary shares and private placement warrants is being issued to the equityholders of Hims as New Hims Class A Common Stock (or equivalent equity awards in respect thereof) and warrants to acquire shares of New Hims Class A Common Stock (or equivalent equity awards in respect thereof) in the Business Combination. The number of shares of New Hims Class A Common Stock that this prospectus covers represents the shares issued or issuable to the existing shareholders and warrant holders of OAC in connection with the Business Combination.

OAC’s units, public shares and public warrants are currently listed on the New York Stock Exchange (“NYSE”) under the symbols “OAC.U,” “OAC” and “OAC WS,” respectively. OAC will apply for listing, to be effective at the time of the Business Combination, of New Hims Class A Common Stock and warrants on the NYSE under the proposed symbols “HIMS” and “HIMS WS,” respectively. It is a condition of the consummation of the Business Combination that OAC receive confirmation from the NYSE that New Hims


Table of Contents

Class A Common Stock has been conditionally approved for listing on the NYSE, but there can be no assurance such listing condition will be met or that OAC will obtain such confirmation from the NYSE. If such listing condition is not met or if such confirmation is not obtained, the Business Combination will not be consummated unless the NYSE condition set forth in the Merger Agreement is waived by the applicable parties.

 

 

The accompanying proxy statement/prospectus provides shareholders of OAC with detailed information about the Business Combination and other matters to be considered at the extraordinary general meeting of OAC. We encourage you to read the entire accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 37 of the accompanying proxy statement/prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated December 29, 2020, and

is first being mailed to OAC’s shareholders on or about December 29, 2020.


Table of Contents

OAKTREE ACQUISITION CORP.

333 South Grand Avenue

28th Floor

Los Angeles, California 90071

Dear Oaktree Acquisition Corp. Shareholders:

You are cordially invited to attend the extraordinary general meeting (the “extraordinary general meeting”) of Oaktree Acquisition Corp., a Cayman Islands exempted company (“OAC”), at 9:00 a.m., Eastern Time, on January 19, 2021, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

As further described in the accompanying proxy statement/prospectus, in connection with the Domestication (as defined below), on the date of the closing of the Business Combination (as defined below) (the “Closing Date”) prior to the Effective Time (as defined below), among other things, (i) OAC will change its name to “Hims & Hers Health, Inc.,” (ii) all of the outstanding shares of OAC will be converted into common stock of a new Delaware corporation and all of the outstanding OAC warrants will be converted into warrants to purchase common stock of a new Delaware corporation, and (iii) the governing documents of OAC will be amended and restated. As used in the accompanying proxy statement/prospectus, “New Hims” refers to OAC after giving effect to the Domestication and the transactions contemplated by that certain Merger Agreement (as defined below) (collectively, the “Business Combination”).

At the extraordinary general meeting, OAC shareholders will be asked to consider and vote upon a proposal, which is referred to herein as the “Business Combination Proposal” to approve and adopt the Agreement and Plan of Merger, dated as of September 30, 2020 (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among OAC, Rx Merger Sub, Inc., a Delaware corporation (“OAC Merger Sub”), and Hims, Inc., a Delaware corporation (“Hims”), including the transactions contemplated thereby. A copy of the Merger Agreement is attached to the accompanying proxy statement/prospectus as Annex A.

As further described in the accompanying proxy statement/prospectus, subject to the terms and conditions of the Merger Agreement, the following transactions will occur:

 

  (a)

Pursuant to the Sponsor Agreement between OAC, Oaktree Acquisition Holdings, L.P. (the “Sponsor”) and Hims (the “Sponsor Agreement”), the Sponsor will surrender and forfeit for no consideration to OAC 25.0% of the Class B ordinary shares of OAC (the “Class B ordinary shares”) and 25.0% of the private placement warrants of OAC. A number of securities equal to such surrendered and forfeited Class B ordinary shares and private placement warrants is being issued to the equityholders of Hims (the “Hims Equityholders”) as shares of Class A common stock, par value $0.0001 per share, of New Hims (the “New Hims Class A Common Stock”) (or equivalent equity awards in respect thereof) and warrants to acquire shares of New Hims Class A Common Stock (or equivalent equity awards in respect thereof) in the Business Combination.

 

  (b)

On the Closing Date, prior to the time at which the Merger (as defined below) becomes effective (the “Effective Time”), OAC will change its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which OAC will change its name to “Hims & Hers Health, Inc.” (“New Hims”) (for further details, see “Proposal No. 2—The Domestication Proposal”).

 

  (c)

At the Effective Time, OAC Merger Sub will merge with and into Hims (the “Merger”), with Hims as the surviving company in the Merger and, after giving effect to such Merger, Hims shall be a wholly-owned subsidiary of New Hims. Immediately prior to the Effective Time, each share of Hims preferred stock and Hims Class F common stock will convert into Hims Class A common stock at the applicable then-effective conversion rate (the “Hims Recapitalization”). In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, based on an implied equity value of


Table of Contents
  $1.6 billion, minus up to $75 million of cash consideration to Hims stockholders at Hims’ election, plus the aggregate strike price of all Hims options and warrants outstanding and unexercised as of immediately prior to the Effective Time, (i) each share of Hims Class A Common Stock and Hims Class V Common Stock and Hims restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Hims Class A Common Stock (or, solely with respect to the Hims Class V Common Stock, New Hims Class V Common Stock), Earn Out Shares (as defined below) and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the closing of the Business Combination (the “Closing”) and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million restricted shares of New Hims Class A Common Stock (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period on or prior to the date that is five years following the Effective Time and will also vest in connection with any Company Sale (as defined in the Merger Agreement) if the applicable thresholds are met in such Company Sale but subject to the same five-year deadline (the “Earn Out Shares”).

In connection with the foregoing and concurrently with the execution of the Merger Agreement, OAC entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to subscribe for and purchase, and OAC has agreed to issue and sell to the PIPE Investors, an aggregate of 7,500,000 shares of New Hims Class A Common Stock at a price of $10.00 per share, for aggregate gross proceeds of $75,000,000 (the “PIPE Financing”). The shares of New Hims Class A Common Stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. OAC will grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the substantially concurrent closing of the Business Combination.

You will also be asked to consider and vote upon (a) a proposal to approve the Domestication, which is referred to herein as the “Domestication Proposal,” (b) six (6) separate proposals to approve material differences between OAC’s existing amended and restated memorandum and articles of association (the “Existing Governing Documents”) and the proposed new certificate of incorporation of New Hims and the proposed new bylaws of New Hims upon the Domestication, copies of which are attached to the accompanying proxy statement/prospectus as Annexes C and D, respectively, and which are referred to herein collectively as the “Governing Documents Proposals,” certain of which are required in order to consummate the Business Combination, which are referred to herein collectively as the “Required Governing Documents Proposals,” (c) a proposal to approve, for purpose of complying with NYSE Listing Rule 312.03, the issuance of New Hims Class A Common Stock and New Hims Class V Common Stock (as defined below) in connection with the Business Combination and the PIPE Financing, which is referred to herein as the “NYSE Proposal,” (d) a proposal to approve and adopt the Hims & Hers Health, Inc. 2020 Equity Incentive Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex J, and which is referred to herein as the “Incentive Equity Plan Proposal,” (e) a proposal to approve and adopt the Hims & Hers Health, Inc. 2020 Employee Stock Purchase Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex K, and which is referred to herein as the “Employee Stock Purchase Plan Proposal,” and (f) a proposal to adjourn the extraordinary general meeting to a later date or dates to the extent necessary, which is referred to herein as the “Adjournment Proposal.”


Table of Contents

The Business Combination will be consummated only if the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals and the NYSE Proposal (collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. The Governing Documents Proposals that are not Required Governing Documents Proposals, the Incentive Equity Plan Proposal and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.

The Adjournment Proposal provides for a vote to adjourn the extraordinary general meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to OAC shareholders, (B) in order to solicit additional proxies from OAC shareholders in favor of one or more of the proposals at the extraordinary general meeting or (C) if OAC shareholders redeem an amount of the public shares such that the condition to consummation of the Business Combination that the aggregate cash in the trust account, together with the aggregate gross proceeds from the PIPE Financing, equal no less than $200,000,000 after deducting any amounts paid to OAC shareholders that exercise their redemption rights in connection with the Business Combination would not be satisfied (such aggregate cash, the “Available Cash,” and such condition to the consummation of the Business Combination, the “Minimum Available Cash Condition”).

In connection with the Business Combination, certain related agreements have been, or will be entered into on or prior to the Closing, including the Sponsor Agreement, Subscription Agreements, Hims Stockholder Support Agreements, the Sponsor Registration Rights Agreement and the Amended and Restated Investors’ Rights Agreement (as defined in the accompanying proxy statement/prospectus). See “Business Combination Proposal—Related Agreements” in the accompanying proxy statement/prospectus for more information.

Subject to approval by OAC’s shareholders of the Business Combination Proposal, the Domestication Proposal and the Required Governing Documents Proposals, New Hims will adopt a dual class stock structure comparable to the one that will be in effect at Hims immediately prior to the Closing following the Hims Recapitalization, comprised of New Hims Class A Common Stock, which will carry one vote per share, and Class V common stock, par value $0.0001 per share, of New Hims (the “New Hims Class V Common Stock”), which will carry 175 votes per share. Upon the Closing, all stockholders of New Hims will hold only shares of New Hims Class A Common Stock, except for Andrew Dudum, the Chief Executive Officer and Co-Founder of Hims, including his affiliates and permitted transferees, who will hold shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock. Immediately following the Closing, and by virtue of his holdings of New Hims Class A Common Stock and New Hims Class V Common Stock, Mr. Dudum is expected to hold, directly or indirectly, approximately 90% of the voting power of the capital stock of New Hims on a fully-diluted basis. The New Hims Class V Common Stock will be entitled to dividends and will rank equally to the New Hims Class A Common Stock upon any liquidation. The New Hims Class V Common Stock is also subject to a “sunset” and conversion to New Hims Class A Common Stock if Mr. Dudum no longer (i) serves as Chief Executive Officer of New Hims or in a board role, or (ii) transfers any shares of New Hims Class V Common Stock (except for permitted transfers). Upon conversion, each share of New Hims Class V Common Stock will convert into one share of New Hims Class A Common Stock. See “Description of New Hims Securities—Common Stock—New Hims Class V Common Stock—Mandatory Conversion.

Pursuant to the Existing Governing Documents, a holder of OAC’s public shares (a “public shareholder”) may request that OAC redeem all or a portion of such public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company (“Continental”), OAC’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem


Table of Contents

its shares. Public shareholders may elect to redeem their public shares even if they vote “for” the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, New Hims will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of OAC’s initial public offering, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of December 24, 2020, this would have amounted to approximately $10.16 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares of New Hims Class A Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of OAC—Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash and such excess public shares would be converted into the merger consideration in connection with the Business Combination.

The Sponsor has, pursuant to the Sponsor Agreement, agreed to, among other things, vote all of its ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive its anti-dilution rights with respect to its Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Agreement.

The Merger Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement. In addition, in no event will OAC redeem public shares in an amount that would cause New Hims’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

OAC is providing the accompanying proxy statement/prospectus and accompanying proxy card to OAC’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general meeting, the Business Combination and other related business to be considered by OAC’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting, all of OAC’s shareholders are urged to read the accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors beginning on page 37 of the accompanying proxy statement/prospectus.

After careful consideration, the board of directors of OAC has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and unanimously recommends that shareholders vote “FOR” the adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Merger, and “FOR” all other proposals presented to OAC’s shareholders in the accompanying proxy statement/prospectus. When you consider the


Table of Contents

recommendation of these proposals by the board of directors of OAC, you should keep in mind that OAC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of OAC’s Directors and Executive Officers in the Business Combination” in the accompanying proxy statement/prospectus for a further discussion of these considerations.

The approval of each of the Domestication Proposal, the Governing Documents Proposal A, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D, the Governing Documents Proposal E, and the Governing Documents Proposal F (each as defined in the accompanying proxy statement/prospectus) requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. The approval of each of the Business Combination Proposal, the NYSE Proposal, the Incentive Equity Plan Proposal, the Employee Stock Purchase Plan Proposal, and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Governing Documents Proposals that are not Required Governing Documents Proposals, the Incentive Equity Plan Proposal and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO OAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.


Table of Contents

On behalf of OAC’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

 

Sincerely,

LOGO

 

John Frank
Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated December 29, 2020 and is first being mailed to shareholders on or about December 29, 2020.

 


Table of Contents

OAKTREE ACQUISITION CORP.

333 South Grand Avenue

28th Floor

Los Angeles, California 90071

NOTICE OF EXTRAORDINARY GENERAL MEETING

TO BE HELD ON JANUARY 19, 2021

TO THE SHAREHOLDERS OF OAKTREE ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders (the “extraordinary general meeting”) of Oaktree Acquisition Corp., a Cayman Islands exempted company (“OAC”), will be held at 9:00 a.m., Eastern Time, on January 19, 2021, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

 

   

Proposal No. 1—The Business Combination ProposalRESOLVED, as an ordinary resolution, that OAC’s entry into the Agreement and Plan of Merger, dated as of September 30, 2020 (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among OAC, Rx Merger Sub, Inc., a Delaware corporation (“OAC Merger Sub”), and Hims, Inc., a Delaware corporation (“Hims”), a copy of which is attached to the proxy statement/prospectus as Annex A, pursuant to which, among other things, following the conversion of each share of Hims preferred stock and Hims Class F common stock into Hims Class A common stock at the applicable then-effective conversion rate (the “Hims Recapitalization”) and the de-registration of OAC as an exempted company in the Cayman Islands and the continuation and domestication of OAC as a corporation in the State of Delaware with the name “Hims & Hers Health, Inc.,” (a) OAC Merger Sub will merge with and into Hims (the “Merger”), with Hims as the surviving company in the Merger and, after giving effect to such Merger, Hims shall be a wholly-owned subsidiary of OAC, and (b) (i) each share of Hims common stock and restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of shares of Class A common stock, par value $0.0001 per share, of New Hims (the “New Hims Class A Common Stock”), Earn Out Shares (as defined below) and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the Closing and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million restricted shares of New Hims Class A Common Stock (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period on or prior to the date that is five years following the Effective Time and will also vest in connection with any Company Sale (as defined in the Merger Agreement) if the applicable thresholds are met in such Company Sale but subject to the same five-year deadline (the “Earn Out Shares”), in each case, on the terms and subject to the conditions set forth in the Merger Agreement, and certain related agreements (including the Sponsor Agreement, the form of Subscription Agreements, the form of Hims Stockholder Support Agreements, the Sponsor Registration Rights Agreement, and the Amended and Restated Investors’ Rights Agreement, each in the form attached to the proxy statement/prospectus as Annex E, Annex F, Annex G, Annex H, and Annex I, respectively), and the transactions contemplated thereby, be approved, ratified and confirmed in all respects.


Table of Contents
   

Proposal No. 2—The Domestication ProposalRESOLVED, as a special resolution, that OAC be transferred by way of continuation to Delaware pursuant to Part XII of the Companies Law (as amended) of the Cayman Islands and Section 388 of the General Corporation Law of the State of Delaware (“DGCL”) and, immediately upon being de-registered in the Cayman Islands, OAC be continued and domesticated as a corporation under the laws of the State of Delaware and, conditioned upon, and with effect from, the registration of OAC as a corporation in the State of Delaware, the name of OAC be changed from “Oaktree Acquisition Corp.” to “Hims & Hers Health, Inc.” be approved.

 

   

Governing Documents Proposals—to consider and vote upon the following six (6) separate resolutions to approve that, upon the Domestication, the existing amended and restated memorandum and articles of association of OAC (“Existing Governing Documents”) be amended and restated by the deletion in their entirety and the substitution in their place of the proposed new certificate of incorporation, a copy of which is attached to the proxy statement/prospectus as Annex C (the “Proposed Certificate of Incorporation”) and the proposed new bylaws, a copy of which is attached to the proxy statement/prospectus as Annex D (the “Proposed Bylaws”) of “Hims & Hers Health, Inc.” upon the Domestication (such proposals, collectively, the “Governing Documents Proposals”):

 

   

Proposal No. 3—Governing Documents Proposal A—RESOLVED, as a special resolution, that the change in the authorized share capital of OAC from US$55,100 divided into (i) 500,000,000 Class A ordinary shares, par value $0.0001 per share, (ii) 50,000,000 Class B ordinary shares, par value $0.0001 per share, and (iii) 1,000,000 preference shares, par value $0.0001 per share, to (a) 2,750,000,000 shares of New Hims Class A Common Stock, (b) 10,000,000 shares of Class V common stock, par value $0.0001 per share, of New Hims (the “New Hims Class V Common Stock”) and (c) 275,000,000 shares of preferred stock, par value $0.0001 per share, of New Hims (the “New Hims Preferred Stock”) be approved.

 

   

Proposal No. 4—Governing Documents Proposal B—RESOLVED, as a special resolution, that the authorization to the New Hims Board to issue any or all shares of New Hims Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New Hims Board and as may be permitted by the DGCL be approved.

 

   

Proposal No. 5—Governing Documents Proposal C—RESOLVED, as a special resolution, that the removal of the ability of New Hims stockholders to take action by written consent in lieu of a meeting from and after the time that Mr. Dudum and his affiliates and permitted transferees no longer beneficially own a majority of the voting power of the then-outstanding shares of capital stock of New Hims be approved.

 

   

Proposal No. 6—Governing Documents Proposal D—RESOLVED, as a special resolution, that the amendment and restatement of the Existing Governing Documents be approved and that all other changes necessary or, as mutually agreed in good faith by OAC and Hims, desirable in connection with the replacement of Existing Governing Documents with the Proposed Certificate of Incorporation and Proposed Bylaws as part of the Domestication (copies of which are attached to the accompanying proxy statement/prospectus as Annex C and Annex D, respectively), including (i) changing the post-Business Combination corporate name from “Oaktree Acquisition Corp.” to “Hims & Hers Health, Inc.” (which is expected to occur upon the consummation of the Domestication), (ii) making New Hims’ corporate existence perpetual, (iii) adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act of 1933, as amended, (iv) electing to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested stockholders and (v) removing certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination be approved.

 

   

Proposal No. 7—Governing Documents Proposal E—RESOLVED, as a special resolution, that the issuance of shares of New Hims Class V Common Stock, which will allow holders of


Table of Contents
 

New Hims Class V Common Stock to cast 175 votes per share of New Hims Class V Common Stock be approved.

 

   

Proposal No. 8—Governing Documents Proposal F—RESOLVED, as a special resolution, that the amendment of the Existing Governing Documents so as to declassify New Hims’ board of directors for so long as Mr. Dudum and his affiliates and permitted transferees beneficially own shares of New Hims Class V Common Stock and such shares have not converted into shares of New Hims Class A Common Stock in accordance with the Proposed Certificate of Incorporation be approved.

 

   

Proposal No. 9—The NYSE ProposalRESOLVED, as an ordinary resolution, that for the purposes of complying with the applicable provisions of NYSE Listing Rule 312.03, the issuance of shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock be approved.

 

   

Proposal No. 10—The Incentive Equity Plan ProposalRESOLVED, as an ordinary resolution, that the Hims & Hers Health, Inc. 2020 Equity Incentive Plan, a copy of which is attached to the proxy statement/prospectus as Annex J, be adopted and approved.

 

   

Proposal No. 11—The Employee Stock Purchase Plan ProposalRESOLVED, as an ordinary resolution, that the Hims & Hers Health, Inc. 2020 Employee Stock Purchase Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex K, be approved.

 

   

Proposal No. 12—The Adjournment ProposalRESOLVED, as an ordinary resolution, that the adjournment of the extraordinary general meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to OAC shareholders, (B) in order to solicit additional proxies from OAC shareholders in favor of one or more of the proposals at the extraordinary general meeting or (C) if OAC shareholders redeem an amount of the public shares such that the condition to consummation of the Business Combination that the aggregate cash in the trust account, together with the aggregate gross proceeds from the PIPE Financing, equal no less than $200,000,000 after deducting any amounts paid to OAC shareholders that exercise their redemption rights in connection with the Business Combination would not be satisfied, at the extraordinary general meeting be approved.

Each of the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals and the NYSE Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals (as defined below). The Governing Documents Proposals that are not Required Governing Documents Proposals, the Incentive Equity Plan Proposal and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on any other proposal.

These items of business are described in the accompanying proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting.

Only holders of record of ordinary shares at the close of business on December 4, 2020 are entitled to notice of and to vote and have their votes counted at the extraordinary general meeting and any adjournment of the extraordinary general meeting.

The accompanying proxy statement/prospectus and accompanying proxy card is being provided to OAC’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to attend the extraordinary general meeting, all of OAC’s shareholders are urged to read the accompanying proxy statement/prospectus, including the Annexes and the documents referred to herein carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 37 of the accompanying proxy statement/prospectus.

After careful consideration, the board of directors of OAC has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and unanimously


Table of Contents

recommends that shareholders vote “FOR” the adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Merger, and “FOR” all other proposals presented to OAC’s shareholders in the accompanying proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of OAC, you should keep in mind that OAC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of OAC’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.

Pursuant to the Existing Governing Documents, a public shareholder may request of OAC that New Hims redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental, OAC’s transfer agent, in which you (a) request that New Hims redeem all or a portion of your public shares for cash, and (b) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

 

  (iii)

deliver your public shares to Continental, OAC’s transfer agent, physically or electronically through The Depository Trust Company.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on January 14, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental, OAC’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders may elect to redeem public shares regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, OAC’s transfer agent, New Hims will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of OAC’s initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of December 24, 2020, this would have amounted to approximately $10.16 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares of New Hims Class A Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of OAC—Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash and such excess public shares would be converted into the merger consideration in connection with the Business Combination.


Table of Contents

The Sponsor has, pursuant to the Sponsor Agreement, agreed to, among other things, vote all of its ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive its anti-dilution rights with respect to its Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Agreement.

The Merger Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement. In addition, in no event will OAC redeem public shares in an amount that would cause New Hims’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

The approval of each of the Domestication Proposal, the Governing Documents Proposal A, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D, the Governing Documents Proposal E, and the Governing Documents Proposal F requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. The approval of each of the Business Combination Proposal, the NYSE Proposal, the Incentive Equity Plan Proposal, the Employee Stock Purchase Plan Proposal, and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Governing Documents Proposals that are not Required Governing Documents Proposals, the Incentive Equity Plan Proposal and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Your attention is directed to the remainder of the accompanying proxy statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read the accompanying proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your ordinary shares, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing OAC.info@investor.morrowsodali.com.


Table of Contents

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of Oaktree Acquisition Corp.

 

LOGO

John Frank

Chairman of the Board of Directors

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO OAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.


Table of Contents

TABLE OF CONTENTS

 

     Page  

ADDITIONAL INFORMATION

     ii  

TRADEMARKS

     ii  

SELECTED DEFINITIONS

     iii  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     viii  

QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF OAC

     x  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     1  

RISK FACTORS

     37  

EXTRAORDINARY GENERAL MEETING OF OAC

     90  

BUSINESS COMBINATION PROPOSAL

     97  

DOMESTICATION PROPOSAL

     126  

GOVERNING DOCUMENTS PROPOSALS

     129  

GOVERNING DOCUMENTS PROPOSAL A—APPROVAL OF AUTHORIZATION OF CHANGE TO AUTHORIZED SHARE CAPITAL, AS SET FORTH IN THE PROPOSED GOVERNING DOCUMENTS

     133  

GOVERNING DOCUMENTS PROPOSAL B—APPROVAL OF PROPOSAL REGARDING ISSUANCE OF PREFERRED STOCK OF NEW HIMS AT THE BOARD OF DIRECTORS’ SOLE DISCRETION, AS SET FORTH IN THE PROPOSED GOVERNING DOCUMENTS

     136  

GOVERNING DOCUMENTS PROPOSAL C—APPROVAL OF PROPOSAL REGARDING THE ABILITY OF STOCKHOLDERS TO ACT BY WRITTEN CONSENT, AS SET FORTH IN THE PROPOSED GOVERNING DOCUMENTS

     138  

GOVERNING DOCUMENTS PROPOSAL D—APPROVAL OF OTHER CHANGES IN CONNECTION WITH ADOPTION OF THE PROPOSED GOVERNING DOCUMENTS

     140  

GOVERNING DOCUMENTS PROPOSAL E—APPROVAL OF DUAL CLASS STRUCTURE

     144  

GOVERNING DOCUMENTS PROPOSAL F—APPROVAL OF DECLASSIFICATION OF NEW HIMS BOARD

     146  

NYSE PROPOSAL

     148  

INCENTIVE EQUITY PLAN PROPOSAL

     150  

EMPLOYEE STOCK PURCHASE PLAN PROPOSAL

     157  

ADJOURNMENT PROPOSAL

     162  

U.S. FEDERAL INCOME TAX CONSIDERATIONS

     163  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     178  

INFORMATION ABOUT OAC

     196  

OAC’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     213  

INFORMATION ABOUT HIMS

     218  

HIMS’ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     236  

EXECUTIVE COMPENSATION

     260  

DIRECTOR COMPENSATION

     268  

MANAGEMENT OF NEW HIMS FOLLOWING THE BUSINESS COMBINATION

     270  

BENEFICIAL OWNERSHIP OF SECURITIES

     276  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     281  

COMPARISON OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS

     293  

DESCRIPTION OF NEW HIMS SECURITIES

     295  

SECURITIES ACT RESTRICTIONS ON RESALE OF NEW HIMS CLASS A COMMON STOCK

     311  

STOCKHOLDER PROPOSALS AND NOMINATIONS

     312  

SHAREHOLDER COMMUNICATIONS

     312  

LEGAL MATTERS

     313  

EXPERTS

     313  

DELIVERY OF DOCUMENTS TO SHAREHOLDERS

     313  

ENFORCEABILITY OF CIVIL LIABILITY

     314  

TRANSFER AGENT AND REGISTRAR

     314  

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

     314  

INDEX TO FINANCIAL STATEMENTS

     F-1  

 

i


Table of Contents

ADDITIONAL INFORMATION

You may request copies of the accompanying proxy statement/prospectus and any other publicly available information concerning OAC, without charge, by written request to Oaktree Acquisition Corp., 333 South Grand Avenue, 28th Floor, Los Angeles, California 90071, or by telephone request at (213) 830-6300; or Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing OAC.info@investor.morrowsodali.com or from the SEC through the SEC website at www.sec.gov.

In order for OAC’s shareholders to receive timely delivery of the documents in advance of the extraordinary general meeting of OAC to be held on January 19, 2021, you must request the information no later than five business days prior to the date of the extraordinary general meeting, by January 11, 2021.

TRADEMARKS

This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

ii


Table of Contents

SELECTED DEFINITIONS

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:

 

   

“Affiliated Medical Groups” are to professional corporations and other professional entities that are owned by licensed physicians and provide the clinical services accessible through the Hims & Hers platform; due to the prohibitions on the corporate practice of medicine, Hims & Hers is prohibited from owning the Affiliated Medical Groups, but the Affiliated Medical Groups were incorporated and established with the assistance of Hims & Hers for the specific purpose of providing clinical services to patients through the Hims & Hers platform and have no other operations or activities outside of the provision of services through the Hims & Hers platform;

 

   

“Articles of Association” are to the second amended and restated articles of association of OAC;

 

   

“Available Cash” are to the aggregate funds in the trust account immediately prior to the Closing, together with the aggregate gross proceeds from the PIPE Financing, after deducting any amounts paid to OAC shareholders that exercise their redemption rights in connection with the Business Combination;

 

   

“Business Combination” are to the Domestication, the Merger and other transactions contemplated by the Merger Agreement, collectively, including the PIPE Financing;

 

   

“Cayman Islands Companies Law” are to the Companies Law (as amended) of the Cayman Islands;

 

   

“Class A ordinary shares” are to the Class A ordinary shares, par value $0.0001 per share, of OAC prior to the Domestication, which will automatically convert, on a one-for-one basis, into shares of New Hims Class A Common Stock in connection with the Domestication, authorized pursuant to the Existing Governing Documents;

 

   

“Class B ordinary shares” or “founder shares” are to the 5,031,250 Class B ordinary shares, par value $0.0001 per share, of OAC outstanding as of the date of this proxy statement/prospectus that were issued to our Sponsor in a private placement prior to our initial public offering, and, in connection with the Domestication, will automatically convert, on a one-for-one basis, into shares of New Hims Class A Common Stock;

 

   

“Closing” are to the closing of the Business Combination;

 

   

“Closing Date” means that date that is in no event later than the third (3rd) business day, following the satisfaction (or, to the extent permitted by applicable law, waiver) of the conditions described under the section entitled “Business Combination Proposal—Conditions to Closing of the Business Combination,” (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions) or at such other date as OAC and Hims may agree in writing;

 

   

“Company Sale” means (i) any transaction or series of related transactions that results in any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) acquiring equity interests that represent more than 50% of the total voting power of New Hims or (ii) a sale or disposition of all or substantially all of the assets of New Hims and its subsidiaries on a consolidated basis, in each case other than a transaction or series of related transactions which results in at least 50% of the combined voting power of the then outstanding voting securities of New Hims (or any successor to New Hims) immediately following the closing of such transaction (or series of related transactions) being beneficially owned, directly or indirectly, by individuals and entities (or affiliates of such individuals and entities) who were the beneficial owners, respectively, of at least 50% of the equity interests of New Hims immediately prior to such transaction (or series of related transactions);

 

   

“Condition Precedent Proposals” are to the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals and the NYSE Proposal, collectively;

 

iii


Table of Contents
   

“Continental” are to Continental Stock Transfer & Trust Company;

 

   

“COVID-19” or the “COVID-19 pandemic” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemic or disease outbreaks;

 

   

“Domestication” are to the transfer by way of continuation and deregistration of OAC from the Cayman Islands and the continuation and domestication of OAC as a corporation incorporated in the State of Delaware;

 

   

“Earn Out Period” are to the five (5) years following the Closing;

 

   

“Earn Out Shares” are to restricted shares of New Hims Class A Common Stock issued in connection with the Business Combination to Hims Equityholders that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period and will also vest in connection with any Company Sale if the applicable thresholds are met in such Company Sale, in each case during the Earnout Period;

 

   

“Effective Time” means the time at which the Merger becomes effective;

 

   

“ESPP” are to the Hims & Hers Health, Inc. 2020 Employee Stock Purchase Plan to be considered for adoption and approval by the shareholders pursuant to the Employee Stock Purchase Plan Proposal;

 

   

“Existing Governing Documents” are to the Memorandum of Association and the Articles of Association;

 

   

“extraordinary general meeting” are to the extraordinary general meeting of OAC at 9:00 a.m., Eastern Time, on January 19, 2021, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, or at such other time, on such other date and at such other place to which the meeting may be adjourned;

 

   

“Hims” and “Hims & Hers” are to Hims, Inc., a Delaware corporation, prior to the consummation of the Business Combination;

 

   

“Hims Class A common stock” are to the shares of Class A common stock, par value $0.000001 per share, of Hims.

 

   

“Hims Class F common stock” are to the shares of Class F common stock, par value $0.000001 per share, of Hims.

 

   

“Hims Competing Transaction” are to (a) any transaction involving, directly or indirectly, Hims or any of its subsidiaries, which upon consummation thereof, would result in Hims or any of its subsidiaries becoming a public company, (b) any direct or indirect sale (including by way of a merger, consolidation, license, transfer, sale, option, right of first refusal with respect to a sale or similar preemptive right with respect to a sale or other business combination or similar transaction) of any material portion of the assets (including intellectual property) or business of Hims or any of its subsidiaries, taken as a whole (but excluding sales of inventory in the ordinary course of business), (c) any direct or indirect sale (including by way of an issuance, dividend, distribution, merger, consolidation, license, transfer, sale, option, right of first refusal with respect to a sale or similar preemptive right with respect to a sale or other business combination or similar transaction) of equity, voting interests or debt securities of Hims or any of its subsidiaries (excluding any such sale between or among Hims or any of its subsidiaries), or rights, or securities that grant rights, to receive the same including profits interests, phantom equity, options, warrants, convertible or preferred stock or other equity-linked securities (except, in each case, to the extent expressly permitted by the terms of the Merger Agreement), (d) any direct or indirect acquisition (whether by merger, acquisition, share exchange, reorganization, recapitalization, joint venture, consolidation or similar business combination transaction), but excluding procurement of assets in the ordinary course of business consistent with past practices (but not the acquisition of a person or business via an asset transfer), by Hims or any of

 

iv


Table of Contents
 

its subsidiaries of the equity or voting interests of, or a material portion of the assets or business of, a third party (except, in each case, to the extent expressly permitted by the terms of the Merger Agreement), or (e) any liquidation or dissolution (or the adoption of a plan of liquidation or dissolution) of Hims or any of its subsidiaries (except to the extent expressly permitted by the terms of the Merger Agreement), in all cases of clauses (a)-(e), either in one or a series of related transactions, where such transaction(s) is to be entered into with a third party other than OAC or Merger Sub;

 

   

“Hims Equityholders” are to the holders of Hims equity interests;

 

   

“Hims Pre-Closing Redemption” are to the transaction or transactions pursuant to which Hims repurchases and cancels up to $75.0 million of its capital stock from certain Hims Stockholders prior to and contingent upon Closing for a per share amount of cash, payable concurrently with or immediately following the Closing, equal to $10.00 multiplied by the number of shares of New Hims Class A Common Stock that would have been issued as merger consideration in respect of such repurchased and cancelled shares of Hims capital stock;

 

   

“Hims Recapitalization” are to the conversion immediately prior to the Effective Time of each share of Hims preferred stock and Hims Class F common stock into Hims Class A common stock at the applicable then-effective conversion rate;

 

   

“Hims restricted stock” are to the shares of Hims capital stock subject to a right of repurchase or risk of forfeiture, in either case in favor of Hims.

 

   

“Hims Stockholders” are to holders of Hims common stock and preferred stock;

 

   

“Incentive Equity Plan” are to the Hims & Hers Health, Inc. 2020 Equity Incentive Plan to be considered for adoption and approval by the shareholders pursuant to the Incentive Equity Plan Proposal;

 

   

“initial public offering” are to OAC’s initial public offering that was consummated on July 22, 2019;

 

   

“Memorandum of Association” are to the second amended and restated memorandum of association of OAC;

 

   

“Merger” are to the merger of OAC Merger Sub with and into Hims pursuant to the Merger Agreement, with Hims as the surviving company in the Merger and, after giving effect to such Merger, Hims becoming a wholly-owned subsidiary of OAC;

 

   

“Merger Agreement” are to that certain Agreement and Plan of Merger, dated September 30, 2020, by and among OAC, OAC Merger Sub and Hims;

 

   

“Minimum Available Cash Condition” are to the condition to consummation of the Business Combination that the aggregate funds in the trust account immediately prior to the Closing, together with the aggregate gross proceeds from the PIPE Financing, equal no less than $200,000,000 after deducting any amounts paid to OAC shareholders that exercise their redemption rights in connection with the Business Combination;

 

   

“New Hims” are to Hims & Hers Health, Inc. (f.k.a. Oaktree Acquisition Corp.) upon and after the Domestication;

 

   

“New Hims Board” are to the board of directors of New Hims;

 

   

“New Hims Class A Common Stock” are to the shares of Class A common stock, par value $0.0001 per share, of New Hims;

 

   

“New Hims Class V Common Stock” are to the shares of Class V common stock, par value $0.0001 per share, of New Hims;

 

   

“New Hims Common Stock” are to the shares New Hims Class A Common Stock and New Hims Class V Common Stock, collectively;

 

v


Table of Contents
   

“New Hims Preferred Stock” are to the shares of preferred stock, par value $0.0001 per share, of New Hims;

 

   

“New Hims Public Warrants” are to warrants included in the public units issued in OAC’s initial public offering that will be exercisable for shares of New Hims Class A Common Stock after the Closing;

 

   

“NYSE” are to the New York Stock Exchange;

 

   

“OAC,” “we,” “us” or “our” are to Oaktree Acquisition Corp., a Cayman Islands exempted company, prior to the consummation of the Business Combination;

 

   

“OAC Board” are to OAC’s board of directors;

 

   

“OAC Competing Transaction” are to any written contract, arrangement or understanding which was mutually negotiated by OAC and a third party and which is executed and delivered by OAC (but excluding any non-disclosure or confidentiality agreement), in each case relating to a transaction involving, directly or indirectly, any merger or consolidation with or acquisition of, purchase of all or substantially all of the assets or equity of, consolidation or similar business combination with or other transaction that would constitute a business combination with or involving OAC (or the shareholders of OAC) and a third party, other than Hims or any of its subsidiaries;

 

   

“OAC Merger Sub” are to Rx Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of OAC prior to the consummation of the Business Combination;

 

   

“OAC Parties” are to OAC and OAC Merger Sub;

 

   

“OAC Warrant Agreement” are to the warrant agreement, dated July 22, 2019, between OAC and Continental, as warrant agent;

 

   

“Oaktree” are to Oaktree Capital Management, L.P., an affiliate of our Sponsor, and its affiliates where applicable;

 

   

“ordinary shares” are to OAC Class A ordinary shares and our Class B ordinary shares;

 

   

“PIPE Financing” are to the transactions contemplated by the Subscription Agreements, pursuant to which the PIPE Investors have collectively committed to subscribe for an aggregate of 7,500,000 shares of New Hims Class A Common Stock for an aggregate purchase price of $75,000,000 to be consummated in connection with Closing;

 

   

“PIPE Investors” are to the investors participating in the PIPE Financing, collectively;

 

   

“private placement shares” are to the 4,016,667 Class A ordinary shares of OAC sold to and held by our Sponsor as part of the private placement warrants;

 

   

“private placement warrants” are to the 4,016,667 private placement warrants outstanding as of the date of this proxy statement/prospectus that were issued to and held by our Sponsor in a private placement simultaneously with the closing of our initial public offering, which are substantially identical to the public warrants sold as part of the units in the initial public offering, subject to certain limited exceptions;

 

   

“pro forma” are to giving pro forma effect to the Business Combination, including the Merger and the PIPE Financing;

 

   

“Proposed Bylaws” are to the proposed bylaws of New Hims to be effective upon the Domestication attached to this proxy statement/prospectus as Annex D;

 

   

“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of New Hims to be effective upon the Domestication attached to this proxy statement/prospectus as Annex C;

 

   

“Proposed Governing Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws;

 

vi


Table of Contents
   

“public shareholders” are to holders of public shares, whether acquired in OAC’s initial public offering or acquired in the secondary market;

 

   

“public shares” are to the currently outstanding 20,125,000 Class A ordinary shares of OAC, whether acquired in OAC’s initial public offering or acquired in the secondary market;

 

   

“public warrants” are to the currently outstanding 6,708,333 redeemable warrants to purchase Class A ordinary shares of OAC that were issued by OAC in its initial public offering;

 

   

“redemption” are to each redemption of public shares for cash pursuant to the Existing Governing Documents;

 

   

“Required Governing Documents Proposals” are to Governing Documents Proposal A and Governing Documents Proposal D;

 

   

“SEC” are to the U.S. Securities and Exchange Commission;

 

   

“Securities Act” are to the Securities Act of 1933, as amended;

 

   

“Sponsor” are to Oaktree Acquisition Holdings, L.P., a Cayman Islands exempted limited company;

 

   

“Sponsor Agreement” are to the Sponsor Agreement, dated as of September 30, 2020, entered into by OAC, the Sponsor and Hims;

 

   

“Subscription Agreements” are to the subscription agreements, entered into by OAC and each of the PIPE Investors in connection with the PIPE Financing;

 

   

“transfer agent” are to Continental, OAC’s transfer agent;

 

   

“trust account” are to the trust account established at the consummation of OAC’s initial public offering that holds the proceeds of the initial public offering and is maintained by Continental, acting as trustee;

 

   

“units” are to the units of OAC, each unit representing one Class A ordinary share and one-third of one warrant to acquire one Class A ordinary share, that were offered and sold by OAC in its initial public offering; and

 

   

“warrants” are to the public warrants and the private placement warrants.

 

vii


Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. The information included in this proxy statement/prospectus in relation to Hims has been provided by Hims and its respective management, and forward-looking statements include statements relating to our and its respective management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

our ability to complete the Business Combination with Hims or, if we do not consummate such Business Combination, any other initial business combination;

 

   

satisfaction or waiver of the conditions to the Business Combination including, among others: (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the Hart-Scott-Rodino Act of 1976 (the “HSR Act”) relating to the Merger Agreement having expired or been terminated; (iii) OAC having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing; (iv) the Minimum Available Cash Condition; and (v) the approval by NYSE of our initial listing application in connection with the Business Combination;

 

   

New Hims’ financial and business performance following the Business Combination, including financial projections and business metrics;

 

   

developments and projections relating to Hims’ competitors and industry;

 

   

the implementation, market acceptance and success of Hims’ business model;

 

   

the anticipated growth rates and market opportunities of Hims;

 

   

Hims’ expectations regarding its ability to obtain and maintain intellectual property protection for its brand and not infringe on the rights of others;

 

   

Hims’ ability to expand the scope of its offerings, including the number and type of products and services that it offers, the number and quality of healthcare providers serving its customers and the number and types of conditions capable of being treated through its platform;

 

   

Hims’ ability to maintain its relationships with the Affiliated Medical Groups, partner pharmacies, payments processors and other third parties on which its business depends;

 

   

Hims’ ability to effectively open an affiliated pharmacy dedicated to its operations and its ability to comply with applicable federal, state and local laws and regulations;

 

   

Hims’ ability to comply with the extensive, complex and evolving regulatory requirements applicable to the healthcare industry;

 

   

Hims’ use, disclosure and other processing of personally identifiable information, including health information, and its ability to comply with applicable federal, state and foreign privacy and security regulations;

 

viii


Table of Contents
   

new or adverse regulatory developments affecting the use of telehealth, pharmaceutical products, or other aspects of the healthcare industry;

 

   

the effect of COVID-19 on the foregoing, including our ability to consummate the Business Combination due to the uncertainty resulting from the recent COVID-19 pandemic; and

 

   

other factors detailed under the section entitled “Risk Factors.”

The forward-looking statements contained in this proxy statement/prospectus are based on current expectations and beliefs concerning future developments and their potential effects on us and/or Hims. There can be no assurance that future developments affecting us and/or Hims will be those that we and/or the Hims have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control or the control of Hims) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. Neither we nor Hims undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any shareholder grants its proxy or instructs how its vote should be cast or vote on the proposals to be put to the extraordinary general meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect OAC and/or Hims.

 

ix


Table of Contents

QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF OAC

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to OAC’s shareholders. We urge shareholders to read this proxy statement/prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting, which will be held at 9:00 a.m., Eastern Time, on January 19, 2021, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

OAC shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination. In accordance with the terms and subject to the conditions of the Merger Agreement, among other things, in connection with the Domestication, on the Closing Date prior to the Effective Time, (i) OAC will be renamed “Hims & Hers Health, Inc.,” (ii) each share of Hims common stock and restricted stock outstanding after the Hims Recapitalization and as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Hims Class A Common Stock, Earn Out Shares and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (iii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the Closing and (iv) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million Earn Out Shares (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period and will also vest in connection with any Company Sale if the applicable thresholds are met in such Company Sale, in each case during the Earn Out Period. See “Business Combination Proposal.”

A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and you are encouraged to read the Merger Agreement in its entirety. This proxy statement/prospectus includes descriptions of the Merger Agreement and particular provisions therein. These descriptions do not purport to be complete and are qualified in their entirety by reference to the full text of the Merger Agreement.

The approval of each of the Business Combination Proposal, the NYSE Proposal, the Incentive Equity Plan Proposal, the Employee Stock Purchase Plan Proposal, and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, and each of the Domestication Proposal, the Governing Documents Proposal A, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D, the Governing Documents Proposal E, and the Governing Documents Proposal F requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

In connection with the Domestication, on the Closing Date prior to the Effective Time, (i) each issued and outstanding Class A ordinary share and each issued and outstanding Class B ordinary share of OAC will

 

x


Table of Contents

convert automatically by operation of law, on a one-for-one basis, into shares of New Hims Class A Common Stock; (ii) each issued and outstanding warrant to purchase Class A ordinary shares of OAC will automatically represent the right to purchase one share of New Hims Class A Common Stock at an exercise price of $11.50 per share of New Hims Class A Common Stock on the terms and conditions set forth in the OAC Warrant Agreement; and (iii) each issued and outstanding unit of OAC that has not been previously separated into the underlying Class A ordinary share of OAC and underlying OAC warrant upon the request of the holder thereof prior to the Domestication will be cancelled and will entitle the holder thereof to one share of New Hims Class A Common Stock and one-third of one warrant representing the right to purchase one share of New Hims Class A Common Stock at an exercise price of $11.50 per share on the terms and conditions set forth in the OAC Warrant Agreement. The Proposed Governing Documents will be appropriately adjusted to give effect to any amendments contemplated by the Proposed Governing Documents that are not adopted and approved by the OAC shareholders, other than the amendments to the OAC governing documents that are contemplated by the Required Governing Documents Proposals, which are a condition to the Closing of the Business Combination. See “Domestication Proposal.”

The provisions of the Proposed Governing Documents will differ in certain material respects from the Existing Governing Documents. Please see “What amendments will be made to the current constitutional documents of OAC?” below.

THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS.

 

Q:

What proposals are shareholders of OAC being asked to vote upon?

 

A:

At the extraordinary general meeting, OAC is asking holders of its ordinary shares to consider and vote upon twelve (12) separate proposals:

 

   

a proposal to approve by ordinary resolution and adopt the Merger Agreement, including the Merger, and the transactions contemplated thereby;

 

   

a proposal to approve by special resolution the Domestication;

 

   

the following six (6) separate proposals to approve by special resolution the following material differences between the Existing Governing Documents and the Proposed Governing Documents:

 

   

to authorize the change in the authorized share capital of OAC from US$55,100 divided into (i) 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) 2,750,000,000 shares of New Hims Class A Common Stock shares of New Hims Class A Common Stock, 10,000,000 shares of New Hims Class V Common Stock and 275,000,000 shares of New Hims Preferred Stock;

 

   

to authorize the New Hims Board to issue any or all shares of New Hims Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New Hims Board and as may be permitted by the DGCL;

 

   

to authorize the removal of the ability of New Hims stockholders to take action by written consent in lieu of a meeting from and after the time that Mr. Dudum and his affiliates and permitted transferees no longer beneficially own a majority of the voting power of the then-outstanding shares of capital stock of New Hims;

 

   

to amend and restate the Existing Governing Documents and authorize all other changes necessary or, as mutually agreed in good faith by OAC and Hims, desirable in connection with the replacement of Existing Governing Documents with the Proposed Governing Documents as part of the Domestication;

 

xi


Table of Contents
   

to authorize the issuance of shares of New Hims Class V Common Stock, which will allow holders of New Hims Class V Common Stock to cast 175 votes per share of New Hims Class V Common Stock; and

 

   

to approve the amendment of the Existing Governing Documents so as to declassify the New Hims Board for so long as Mr. Dudum and his affiliates and permitted transferees beneficially own shares of New Hims Class V Common Stock and such shares have not converted into shares of New Hims Class A Common Stock in accordance with the Proposed Certificate of Incorporation.

 

   

a proposal to approve by ordinary resolution the issuance of shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock in connection with the Business Combination and the PIPE Financing in compliance with the NYSE Listing Rules;

 

   

a proposal to approve and adopt by ordinary resolution the Incentive Equity Plan;

 

   

a proposal to approve and adopt by ordinary resolution the ESPP; and

 

   

a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to, among other things, permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting.

If our shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated.

For more information, please see “Business Combination Proposal,” “Domestication Proposal,” “Governing Documents Proposals,” “NYSE Proposal,” “Incentive Equity Plan Proposal,” “Employee Stock Purchase Plan Proposal,” and “Adjournment Proposal.”

OAC will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of OAC should read it carefully.

After careful consideration, the OAC Board has determined that the Business Combination Proposal, the Domestication Proposal, each of the Governing Documents Proposals, the NYSE Proposal, the Incentive Equity Plan Proposal, the Employee Stock Purchase Plan Proposal, and the Adjournment Proposal are in the best interests of OAC and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of OAC’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of OAC and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, OAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of OAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

Why is OAC proposing the Business Combination?

 

A:

OAC is a blank check company incorporated on April 9, 2019 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although OAC may pursue an acquisition opportunity in any business, industry, sector or geographical location for purposes of consummating an initial business combination, OAC has focused on companies in the industrial and consumer sectors. OAC is not permitted under its Existing Governing Documents to effect a business combination with a blank check company or a similar type of company with nominal operations.

 

xii


Table of Contents

OAC has identified several criteria and guidelines it believes are important for evaluating acquisition opportunities. OAC has sought to acquire companies that it believes have some or all of the following characteristics: will benefit from a public currency; have a healthy growing platform; have a management team and/or a strong sponsor that desire a significant equity stake in the post-business combination company; can be acquired at an attractive valuation for public market investors; will be resilient to economic cycles; will maintain strong cash flow characteristics; and will benefit from Oaktree’s long-term sponsorship as it looks to accelerate its growth in the public markets.

Based on its due diligence investigations of Hims and the industry in which it operates, including the financial and other information provided by Hims in the course of negotiations, the OAC Board believes that Hims meets the criteria and guidelines listed above. However, there is no assurance of this. See “Business Combination Proposal—The OAC Board’s Reasons for the Business Combination.”

Although the OAC Board believes that the Business Combination with Hims presents an attractive business combination opportunity and is in the best interests of OAC and its shareholders, the board of directors did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the sections entitled “Business Combination Proposal—The OAC Board’s Reasons for the Business Combination” and “Risk Factors—Risks Related to Hims’ and New Hims’ Business Following the Business Combination.”

 

Q:

Did the OAC Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:

No. The OAC Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. However, OAC’s management, the members of the OAC Board and the other representatives of OAC have substantial experience in evaluating the operating and financial merits of companies similar to Hims and reviewed certain financial information of Hims and compared it to certain publicly traded companies, selected based on the experience and the professional judgment of OAC’s management team, which enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of the OAC Board in valuing Hims’ business and assuming the risk that the OAC Board may not have properly valued such business.

 

Q:

What will Hims’ equityholders receive in return for the Business Combination with OAC?

 

A:

On the date of Closing, promptly following the Hims Recapitalization and the consummation of the Domestication, OAC Merger Sub will merge with and into Hims, with Hims as the surviving company in the Merger and, after giving effect to such Merger, Hims shall be a wholly-owned subsidiary of OAC. In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, (i) each share of Hims common stock and restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Hims Class A Common Stock, Earn Out Shares and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the Closing and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million Earn Out Shares (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any

 

xiii


Table of Contents
  10 trading days within any 20-trading day period and will also vest in connection with any Company Sale if the applicable thresholds are met in such Company Sale, in each case, during the Earn Out Period.

 

Q:

How will the combined company be managed following the Business Combination?

 

A:

Following the Closing, it is expected that the current management of Hims will become the management of New Hims, and the New Hims Board will consist of seven directors. Pursuant to the Merger Agreement, the New Hims Board will consist of Andrew Dudum, Jules Maltz, Kirsten Green, Toby Cosgrove, M.D., Alex Bard, David Wells and Lynne Chou O’Keefe. Please see the section entitled “Management of New Hims Following the Business Combination” for further information.

 

Q:

What equity stake will current OAC shareholders and current equityholders of Hims hold in New Hims immediately after the consummation of the Business Combination?

 

A:

As of the date of this proxy statement/prospectus, there are (i) 20,125,000 Class A ordinary shares outstanding underlying units issued in OAC’s initial public offering and (ii) 5,031,250 Class B ordinary shares outstanding held by the Sponsor. As of the date of this proxy statement/prospectus, there are 4,016,667 private placement warrants outstanding and held by the Sponsor and 6,708,333 public warrants. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of New Hims Class A Common Stock. Pursuant to the Sponsor Agreement, the Sponsor will surrender and forfeit for no consideration 25.0% of the Class B ordinary shares and 25.0% of the private placement warrants of OAC. A number of securities equal to such surrendered and forfeited Class B ordinary shares and private placement warrants is being issued to Hims Equityholders as New Hims Class A Common Stock (or equivalent equity awards in respect thereof) and warrants to acquire shares of New Hims Class A Common Stock (or equivalent equity awards in respect thereof) in the Business Combination. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming that none of OAC’s outstanding public shares are redeemed in connection with the Business Combination), OAC’s fully-diluted share capital, giving effect to the exercise of all of the private placement warrants and public warrants, would be 35,881,250 ordinary shares.

The following table illustrates varying estimated ownership levels in New Hims Class A Common Stock immediately following the consummation of the Business Combination, based on the varying levels of redemptions by the public shareholders and the following additional assumptions: (i) 145,464,420 shares of New Hims Class A Common Stock are issued to the holders of shares of capital stock of Hims at the Closing; (ii) all shares of New Hims Class V Common Stock that will be held by Andrew Dudum, the Chief Executive Officer and Co-Founder of Hims, including his affiliates and permitted transferees, immediately following Closing have been converted into New Hims Class A Common Stock on a one-for-one basis; (iii) no shares of Hims capital stock are repurchased in the Hims Pre-Closing Redemption; (iv) 7,500,000 shares of New Hims Class A Common Stock will be issued in the PIPE Financing; (v) no public warrants or private placement warrants to purchase New Hims Class A Common Stock that will be outstanding immediately following the Closing have been exercised; (vi) no vested or unvested options to acquire New Hims Class A Common Stock that will be held by Hims Equityholders immediately following Closing have been exercised; (vii) no restricted stock unit awards that will be held by Hims Equityholders immediately following the Closing have been settled; and (viii) no Earn Out Shares (or equivalent equity awards in respect thereof) that will be held by Hims Equityholders immediately following the Closing will have

 

xiv


Table of Contents

vested. If the actual facts are different than these assumptions, the ownership percentages in New Hims will be different.

 

     Share Ownership in New Hims  
     No redemptions     Maximum
redemptions(1)
 
     Percentage of
Outstanding
Shares
    Percentage of
Outstanding
Shares
 

OAC public shareholders

     11.4     7.3

Sponsor(2)

     2.1     2.2

PIPE Investors

     4.2     4.4

Hims Stockholders(3), (4), (5)

     82.3     86.1

 

(1)

Assumes that 7,822,956 of OAC’s outstanding public shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Available Cash Condition based on a per share redemption price of $10.16 per share) are redeemed in connection with the Business Combination.

(2)

Includes 3,773,437 Class B ordinary shares held by the Sponsor originally acquired prior to or in connection with OAC’s initial public offering and reflects the forfeiture of 25.0% of the Class B ordinary shares pursuant to the Sponsor Agreement.

(3)

Includes shares of New Hims Class V Common Stock to be issued to Mr. Dudum, including his affiliates and permitted transferees. Pursuant to the terms of the Merger Agreement, Mr. Dudum is expected to hold, directly or indirectly, shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock representing approximately 90% of the voting power of the capital stock of New Hims on a fully-diluted basis.

(4)

Excludes options to acquire New Hims Class A Common Stock, awards of restricted stock units with respect to shares of New Hims Class A Common Stock, and the 16 million Earn Out Shares (or equivalent equity awards in respect thereof). Inclusion of all such securities would dilute the ownership of all stockholders of New Hims.

(5)

Excludes 720,838 shares of New Hims Common Stock otherwise issuable upon consummation of the Business Combination which are expected to be settled upon consummation of the Business Combination to satisfy amounts due under certain Hims promissory notes.

For further details, see “Business Combination Proposal—Consideration to Hims Equityholders in the Business Combination.”

Furthermore, subject to approval by OAC’s shareholders, the Business Combination Proposal, the Domestication Proposal and the Required Governing Documents Proposals, New Hims will adopt a dual class stock structure comparable to the one that will be in effect at Hims immediately prior to the Closing, comprised of New Hims Class A Common Stock, which will carry one vote per share, and New Hims Class V Common Stock, which will carry 175 votes per share. Upon the Closing, all stockholders of New Hims will hold only shares of New Hims Class A Common Stock, except for Andrew Dudum, the Chief Executive Officer and Co-Founder of Hims, including his affiliates and permitted transferees, who will hold shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock. Immediately following the Closing, and by virtue of his holdings of New Hims Class A Common Stock and New Hims Class V Common Stock, Mr. Dudum is expected to hold, directly or indirectly, approximately 90% of the voting power of the capital stock of New Hims on a fully-diluted basis. The New Hims Class V Common Stock will be entitled to dividends and will rank equally to the New Hims Class A Common Stock upon any liquidation. The New Hims Class V Common Stock is also subject to a “sunset” and conversion to New Hims Class A Common Stock if Mr. Dudum no longer (i) serves as the Chief Executive Officer of New Hims or in a board role, or (ii) transfers any shares of New Hims Class V Common Stock (except for permitted transfers). Upon conversion, each share of New Hims Class V Common Stock will convert into one share of New Hims Class A Common Stock. See “Description of New Hims Securities—Common Stock—New Hims Class V Common Stock—Mandatory Conversion.

 

Q:

Why is OAC proposing the Domestication?

 

A:

Our board of directors believes that there are significant advantages to us that will arise as a result of a change of our domicile to Delaware. Further, our board of directors believes that any direct benefit that the Delaware General Corporation Law (the “DGCL”) provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. The board of directors believes that there are several

 

xv


Table of Contents
  reasons why transfer by way of continuation to Delaware is in the best interests of OAC and its shareholders, including, (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors, each of the foregoing are discussed in greater detail in the section entitled “Domestication Proposal—Reasons for the Domestication.”

To effect the Domestication, we will file an application for deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of corporate domestication and a certificate of incorporation with the Secretary of State of the State of Delaware, under which we will be domesticated and continue as a Delaware corporation.

The approval of the Domestication Proposal is a condition to closing the Business Combination under the Merger Agreement. The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal.

 

Q:

What amendments will be made to the current constitutional documents of OAC?

 

A:

The consummation of the Business Combination is conditional, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, OAC’s shareholders also are being asked to consider and vote upon a proposal to approve the Domestication, and replace OAC’s Existing Governing Documents, in each case, under Cayman Islands law with the Proposed Governing Documents, in each case, under the DGCL, which differ from the Existing Governing Documents in the following material respects:

 

   

Existing Governing Documents

 

Proposed Governing Documents

Authorized Shares
(Governing Documents
Proposal A)
  The share capital under the Existing Governing Documents is US$55,100 divided into 500,000,000 Class A ordinary shares of par value US$0.0001 per share, 50,000,000 Class B ordinary shares of par value US$0.0001 per share and 1,000,000 preference shares of par value US$0.0001 per share.   The Proposed Governing Documents authorize 2,750,000,000 shares of New Hims Class A Common Stock, 10,000,000 shares of New Hims Class V Common Stock and 275,000,000 shares of New Hims Preferred Stock.
  See paragraph 7 of the Memorandum of Association.   See Article IV of the Proposed Certificate of Incorporation.
Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent
(Governing Documents
Proposal B)
  The Existing Governing Documents authorize the issuance of 1,000,000 preference shares with such designation, rights and preferences as may be determined from time to time by our board of directors. Accordingly, our board of directors is empowered under the Existing Governing Documents, without shareholder approval, to issue preference shares with dividend, liquidation, redemption, voting or   The Proposed Governing Documents authorize the board of directors to issue all or any shares of preferred stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as the board of directors may determine.

 

xvi


Table of Contents
   

Existing Governing Documents

 

Proposed Governing Documents

  other rights, provided that the issuance of such preference shares does not materially adversely affect the rights attached to the other shareholders of OAC.  
  See paragraph 7 of the Memorandum of Association and Articles 8 and 10 of the Articles of Association.   See Article IV subsection B of the Proposed Certificate of Incorporation.
Shareholder/Stockholder Written Consent In Lieu of a Meeting
(Governing Documents
Proposal C)
  The Existing Governing Documents provide that resolutions may be passed by a vote in person, by proxy at a general meeting, or by unanimous written resolution.   The Proposed Governing Documents allow stockholders to vote in person or by proxy at a meeting of stockholders, but prohibit the ability of stockholders to act by written consent in lieu of a meeting from and after the time that Mr. Dudum and his affiliates and permitted transferees beneficially own less than a majority of the voting power of the capital stock of New Hims.
  See Articles 82 and 91 of our Articles of Association.   See Article VIII subsection A of the Proposed Certificate of Incorporation.
Corporate Name
(Governing Documents
Proposal D)
  The Existing Governing Documents provide the name of the company is “Oaktree Acquisition Corp.”   The Proposed Governing Documents will provide that the name of the corporation will be “Hims & Hers Health, Inc.”
  See paragraph 1 of our Memorandum of Association.   See Article I of the Proposed Certificate of Incorporation.
Perpetual Existence
(Governing Documents
Proposal D)
  The Existing Governing Documents provide that if we do not consummate a business combination (as defined in the Existing Governing Documents) by July 22, 2021 (twenty-four months after the closing of OAC’s initial public offering), OAC will cease all operations except for the purposes of winding up and will redeem the shares issued in OAC’s initial public offering and liquidate its trust account.   The Proposed Governing Documents do not include any provisions relating to New Hims’ ongoing existence; the default under the DGCL will make New Hims’ existence perpetual.
  See Article 165 of our Articles of Association.   This is the default rule under the DGCL.

 

xvii


Table of Contents
   

Existing Governing Documents

 

Proposed Governing Documents

Exclusive Forum
(Governing Documents
Proposal D)
  The Existing Governing Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation.   The Proposed Governing Documents adopt Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act.
    See Article XII subsection A of the Proposed Certificate of Incorporation.
Takeovers by Interested Stockholders
(Governing Documents
Proposal D)
  The Existing Governing Documents do not provide restrictions on takeovers of OAC by a related shareholder following a business combination.   The Proposed Governing Documents will have New Hims elect not to be governed by Section 203 of the DGCL relating to takeovers by interested stockholders but will provide other restrictions regarding takeovers by interested stockholders.
    See Article XIII subsections A and B of the Proposed Certificate of Incorporation.
Provisions Related to Status as Blank Check Company
(Governing Documents
Proposal D)
  The Existing Governing Documents set forth various provisions related to our status as a blank check company prior to the consummation of a business combination.   The Proposed Governing Documents do not include such provisions related to our status as a blank check company, which no longer will apply upon consummation of the Business Combination, as we will cease to be a blank check company at such time.
  See Articles 157-172 of our Articles of Association.  

Voting Rights of Common Stock

(Governing Documents
Proposal E)

  The Existing Governing Documents provide that the holders of each ordinary share of OAC is entitled to one vote for each share on each matter properly submitted to the shareholders entitled to vote.   The Proposed Governing Documents provide that holders of shares of New Hims Class A Common Stock will be entitled to cast one vote per share of New Hims Class A Common Stock, and holders of shares of New Hims Class V Common Stock will be entitled to cast 175 votes per share of New Hims Class V Common Stock on each matter properly submitted to the stockholders entitled to vote.

 

xviii


Table of Contents
   

Existing Governing Documents

 

Proposed Governing Documents

  See Article 82 of our Articles of Association.   See Article IV subsection A of the Proposed Certificate of Incorporation.

Declassification of the Board of Directors

(Governing Documents
Proposal F)

  The Existing Governing Documents provide that the OAC board of directors is divided into three classes, with only one class of directors being elected in each year and each class serving a three-year term.  

The Proposed Governing Documents provide for the declassification of the New Hims Board for so long as Mr. Dudum and his affiliates and permitted transferees beneficially own shares of New Hims Class V Common Stock and such shares have not converted into shares of New Hims Class A Common Stock in accordance with the Proposed

Certificate of Incorporation.

  See Article 97 of our Articles of Association.   See Article V subsection D of the Proposed Certificate of Incorporation.

 

Q:

How will the Domestication affect my ordinary shares, warrants and units?

 

A:

In connection with the Domestication, on the Closing Date prior to the Effective Time, (i) each issued and outstanding Class A ordinary share and each issued and outstanding Class B ordinary share of OAC will convert automatically by operation of law, on a one-for-one basis, into shares of New Hims Class A Common Stock; (ii) each issued and outstanding warrant to purchase Class A ordinary shares of OAC will automatically represent the right to purchase one share of New Hims Class A Common Stock at an exercise price of $11.50 per share of New Hims Class A Common Stock on the terms and conditions set forth in the OAC Warrant Agreement; and (iii) each issued and outstanding unit of OAC that has not been previously separated into the underlying Class A ordinary share of OAC and underlying OAC warrant upon the request of the holder thereof prior to the Domestication will be cancelled and will entitle the holder thereof to one share of New Hims Class A Common Stock and one-third of one warrant representing the right to purchase one share of New Hims Class A Common Stock at an exercise price of $11.50 per share on the terms and conditions set forth in the OAC Warrant Agreement. See “Domestication Proposal.

In accordance with the terms and subject to the conditions of the Merger Agreement, following the Hims Recapitalization and at the Effective Time, (i) each share of Hims common stock and restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Hims Class A Common Stock, Earn Out Shares and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised prior or settled immediately to the Closing and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million Earn Out Shares (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period and will also vest in connection with any Company Sale if the applicable thresholds are met in such Company Sale, in each case, during the Earn Out Period.

 

xix


Table of Contents
Q:

What are the U.S. federal income tax consequences of the Domestication?

 

A:

As discussed more fully under “U.S. Federal Income Tax Considerations” the Domestication generally should constitute a “reorganization” within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as OAC, this result is not entirely clear. In the case of a transaction, such as the Domestication, that qualifies as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders” below) will be subject to Section 367(b) of the Code and, as a result of the Domestication:

 

   

a U.S. Holder whose public shares have a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of OAC’s earnings in income;

 

   

a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock will generally recognize gain (but not loss) on the exchange of public shares for shares of New Hims Class A Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its public shares provided certain other requirements are satisfied; and

 

   

a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock will generally be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its public shares provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (participation exemption).

OAC does not expect to have significant cumulative earnings and profits through the date of the Domestication.

In the case of a transaction, such as the Domestication, that should qualify as a “reorganization” under Section 368(a)(1)(F) of the Code, a U.S. Holder of public shares may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its public shares for shares of New Hims Class A Common Stock pursuant to the Domestication under the “passive foreign investment company” (“PFIC”) rules of the Code equal to the excess, if any, of the fair market value of the shares of New Hims Class A Common Stock received in the Domestication over the U.S. Holder’s adjusted tax basis in the corresponding public shares surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see the discussion in the section entitled “U.S. Federal Income Tax Considerations.”

Additionally, the Domestication may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—Non-U.S. Holders”) to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such non-U.S. Holder’s shares of New Hims Class A Common Stock after the Domestication.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor on the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “U.S. Federal Income Tax Considerations.

 

xx


Table of Contents
Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash and such excess public shares would be converted into the merger consideration in connection with the Business Combination.

The Sponsor has agreed to waive its redemption rights with respect to all of its ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

 

Q:

How do I exercise my redemption rights?

 

A:

If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental, OAC’s transfer agent, in which you (a) request that we redeem all or a portion of your public shares for cash, and (b) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

 

  (iii)

deliver your public shares to Continental, OAC’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on January 14, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

The address of Continental, OAC’s transfer agent, is listed under the question “Who can help answer my questions?” below.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, OAC’s transfer agent, directly and instruct them to do so.

Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, as of December 24, 2020, this would have amounted to approximately $10.16 per issued and outstanding public share. However, the proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders, regardless of whether such public shareholders vote or, if

 

xxi


Table of Contents

they do vote, irrespective of if they vote for or against the Business Combination Proposal. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote irrespective of how you vote, on any proposal, including the Business Combination Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting. If you deliver your shares for redemption to Continental, OAC’s transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that our transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, OAC’s transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, OAC’s transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental, OAC’s transfer agent, at least two business days prior to the vote at the extraordinary general meeting.

If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, we will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination. The redemption takes place following the Domestication and, accordingly, it is shares of New Hims Class A Common Stock that will be redeemed immediately after consummation of the Business Combination.

If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.

 

Q:

If I am a holder of units, can I exercise redemption rights with respect to my units?

 

A:

No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, OAC’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. You are requested to cause your public shares to be separated and delivered to Continental, our transfer agent, by 5:00 p.m., Eastern Time, on January 14, 2021 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

We expect that a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders”) that exercises its redemption rights to receive cash from the trust account in exchange for its shares of New Hims Class A Common Stock will generally be treated as selling such shares of New Hims Class A Common Stock resulting in the recognition of capital gain or capital loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of shares of New Hims Class A Common Stock that such U.S. Holder owns or is deemed to own (including through the ownership of warrants) prior to and following the redemption. For a more complete

 

xxii


Table of Contents
  discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “U.S. Federal Income Tax Considerations.

Additionally, because the Domestication will occur immediately prior to the redemption by any public shareholder, U.S. Holders exercising redemption rights will take into account the potential tax consequences of Section 367(b) of the Code as well as potential tax consequences of the U.S. federal income tax rules relating to PFICs. The tax consequences of the exercise of redemption rights, including pursuant to Section 367(b) of the Code and the PFIC rules, are discussed more fully below under “U.S. Federal Income Tax Considerations—U.S. Holders.” All holders of our public shares considering exercising their redemption rights are urged to consult their tax advisors on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws.

 

Q:

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A:

Following the closing of OAC’s initial public offering, an amount equal to $201,250,000 ($10.00 per unit) of the net proceeds from OAC’s initial public offering and the sale of the private placement warrants was placed in the trust account. As of December 24, 2020, funds in the trust account totaled approximately $204,524,663 and were held in money market funds. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (i) the completion of a business combination (including the closing of the Business Combination) or (ii) the redemption of all of the public shares if we are unable to complete a business combination by July 22, 2021 (unless such date is extended in accordance with the Existing Governing Documents), subject to applicable law.

If OAC’s initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with OAC’s initial business combination or used for redemptions or purchases of the public shares, New Hims may apply the balance of the cash released to it from the trust account for general corporate purposes, including for maintenance or expansion of operations of New Hims, the payment of principal or interest due on indebtedness incurred in completing our Business Combination, to fund the purchase of other companies or for working capital. See “Summary of the Proxy Statement/Prospectus—Sources and Uses of Funds for the Business Combination.”

 

Q:

What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

A:

OAC’s public shareholders are not required to vote in respect of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders.

The Merger Agreement provides that the obligations of Hims to consummate the Business Combination are conditioned on, among other things, that as of the Closing, the Available Cash plus the aggregate proceeds from the PIPE Financing equaling no less than $200,000,000 after deducting any amounts paid to OAC shareholders that exercise their redemption rights. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated.

In no event will OAC redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

Additionally, as a result of redemptions, the trading market for the New Hims Class A Common Stock may be less liquid than the market for the public shares was prior to consummation of the Business Combination and we may not be able to meet the listing standards for NYSE or another national securities exchange.

 

xxiii


Table of Contents
Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Merger Agreement having expired or been terminated; (iii) OAC having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing; (iv) the Minimum Available Cash Condition; (v) the approval by NYSE of our initial listing application in connection with the Business Combination; and (vi) the consummation of the Domestication. Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated.

For more information about conditions to the consummation of the Business Combination, see “Business Combination Proposal—Conditions to Closing of the Business Combination.”

 

Q:

When do you expect the Business Combination to be completed?

 

A:

It is currently expected that the Business Combination will be consummated in the fourth quarter of 2020. This date depends, among other things, on the approval of the proposals to be put to OAC shareholders at the extraordinary general meeting. However, such extraordinary general meeting could be adjourned if the Adjournment Proposal is adopted by our shareholders at the extraordinary general meeting and we elect to adjourn the extraordinary general meeting to a later date or dates to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates (i) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to OAC shareholders, (ii) in order to solicit additional proxies from OAC shareholders in favor of one or more of the proposals at the extraordinary general meeting or (iii) if OAC shareholders redeem an amount of public shares such that the Minimum Available Cash Condition would not be satisfied. For a description of the conditions for the completion of the Business Combination, see “Business Combination Proposal—Conditions to Closing of the Business Combination.”

 

Q:

What happens if the Business Combination is not consummated?

 

A:

OAC will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Merger Agreement. If OAC is not able to consummate the Business Combination with Hims nor able to complete another business combination by July 22, 2021, in each case, as such date may be extended pursuant to its Existing Governing Documents, OAC will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to OAC to fund its regulatory compliance requirements and other costs related thereto (a “Regulatory Withdrawal”) and/or to pay its income taxes, if any, (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of OAC’s remaining shareholders and OAC’s board of directors, liquidate and dissolve, subject in each case to OAC’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable laws.

 

Q:

Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?

 

A:

Neither OAC’s shareholders nor OAC’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

 

xxiv


Table of Contents
Q:

What do I need to do now?

 

A:

OAC urges you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder and/or warrant holder. OAC’s shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

 

Q:

How do I vote?

 

A:

If you are a holder of record of ordinary shares on the record date for the extraordinary general meeting, you may vote in person at the extraordinary general meeting or by submitting a proxy for the extraordinary general meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a proxy from your broker, bank or nominee.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. If you decide to vote, you should provide instructions to your broker, bank or other nominee on how to vote in accordance with the information and procedures provided to you by your broker, bank or other nominee.

 

Q:

When and where will the extraordinary general meeting be held?

 

A:

The extraordinary general meeting will be held at 9.00 a.m., Eastern Time, on January 19, 2021, at the offices of Kirkland & Ellis LLP, located at 601 Lexington Avenue, New York, New York 10022, unless the extraordinary general meeting is adjourned.

 

Q:

How will the COVID-19 pandemic impact in-person voting at the General Meeting?

 

A:

OAC intends to hold the extraordinary general meeting in person. However, OAC is sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving nature of COVID-19 situation. As a result, OAC may impose additional procedures or limitations on meeting attendees. OAC plans to announce any such updates in a press release filed with the SEC and on its proxy website (https://www.cstproxy.com/oaktreeacquisitioncorp/2021), and OAC encourages you to check this website prior to the meeting if you plan to attend.

 

Q:

What impact will the COVID-19 pandemic have on the Business Combination?

 

A:

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus outbreak on the businesses of OAC and Hims, and there is no guarantee that efforts by OAC

 

xxv


Table of Contents
  and Hims to address the adverse impacts of COVID-19 will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and actions taken to contain COVID-19 or its impact, among others. If OAC or Hims are unable to recover from a business disruption on a timely basis, the Business Combination and New Hims’ business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by COVID-19 and become more costly. Each of OAC and Hims may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations.

 

Q:

Who is entitled to vote at the extraordinary general meeting?

 

A:

OAC has fixed December 4, 2020 as the record date for the extraordinary general meeting. If you were a shareholder of OAC at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting.

 

Q:

How many votes do I have?

 

A:

OAC shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 25,156,250 ordinary shares issued and outstanding, of which 20,125,000 were issued and outstanding public shares.

 

Q:

What constitutes a quorum?

 

A:

A quorum of OAC shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold not less than a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 12,578,126 ordinary shares would be required to achieve a quorum.

 

Q:

What vote is required to approve each proposal at the extraordinary general meeting?

 

A:

The following votes are required for each proposal at the extraordinary general meeting:

 

  (i)

Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (ii)

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (iii)

Governing Documents Proposals: The separate approval of each of the Governing Documents Proposals requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (iv)

NYSE Proposal: The approval of the NYSE Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

xxvi


Table of Contents
  (v)

Incentive Equity Plan Proposal: The approval of the Incentive Equity Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (vi)

Employee Stock Purchase Plan Proposal: The approval of the Employee Stock Purchase Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (vii)

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

Q:

What are the recommendations of the OAC Board?

 

A:

The OAC Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of OAC and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Governing Documents Proposals, “FOR” the NYSE Proposal, “FOR” the Incentive Equity Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of OAC’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of OAC and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, OAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of OAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

How does the Sponsor intend to vote its shares?

 

A:

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor has agreed to vote all its shares in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding ordinary shares.

At any time at or prior to the Business Combination, during a period when it is not then aware of any material nonpublic information regarding OAC or its securities, the Sponsor, Hims and/or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of OAC shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, Hims and/or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents

 

xxvii


Table of Contents

Proposal A, the NYSE Proposal, the Incentive Equity Plan Proposal, the Employee Stock Purchase Plan Proposal, and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matters, (ii) the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D, the Governing Documents Proposal E, and the Governing Documents Proposal F are approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matters, (iii) the Minimum Available Cash Condition is satisfied and otherwise limit the number of public shares electing to redeem and (iv) New Hims’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

Entering into any such arrangements may have a depressive effect on the ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he or she owns, either at or prior to the Business Combination.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold.

Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

Q:

What happens if I sell my OAC ordinary shares before the extraordinary general meeting?

 

A:

The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. Shareholders may send a later-dated, signed proxy card to OAC’s Chief Financial Officer at OAC’s address set forth below so that it is received by OAC’s general counsel prior to the vote at the extraordinary general meeting (which is scheduled to take place on January 19, 2021) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to OAC’s general counsel, which must be received by OAC’s general counsel prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.

 

Q:

What happens if I fail to take any action with respect to the extraordinary general meeting?

 

A:

If you fail to vote with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder and/or warrant holder of New Hims. If you fail to vote with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder and/or warrant holder of OAC. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination.

 

xxviii


Table of Contents
Q:

What should I do if I receive more than one set of voting materials?

 

A:

Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting?

 

A:

OAC will pay the cost of soliciting proxies for the extraordinary general meeting. OAC has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies for the extraordinary general meeting. OAC has agreed to pay Morrow a fee of $22,500, plus disbursements, and will reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. OAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of Class A ordinary shares and in obtaining voting instructions from those owners. OAC’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Where can I find the voting results of the extraordinary general meeting?

 

A:

The preliminary voting results will be announced at the extraordinary general meeting. OAC will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

Morrow Sodali LLC

470 West Avenue

Stamford, Connecticut 06902

Individuals call toll-free: (800) 662-5200

Banks and brokers call collect: (203) 658-9400

E-mail: OAC.info@investor.morrowsodali.com

 

xxix


Table of Contents

You also may obtain additional information about OAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information; Incorporation by Reference.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your public shares (either physically or electronically) to Continental, OAC’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on January 14, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

xxx


Table of Contents

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meeting, including the Business Combination, you should read this proxy statement/prospectus, including the Annexes and other documents referred to herein, carefully and in their entirety. The Merger Agreement is the legal document that governs the Business Combination and the other transactions that will be undertaken in connection with the Business Combination. The Merger Agreement is also described in detail in this proxy statement/prospectus in the section entitled “Business Combination Proposal—The Merger Agreement.”

Business Summary

Unless otherwise indicated or the context otherwise requires, references in this Business Summary to “Hims & Hers,” “the Company,” “we,” “us,” “our,” and other similar terms refer to Hims and its subsidiaries prior to the Business Combination and to New Hims and its consolidated subsidiaries after giving effect to the Business Combination.

Company Overview

Launched in 2017, Hims & Hers has built a proprietary solution that connects consumers to licensed healthcare professionals for care across numerous specialties, including primary care, mental health, sexual health, and dermatology, among others. Since its founding, the Company has facilitated more than two million telehealth consultations, enabling greater access to high quality, convenient, and affordable care for people in all 50 states. The Company has driven over 100% compounded annual revenue growth over the last two years and has more than doubled gross margins to approximately 70%, with revenue that is over 90% recurring in nature.

The future of healthcare will be led by consumer brands that empower people and give them full control over their healthcare. A direct relationship with consumers is the most valuable component in the healthcare system. Hims & Hers has endeavored to build a business that squarely focuses on the needs of the healthcare consumer. Hims & Hers facilitates the consumer experience from start to finish, uniquely positioning the Company in the rapidly-emerging telehealth landscape to lead the industry in B2C-focused telehealth solutions.

Hims & Hers has built a customer base of loyal brand ambassadors representing the future of the healthcare system. The majority of the Company’s customers are millennials, a brand-conscious and high-value generation poised to expand its purchasing power. Hims & Hers customers embrace the Company’s convenient, digitally native, and mobile-first product, driving organic growth through word of mouth and user-generated content. This, in-turn, enhances brand awareness and lowers customer acquisition costs of an attractive cohort of customers that have limited loyalty to the traditional health system and are at the beginning of their lifetime value curve. The Hims & Hers solution is set up to serve these customers over the long-term by offering access to high-quality, evidence-based medicine paired with a customer-driven user experience. As of September 30, 2020, Hims & Hers had over 280,000 customer subscriptions.

The Market Opportunity

Since its founding, Hims & Hers has focused on changing the way patients access, interact with and consume healthcare. In the United States, healthcare spending is projected to exceed $4.0 trillion in 2020 and grow to $6.2 trillion by 2028, according to the Centers for Medicare & Medicaid Services. However, it is not always clear what the individual consumer receives in return for this massive spending. Hims & Hers believes that a new healthcare model, one that places the consumer at the center of the healthcare ecosystem, can help to improve health outcomes while reducing costs to all healthcare constituents.




Table of Contents

Despite the vast spending on healthcare in the United States, the current system frequently fails the average consumer. According to the Centers for Medicare & Medicaid Services, per capita spend on healthcare in the United States has doubled in the last 20 years with total spending near $4 trillion; however, United States life expectancy and health indicators are falling behind those of other developed nations. The existing healthcare system is highly fragmented and inefficient, lacks transparency, and is unfriendly to the consumer. In addition, myriad issues related to insurance coverage and other cost barriers stand in the way of too many Americans getting the treatment they need and deserve.

Supported by increasing deregulation and broad societal shifts, demand for and provision of telehealth services is surging. Telehealth enables more efficient allocation and utilization of existing clinical resources that could otherwise go unused. With an aging population requiring more complex care and a younger generation that is accustomed to digital technology, telehealth offers an efficient way to leverage finite resources.

Hims & Hers approaches the challenges to the current system through two of the largest spend categories in healthcare, prescription drugs and primary care, representing $600 billion and $280 billion markets respectively, according to Deloitte and Grand View Research. Hims & Hers believes that it has the technical platform, distributed provider network, and access to clinical capabilities to lead the migration of routine office visits to a digital format. The tailored offerings and the simplicity of the Hims & Hers platform and the convenience of its websites have resulted in increased adoption of its products and services. Hims & Hers is expanding the market by eliminating cost and accessibility barriers, which previously prevented people from seeking medical care through traditional brick-and-mortar care.

Competitive Advantage

Hims & Hers believes that it has multiple competitive advantages that will enable it to continue to disrupt the current healthcare system through consumer-centric telehealth.

Brand

Hims & Hers operates without the typical dependencies on the existing healthcare system, and it seeks to empower consumers to gain greater control of their health needs. The single unified Hims & Hers brand is unique in healthcare because it is pioneering one of the first truly digitally native, mobile-first, multi-condition health platform for consumers, placing the company at the forefront of change in healthcare. Hims & Hers’ strong brand and resultant satisfaction is supported by its Net Promoter Score (“NPS”) of +65, far above the +9 NPS for the traditional health systems.

Audience

Hims & Hers’ solutions have been adopted and championed by customers who represent the future of the healthcare system, namely the millennial generation. The convenience of the Hims & Hers websites has allowed the company to eliminate access- and stigma-related barriers as evidenced by the fact that approximately 80% of Hims & Hers customers indicate they are seeking treatment for their particular condition for the first time. These customers represent a cohort that Hims & Hers believes will serve as ambassadors for the brand, building the Hims & Hers community and driving meaningful organic growth.

Scalability

Hims & Hers is a leading consumer-first telehealth company offering a digitally native, fully verticalized multi-condition health solution, empowering customers through access to a high quality, diverse, and integrated suite of care offerings. Hims & Hers powers this consumer experience from start to finish which positions it for success in the rapidly-emerging telehealth landscape. The Hims & Hers solutions can be quickly scaled, allow for



 

2


Table of Contents

transparent and affordable pricing to consumers, can be easily leveraged to serve meaningfully higher volumes, and are built to accommodate the seamless and quick addition of new products and services to the Hims & Hers solution suite. The combination of Hims & Hers’ brand, technology, and product diversification results in a virtuous flywheel that positions the company favorably against competitors.

Quality

Hims & Hers has built a solution that offers a higher quality experience for both consumers and providers. The Company’s offerings directly address consumers’ preference for telehealth. Customers can access healthcare providers on their computers or mobile devices and can have prescribed medications delivered directly. Care

accessed through Hims & Hers is subject to evidence-based clinical guidelines and delivered by highly-trained healthcare providers to ensure consistency and quality. Significant quality assurance measures are implemented to maintain safety and quality, and over 11,000 visit encounters have been reviewed by a clinical quality team to monitor quality of care and provider adherence to evidence-based principles.

Team

Hims & Hers’ founder and management team bring veteran leadership with the most highly-relevant healthcare, technology, and consumer expertise, and leverage a wealth of knowledge in management roles at both public and private organizations ranging from start-ups to Fortune 500 companies. The leadership team is comprised of industry veterans who have led some of the most beloved consumer and healthcare brands. Hims & Hers believes the experience of its leadership team is critical in navigating the future landscape of the healthcare system.

Business Model

Hims & Hers offers a range of health and wellness products and services available for purchase on its websites directly by customers. The offerings generally focus on chronic conditions, where treatment typically involves use of prescription medication on a recurring basis and ongoing care from healthcare providers. Hims & Hers also offers over-the-counter drug and device products and cosmetics and supplement products, which are primarily focused on wellness, sexual health, skincare, and hair care. These curated non-prescription products include vitamin C, melatonin, biotin, collagen protein and teas in the wellness category, moisturizer, fragrances, face wash and anti-wrinkle cream in the skincare category, condoms and lubricants in the sexual health category and shampoos, conditioners, scalp scrubs and topical treatments such as minoxidil in the hair care category. The over-the-counter drug and device products and some of the cosmetics and supplement products Hims & Hers sells are “white-labeled” products, where Hims & Hers sells the manufacturer-developed product under the Hims & Hers brand name or co-branded along with the manufacturer’s brand. Several cosmetics and supplement products have been developed by Hims & Hers in partnership with the manufacturer. For these products, the manufacturer develops the formulation with input from the internal Hims & Hers Product Research & Development team. In all cases, the manufacturer is responsible for obtaining and maintaining the FDA authorization, if required, and complying with current Good Manufacturing Processes (cGMP) adopted and enforced by the FDA. Hims & Hers maintains an internal Quality program, under which it engages independent laboratories to test non-prescription products for compliance with quality standards, periodically evaluate non-prescription product suppliers for compliance with cGMP and other quality standards, and address product complaints and adverse events reported by customers.

Most of the offerings on the Hims & Hers websites are sold to customers on a subscription basis. Subscription plans provide an easy and convenient way for customers to get the ongoing treatment they need while simultaneously providing the company with predictability through a recurring revenue stream.

For subscription plans, customers select a desired cadence to receive products, which can range from every month to every two to twelve months, depending on the product. The customer is billed on a recurring basis based on the selected cadence and a specified quantity of product is shipped at each billing. Customers can cancel



 

3


Table of Contents

subscriptions in between billing periods to stop receiving additional products and can reactivate subscriptions to continue receiving additional products. Hims & Hers’ integrated technology platform allows it to serve its customers efficiently from start to finish: initially from customer discovery and purchase of offerings on its websites, to connecting customers with medical providers for telehealth consultations, to the fulfilment and delivery of customer orders, and finally through ongoing clinical management by medical providers. This technology-driven efficiency provides cost advantages that allow Hims & Hers to offer customers affordable prices and to generate robust gross margins.

Hims & Hers acquires new customers and drives brand awareness through various marketing channels, including social media, online search, television, radio, and other media channels. The Company intends to invest in growth in its current offerings and additionally in new products and services. The Hims & Hers platform is purpose-built to scale efficiently and to accommodate the seamless addition of new products and services. Hims & Hers plans to launch new subscription-based offerings which it expects will have a similar margin profile and unit economics to current offerings. As it implements its product roadmap, Hims & Hers expects to grow revenue through additional subscription-based recurring revenue offerings. The recent launches of new products and services in behavioral health, dermatology, and primary care demonstrate the scalability of the platform.

Growth Opportunities

Continue to acquire more customers

Customers serve as ambassadors for the Hims & Hers brand, further driving organic growth through word of mouth and user-generated content. The convenience of the Hims & Hers websites allows the Company to reduce stigma and access-related barriers that frequently prevent consumers from seeking medical care, expanding the Company’s market opportunity. Organic growth is enhanced by sophisticated omni-channel acquisition strategies meant to target future customers with condition specific on-ramps at profitable returns on investment. In addition, Hims & Hers’ brand positioning has afforded significant partnerships with leading talent whose promotional efforts drive meaningful awareness of the products and services Hims & Hers makes available. As its portfolio of products and services grows across categories, Hims & Hers believes that its market presence and brand recognition will expand, driving more consumers to seek out the Company for future healthcare needs.

Grow within existing customer base

Hims & Hers’ customer base represents the future of healthcare and differentiates the Company. Approximately 80% of customers to date indicate that they came to Hims & Hers to learn about and find options for their condition, and are seeking treatment for their particular conditions for the first time. In addition, the majority of Hims & Hers’ customers are millennials at the beginning of their healthcare journey and Hims & Hers intends to grow with them as their healthcare needs evolve. Hims & Hers believes this demographic will make up the majority of healthcare spend in the coming decades, and as such it has intentionally built its brand and technologies to align with the expectations of this consumer group.

Category expansion into new chronic conditions

Hims & Hers is pursuing a roadmap of rapid category expansion into new chronic and often stigmatized conditions that can be treated safely via telehealth, require ongoing and recurring customer relationships, and for which generic medication has been established as an effective means of treatment. Future chronic care opportunities that show high prevalence within Hims & Hers’ existing customer base and offer traits similar to its existing categories in terms of business model characteristics include sleep disorders, infertility, diabetes, cholesterol, and hypertension, which represent $15 billion, $15 billion, $70 billion, $21 billion, and $7 billion market opportunities, respectively. With approximately 130 million individuals in the United States currently suffering from chronic conditions, Hims & Hers sees a large market opportunity for its current and future offerings.



 

4


Table of Contents

Additionally, Hims & Hers’ tools ideally position the Company to identify other medical issues and chronic conditions impacting customers, which allows the Company to develop tailored offerings to meet customer needs. Understanding which chronic conditions may be prevalent within its existing customer base allows Hims & Hers to expand with confidence into a myriad of new categories with high customer cross-sale opportunity and lifetime value expansion.

Leverage existing capabilities to penetrate new sales channels and further improve operations

The strength of the Hims & Hers brand affords the Company numerous opportunities to partner with and offer new solutions to help transform existing healthcare stakeholders. Hims & Hers has relationships with leading health systems including Ochsner Health and Mount Sinai Health System to provide a clinically-focused, telehealth-enabled patient care collaboration, providing customers with access to applicable in-person care within these systems to enhance their overall healthcare experience. These collaborations, which are intended to help Hims & Hers customers obtain in-person care not accessible through the Hims & Hers platform, are non-exclusive and do not involve any monetary exchange, compensation or other financial incentives between the parties.

Hims & Hers also recently opened a 300,000 square foot facility in Columbus, Ohio that will house a dedicated pharmacy, enable seamless drug delivery, and drive increased operating leverage across the platform. This pharmacy will also provide an opportunity to incorporate insurance reimbursement into Hims & Hers’ system, increasing drug coverage and allowing the Company to provide access to treatment for a broader range of conditions with enhanced treatment flexibility for customers.

Expand into new geographies

Hims & Hers’ strong brand and digital-first, cloud-based business model has driven rapid adoption in the U.S. Additionally, the Company’s model has been developed to be scalable and applicable across new markets and languages which would allow Hims & Hers to expand internationally. The global market for chronic diseases will grow to nearly $47 trillion by 2030, per a study by the World Economic Forum, and Hims & Hers believes the consumer-focused services it provides are applicable to a range of geographies across the world.

Affiliated Medical Groups, Providers and Partner Pharmacies

Affiliated Medical Groups

Due to the prohibition on the corporate practice of medicine adopted by a majority of states in the U.S., Hims & Hers has contractual arrangements with the Affiliated Medical Groups to enable their provision of clinical services to Hims & Hers’ customers. The Affiliated Medical Groups are separate professional entities owned solely by licensed physicians. Hims & Hers is prohibited from owning a professional entity such as the Affiliated Medical Groups under the rules prohibiting the corporate practice of medicine. However, the Affiliated Medical Groups were incorporated and established with Hims & Hers’ assistance for the specific purpose of providing clinical services to patients through the Hims & Hers platform and have no other operations or activities outside of the provision of services through the Hims & Hers platform.

The Affiliated Medical Groups contract with or employ physicians, nurse practitioners, and physician assistants to provide telehealth consultations and related services on the Hims & Hers platform. Hims & Hers enters into certain contractual agreements with the Affiliated Medical Groups and their physician owners, including administrative services agreements and continuity agreements, under which Hims & Hers serves as an administrative services manager for the Affiliated Medical Groups for the non-clinical aspects of their operations and receives a fixed administrative fee from each Affiliated Medical Group for these services. The administrative services and support Hims & Hers provides include IT products and support, including the Hims & Hers platform and electronic medical record system, billing and collection services, non-clinical personnel, customer service



 

5


Table of Contents

support, administrative support for provider credentialing and quality assurance, and other non-clinical items and services, including access to a line of credit Hims & Hers makes available to the Affiliated Medical Groups as necessary to support their operations. The Affiliated Medical Groups retain sole control of clinical decision-making and the practice of medicine and pay the providers on an hourly basis for clinical services provided through the platform. Hims & Hers is the exclusive administrative services provider for the Affiliated Medical Groups, and the Affiliated Medical Groups provide services to patients exclusively through the platform. Hims & Hers’ arrangements with the Affiliated Medical Groups generally have initial 10 year terms with renewal options. The arrangements between Hims & Hers and the Affiliated Medical Groups are reviewed and updated periodically to address changing regulatory or market conditions. Hims & Hers consolidates all of the financial results of the Affiliated Medical Groups with its own based upon its determination that the Affiliated Medical Groups are variable interest entities and that Hims & Hers is the primary beneficiary of the Affiliated Medical Groups for accounting purposes.

Partner Pharmacies

Hims & Hers has entered into contractual arrangements with two licensed pharmacies, PostMeds, Inc. (dba TruePill) and EHT Pharmacy, LLC (dba Curexa Pharmacy) for fulfillment and distribution of certain prescription and non-prescription products available through its platform. Hims & Hers is not bound by any exclusivity or minimum order requirements with respect to its use of either pharmacy, and has the ability to utilize other pharmacies at its discretion. The contractual arrangements with the pharmacies are typically for one year terms with automatic renewals, subject to standard termination rights of the parties. The pharmacies’ rates are fixed in the contractual arrangements and changes require the mutual agreement of the parties.

Regulatory Environment

As a consumer-driven healthcare organization delivering comprehensive telehealth technologies and services, in addition to the typical legal and regulatory considerations faced by a technology-based company, Hims & Hers is required to comply with complex healthcare laws and regulations at both the state and federal level. Hims & Hers’s business and its operations are subject to extensive regulation, including with respect to the practice of medicine, the use of telehealth, relationships with healthcare providers, and privacy and security of personal health information.

Government regulation of healthcare

Generally speaking, the healthcare industry is one of the most highly regulated industries in the United States. Healthcare businesses are subject to a broad array of governmental regulation at the federal, state and local levels. While portions of Hims & Hers’ business are subject to significant regulations, some of the more well-known healthcare regulations do not apply to the Company because of the way its current operations are structured. Hims & Hers currently accepts payments only from its customers—not any third-party payors, such as government healthcare programs or health insurers. Because of this approach, Hims & Hers is not subject to many of the laws and regulations that impact other participants in healthcare industry.

Irrespective of Hims & Hers’ business model, the healthcare industry is subject to changing political, economic and regulatory influences that may affect healthcare companies like Hims & Hers. During the past several years, the healthcare industry has been subject to an increase in governmental regulation and subject to potential disruption due to legislative initiatives and government regulation, as well as judicial interpretations thereof. While these regulations may not directly impact Hims & Hers or its offerings in any given case, they will affect the healthcare industry as a whole and may impact customer use of the Company’s solutions. If the government asserts broader regulatory control over companies like Hims & Hers or if Hims & Hers determines



 

6


Table of Contents

that it will accept payment from and/or participate in third party payor programs, the complexity of the Company’s operations and its compliance obligations will materially increase.

Government regulation of the practice of medicine and telehealth

The practice of medicine is subject to various federal, state and local certification and licensing laws, regulations, approvals and standards, relating to, among other things, the qualifications of the provider, the practice of medicine (including specific requirements when providing health care utilizing telehealth technologies and the provision of remote care), the continuity and adequacy of medical care, the maintenance of medical records, the supervision of personnel, and the prerequisites for the prescription of medication and ordering of tests. Because the practice of telehealth is relatively new and rapidly developing, regulation of telehealth is evolving and the application, interpretation and enforcement of these laws, regulations and standards can be uncertain or uneven. As a result, Hims & Hers must continually monitor legislative, regulatory and judicial developments regarding the practice of medicine and telehealth in order to support the Affiliated Medical Groups.

Physicians and midlevel providers (e.g., physician assistants, nurse practitioners) who provide professional medical services via telehealth must, in most instances, hold a valid license to practice medicine in the state in which the patient is located. Hims & Hers has established systems to assist the Affiliated Medical Groups in ensuring that its providers are appropriately licensed under applicable state law and that their provision of telehealth to Hims & Hers customers occurs in each instance in compliance with applicable rules governing telehealth.

In response to the COVID-19 pandemic, some state and federal regulatory authorities lowered certain barriers to the practice of telehealth in order to make remote healthcare services more accessible. Due to the Hims & Hers business model, these changes did not dramatically change the Company’s operations, but these changes did introduce many people to the practice of telehealth. It is unclear whether these changes will have a long-term impact on the adoption of telehealth services by the general public or legislative and regulatory authorities.

Corporate practice of medicine laws in the U.S.; Fee splitting

In certain jurisdictions, the corporate practice of medicine doctrine generally prohibits non-physicians from practicing medicine, including by employing physicians to provide clinical services, directing the clinical practice of physicians, or holding an ownership interest in an entity that employs physicians. Other practices, such as professionals splitting their professional fees with non-professional persons or entities, is also prohibited in some jurisdictions. These laws are intended to prevent unlicensed persons from interfering with or unduly influencing a physician’s professional judgment. State laws and enforcement activities related to the corporate practice of medicine and fee-splitting vary dramatically. In some states, even activities not directly related to the delivery of clinical services may be considered an element of the practice of medicine. For example, in some states the corporate practice of medicine restrictions may be implicated by non-clinical activities such as scheduling, contracting, setting rates and the hiring and management of non-clinical personnel.

Because of the restrictions on the corporate practice of medicine doctrine and fee-splitting in various jurisdictions, Hims & Hers does not employ the healthcare providers who provide clinical services on the Hims & Hers platform. Instead, the Affiliated Medical Groups provide services on the platform and Hims & Hers contracts with but does not own the Affiliated Medical Groups. The Affiliated Medical Groups and their providers maintain exclusive authority regarding the provision of healthcare services (including consults that may lead to the writing of prescriptions) and remain responsible for retaining and compensating their physicians and midlevel providers, credentialing decisions regarding their providers, maintaining professional standards, maintaining clinical documentation within medical records, establishing their own fee schedule, and submitting



 

7


Table of Contents

accurate information to Hims & Hers so that it can bill customers. Despite Hims & Hers’ care in structuring arrangements with the Affiliated Medical Groups, it is possible that a regulatory authority or another party, including providers affiliated with Affiliated Medical Groups, could assert that Hims & Hers (or other organizations with similar business models) is engaged in the corporate practice of medicine or that the contractual arrangements with Affiliated Medical Groups violate a state’s fee-splitting prohibition. Failure to comply with these state laws could lead to materially adverse consequences.

U.S. Federal and State fraud and abuse laws

Participants in the United States healthcare industry are subject to extensive federal and state regulation with respect to kickbacks, physician self-referral arrangements, false claims and other fraud and abuse issues. For example, the federal anti-kickback law (the “Anti-Kickback Law”) prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program. The federal False Claims Act imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government. The penalties for violating these laws can be severe, including criminal and civil penalties, imprisonment, and possible exclusion from the federal health care programs.

Given Hims & Hers’ current operations and the current state of this federal law, the Anti-Kickback Statute, federal False Claim Act and other laws that are tied to federal health care program or commercial insurer reimbursement should not apply to Hims & Hers’ business. If the scope of these laws is extended to include a broader spectrum of activities or if Hims & Hers changes it business model to accept payments from third party payors such as a government program, it could become subject to these laws and need to modify its business model.

FDA regulation

The products available through the Hims & Hers platform are regulated by the US Food and Drug Administration (“the FDA”) and are subject to the limitations placed by the FDA on the approved uses in the product prescribing information. The FDA regulates product promotion and noncompliance with the FDA’s regulations can result in the FDA requesting that Hims & Hers modify product promotion or subjecting it to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine and criminal penalties. Other federal, state or foreign enforcement authorities monitor product promotion and have the authority to levy significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement, if violations of applicable law or regulations occur.

U.S. State and Federal Health Information Privacy and Security Laws

Numerous state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability, integrity, and other processing of health information. Hims & Hers believes that, because of its operating processes, it is not a covered entity or a business associate under the Health Insurance Portability and Accountability Act and the implementing regulations (“HIPAA”), which establishes a set of national privacy and security standards for the protection of protected health information by health plans, healthcare clearinghouses and certain healthcare providers, referred to as covered entities, and the business associates with whom such covered entities contract for services. Notwithstanding that Hims & Hers does not believe that it meets the definition of a covered entity or business associate under HIPAA, it has executed business associate agreements with certain other parties and has assumed obligations that are based upon HIPAA-related requirements. Because Hims & Hers needs to use and disclose customers’ health and personal information in order to provide its services, it has developed and maintains policies and procedures to protect that information, including administrative, physical and technical safeguards.



 

8


Table of Contents

In addition to HIPAA, numerous other federal, state, and foreign laws and regulations protect the confidentiality, privacy, availability, integrity and security of health information and other types of personal information. These laws and regulations can be more restrictive than, and may not be preempted by, HIPAA and its implementing rules. These laws and regulations are often uncertain, contradictory, and subject to changed or differing interpretations, and Hims & Hers expects new laws, rules and regulations regarding privacy, data protection, and information security to be proposed and enacted in the future.

The Parties to the Business Combination

OAC

OAC is a blank check company incorporated on April 9, 2019 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. OAC has neither engaged in any operations nor generated any revenue to date. Based on OAC’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

On July 22, 2019, OAC consummated an initial public offering of 20,125,000 units at an offering price of $10.00 per unit, and a private placement with Sponsor of 4,016,667 private placement warrants at an offering price of $1.50 per private placement warrant. Each unit sold in the initial public offering and private placement consists of one Class A ordinary share and one-third of one redeemable warrant.

Following the closing of OAC’s initial public offering, an amount equal to $201,250,000 of the net proceeds from its initial public offering and the sale of the private placement warrants was placed in the trust account. The trust account may be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government obligations. As of December 24, 2020, funds in the trust account totaled approximately $204,524,663 and were held in money market funds. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (i) the completion of OAC’s initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Existing Governing Documents to modify the substance and timing of our obligation to redeem 100% of the public shares if OAC does not complete a business combination by July 22, 2021, or (iii) the redemption of all of the public shares if OAC is unable to complete a business combination by July 22, 2021 (unless such date is extended in accordance with the Existing Governing Documents), subject to applicable law.

OAC’s units, public shares and public warrants are currently listed on NYSE under the symbols “OAC.U,” “OAC” and “OAC WS,” respectively.

OAC’s principal executive office is located at 333 South Grand Avenue, 28th Floor, Los Angeles, California 90071, and its telephone number is (213) 830-6300. OAC’s corporate website address is https://www.oaktreeacquisitioncorp.com/. OAC’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus.

Hims

Hims is a Delaware corporation.

Hims’ principal executive office is located at 2269 Chestnut Street, #523, San Francisco, California 94123, and its telephone number is (415) 851-0195. Hims’ corporate website address is https://www.forhims.com/. The



 

9


Table of Contents

information on, or that can be accessed through, Hims’ website is not part of this proxy statement/ prospectus. The website address is included as an inactive textual reference only.

OAC Merger Sub

OAC Merger Sub is a Delaware corporation and wholly-owned subsidiary of OAC formed for the purpose of effecting the Business Combination. OAC Merger Sub owns no material assets and does not operate any business.

OAC Merger Sub’s principal executive office is located at 333 South Grand Avenue, 28th Floor, Los Angeles, California 90071, and its telephone number is (213) 830-6300.

Proposals to be Put to the Shareholders of OAC at the Extraordinary General Meeting

The following is a summary of the proposals to be put to the extraordinary general meeting of OAC and certain transactions contemplated by the Merger Agreement. Each of the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals and the NYSE Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Governing Documents Proposals that are not Required Governing Documents Proposals, the Incentive Equity Plan Proposal and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on any other proposal. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting.

As discussed in this proxy statement/prospectus, OAC is asking its shareholders to approve by ordinary resolution the Merger Agreement, pursuant to which, among other things, on the date of Closing, promptly following the Hims Recapitalization and the consummation of the Domestication, OAC Merger Sub will merge with and into Hims, with Hims as the surviving company in the Merger and, after giving effect to such Merger, Hims shall be a wholly-owned subsidiary of OAC. In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, (i) each share of Hims common stock and restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Hims Class A Common Stock, Earn Out Shares and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the Closing, and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million Earn Out Shares (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period and will also vest in connection with any Company Sale if the applicable thresholds are met in such Company Sale, in each case, during the Earn Out Period. In addition, in connection with the Domestication, New Hims will amend and restate the Existing Governing Documents to be the Proposed Governing Documents and adopt a dual class structure, as described in the section of this proxy statement/prospectus titled “Description of New Hims Securities.”

After consideration of the factors identified and discussed in the section entitled “Business Combination Proposal—The OAC Board’s Reasons for the Business Combination,” the OAC Board concluded that the



 

10


Table of Contents

Business Combination met all of the requirements disclosed in the prospectus for OAC’s initial public offering, including that the businesses of Hims had a fair market value of at least 80% of the balance of the funds in the trust account at the time of execution of the Merger Agreement. For more information about the transactions contemplated by the Merger Agreement, see “Business Combination Proposal.”

Consideration to Hims Equityholders in the Business Combination

In accordance with the terms and subject to the conditions of the Merger Agreement, following the Hims Recapitalization and at the Effective Time, (i) each share of Hims common stock and restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration comprised of New Hims Class A Common Stock, Earn Out Shares, and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards, and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the Closing, and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million Earn Out Shares (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50, and $20 for any 10 trading days within any 20-trading day period and will also vest in connection with any Company Sale if the applicable thresholds are met in such Company Sale, in each case, during the Earn Out Period.

For further details, see “Business Combination Proposal—Business Combination Consideration.”

In addition, in connection with the Domestication, New Hims will amend and restate the Existing Governing Documents to be the Proposed Governing Documents and adopt a dual class structure, as described in the section of this proxy statement/prospectus titled “Description of New Hims Securities.”

Conditions to Closing of the Business Combination

The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Merger Agreement having expired or been terminated; (iii) OAC having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing; (iv) the Minimum Available Cash Condition; (v) the approval by NYSE of our initial listing application in connection with the Business Combination; and (vi) the consummation of the Domestication. Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. For further details, see “Business Combination Proposal—Conditions to Closing of the Business Combination.”

Domestication Proposal

As discussed in this proxy statement/prospectus, OAC will ask its shareholders to approve by special resolution the Domestication Proposal. As a condition to closing the Business Combination pursuant to the terms of the Merger Agreement, the board of directors of OAC has unanimously approved the Domestication Proposal. The Domestication Proposal, if approved, will authorize a change of OAC’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while OAC is currently incorporated as an exempted



 

11


Table of Contents

company under the Cayman Islands Companies Law, upon Domestication, New Hims will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law, as well as the Existing Governing Documents and the Proposed Governing Documents. The approval of each of the Domestication Proposal, the Governing Documents Proposal A, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D, the Governing Documents Proposal E, and the Governing Documents Proposal F requires a special resolution under Cayman Islands law, being the affirmative vote of holders at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. Accordingly, we encourage shareholders to carefully consult the information set out below under “Comparison of Corporate Governance and Shareholder Rights.”

For further details, see “Domestication Proposal” and “Governing Documents Proposals.”

Governing Documents Proposals

OAC will ask its shareholders to approve by special resolution six (6) separate Governing Documents Proposals in connection with the replacement of the Existing Governing Documents, under Cayman Islands law, with the Proposed Governing Documents, under the DGCL. The OAC Board has unanimously approved each of the Governing Documents Proposals and believes such proposals are necessary to adequately address the needs of New Hims after the Business Combination. Approval of each of the Governing Documents Proposals is a condition to the consummation of the Business Combination. A brief summary of each of the Governing Documents Proposals is set forth below. These summaries are qualified in their entirety by reference to the complete text of the Proposed Governing Documents.

 

   

Governing Documents Proposal A—to authorize the change in the authorized share capital of OAC from US$55,100 divided into (i) 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) 2,750,000,000 shares of New Hims Class A Common Stock, 10,000,000 shares of New Hims Class V Common Stock and 275,000,000 shares of New Hims Preferred Stock.

 

   

Governing Documents Proposal B—to authorize the New Hims Board to issue any or all shares of New Hims Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New Hims Board and as may be permitted by the DGCL.

 

   

Governing Documents Proposal C—to authorize the removal of the ability of New Hims stockholders to take action by written consent in lieu of a meeting from and after the time that Mr. Dudum and his affiliates and permitted transferees no longer beneficially own a majority of the voting power of the then-outstanding shares of capital stock of New Hims.

 

   

Governing Documents Proposal D—to amend and restate the Existing Governing Documents and authorize all other changes necessary or, as mutually agreed in good faith by OAC and Hims, desirable in connection with the replacement of Existing Governing Documents with the Proposed Governing Documents as part of the Domestication, including (i) changing the post-Business Combination corporate name from “Oaktree Acquisition Corp.” to “Hims & Hers Health, Inc.” (which is expected to occur after the consummation of the Domestication in connection with the Business Combination), (ii) making New Hims’ corporate existence perpetual, (iii) adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act, (iv) electing to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested stockholders, and (v) removing certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which the OAC Board believes is necessary to adequately address the needs of New Hims after the Business Combination.



 

12


Table of Contents
   

Governing Documents Proposal E—to authorize the issuance of shares of New Hims Class V Common Stock, which will allow holders of New Hims Class V Common Stock to cast 175 votes per share of New Hims Class V Common Stock.

 

   

Governing Documents Proposal F—to approve the amendment of the Existing Governing Documents so as to declassify the New Hims Board for so long as Mr. Dudum and his affiliates and permitted transferees beneficially own shares of New Hims Class V Common Stock and such shares have not converted into shares of New Hims Class A Common Stock in accordance with the Proposed Certificate of Incorporation.

The Proposed Governing Documents differ in certain material respects from the Existing Governing Documents, and we encourage shareholders to carefully consult the information set out in the section entitled “Governing Documents Proposals” and the full text of the Proposed Governing Documents of New Hims, attached hereto as Annexes C and D.

NYSE Proposal

Our shareholders are also being asked to approve, by ordinary resolution, the NYSE Proposal. Our units, public shares, and public warrants are listed on NYSE and, as such, we are seeking shareholder approval for issuance of shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock in connection with the Business Combination and the PIPE Financing pursuant to NYSE Listing Rule 312.03.

For additional information, see “NYSE Proposal.”

Incentive Equity Plan Proposal

Our shareholders are also being asked to approve, by ordinary resolution, the Incentive Equity Plan Proposal. A total of 21,000,000 shares of New Hims Class A Common Stock will be reserved for issuance under the Incentive Equity Plan. The Incentive Equity Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by 5.0% of the outstanding number of shares of New Hims Class A Common Stock and New Hims Class V Common Stock on the last day of the immediately preceding fiscal year, or such lesser amount as determined by the New Hims Board or compensation committee thereof. For additional information, see “Incentive Equity Plan Proposal.” The full text of the Incentive Equity Plan is attached hereto as Annex J.

Equity Stock Purchase Plan Proposal

Our shareholders are also being asked to approve, by ordinary resolution, the Employee Stock Purchase Plan Proposal. A total of 4,000,000 shares of New Hims Class A Common Stock will be reserved for issuance under the ESPP. Based upon a price per share of $10.00, the maximum aggregate market value of the New Hims Class A Common Stock that could potentially be issued under the ESPP at Closing is $40,000,000. The ESPP provides that the number of shares reserved and available for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2022, by the the lesser of (i) 1.0% of the outstanding number of shares of New Hims Class A Common Stock and New Hims Class V Common Stock on the last day of the immediately preceding fiscal year, (ii) 12,000,000 shares of New Hims Class A Common Stock or (iii) an amount determined by the New Hims Board. For additional information, see “Employee Stock Purchase Plan Proposal.” The full text of the ESPP is attached hereto as Annex K.

Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize OAC to consummate the Business Combination, the OAC Board may submit a proposal to adjourn



 

13


Table of Contents

the extraordinary general meeting to a later date or dates to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates. For additional information, see “Adjournment Proposal.”

The OAC Board’s Reasons for the Business Combination

OAC was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The OAC Board sought to do this by utilizing the networks and industry experience of both the Sponsor and the OAC Board and management to identify, acquire, and operate one or more businesses. The members of the OAC Board and management have extensive transactional experience, particularly in the industrial and consumer sectors.

In particular, the OAC Board considered the following positive factors, although not weighted or in any order of significance, in deciding to approve the Business Combination Proposal:

 

  A.

the strength of the Hims brand;

 

  B.

Hims’ expertise in building direct and deep relationships with the millennial audience;

 

  C.

Hims’ proprietary and vertically-integrated telehealth platform;

 

  D.

the scalability of the Hims platform;

 

  E.

higher quality experience for both consumers and providers that the Hims platform is offering;

 

  F.

the Hims management team, which will remain in place after the Business Combination;

 

  G.

the attractiveness of the Hims strategic plan given the availability of a multitude of growth levers;

 

  H.

the financial condition of Hims;

 

  I.

the terms of the Merger Agreement and the related agreements;

 

  J.

the results of its review of several alternative transactions;

 

  K.

the continued ownership by the Hims equityholders;

 

  L.

the results of the due diligence investigation conducted by OAC’s management; and

 

  M.

Hims’ attractive valuation.

The OAC Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

  A.

the possibility that the Business Combination may not be completed;

 

  B.

risks associated with the successful implementation of the combined company’s long term business plan and strategy, the combined company realizing the anticipated benefits of the Business Combination on the timeline expected or at all;

 

  C.

risks linked to the post-business combination corporate governance;

 

  D.

the limited review undertaking by the OAC Board;

 

  E.

risks related to the no survival of remedies for breach of representations, warranties or covenants of Hims; and

 

  F.

the interests of OAC’s directors and executive officers.



 

14


Table of Contents

In addition to considering the factors described above, the OAC Board also considered that certain of the officers and directors of OAC may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of OAC’s shareholders. OAC’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and approving, as members of the OAC Board, the Merger Agreement and the transactions contemplated therein, including the Business Combination.

The OAC Board concluded that the potential benefits that it expected OAC and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the OAC Board determined that the Merger Agreement, the Business Combination and the Merger, were in the best interests of, OAC and its shareholders.

For more information about the OAC Board’s decision-making process concerning the Business Combination, please see the section entitled “The Business Combination Proposal—the OAC Board’s Reasons for the Business Combination.”

Related Agreements

This section describes certain additional agreements entered into or to be entered into in connection with the Merger Agreement. For additional information, see “Business Combination Proposal—Related Agreements.”

PIPE Financing

OAC entered into Subscription Agreements with the PIPE Investors to consummate the PIPE Financing, pursuant to which the PIPE Investors have agreed to subscribe for and purchase, and OAC has agreed to issue and sell to the PIPE Investors, an aggregate of 7,500,000 shares of New Hims Class A Common Stock at a price of $10.00 per share, for aggregate gross proceeds of $75,000,000. The shares of New Hims Class A Common Stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. OAC will grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the substantially concurrent closing of the Business Combination. For additional information, see “Business Combination Proposal—Related Agreements—PIPE Financing.”

Sponsor Registration Rights Agreement

At the Closing, OAC and the Sponsor will enter into a Registration Rights Agreement (the “Sponsor Registration Rights Agreement”), which will terminate and replace the existing registration and shareholder rights agreement between OAC and the Sponsor, dated July 22, 2019 (the “OAC Registration and Shareholder Rights Agreement”), and pursuant to which, among other things, the Sponsor will be granted certain customary registration rights with respect to its shares of New Hims Class A Common Stock. For additional information, see “Business Combination Proposal—Related Agreements—Sponsor Registration Rights Agreement.”

Amended and Restated Investors’ Rights Agreement

Pursuant to the Merger Agreement, OAC and certain Hims Stockholders entered into an Amended and Restated Investors’ Rights Agreement (the “Amended and Restated Investors’ Rights Agreement”) contingent upon and to be effective immediately prior to the Closing pursuant to which, among other things, such Hims Stockholders (i) have agreed not to effect any sale or distribution of equity securities of New Hims issued to such stockholders pursuant to the Merger Agreement during the lock-up period described therein and (ii) will be granted certain customary registration rights with respect to their shares of New Hims Class A Common Stock.



 

15


Table of Contents

In particular, the Amended and Restated Investors’ Rights Agreement provides such Hims Stockholders with the following rights and obligations:

 

   

Shelf registration rights. Certain holders of New Hims Class A Common Stock will be entitled to include such shares in the Resale Shelf Registration Statement to be filed by New Hims no later than forty five (45) days following the Closing Date, subject to the terms described above in “Sponsor Registration Rights Agreement — Shelf Registration Rights.”

 

   

Piggyback registration rights. At any time after the Closing Date, if New Hims proposes to file a registration statement to register any of its equity securities under the Securities Act or to conduct a public offering, either for its own account or for the account of any other person, subject to certain exceptions, parties to the Amended and Restated Investors’ Rights Agreement are entitled to include their registrable securities in such registration statement.

 

   

Expenses and indemnification. All fees, costs and expenses of underwritten registrations will be borne by New Hims and underwriting discounts and selling commissions will be borne by the holders of the shares being registered. The Amended and Restated Investors’ Rights Agreement contains customary cross-indemnification provisions, under which New Hims is obligated to indemnify holders of registrable securities in the event of material misstatements or omissions in the registration statement attributable to New Hims, and holders of registrable securities are obligated to indemnify New Hims for material misstatements or omissions attributable to them.

 

   

Termination of Registration Rights. A party to the Amended and Restated Investors’ Rights Agreement is no longer entitled to exercise registration rights under that agreement (i) at a time that is more than five years after the Closing Date, (ii) as to a particular party, such earlier time at which such party (a) can sell all of its securities in compliance with Rule 144(b)(1)(i) or (b) holds one percent (1%) or less of New Hims’ outstanding capital stock and all registrable securities held by such party can be sold under Rule 144 without restriction during any three month period.

 

   

Lock-up. Each party to the Amended and Restated Investor Rights Agreement agreed that it will not, without the prior written consent of New Hims, during the period commencing on the Closing Date and ending on the date that is one hundred eighty (180) days after the Closing Date (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of New Hims Class A Common Stock or any securities convertible into or exercisable or exchangeable for New Hims Class A Common Stock issued or issuable to such party pursuant to the Merger Agreement (collectively, the “Lock-Up Shares”), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares. Notwithstanding the foregoing, if, at any time beginning 90 days after the Closing Date (the “Earliest Release Date”), the closing price of the New Hims Class A Common Stock equals or exceeds 133% of the closing price per share of New Hims Class A Common Stock on the Closing Date (as adjusted for stock splits, reverse splits, recapitalizations, reorganizations, and any similar transaction) for any 10 trading days within any 20 trading day period (with the calculation including the 20 trading day period immediately prior to the Earliest Release Date), then 25% of each party’s Lock-Up Shares (which, for purposes of holders of options, shall only include options that have vested as of such date) will be automatically released from the lock-up restrictions as of the last day of such 20 trading day period. The lock-up restrictions contain customary exceptions, including for estate planning transfers, affiliates transfers, and transfers upon death or by will.

Hims Stockholder Support Agreements

Pursuant to the Merger Agreement, certain Hims Stockholders each entered into a Support Agreement (collectively, the “Hims Stockholder Support Agreements”) with OAC, pursuant to which such Hims Stockholders



 

16


Table of Contents

have agreed to, among other things, (i) vote in favor of the Merger Agreement and the transactions contemplated thereby, and (ii) be bound by certain other covenants and agreements related to the Business Combination. For additional information, see “Business Combination Proposal—Related Agreements—Support Agreements.”

Sponsor Agreement

Pursuant to the Merger Agreement, OAC, the Sponsor and Hims entered into a Sponsor Agreement (the “Sponsor Agreement”) pursuant to which the Sponsor has agreed to, among other things, (i) vote in favor of the Condition Precedent Proposals, (ii) not effect any sale or distribution of equity securities of New Hims during the lock-up period described therein, and (iii) surrender and forfeit 25.0% of the Class B ordinary shares and 25.0% of the private placement warrants for no consideration and as a contribution to the capital of OAC to be effectuated in connection with the consummation of the Business Combination. A number of securities equal to such surrendered and forfeited Class B ordinary shares and private placement warrants is being issued to Hims Equityholders as New Hims Class A Common Stock (or equivalent equity awards in respect thereof) and warrants to acquire shares of New Hims Class A Common Stock (or equivalent equity awards in respect thereof) in the Business Combination. For additional information, see “Business Combination Proposal—Related Agreements—Sponsor Agreement.”

Ownership of New Hims

As of the date of this proxy statement/prospectus, there are 25,156,250 ordinary shares issued and outstanding, which includes an aggregate of 5,031,250 Class B ordinary shares. As of the date of this proxy statement/prospectus, there is outstanding an aggregate of 10,725,000 warrants, comprised of 4,016,667 private placement warrants held by Sponsor and 6,708,333 public warrants. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of New Hims Class A Common Stock. Pursuant to the Sponsor Agreement, the Sponsor will surrender and forfeit 25.0% of the Class B ordinary shares and 25.0% of the private placement warrants of OAC for no consideration. A number of securities equal to such surrendered and forfeited Class B ordinary shares and private placement warrants is being issued to Hims Equityholders as New Hims Class A Common Stock (or equivalent equity awards in respect thereof) and warrants to acquire shares of New Hims Class A Common Stock (or equivalent equity awards in respect thereof) in the Business Combination. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming that none of OAC’s outstanding public shares are redeemed in connection with the Business Combination), OAC’s fully-diluted share capital would be 35,881,250 ordinary shares.

The following table illustrates varying estimated ownership levels in New Hims Class A Common Stock immediately following the consummation of the Business Combination, based on the varying levels of redemptions by the public shareholders and the following additional assumptions: (i) 145,464,420 shares of New Hims Class A Common Stock are issued to the holders of shares of capital stock of Hims at the Closing; (ii) all shares of New Hims Class V Common Stock that will be held by Andrew Dudum, the Chief Executive Officer and Co-Founder of Hims, including his affiliates and permitted transferees, immediately following Closing have been converted into New Hims Class A Common Stock on a one-for-one basis; (iii) no shares of Hims capital stock are repurchased in the Hims Pre-Closing Redemption; (iv) 7,500,000 shares of New Hims Class A Common Stock will be issued in the PIPE Financing; (v) no public warrants or private placement warrants to purchase New Hims Class A Common Stock that will be outstanding immediately following the Closing have been exercised; (vi) no vested or unvested options to acquire New Hims Class A Common Stock that will be held by Hims Equityholders immediately following Closing have been exercised; (vii) no restricted stock unit awards that will be held by Hims Equityholders immediately following the Closing have been settled; and (viii) no Earn Out Shares (or equivalent equity awards in respect thereof) that will be held by Hims Equityholders immediately



 

17


Table of Contents

following the Closing will have vested. If the actual facts are different than these assumptions, the ownership percentages in New Hims will be different.

 

     Share Ownership in New Hims  
     No redemptions     Maximum
redemptions(1)
 
     Percentage of
Outstanding
Shares
    Percentage of
Outstanding
Shares
 

OAC public shareholders

     11.4     7.3

Sponsor(2)

     2.1     2.2

PIPE Investors

     4.2     4.4

Hims Stockholders(3),(4),(5)

     82.3     86.1

 

(1)

Assumes that 7,822,956 of OAC’s outstanding public shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Available Cash Condition based on a per share redemption price of $10.16 per share) are redeemed in connection with the Business Combination.

(2)

Includes 3,773,437 Class B ordinary shares held by the Sponsor originally acquired prior to or in connection with OAC’s initial public offering and reflects the forfeiture of 25.0% of the Class B ordinary shares pursuant to the Sponsor Agreement.

(3)

Includes shares of New Hims Class V Common Stock to be issued to Mr. Dudum, including his affiliates and permitted transferees. Pursuant to the terms of the Merger Agreement, Mr. Dudum is expected to hold, directly or indirectly, shares of New Hims Class A Common Stock and shares of New Hims Class V Common Stock representing approximately 90% of the voting power of the capital stock of New Hims on a fully-diluted basis.

(4)

Excludes options to acquire New Hims Class A Common Stock, awards of restricted stock units with respect to shares of New Hims Class A Common Stock, and the 16 million Earn Out Shares (or equivalent equity awards in respect thereof). Inclusion of all such securities would dilute the ownership of all stockholders of New Hims.

(5)

Excludes 720,838 shares of New Hims Common Stock otherwise issuable upon consummation of the Business Combination which are expected to be settled upon consummation of the Business Combination to satisfy amounts due under certain Hims promissory notes.

For further details, see “Business Combination Proposal—Consideration to Hims Equityholders in the Business Combination.”

Date, Time, and Place of Extraordinary General Meeting of OAC’s Shareholders

The extraordinary general meeting of OAC, will be held at 9:00 a.m., Eastern Time, on January 19, 2021, at the offices of Kirkland & Ellis LLP, located at 601 Lexington Avenue, New York, New York 10022, to consider and vote upon the proposals to be put to the extraordinary general meeting, including if necessary, the Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, each of the Condition Precedent Proposals have not been approved.

Voting Power; Record Date

OAC shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on December 4, 2020, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Our warrants do not have voting rights. As of the close of business on the record date, there were 25,156,250 ordinary shares issued and outstanding, of which 20,125,000 were issued and outstanding public shares.

Quorum and Vote of OAC Shareholders

A quorum of OAC shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold not less than a majority of the



 

18


Table of Contents

issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 12,578,126 ordinary shares would be required to achieve a quorum.

The Sponsor has, pursuant to the Sponsor Agreement, agreed to, among other things, vote all of its ordinary shares in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding ordinary shares. As a result, in addition to the ordinary shares owned by the Sponsor, (i) for proposals requiring at least a majority of the votes cast by the holders of the issued ordinary shares, we would need 7,546,876, or 37.5% (assuming all outstanding ordinary shares are voted), or 1,257,813, or 6.25% (assuming only the minimum number of ordinary shares shares representing a quorum are voted), of the 20,125,000 issued and outstanding public shares (assuming all outstanding ordinary shares shares are voted), in order to approve each respective proposal, and (ii) for proposals requiring at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares, we would need 11,739,584, or 58.3% (assuming all outstanding ordinary shares are voted), or 3,354,168, or 16.6% (assuming only the minimum number of ordinary shares shares representing a quorum are voted), of the 20,125,000 issued and outstanding public shares (assuming all outstanding ordinary shares shares are voted), in order to approve each respective proposal. See “Business Combination Proposal—Related Agreements—Sponsor Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Agreement.

The proposals presented at the extraordinary general meeting require the following votes:

 

  (i)

Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (ii)

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (iii)

Governing Documents Proposals: The separate approval of each of the Governing Documents Proposals requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (iv)

NYSE Proposal: The approval of the NYSE Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (v)

Incentive Equity Plan Proposal: The approval of the Incentive Equity Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (vi)

Employee Stock Purchase Plan Proposal: The approval of the Employee Stock Purchase Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (vii)

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the



 

19


Table of Contents
  holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Redemption Rights

Pursuant to the Existing Governing Documents, a public shareholder may request of OAC that New Hims redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental, OAC’s transfer agent, in which you (a) request that New Hims redeem all or a portion of your public shares for cash, and (b) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

 

  (iii)

deliver your public shares to Continental, OAC’s transfer agent, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on January 14, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, OAC’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, OAC’s transfer agent, New Hims will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of December 24, 2020, this would have amounted to approximately $10.16 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and accordingly it is shares of New Hims Class A Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of OAC—Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash and such excess public shares would be converted into the merger consideration in connection with the Business Combination.



 

20


Table of Contents

The Sponsor has, pursuant to the Sponsor Agreement, agreed to, among other things, vote all of its ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive its anti-dilution rights with respect to its Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Agreement.

Holders of the warrants will not have redemption rights with respect to the warrants.

Appraisal Rights

Neither OAC shareholders nor OAC warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. OAC has engaged Morrow to assist in the solicitation of proxies.

If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of OAC—Revoking Your Proxy.”

Interests of OAC Directors and Executive Officers in the Business Combination

When you consider the recommendation of the OAC Board in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor, including OAC’s directors and executive officers, have interests in such proposal that are different from, or in addition to, those of OAC shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

 

   

the fact that the Sponsor has agreed not to redeem any Class A ordinary shares held by it in connection with a shareholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the 5,031,250 Class B ordinary shares it currently owns and such securities will have a significantly higher value at the time of the Business Combination;

 

   

the fact that Sponsor paid $6,025,000 for its private placement warrants, and the Class A ordinary shares and private placement warrants underlying those units would be worthless if a business combination is not consummated by July 22, 2021 (unless such date is extended in accordance with the Existing Governing Documents);

 

   

the fact that the Sponsor and OAC’s other current officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if OAC fails to complete an initial business combination by July 22, 2021;

 

   

the fact that the Sponsor Registration Rights Agreement will be entered into by the Sponsor;

 

   

the fact that the Sponsor entered into the Sponsor Agreement pursuant to which the lock-up period to which our Sponsor and our directors and executive officers are subject was amended to provide for termination of the lock-up subsequent to our initial business combination upon the closing price of



 

21


Table of Contents
 

New Hims Class A Common Stock equaling or exceeding $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 10 trading days within any 20-trading day period commencing at least 150 days after the Closing;

 

   

the continued indemnification of OAC’s directors and officers and the continuation of OAC’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”);

 

   

the fact that the Sponsor and OAC’s officers and directors will lose their entire investment in OAC and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by July 22, 2021; and

 

   

the fact that if the trust account is liquidated, including in the event OAC is unable to complete an initial business combination by July 22, 2021, the Sponsor has agreed to indemnify OAC to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which OAC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to OAC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account.

The Sponsor has, pursuant to the Sponsor Agreement, agreed to, among other things, vote all of its ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive its anti-dilution rights with respect to its Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Agreement.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding OAC or its securities, the Sponsor, Hims and/or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, Hims and/or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposal A, the NYSE Proposal, the Incentive Equity Plan Proposal, the Employee Stock Purchase Plan Proposal, and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (ii) the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D, the Governing Documents Proposal E, and the Governing Documents Proposal F are approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (iii) the Minimum Available Cash Condition is met and otherwise limit the number of public shares electing to redeem and (iv) New Hims’ net tangible assets (as determined in



 

22


Table of Contents

accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

Entering into any such arrangements may have a depressive effect on the ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he or she owns, either at or prior to the Business Combination.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

The existence of financial and personal interests of one or more of OAC’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of OAC and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, OAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder.

Recommendation to Shareholders of OAC

The OAC Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of OAC and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the Governing Documents Proposals, “FOR” the NYSE Proposal, “FOR” the Incentive Equity Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of OAC’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of OAC and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, OAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of OAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Sources and Uses of Funds for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination assuming a Closing Date of September 30, 2020, and (i) assuming that none of OAC’s outstanding public shares are redeemed in connection with the Business Combination and (ii) assuming 7,822,956 Class A ordinary shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Available Cash Condition based on a per share redemption price of $10.16 per share) are redeemed in connection with the Business Combination.



 

23


Table of Contents

No Redemption

 

Source of Funds(1)

(in thousands)

    

Uses(1)

(in thousands)

 

Existing Cash held in trust account(2)

  $ 204,481     

Merger Consideration to Hims Equityholders(3)

  $ 1,622,620  

Merger Consideration to Hims Equityholders(3)

  $ 1,622,620     

Transaction Fees and Expenses(4)

  $ 23,324  

PIPE Financing

  $ 75,000     

Remaining Cash to Balance Sheet

  $ 256,157  
 

 

 

      

 

 

 

Total Sources

  $ 1,902,101     

Total Uses

  $ 1,902,101  
 

 

 

      

 

 

 

 

(1)

Totals might be affected by rounding.

(2)

As of September 30, 2020.

(3)

Shares issued to Hims Stockholders are at a deemed value of $10.00 per share. Assumes (i) 145,464,420 shares are issued to the Hims Stockholders, (ii) that shares of New Hims Class V Common Stock are converted into New Hims Class A Common Stock on a one-to-one basis and (iii) no shares of Hims capital stock are repurchased in the Hims Pre-Closing Redemption. The aggregate merger consideration also includes the value of shares issuable to Hims Equityholders in respect of outstanding warrants, options and restricted stock units.

(4)

Excludes up to $10.0 million of bonuses that may be paid at the discretion of the New Hims Board or a committee thereof to New Hims employees and members of management after the consummation of the Business Combination. Up to 50% of the $10.0 million bonus pool may be allocated in the form of New Hims Class A Common Stock, or other equity awards exercisable or settleable for New Hims Class A Common Stock. Since the bonus is discretionary and the final terms, structure, and timing have not yet been determined, the maximum aggregate bonus amount of $10.0 million has been excluded from transaction fees and expenses. Certain transaction fees and expenses payable in shares of New Hims Class A Common Stock have also been excluded.

Maximum Redemption

 

Source of Funds(1)

(in thousands)

    

Uses(1)

(in thousands)

 

Existing Cash held in trust account(2)

  $ 204,481     

Merger Consideration to Hims Equityholders(3)

  $ 1,622,620  

Merger Consideration to Hims Equityholders(3)

  $ 1,622,620     

Transaction Fees and Expenses(4)

  $ 23,324  
  

OAC public shareholder redemptions

  $ 79,481  

PIPE Financing

  $ 75,000     

Remaining Cash to Balance Sheet

  $ 176,676  
 

 

 

      

 

 

 

Total Sources

  $ 1,902,101      Total Uses   $ 1,902,101  
 

 

 

      

 

 

 

 

(1)

Totals might be affected by rounding.

(2)

As of September 30, 2020.

(3)

Shares issued to Hims Stockholders are at a deemed value of $10.00 per share. Assumes (i) 145,464,420 shares are issued to the Hims Stockholders, (ii) that shares of New Hims Class V Common Stock are converted into New Hims Class A Common Stock on a one-to-one basis and (iii) no shares of Hims capital stock are repurchased in the Hims Pre-Closing Redemption. The aggregate merger consideration also includes the value of shares issuable to Hims Equityholders in respect of outstanding warrants, options and restricted stock units.

(4)

Excludes up to $10.0 million of bonuses that may be paid at the discretion of the New Hims Board or a committee thereof to New Hims employees and members of management after the consummation of the Business Combination. Up to 50% of the $10.0 million bonus pool may be allocated in the form of New Hims Class A Common Stock, or other equity awards exercisable or settleable for New Hims Class A Common Stock. Since the bonus is discretionary and the final terms, structure, and timing have not yet been determined, the maximum aggregate bonus amount of $10.0 million has been excluded from transaction fees and expenses. Certain transaction fees and expenses payable in shares of New Hims Class A Common Stock have also been excluded.

U.S. Federal Income Tax Considerations

As discussed more fully under “U.S. Federal Income Tax Considerations” the Domestication generally should constitute a “reorganization” within the meaning of Section 368(a)(l)(F) of the Code. However, due to the



 

24


Table of Contents

absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as OAC, this result is not entirely clear. In the case of a transaction, such as the Domestication, that qualifies as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders” below) will be subject to Section 367(b) of the Code and, as a result of the Domestication:

 

   

a U.S. Holder whose public shares have a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of OAC’s earnings in income;

 

   

a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock will generally recognize gain (but not loss) on the exchange of public shares for shares of New Hims Class A Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its public shares provided certain other requirements are satisfied; and

 

   

a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock will generally be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its public shares provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (participation exemption).

OAC does not expect to have significant cumulative earnings and profits through the date of the Domestication.

In the case of a transaction, such as the Domestication, that should qualify as a “reorganization” under Section 368(a)(1)(F) of the Code, a U.S. Holder of public shares may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its public shares for shares of New Hims Class A Common Stock pursuant to the Domestication under the PFIC rules of the Code equal to the excess, if any, of the fair market value of the shares of New Hims Class A Common Stock received in the Domestication over the U.S. Holder’s adjusted tax basis in the corresponding public shares surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see the discussion in the section entitled “U.S. Federal Income Tax Considerations.”

Additionally, the Domestication may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—Non-U.S. Holders”) to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such non-U.S. Holder’s shares of New Hims Class A Common Stock after the Domestication.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor on the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws. For a discussion summarizing the U.S. federal income tax considerations of the Domestication and exercise of redemption rights, please see “U.S. Federal Income Tax Considerations.”



 

25


Table of Contents

Expected Accounting Treatment

The Domestication

There will be no accounting effect or change in the carrying amount of the consolidated assets and liabilities of OAC as a result of the Domestication. The business, capitalization, assets and liabilities and financial statements of New Hims immediately following the Domestication will be the same as those of OAC immediately prior to the Domestication.

The Business Combination

The Business Combination will be accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Under this method of accounting, OAC has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Mr. Dudum comprising a majority of the voting power of the combined company, Hims’ operations prior to the acquisition comprising the only ongoing operations of New Hims, Hims’ senior management comprising a majority of the senior management of New Hims, and Hims’ directors comprising all of the board of directors of New Hims. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Hims with the Business Combination being treated as the equivalent of Hims issuing stock for the net assets of OAC, accompanied by a recapitalization. The net assets of OAC will be stated at historical costs, with no goodwill or other intangible assets recorded.

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the U.S. Federal Trade Commission (“FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The OAC portion of the Business Combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. OAC and Hims filed the required forms under the HSR Act with the Antitrust Division and the FTC within ten (10) business days following the date of the Merger Agreement.

At any time before or after consummation of the Business Combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities in the United States or any other applicable jurisdiction could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of New Hims’ assets, subjecting the completion of the Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. OAC cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, OAC cannot assure you as to its result.

None of OAC and Hims are aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.



 

26


Table of Contents

Emerging Growth Company

OAC is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. OAC has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, OAC, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of OAC’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

New Hims will qualify as an “emerging growth company.” New Hims will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of OAC’s initial public offering, (b) in which New Hims has total annual gross revenue of at least $1.07 billion, or (c) in which New Hims is deemed to be a large accelerated filer, which means the market value of the common equity of New Hims that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which New Hims has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Smaller Reporting Company

Additionally, OAC is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. New Hims will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of the common equity of New Hims held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.

Risk Factors

In evaluating the proposals to be presented at the OAC extraordinary general meeting, a shareholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.” Such risks include, but are not limited to:

 

   

Hims’ limited operating history and evolving business make it difficult to evaluate Hims’ current business and future prospects and increases the risk of your investment.

 

   

Hims’ quarterly results of operations, as well as Hims’ key metrics, may fluctuate on a quarterly and annual basis, which may result in Hims failing to meet the expectations of industry and securities analysts or our investors.



 

27


Table of Contents
   

If Hims is unable to expand the scope of its offerings, including the number and type of products and services that Hims offers, the number and quality of healthcare providers serving Hims’ customers and the number and types of conditions capable of being treated through its platform, its business, financial condition and results of operations may be materially and adversely affected.

 

   

If Hims is unable to successfully market to new customers and retain existing customers, or if evolving privacy, healthcare or other laws prevent or limit Hims’ marketing activities, Hims’ business, financial condition, and results of operations could be harmed.

 

   

Hims operates in highly competitive markets and faces competition from large, well-established healthcare providers and more traditional retailers and pharmaceutical providers with significant resources, and, as a result, Hims may not be able to compete effectively.

 

   

Hims’ brand is integral to its success. If Hims fails to effectively maintain, promote, and enhance Hims’ brand in a cost-effective manner, Hims’ business and competitive advantage may be harmed.

 

   

If Hims is unable to attract and retain high quality healthcare providers for Hims’ customers, Hims’ business, financial condition and results of operations may be materially and adversely affected.

 

   

The COVID-19 pandemic has increased interest in and customer use of telehealth solutions, including Hims’ platform, and Hims cannot guarantee that this increased interest will continue after the pandemic.

 

   

Hims’ pharmacy business will subject it to regulations in addition to those Hims faces with its core telehealth business.

 

   

Government regulation of healthcare creates risks and challenges with respect to Hims’ compliance efforts and its business strategies.

 

   

If Hims fails to comply with applicable healthcare and other governmental regulations, it could face substantial penalties, its business, financial condition and results of operations could be adversely affected, and Hims may be required to restructure its operations.

 

   

Evolving government regulations and enforcement activities may require increased costs or adversely affect Hims’ results of operations.

 

   

Security breaches, loss of data and other disruptions could compromise sensitive information related to Hims’ business or customers, or prevent Hims from accessing critical information and expose it to liability, which could adversely affect Hims’ business and its reputation.

 

   

Hims may be subject to legal proceedings and litigation, including intellectual property disputes, which are costly to defend and could materially harm Hims’ business and results of operations.

 

   

Hims may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

 

   

The COVID-19 pandemic triggered an economic crisis which may delay or prevent the consummation of the Business Combination.

 

   

The dual class structure of New Hims’ common stock will have the effect of concentrating voting power with the New Hims’ Chief Executive Officer and Co-Founder, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control.

 

   

The NYSE may not list New Hims’ securities on its exchange, which could limit investors’ ability to make transactions in New Hims’ securities and subject New Hims to additional trading restrictions.

 

   

If third parties bring claims against OAC, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price in our initial public offering).



 

28


Table of Contents
   

The Domestication may result in adverse tax consequences for holders of public shares.

 

   

Public Shareholders who wish to redeem their public shares for a pro rata portion of the trust account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their public shares for a pro rata portion of the funds held in the trust account.

 

   

If OAC does not consummate an initial business combination by July 22, 2021, the OAC public shareholders may be forced to wait until after July 22, 2021 before redemption from the trust account.

 

   

Risks and uncertainties described in this proxy statement/prospectus, including those under the section entitled “Risk Factors.”



 

29


Table of Contents

SELECTED HISTORICAL FINANCIAL INFORMATION OF OAC

OAC is providing the following selected historical financial data to assist you in your analysis of the financial aspects of the Business Combination. OAC’s condensed balance sheet data as of December 31, 2019 and the statement of operations data and cash flow data for the period from April 9, 2019 through December 31, 2019 are derived from OAC’s audited financial statements included elsewhere in this proxy statement/prospectus. OAC’s balance sheet data as of September 30, 2020 and the statement of operations data and cash flow data for the nine months ended September 30, 2020 are derived from OAC’s unaudited interim financial statements included elsewhere in this proxy statement/prospectus.

The information is only a summary and should be read in conjunction with OAC’s consolidated financial statements and related notes and “OAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus. OAC’s historical results are not necessarily indicative of future results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

 

     For the Nine Months
Ended
September 30, 2020
(unaudited)
    Period from
April 9, 2019
(inception) through
December 31, 2019
(audited)
 

Statement of Operations Data:

    

General and administrative costs

   $ 2,708,421     $ 710,080  

Loss from operations

     (2,708,421     (710,080

Interest earned on marketable securities held in Trust Account

     1,698,895       1,857,342  
  

 

 

   

 

 

 

Net loss

   $ 1,009,526     $ 1,147,262  
  

 

 

   

 

 

 

Weighted average shares outstanding of Class A ordinary shares

     20,125,000       20,125,000  
  

 

 

   

 

 

 

Basic and diluted net income per share, Class A ordinary shares

   $ 0.08     $ 0.08  
  

 

 

   

 

 

 

Weighted average shares outstanding of Class B ordinary shares

     5,031,250       5,031,250  
  

 

 

   

 

 

 

Basic and diluted net loss per share, Class B ordinary shares

   $ (0.54   $ (0.08
  

 

 

   

 

 

 

 

    September 30, 2020
(unaudited)
    December 31, 2019
(audited)
 

Condensed Balance Sheet Data (At Period End):

   

Working capital

  $ (1,704,974   $ 678,447  

Total assets

  $ 205,813,988     $ 204,765,183  

Total liabilities

  $ 10,231,475     $ 8,173,144  

Class A ordinary shares (including 19,058,251 and 19,159,203 subject to possible redemption as of September 30, 2020 and December 31, 2019, respectively)

  $ 107     $ 97  

Class B ordinary shares

  $ 503     $ 503  

Total shareholders’ equity

  $ 5,000,003     $ 5,000,009  

 

     For the Nine Months
Ended
September 30, 2020
(unaudited)
    Period from
April 9, 2019
(inception) through
December 31, 2019
(audited)
 

Cash Flow Data:

    

Net cash used in operating activities

   $ (577,740   $ (241,682

Net cash (provided by/used in) investing activities

   $ 325,000     $ (201,250,000

Net cash provided by financing activities

   $ —       $ 203,002,023  


 

30


Table of Contents

SELECTED HISTORICAL FINANCIAL INFORMATION OF HIMS

You should read the following selected historical financial data of Hims together with Hims’ audited consolidated financial statements and the related notes and Hims’ unaudited condensed consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus and the information in the section entitled “Hims’ Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Hims has derived the consolidated statements of operations data for the years ended December 31, 2018 and December 31, 2019, and the balance sheet data as of December 31, 2018 and 2019, from Hims’ audited consolidated financial statements included elsewhere in this proxy statement/prospectus. The consolidated statements of operations data for the nine months ended September 30, 2019 and 2020, and the consolidated balance sheet data as of September 30, 2020, have been derived from Hims’ unaudited condensed consolidated financial statements included elsewhere in this proxy statement/prospectus and have been prepared on the same basis as Hims’ audited consolidated financial statements. In the opinion of Hims’ management, the unaudited data reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information contained in those statements. Hims’ historical results are not necessarily indicative of the results that may be expected in the future, and Hims’ results from any interim period are not necessarily indicative of the results that may be expected for any full-year or future period.

The following tables set forth Hims’ historical financial information as of, and for the periods ended on, the dates indicated.

 

    For the Nine
Months Ended
September 30,
2020
(unaudited)
    For the Nine
Months Ended
September 30,
2019
(unaudited)
    For the Year
Ended
December 31,
2019
(audited)
    For the Year
Ended
December 31,
2018

(audited)
 
    (in thousands, except share and per share data)  

Consolidated Statements of Operations Data:

       

Revenue

  $ 107,291     $ 57,789     $ 82,558     $ 26,679  

Cost of Revenue

    29,733       28,315       37,953       18,876  
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

    77,558       29,474       44,605       7,803  

Operating Expenses

       

Marketing

    39,675       49,983       63,156       55,570  

Selling and General Administrative

    48,401       40,371       55,863       28,002  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

    88,076       90,354       119,019       83,572  
 

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

    (10,518     (60,880     (74,414     (75,769

Other income (expense):

       

Interest Expense

    (10     (336     (369     (154

Other income (expense), net

    (2,254     1,575       2,809       717  
 

 

 

   

 

 

   

 

 

   

 

 

 

Loss before provision for income taxes

    (12,782     (59,641     (71,974     (75,206

Provision for income taxes

    (103     (67     (90     (37
 

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss

    (12,885     (59,708     (72,064     (75,243

Other comprehensive (loss) income

    (12     (1     4       (2
 

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive (loss)

  $ (12,897   $ (59,709   $ (72,060   $ (75,245
 

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to common stockholders:

       

Basic and diluted

  $ (0.17   $ (0.78   $ (0.94   $ (1.12
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding:

       

Basic and diluted

    78,029,821       76,720,733       76,545,970       67,292,586  
 

 

 

   

 

 

   

 

 

   

 

 

 


 

31


Table of Contents
     As of
September 30, 2020
(unaudited)
    As of
December 31, 2019
(audited)
    As of
December 31, 2018

(audited)
 
     (in thousands, except share and per share data)  

Consolidated Balance Sheet Data:

      

Cash and cash equivalents

   $ 36,400     $ 22,647     $ 41,500  

Short-term investments

     59,146       37,721       —    

Total assets

     119,187       72,070       47,525  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     17,360       20,622       24,731  
  

 

 

   

 

 

   

 

 

 

Convertible preferred stock

     245,168       186,741       94,151  

Accumulated deficit

     (166,063     (153,178     (81,114

Total stockholders’ deficit

   $ (143,341   $ (139,793   $ (71,357
  

 

 

   

 

 

   

 

 

 


 

32


Table of Contents

SUMMARY UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information has been derived from the unaudited pro forma condensed combined balance sheet as of September 30, 2020 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2019, and the nine months ended September 30, 2020, included in “Unaudited Pro Forma Condensed Combined Financial Information.”

The summary unaudited pro forma condensed combined financial information should be read in conjunction with the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statement of operations, and the accompanying notes. In addition, the unaudited condensed combined pro forma financial information was based on and should be read in conjunction with the historical financial statements of OAC and Hims, including the accompanying notes, which are included elsewhere in this proxy statement/prospectus.

The Business Combination will be accounted for as a reverse capitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, OAC is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Hims with the Business Combination being treated as the equivalent of Hims issuing stock for the net assets of OAC, accompanied by a recapitalization. The net assets of OAC are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Hims.

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption into cash of OAC’s ordinary shares:

 

   

Assuming No Redemption Scenario: This presentation assumes that no OAC shareholders exercise redemption rights with respect to their public shares.

 

   

Assuming Maximum Redemption Scenario (given Minimum Available Cash Condition): This presentation assumes that 7,822,956 Class A ordinary shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Available Cash Condition based on a per share redemption price of $10.16 per share) are redeemed in connection with the Business Combination.

 

     Pro Forma
Combined
(Assuming No
Redemptions)
    Pro Forma
Combined
(Assuming

Maximum
Redemptions)
 
(in thousands, except per share data)             

Summary Unaudited Pro Forma Condensed Combined

    

Statement of Operations Data

    

Nine Months Ended September 30, 2020

    

Revenue

   $ 107,291     $ 107,291  

Net loss per share, Class A – basic and diluted

   $ (0.09   $ (0.10

Weighted-average shares outstanding, Class A – basic and diluted

     167,620,397       159,797,441  

Net loss per share, Class V – basic and diluted

   $ (0.09   $ (0.10

Weighted-average shares outstanding, Class V – basic and diluted

     8,603,008       8,603,008  


 

33


Table of Contents
     Pro Forma
Combined
(Assuming No
Redemptions)
    Pro Forma
Combined
(Assuming

Maximum
Redemptions)
 
(in thousands, except per share data)             

Summary Unaudited Pro Forma Condensed Combined

    

Statement of Operations Data

    

Year Ended December 31, 2019

    

Revenue

   $ 82,558     $ 82,558  

Net loss per share, Class A – basic and diluted

   $ (0.46 )     $ (0.48

Weighted-average shares outstanding, Class A – basic and diluted

     167,620,397       159,797,441  

Net loss per share, Class V – basic and diluted

   $ (0.46   $ (0.48

Weighted-average shares outstanding, Class V – basic and diluted

     8,603,008       8,603,008  

Summary Unaudited Pro Forma Condensed Combined

    

Balance Sheet Data as of September 30, 2020

    

Total assets

   $ 376,110     $ 296,629  

Total liabilities

   $ 12,540     $ 12,540  

Total stockholders’ deficit

   $ 363,570     $ 284,089  


 

34


Table of Contents

COMPARATIVE PER SHARE DATA

The following table sets forth:

 

   

historical per share information of OAC for the period from April 9, 2019 (inception) through December 31, 2019 and for the nine months ended September 30, 2020;

 

   

historical per share information of Hims for the year ended December 31, 2019 and the nine months ended September 30, 2020; and

 

   

unaudited pro forma per share information of the combined company for the year ended December 31, 2019 and the nine months ended September 30, 2020 after giving effect to the Business Combination and PIPE Financing, assuming two redemption scenarios as follows:

 

   

Assuming No Redemption Scenario: This presentation assumes that no OAC shareholders exercise redemption rights with respect to their public shares.

 

   

Assuming Maximum Redemption Scenario (given Minimum Available Cash Condition): This presentation assumes that 7,822,956 Class A ordinary shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Available Cash Condition based on a per share redemption price of $10.16 per share) are redeemed in connection with the Business Combination.

The following table is also based on the assumption that 7,500,000 shares of New Hims Class A Common Stock are issued to the PIPE Investors upon the consummation of the PIPE Financing, and that 25.0% of the Class B ordinary shares and 25.0% of the private placement warrants have been surrendered and forfeited by the Sponsor pursuant to the Sponsor Agreement, and a number of securities equal to such surrendered and forfeited Class B ordinary shares and private placement warrants is being issued to Hims Equityholders as New Hims Class A Common Stock (or equivalent equity awards in respect thereof) and warrants to acquire shares of New Hims Class A Common Stock (or equivalent equity awards in respect thereof) in the Business Combination). If the actual facts are different than this assumption, the below numbers will be different. These numbers also do not take into account public and private warrants to purchase New Hims Class A Common Stock that will be outstanding immediately following the completion of the Business Combination.

The historical information should be read in conjunction with “—Selected Historical Financial Information of Hims,” “—Selected Historical Financial Information of OAC,” “Hims’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “OAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus and the audited consolidated financial statements and the related notes of Hims and OAC contained elsewhere in this proxy statement/prospectus.

The unaudited pro forma per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined net loss per share information below does not purport to represent what the actual results of operations of New Hims would have been had the Business Combination been completed or to project New Hims results of operations that may be achieved after the Business Combination. The unaudited pro forma book value per share information below does not purport to represent what the book value of New Hims would have been had the Business Combination been completed nor the book value per share for any future date or period.



 

35


Table of Contents
     Historical     Pro forma  
     OAC     Hims     No
redemption
scenario
    Maximum
redemption
scenario
 
     Class A
ordinary
shares
     Class B
ordinary
shares
                   

As of and for the Nine Months ended September 30, 2020

           

Book value per share—basic and diluted(1)

   $ 4.97      $ 0.99     $ (1.25   $ 2.06     $ 1.69  

Net income (loss) per share—basic and diluted(2)

   $ 0.08      $ (0.54   $ (0.17   $ (0.09   $ (0.10

 

     Historical     Pro forma  
     OAC     Hims     No
redemption
scenario
    Maximum
redemption
scenario
 
     Class A
ordinary
shares
     Class B
ordinary
shares
                   

For the Year Ended December 31, 2019

           

Net loss per share—basic and diluted(2)

   $ 0.08      $ (0.08   $ (0.94   $ (0.46   $ (0.48

 

(1)

Book value per share is calculated as total equity divided by:

 

   

Class B ordinary shares outstanding at September 30, 2020 for OAC;

 

   

Common shares outstanding at September 30, 2020 for Hims;

 

   

Common shares outstanding at September 30, 2020 for the pro forma information.

 

(2)

Net income per common share / unit and cash distributions per common share / unit are based on:

 

   

Weighted average number of Class B ordinary shares outstanding for the nine months ended September 30, 2020 for OAC;

 

   

Weighted average number of common shares outstanding for the nine months ended September 30, 2020 and the year ended December 31, 2019 for Hims;

 

   

Weighted average number of common shares outstanding for the nine months ended September 30, 2020 and the year ended December 31, 2019 for the pro forma information. The pro forma net loss per share for New Hims Class A Common Stock and New Hims Class V Common Stock is the same for the respective periods. Thus, the net loss per share is not presented separately for New Hims Class A Common Stock and New Hims Class V Common in the table above. For more information, see “Unaudited Pro Forma Condensed Combined Financial Information.”



 

36


Table of Contents

RISK FACTORS

OAC shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to our business, financial condition and prospects.

Risks Related to Hims’ and New Hims’ Business Following the Business Combination

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “Hims,” “we,” “us” or “our” refers to Hims prior to the Business Combination and New Hims and its subsidiaries following the Business Combination.

Risks Related to Hims’ Business

Our limited operating history and evolving business make it difficult to evaluate our current business and future prospects and increases the risk of your investment.

Our limited operating history and evolving business make it difficult to evaluate our current business and future prospects and plan for our future growth. We began offering products and services in 2017. Since that time, our business has expanded and we have increased the ways that we can address customer needs. We have encountered and will continue to encounter significant risks and uncertainties frequently experienced by new and growing companies in rapidly changing and heavily regulated industries, such as attracting new customers and healthcare providers (sometimes referred to herein as “providers”), to our platform, retaining our customers and encouraging them to utilize new offerings we make available, increasing the number of conditions that can be treated by providers through our platform, competition from other companies, whether online healthcare providers or traditional healthcare providers, hiring, integrating, training and retaining skilled personnel, verifying the identity of customers and credentials of providers serving our customers, developing new solutions, determining prices for our solutions, unforeseen expenses, challenges in forecasting accuracy, and new or adverse regulatory developments affecting the use of telehealth, pharmaceutical products, or other aspects of the healthcare industry. Additional risks include our ability to effectively manage growth and process, store, protect, and use personal data in compliance with governmental regulation, contractual obligations, and other legal obligations related to privacy and security. If our assumptions regarding these and other similar risks and uncertainties that relate to our business, which we use to plan our business, are incorrect or change as we gain more experience operating our platform or expand into the treatment of new conditions, or if we do not address these challenges successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

We may not be successful in our women’s health and wellness initiatives.

Our offerings originally catered towards men seeking treatment for conditions specifically affecting the male population, such as hair loss and erectile dysfunction. A substantial majority of our annual revenue to date has come from male customers. Although we recently began offering products and services for women as well, this part of our business is new and still developing. We have less experience marketing our platform and its capabilities to women as compared to men. As a result, our efforts to attract new female customers and to retain existing customers may not be as successful.

 

37


Table of Contents

If we are unable to expand the scope of our offerings, including the number and type of products and services that we offer, the number and quality of healthcare providers serving our customers and the number and types of conditions capable of being treated through our platform, our business, financial condition and results of operations may be materially and adversely affected.

We provide customers with access to non-prescription products, telehealth-based medical consultations with providers, and applicable pharmaceutical products prescribed by the providers for specific medical conditions. In order for our business to continue growing and expanding, we need to continue expanding the scope of products and services we offer our customers, including telehealth consultations and prescription and non-prescription medication for additional conditions. The introduction of new products, services, or technologies by market participants, including us, can quickly make existing products and services offered by us obsolete and unmarketable. Additionally, changes in laws and regulations (or enforcement thereof) could impact the usefulness of our platform and could necessitate changes or modifications to our platform or offerings to accommodate such changes. We invest substantial resources in researching and developing new offerings and enhancing our solutions by incorporating additional features, improving functionality, and adding other improvements to meet our customers’ evolving demands. The success of any enhancements or improvements to our services or any new offerings depends on a number of factors, including timely completion, competitive pricing, adequate quality testing, integration with new and existing technologies and overall market acceptance. We may not succeed in developing, marketing, and delivering on a timely and cost-effective basis enhancements or improvements to our services or any new offerings that respond to continued changes in market demands or new customer requirements, and any enhancements or improvements to our services or any new offerings may not achieve market acceptance. Since developing enhancements to our services and the launch of new offerings can be complex, the timetable for the release of new offerings and enhancements to our existing services is difficult to predict, and we may not launch new offerings and updates as rapidly as our current or prospective customers require or expect. Any new offerings or service enhancements that we develop may not be introduced in a timely or cost-effective manner, may contain errors or defects, or may not achieve the broad market acceptance necessary to generate sufficient revenue. Moreover, even if we introduce new offerings, we may experience a decline in revenue of our existing offerings that is not offset by revenue from the new offerings. In addition, we may lose existing customers who choose a competitor’s products and services. This could result in a temporary or permanent revenue shortfall and adversely affect our business.

If we are unable to successfully market to new customers and retain existing customers, or if evolving privacy, healthcare or other laws prevent or limit our marketing activities, our business, financial condition, and results of operations could be harmed.

We generate revenue from our platform by selling non-prescription health and personal care products to consumers and offering consumers access to telehealth consultations with providers and certain prescription medications that may be prescribed by the providers in connection with the telehealth consultations. We also rely on selling our products through wholesale partnerships. Unless we are able to attract new customers, retain existing customers, and maintain our wholesale partnerships, our business, financial condition, and results of operations may be harmed.

In order to attract new customers and incentivize existing customers to purchase more of our offerings, we use social media, emails, text messages, celebrity influencers, and other marketing strategies to reach new and existing customers. State and federal laws and regulations governing the privacy and security of personal information, including healthcare data, are evolving rapidly and could impact our ability to identify and market to potential and existing customers. Similarly, certain federal and state laws regulate, and in some cases limit, the use of discounts, promotions, and other marketing strategies in the healthcare industry. If federal, state, or local laws governing our marketing activities become more restrictive or are interpreted by governmental authorities to prohibit or limit these activities, our ability to attract new customers and retain customers would be affected and our business could be materially harmed. In addition, any failure, or perceived failure, by us, to comply with any federal, state, or local laws or regulations governing our marketing activities could adversely affect our

 

38


Table of Contents

reputation, brand, and business, and may result in claims, proceedings, or actions against us by governmental entities, consumers, suppliers or others or other liabilities or may require us to change our operations and/or cease using certain marketing strategies.

Changes to social networking or advertising platforms’ terms of use, terms of service or traffic algorithms that limit promotional communications, impose restrictions that would limit our ability or our customers’ ability to send communications through their platforms, disruptions or downtime experienced by these platforms or reductions in the use of or engagement with social networking or advertising platforms by customers and potential customers could also harm our business. As laws and regulations rapidly evolve to govern the use of these channels, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these channels could adversely affect our reputation or subject us to fines or other penalties. In addition, our employees or third parties acting at our direction may knowingly or inadvertently make use of social media in ways that could lead to the loss or infringement of intellectual property, as well as the public disclosure of proprietary, confidential or sensitive personal information of our business, employees, consumers or others. Any such inappropriate use of social media, emails and text messages could also cause reputational damage and adversely affect our business.

Additionally, we use emails and text messages to communicate with customers and we collect consumer data, including email addresses and phone numbers, to further our marketing efforts with such consenting consumers. If we fail to adequately or accurately collect such data or if our data collection systems are breached or information therein is misused, our business, financial condition and results of operations could be harmed. Further, any failure, or perceived failure, by us, or any third parties processing such data, to comply with privacy policies or with any federal or state healthcare, privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy or consumer protection could adversely affect our reputation, brand, and business, and may result in claims, proceedings or actions against us by governmental entities, consumers, suppliers or others or other liabilities or may require us to change our operations and/or cease using certain data sets.

If we are unable to expand our marketing infrastructure, we may fail to increase the usage of our platform to meet our forecasts.

We first launched our services in 2017. As a result, we have only limited experience marketing our offerings and engaging customers at our current scale. We derive a substantial majority of our revenue from customers’ subscription-based purchases of prescription products made available through our platform. We expect to expand the conditions for which customers can seek treatment from providers, including fulfillment of prescription medication, through our platform and, as a result, new customer acquisition is integral to our business. Our financial condition and results of operations are and will continue to be highly dependent on the ability of our marketing function to adequately promote, market, and attract customers to our platform and offerings in a manner that complies with applicable laws and regulations and at a cost that does not exceed our current budget allocated to marketing.

A key element of our business strategy is the continued expansion of our marketing infrastructure to drive customer enrollment. As we increase our marketing efforts in connection with the expansion of our platform offerings, we will need to further expand the reach of our marketing networks. Our future success will depend largely on our ability to continue to hire, train, retain, and motivate a skilled marketing workforce with significant industry-specific knowledge in various areas, including direct-to-consumer business models, ecommerce, technology, healthcare, and the regulatory restrictions related thereto, as well as the competitive landscape for our solutions.

If we are unable to expand our marketing capabilities, we may not be able to effectively expand the scope of our platform to attract new customers and give our existing customers additional treatment options. Relatedly, if

 

39


Table of Contents

any of our marketing platforms significantly increase their advertising fees, our ability to expand our marketing reach will be greatly impeded. Any such failure could adversely affect our reputation, revenue, and results of operations.

The failure of our offerings to achieve and maintain market acceptance could result in us achieving revenue below our expectations, which could cause our business, financial condition, and results of operation to be materially and adversely affected.

Our current business strategy is highly dependent on our platform and offerings achieving and maintaining market acceptance. Market acceptance and adoption of our model and the products and services we make available depend on educating potential customers who may find our services and these products and services useful, as well as potential partners, suppliers, and providers, as to the distinct features, ease-of-use, positive lifestyle impact, cost savings, and other perceived benefits of our offerings as compared to those of competitors. If we are not successful in demonstrating to existing and potential customers the benefits of our services, our revenue may decline or we may fail to increase our revenue in line with our forecasts.

Achieving and maintaining market acceptance of our model and our services could be negatively impacted by many factors, including, to the extent they arise:

 

   

perceived risks associated with the use of our platform, telehealth or similar technologies generally, including those related to privacy and customer data;

 

   

our inability to expand into new conditions and to attract providers qualified to treat those conditions;

 

   

regulatory developments that affect our business, including in healthcare, data privacy and security, and consumer protection;

 

   

competitors offering telehealth options or technologies for customers and the rate of acceptable of those solutions as compared to our platform;

 

   

perceived difficulty or complexity of obtaining a medical consultation or prescription on our platform; and

 

   

negative reviews of providers treating our customers.

In addition, our business model and the services and products we make available may be perceived by potential customers, providers, suppliers, and partners to be less trustworthy or effective than traditional medical care or competitive telehealth options, and people may be unwilling to change their current health regimens or adopt our offerings. Consumers who have healthcare insurance coverage may not wish to use the platform to access healthcare services or products for which insurance reimbursement is not available. Moreover, we believe that providers can be slow to change their treatment practices or approaches because of perceived liability risks or distrust of departures from traditional practice. Accordingly, we may face resistance to our offerings from brick-and-mortar providers until there is overwhelming evidence to convince them to alter their current approach.

The market for our model and services is new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change and consolidation, which makes it difficult to forecast demand for our solutions.

The market for our model is new and rapidly evolving and we are expanding our business by offering access to consultation and treatment options for new conditions, and it is uncertain whether our offerings will achieve and sustain high levels of demand and market adoption. Our future financial performance depends in part on growth in this market, our ability to market effectively and in a cost-efficient manner, and our ability to adapt to emerging demands of our customers. It is difficult to predict the future growth rate and size of our target market. Negative publicity concerning telehealth generally, our offerings, customer success on our platform, or our market as a whole could limit market acceptance of our business model and services. If our customers do not

 

40


Table of Contents

perceive the benefits of our offerings, or if our offerings do not drive customer use and enrollment, then our market and our customer base may not continue to develop, or they may develop more slowly than we expect. Our success depends in part on the willingness of providers and healthcare organizations to partner with us, increase their use of telehealth, and our ability to demonstrate the value of our technology to providers, as well as our existing and potential customers. If providers, healthcare organizations or regulators work in opposition to us or if we are unable to reduce healthcare costs or drive positive health outcomes for our customers, then the market for our services may not continue to develop, or it might develop more slowly than we expect. Similarly, negative publicity regarding customer confidentiality and privacy in the context of telehealth could limit market acceptance of our business model and services.

The healthcare industry in the United States is continually undergoing or threatened with significant structural change and is rapidly evolving. We believe demand for our offerings has been driven in part by rapidly growing costs in the traditional healthcare system, difficulties accessing the healthcare system, patient stigma associated with sensitive medical conditions, the movement toward patient-centricity and personalized healthcare, and advances in technology. Widespread acceptance of personalized healthcare enabled by technology is critical to our future growth and success. A reduction in the growth of technology-enabled personalized healthcare could reduce the demand for our services and result in a lower revenue growth rate or decreased revenue. Additionally, the majority of our revenue is driven by products and services offered through our platform on a subscription basis, and the adoption of subscription business models is still relatively new, especially in the healthcare industry. If customers do not shift to subscription business models and subscription health management tools do not achieve widespread adoption, or if there is a reduction in demand for subscription products and services or subscription health management tools, our business, financial condition, and results of operations could be adversely affected.

Additionally, if healthcare or healthcare benefits trends shift or entirely new technologies are developed that replace existing offerings, our existing or future services could be rendered obsolete and require that we materially change our technology or business model. If we are unable to do so, our business could be adversely affected. In addition, we may experience difficulties with software development, industry standards, design or marketing that could delay or prevent our development, introduction or implementation of new options on our platform and any enhancements thereto. Any such difficulties may have an adverse effect on our business, financial condition, and results of operations.

Competitive platforms or other technological breakthroughs for the monitoring, treatment or prevention of medical conditions may adversely affect demand for our offerings.

Our ability to achieve our strategic objectives will depend, among other things, on our ability to enable fast and efficient telehealth consultations, maintain comprehensive and affordable offerings, and deliver an accessible and reliable platform that is more appealing and user-friendly than available alternatives. Our competitors, as well as a number of other companies and providers, within and outside the healthcare industry, are pursuing new devices, delivery technologies, sensing technologies, procedures, treatments, drugs, and other therapies for the monitoring and treatment of medical conditions. Any technological breakthroughs in monitoring, treatment or prevention of medical conditions that we could not similarly leverage could reduce the potential market for our offerings, which could significantly reduce our revenue and our potential to grow certain aspects of our business.

The introduction by competitors of solutions or offerings that are or claim to be superior to our platform or offerings may create market confusion, which may make it difficult for potential customers to differentiate between the benefits of our offerings and competitive solutions. In addition, the entry of multiple new products may lead some of our competitors to employ pricing strategies that could adversely affect the pricing of products and services we make available. If a competitor develops a product or business that competes with or is perceived to be superior to our offerings, or if a competitor employs strategies that place downward pressure on pricing within our industry, our revenue may decline significantly or may not increase in line with our forecasts, either of which could adversely affect our business, financial condition and results of operations.

 

41


Table of Contents

We operate in highly competitive markets and face competition from large, well-established healthcare providers and more traditional retailers and pharmaceutical providers with significant resources, and, as a result, we may not be able to compete effectively.

The markets for healthcare are intensely competitive, subject to rapid change and significantly affected by new product and technological introductions and other market activities of industry participants. We compete directly not only with other established telehealth providers but also traditional healthcare providers, pharmacies, and large retailers that sell non-prescription products, including, for example, nutritional supplements, vitamins, and hair care treatments. Our current competitors include traditional healthcare providers expanding into the telehealth market, incumbent telehealth providers, as well as new entrants into our market that are focused on direct-to-consumer healthcare. Our competitors include enterprise-focused companies who may enter the direct-to-consumer healthcare industry, as well as direct-to-consumer healthcare providers. Many of our current and potential competitors may have greater name and brand recognition, longer operating histories, significantly greater resources than we do and may be able to offer products and services similar to those offered on our platform at more attractive prices than we can. Further, our current or potential competitors may be acquired by third parties with greater available resources, which has recently occurred in our industry. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements and may have the ability to initiate or withstand substantial price competition. In addition, our competitors have established, and may in the future establish, cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their solutions in the marketplace.

New competitors or alliances may emerge that have greater market share, a larger customer base, more widely adopted proprietary technologies, greater marketing expertise, and greater financial resources, which could put us at a competitive disadvantage. For example, some state and federal regulatory authorities lowered certain barriers to the practice of telehealth in order to make remote healthcare services more accessible in response to the COVID-19 pandemic. Although it is unclear whether these regulatory changes will be permanent or that they will have a long-term impact on the adoption of telehealth services by the general public or legislative and regulatory authorities, these changes may result in greater competition for our business. The lower barriers to entry may allow various new competitors to enter the market more quickly and cost effectively than before the COVID-19 pandemic. Additionally, we believe that the COVID-19 pandemic has introduced many new users to telehealth and further reinforced its benefits to potential competitors. We believe this may drive additional industry consolidation or collaboration involving competitors that may create competitors with greater resources and access to potential customers. The COVID-19 pandemic may also cause various traditional healthcare providers to evaluate and eventually pursue telehealth options that can be paired with their in-person capabilities. These industry changes could better position our competitors to serve certain segments of our current or future markets, which could create additional price pressure. In light of these factors, even if our offerings are more effective than those of our competitors, current or potential customers may accept competitive solutions in lieu of purchasing from us.

Our ability to compete effectively depends on our ability to distinguish our company and our offerings from our competitors and their products, and includes factors such as:

 

   

accessibility, ease of use and convenience;

 

   

price and affordability,

 

   

personalization,

 

   

brand recognition;

 

   

long-term outcomes;

 

   

breadth and efficacy of offerings;

 

   

market penetration;

 

42


Table of Contents
   

marketing resources and effectiveness;

 

   

partnerships and alliances;

 

   

relationships with providers, suppliers and partners; and

 

   

regulatory compliance recourses.

If we are unable to successfully compete with existing and potential competitors, our business, financial condition, and results of operations could be adversely affected.

We have experienced rapid growth in recent periods and expect to continue to invest in our growth for the foreseeable future. If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges.

We have recently experienced a period of rapid growth in our headcount and operations. Our revenue grew from $26.7 million for the year ended December 31, 2018 to $82.6 million for the year ended December 31, 2019. Our number of full-time employees has increased significantly over the last few years, from 41 employees as of December 31, 2018 to 158 employees as of September 30, 2020. During this period, we also established operations in the United Kingdom and significantly increased the size of our customer base.

We anticipate that we will continue to significantly expand our operations and headcount in the near term, including internationally. This growth has placed, and future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure. Our success will depend in part on our ability to manage this growth effectively and execute our business plan. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures, and we will need to ensure that we maintain high levels of customer support. Failure to effectively manage growth and execute our business plan could result in difficulty or delays in increasing the size of our customer base, declines in quality of customer support or customer satisfaction, increases in costs, difficulties in introducing new products or features, or other operational difficulties, and any of these difficulties could adversely affect our business performance and results of operations.

Our brand is integral to our success. If we fail to effectively maintain, promote, and enhance our brand in a cost-effective manner, our business and competitive advantage may be harmed.

We believe that maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing customers, providers, strategic partners, and partner pharmacies, and to our ability to attract new customers, providers, strategic partners, and partner pharmacies. The promotion of our brand may require us to make substantial investments, and we anticipate that, given the highly competitive nature of our market, these marketing initiatives may become increasingly difficult and expensive. Brand promotion and marketing activities may not be successful or yield increased revenue, and to the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur and our results of operations could be harmed. In addition, any factor that diminishes our reputation or that of our management, including failing to meet the expectations of our customers, providers, or partners, could harm our reputation and brand and make it substantially more difficult for us to attract new customers, providers, and partners. If we do not successfully maintain and enhance our reputation and brand recognition in a cost-effective manner, our business may not grow and we could lose our relationships with customers, providers, and partners, which could harm our business, financial condition and results of operations.

 

43


Table of Contents

We are dependent on our relationships with the Affiliated Medical Groups, which we do not own, to provide medical consultation services, and our business could be adversely affected if those relationships were disrupted.

In certain jurisdictions, the corporate practice of medicine doctrine generally prohibits non-physicians from practicing medicine, including by employing physicians to provide clinical services, directing the clinical practice of physicians, or holding an ownership interest in an entity that employs or contracts with physicians. Other practices, such as professionals splitting their professional fees with a non-professional, are also prohibited in some jurisdictions. Many states also limit the extent to which nurse practitioners and physician assistants can practice independently and require that they practice under the supervision of or in collaboration with a supervising physician.

Through our platform, our customers gain access to one or more licensed providers, including medical doctors, physician assistants, and nurse practitioners, for telehealth consultations conducted by video, phone, or store-and-forward technology. These providers are employed by or contracted with Affiliated Medical Groups to provide telehealth consultations and related services, including applicable physician supervision of nurse practitioners and physician assistants. We enter into certain contractual arrangements with the Affiliated Medical Groups and their physician owners, including an administrative services agreement with each Affiliated Medical Group for the exclusive provision by us of non-clinical services and support for the Affiliated Medical Groups. While we expect that these relationships with the Affiliated Medical Groups will continue, we cannot guarantee that they will. We believe that our arrangements with the Affiliated Medical Groups have been structured to comply with applicable law and allow the healthcare providers the ability to maintain exclusive authority regarding the provision of clinical healthcare services (including consults that may lead to the writing of prescriptions), but there can be no assurance that government entities or courts would find our approach to be consistent with their interpretation of, and enforcement activities or initiatives related to, these laws and the corporate practice of medicine doctrine. If our arrangements are deemed to be inconsistent with any applicable government entity’s interpretation of a law or regulation prohibiting the corporate practice of medicine or a fee-splitting law, we would need to restructure the arrangements with the Affiliated Medical Groups to create a compliant arrangement or terminate the arrangement. A material change in our relationships with the Affiliated Medical Groups, whether resulting from a dispute, a change in government regulation or enforcement patterns, a determination of non-compliance, or the loss of these agreements or business relationships, could impair our ability to provide products and services to our customers and could have a material adverse effect our business, financial condition and results of operations. Violations of the prohibition on corporate practice of medicine doctrine and fee-splitting may impose penalties (e.g., fines or license suspension) on healthcare providers, which could discourage professionals from entering into arrangements with the Affiliated Medical Groups and using our platform and could result in lawsuits by providers against the Affiliated Medical Groups and us. These laws and regulations are subject to change and enforcement based upon political, regulatory, and other influences. More restrictive treatment of healthcare professionals’ relationships with non-professionals such as our company in the healthcare services delivery context could have a material adverse effect our business, financial condition and results of operations. For more information about Affiliated Medical Groups, see “Information About Hims—Affiliated Medical Groups and Providers.

If we are unable to attract and retain high quality healthcare providers for our customers, our business, financial condition and results of operations may be materially and adversely affected.

Our success depends on our continued ability to maintain customer access to a network of qualified healthcare providers, which include medical doctors, physician assistants, and nurse practitioners. If the Affiliated Medical Groups are unable to recruit and retain licensed physicians and other qualified providers to perform services on our platform, it could have a material adverse effect on our business and ability to grow and could adversely affect our results of operations. In any particular market, providers could demand higher payments from the Affiliated Medical Groups or take other actions that could result in higher medical costs, less attractive service for our customers, or difficulty meeting regulatory requirements. Our ability to develop and

 

44


Table of Contents

maintain satisfactory relationships with providers and the Affiliated Medical Groups also may be negatively impacted by other factors not associated with us, such as pressures on healthcare providers, consolidation activity among hospitals, physician groups, and other healthcare providers, changes in the patterns of delivery and payment for healthcare services, and any perceived liability risks associated with the use of telehealth. The failure to maintain or to secure new cost-effective arrangements with the Affiliated Medical Groups that engage the providers on our platform may result in a loss of, or inability to grow, our customer base, higher costs, less attractive service for our customers and/or difficulty in meeting regulatory requirements, any of which could have a material adverse effect on our business, financial condition, and results of operations.

The activities and quality of healthcare providers treating our customers, including potentially unethical or illegal practices, could damage our brand, subject us to liability, and harm our business and financial results.

Our business entails the risk of professional liability claims against the Affiliated Medical Groups, the providers, and us. Although we carry insurance covering medical malpractice claims in amounts that we believe are appropriate in light of the risks attendant to our business, successful professional liability or other claims could result in substantial damage awards that exceed the limits of our insurance coverage. In addition, professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand the scope of our services and the number of conditions for which we provide access to treatment. As a result, adequate professional liability insurance may not be available to the Affiliated Medical Groups, the providers, or to us in the future at acceptable costs or at all.

Any claims made against us that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us and divert the attention of our management, Affiliated Medical Groups, and/or providers from our operations, which could have a material adverse effect on our business, financial condition, and results of operations. In addition, claims against us, even if covered by insurance, may adversely affect our business, brand, or reputation and divert the attention of our management, Affiliated Medical Groups, and/or providers from our operations. If our customers have negative experiences on our platform as a result of the activities or quality of providers, including any allegations of potentially unethical or illegal practices, such negative experiences could subject us to liability and negatively affect our brand, our ability to attract new customers, and our ability to retain existing customers.

Any failure to offer high-quality support may adversely affect our relationships with customers and healthcare providers, and in turn our business, financial condition, and results of operations.

In using our platform, our customers depend on our customer support to resolve issues in a timely manner. We may be unable to respond quickly enough to accommodate short-term increases in demand for customer support. We also may be unable to modify the nature, scope, and delivery of our offerings or customer support to compete with changes in solutions provided by our competitors. Increased customer demand for support could increase costs and adversely affect our business, financial condition, and results of operations . Our revenue is highly dependent on our reputation and on positive recommendations from our customers, providers, and partners. Any failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could adversely affect our reputation, our ability to sell the offerings on our platform, and in turn our business, financial conditions, and results of operations.

Our business could be adversely affected if healthcare providers were classified as employees of the Affiliated Medical Groups instead of independent contractors.

The Affiliated Medical Groups with which we have relationships typically engage providers that perform services through our platform as independent contractors. The Affiliated Medical Groups believe that the providers are independent contractors because, among other things, they can choose whether, when, and where to provide services on our platform and are free to provide services on our competitors’ platforms. Nevertheless, recent legislative and judicial activity have in some jurisdictions created more restrictive standards or

 

45


Table of Contents

enforcement uncertainty with respect to the classification of workers within certain industries. The Affiliated Medical Groups may not be successful in defending the independent contractor status of providers in some or all jurisdictions in which we and/or they operate. Furthermore, the costs associated with defending, settling, or resolving pending and future lawsuits (including demands for arbitration) relating to the independent contractor status of providers could be material to the Affiliated Medical Groups. Foreign, state, and local laws governing the definition or classification of independent contractors, or changes thereto, or judicial decisions regarding independent contractor classification, could require classification of providers as employees (or workers or quasi-employees where those statuses exist) of Affiliated Medical Groups. If the Affiliated Medical Groups are required to classify providers as employees (or as workers or quasi-employees where applicable), it could result in significant additional expenses, potentially including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes, and penalties. Further, any such reclassification could add significant complexity to our business model and could force us to have to modify or renegotiate our relationships with the Affiliated Medical Groups, which may not be possible on mutually agreeable terms, and could have an adverse effect on our business, financial condition, and results of operations.

Acquisitions and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact our business, financial condition, and results of operations. Additionally, if we are not able to identify and successfully acquire suitable businesses, our results of operations and prospects could be harmed.

We may, in the future, make acquisitions to add employees, complementary companies, products, solutions, technologies, or revenue. These transactions could be material to our results of operations and financial condition. We also expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The identification of suitable acquisition candidates can be difficult, time-consuming, and costly, and we may not be able to complete acquisitions on favorable terms, if at all. The process of integrating an acquired company, business, or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The related areas where we face risks include, but are not limited to:

 

   

diversion of management time and focus from operating our business to addressing acquisition integration challenges;

 

   

loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture, as well as reputational harm if integration is not successful;

 

   

difficulties in integrating and managing the combined operations, technologies, technology platforms and products of the acquired companies, and realizing the anticipated economic, operational and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical, or financial problems;

 

   

regulatory complexities of integrating or managing the combined operations or expanding into other industries or parts of the healthcare industry;

 

   

assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights, or increase our risk for liabilities;

 

   

failure to successfully further develop the acquired technology or realize our intended business strategy;

 

   

uncertainty of entry into markets in which we have limited or no prior experience or in which competitors have stronger market positions;

 

   

unanticipated costs associated with pursuing acquisitions;

 

   

failure to find commercial success with the products or services of the acquired company;

 

46


Table of Contents
   

difficulty of transitioning the acquired technology onto our existing platforms and maintaining the security standards for such technology consistent with our other solutions;

 

   

failure to successfully onboard customers or maintain brand quality of acquired companies;

 

   

responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, as well as, without limitation, liabilities arising out of their failure to maintain effective data protection and privacy controls and comply with applicable regulations;

 

   

failure to generate the expected financial results related to an acquisition on a timely manner or at all; and

 

   

potential accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, client relationships, or intellectual property, are later determined to be impaired and written down in value.

Future acquisitions could also result in expenditures of significant cash, dilutive issuances of our equity securities, the incurrence of debt, restrictions on our business, contingent liabilities, amortization expenses, or write-offs of goodwill, any of which could harm our financial condition. In addition, any acquisitions we announce could be viewed negatively by customers, providers, partners, suppliers, or investors.

Additionally, competition within our industry for acquisitions of business, technologies and assets may become intense. Even if we are able to identify an acquisition that we would like to consummate, we may not be able to complete the acquisition on commercially reasonable terms or the target may be acquired by another company. We may enter into negotiations for acquisitions that are not ultimately consummated. Those negotiations could result in diversion of management time and significant out-of-pocket costs. If we fail to evaluate and execute acquisitions successfully, we may not be able to realize the benefits of these acquisitions, and our results of operations could be harmed. If we are unable to successfully address any of these risks, our business, financial condition, or results of operations could be harmed.

Expansion into international markets is important for our long-term growth, and as we expand internationally, we will face additional business, political, legal, regulatory, operational, financial and economic risks, any of which could increase our costs and hinder such growth.

Expanding our business to attract customers, providers and suppliers in countries other than the United States is an element of our long-term business strategy. An important part of targeting international markets is increasing our brand awareness and establishing relationships with partners internationally. Doing business internationally involves a number of risks, including:

 

   

uncertain legal and regulatory requirements applicable to telehealth and prescription medication;

 

   

our inability to replicate our domestic business structure consistently outside of the United States, especially as it relates to our contractual arrangement with affiliated professional entities;

 

   

multiple, conflicting and changing laws and regulations such as tax laws, privacy and data protection laws and regulations, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

 

   

obtaining regulatory approvals or clearances where required for the sale of our offerings, products, devices and services in various countries;

 

   

requirements to maintain data and the processing of that data on servers located within the United States or in such countries;

 

   

protecting and enforcing our intellectual property rights;

 

47


Table of Contents
   

logistics and regulations associated with prescribing medicine online and engaging with partner pharmacies to ship the prescribed medication;

 

   

natural disasters, political and economic instability, including wars, terrorism, social or political unrest, including civil unrest, protests, and other public demonstrations, outbreaks of disease, pandemics or epidemics, boycotts, curtailment of trade, and other market restrictions; and

 

   

regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the U.S. Foreign Corrupt Practices Act (the “FCPA”), and comparable laws and regulations in other countries.

Our ability to continue to expand our business and to attract talented employees, customers, providers, partners, and suppliers in various international markets will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute resolution systems, regulatory systems and commercial infrastructures. Entering new international markets will be expensive, our ability to successfully gain market acceptance in any particular market is uncertain and the distraction of our senior management team could harm our business, financial condition, and results of operations.

Economic uncertainty or downturns, particularly as it impacts particular industries, could adversely affect our business and results of operations.

In recent years, the United States and other significant markets have experienced cyclical downturns and worldwide economic conditions remain uncertain. This has especially been the case in 2020 as a result of the COVID-19 pandemic. Economic uncertainty and associated macroeconomic conditions make it extremely difficult for our partners, suppliers, and us to accurately forecast and plan future business activities, and could cause our customers to slow spending on our offerings and could limit the ability of our pharmacy partners to purchase sufficient quantities of pharmaceutical products from suppliers, which could adversely affect our ability to fulfill customer orders and attract new providers.

A significant downturn in the domestic or global economy may cause our customers to pause, delay, or cancel spending on our platform or seek to lower their costs by exploring alternative providers or our competitors. To the extent purchases of our offerings are perceived by customers and potential customers as discretionary, our revenue may be disproportionately affected by delays or reductions in general healthcare spending. Also, competitors may respond to challenging market conditions by lowering prices and attempting to lure away our customers.

We cannot predict the timing, strength, or duration of any economic slowdown or any subsequent recovery generally, or any industry in particular. If the conditions in the general economy and the markets in which we operate worsen from present levels, our business, financial condition and results of operations could be materially adversely affected.

The COVID-19 pandemic has increased interest in and customer use of telehealth solutions, including our platform, and we cannot guarantee that this increased interest will continue after the pandemic.

In December 2019, COVID-19 surfaced in Wuhan, China. The World Health Organization declared a global emergency on January 30, 2020 with respect to the outbreak and then characterized it as a pandemic on March 11, 2020. The outbreak has spread globally, causing companies and various local, state, federal, and international jurisdictions to impose restrictions, such as quarantines, closures, cancellations and travel restrictions. The duration of the business disruptions, travel restrictions and related financial impact cannot be reasonably estimated at this time. As the COVID-19 pandemic is ongoing, the complete impact of the pandemic is still unknown and rapidly evolving.

 

48


Table of Contents

Due to COVID-19, telehealth has seen a steep increase in use across the industry, in part due to governmental waivers of statutory and regulatory restrictions that have historically limited how telehealth may be used in delivering care in certain jurisdictions. We do not know if this relaxation of regulatory barriers resulting from COVID-19 will remain or for how long. There is renewed focus on telehealth among legislatures and regulators due to COVID-19 and the expanded use of telehealth that could result in regulatory changes inconsistent with or that place additional restrictions on our current business model or operations in certain jurisdictions. If customer adoption of telehealth generally or our platform in particular materially decreases as the COVID-19 restrictions are lifted, or if COVID-19 results in regulatory changes that limit our current activities, our industry, business, and results of operations could be adversely affected.

Our business depends on continued and unimpeded access to the internet and mobile networks.

Our ability to deliver our internet-based and mobile-application based services depends on the development and maintenance of the infrastructure of the internet by third parties. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, bandwidth capacity, and security. Our services are designed to operate without interruption. However, we may experience future interruptions and delays in services and availability from time to time. In the event of a catastrophic event with respect to one or more of our systems or those of our service providers, we may experience an extended period of system unavailability, which could negatively impact our relationship with customers, providers, partners, and suppliers. To operate without interruption, both we and our service providers must guard against:

 

   

damage from fire, power loss, natural disasters, and other force majeure events outside our control;

 

   

communications failures;

 

   

software and hardware errors, failures, and crashes;

 

   

security breaches, computer viruses, hacking, denial-of-service attacks, and similar disruptive problems; and

 

   

other potential interruptions.

We also rely on software licensed from third parties in order to offer our services. These licenses are generally commercially available on varying terms. However, it is possible that this software may not continue to be available on commercially reasonable terms, or at all. Any loss of the right to use any of this software could result in delays in the provisioning of our services until equivalent technology is either developed by us, or, if available, is identified, obtained and integrated. Furthermore, our use of additional or alternative third-party software would require us to enter into license agreements with third parties, and integration of our software with new third-party software may require significant work and require substantial investment of our time and resources. Also, any undetected errors or defects in third-party software could prevent the deployment or impair the functionality of our software, delay new updates or enhancements to our solution, result in a failure of our solution, and injure our reputation. The occurrence of any of the foregoing events could have an adverse impact on our business, financial condition, and results of operations.

Any disruption of service at Amazon Web Services, partner pharmacies or other third-party service providers could interrupt access to our platform or delay our customers’ ability to seek treatment.

We currently host our platform, serve our customers and support our operations in the United States using Amazon Web Services (“AWS”), a provider of cloud infrastructure services, and through partner pharmacies and other third-party service providers, including shipping providers and contract manufacturers. We do not have control over the operations of the facilities of partner pharmacies, AWS, or other third-party service providers. Such facilities are vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, cyber security attacks, terrorist attacks, power losses, telecommunications failures, and similar events. The occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice, or other

 

49


Table of Contents

unanticipated problems could result in lengthy interruptions in our ability to generate revenue through customer purchases on the platform. The facilities also could be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism, and other misconduct. Our platform’s continuing and uninterrupted performance is critical to our success. Because our platform is used by our customers to engage with providers who can diagnose, manage, and treat medical conditions, and pharmacies who can fulfill and ship prescription medication, it is critical that our platform be accessible without interruption or degradation of performance. Customers may become dissatisfied by any system failure that interrupts our ability to provide our platform or access to the products and services offered through our platform to them. Outages and partner pharmacy closures could lead to claims of damages from our customers, providers, partners, suppliers, and others. We may not be able to easily switch our AWS operations to another cloud provider if there are disruptions or interference with our use of AWS. Sustained or repeated system failures could reduce the attractiveness of our offerings to customers and result in contract terminations, thereby reducing revenue. Moreover, negative publicity arising from these types of disruptions could damage our reputation and may adversely impact use of our platform. We may not carry sufficient business interruption insurance to compensate us for losses that may occur as a result of any events that cause interruptions in our platform. Thus, any such disruptions could have an adverse effect on our business and results of operations.

None of our call centers, partner pharmacies, shipping providers, contract manufacturers nor AWS have an obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew our agreements with these third-party service providers on commercially reasonable terms, if our agreements with these providers are prematurely terminated, or if in the future we add additional data, call center, or pharmacy providers, we may experience costs or downtime in connection with the transfer to, or the addition of, such new providers. If these third-party service providers were to increase the cost of their services, we may have to increase the price of our offerings, and our results of operations may be adversely impacted.

We depend on a number of other companies to perform functions critical to our ability to operate our platform, generate revenue from customers, and to perform many of the related functions.

We depend on the Affiliated Medical Groups and their providers to deliver quality healthcare consultations and services through our platform. Through our platform, providers are able to prescribe medication fulfilled by a partner pharmacy. Any interruption in the availability of a sufficient number of providers or supply from our partner pharmacies could materially and adversely affect our ability to satisfy our customers and ensure they receive consultation services and any medication that they have been prescribed. If we were to lose our relationship with one of the Affiliated Medical Groups, we cannot guarantee that we will be able to ensure access to a sufficient network of providers. Similarly, if we were to lose our relationship with one of our partner pharmacies in the near term before our own affiliated pharmacy is operational at scale and able to service all geographies, we cannot guarantee that we will be able to find, diligence, and engage with a replacement partner in a timely manner. Our ability to service customer requirements could be materially impaired or interrupted in the event that our relationship with an Affiliated Medical Group or partner pharmacy is terminated. We also depend on cloud infrastructure providers, payment processors, suppliers of non-prescription products and packaging, and various others that allow our platform to function effectively and serve the needs of our customers. Difficulties with our significant partners and suppliers, regardless of the reason, could have a material adverse effect on our business.

Our pharmacy business will subject us to regulations in addition to those we face with our core telehealth business.

We are currently in the process of opening an affiliated pharmacy dedicated to our operations, which will subject us to extensive federal, state, and local regulation. Pharmacies, pharmacists, and pharmacy technicians are subject to a variety of federal and state statutes and regulations governing various aspects of the pharmacy business, including the distribution of drugs; operation of mail order pharmacies; licensure of facilities and professionals, including pharmacists, technicians, and other healthcare professionals; packaging, storing,

 

50


Table of Contents

distributing, shipping and tracking of pharmaceuticals; repackaging of drug products; labeling, medication guides, and other consumer disclosures; interactions with prescribing professionals; compounding of prescription medications; counseling of patients; prescription transfers; advertisement of prescription products and pharmacy services; security; controlled substance inventory control and recordkeeping; and reporting to the U.S. Drug Enforcement Agency, the FDA, state boards of pharmacy, the U.S. Consumer Product Safety Commission, and other state enforcement or regulatory agencies. Many states have laws and regulations requiring out-of-state mail-order pharmacies to register with that state’s board of pharmacy. In addition, the FDA inspects facilities in connection with procedures to effect recalls of prescription drugs. The Federal Trade Commission also has requirements for mail-order sellers of goods. The U.S. Postal Service the “USPS”) has statutory authority to restrict the transmission of drugs and medicines through the mail to a degree that may have an adverse effect on our mail-order operations. The USPS historically has exercised this statutory authority only with respect to controlled substances. If the USPS restricts our ability to deliver drugs through the mail, alternative means of delivery are available to us. However, alternative means of delivery could be significantly more expensive. The U.S. Department of Transportation has regulatory authority to impose restrictions on drugs inserted into the stream of commerce. These regulations generally do not apply to the USPS and its operations. Failure to successfully open our affiliated pharmacy or any failure or perceived failure by us or our affiliated pharmacy to comply with any applicable federal, state, and local laws and regulations could have a material adverse effect on our business, financial condition, and results of operations and may expose us to civil and criminal penalties.

Our payments system depends on third party service providers and is subject to evolving laws and regulations.

We have engaged third-party service providers to perform underlying card processing and currency exchange. If these service providers do not perform adequately or if our relationships with these service providers were to terminate, our ability to accept orders through the platform could be adversely affected and our business could be harmed. In addition, if these service providers increase the fees they charge us, our operating expenses could increase and if we respond by increasing the fees we charge to our customers, we could lose some of our customers.

The laws and regulations related to payments are complex and vary across different jurisdictions in the United States and globally. As a result, we are required to spend significant time and effort to comply with those laws and regulations. Any failure or claim of our failure to comply, or any failure by our third-party service providers to comply, could cost us substantial resources, could result in liabilities, or could force us to stop offering third-party payment systems. As we expand the availability of payments via third parties or offer new payment methods to our customers in the future, we may become subject to additional regulations and compliance requirements.

Further, through our agreement with our third-party credit card processor, we are indirectly subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard. We are also subject to rules governing electronic funds transfers. Any change in these rules and requirements could make it difficult or impossible for us to comply. Any such difficulties or failures with respect to the payment systems we utilize may have an adverse effect on our business.

Our pricing decisions may adversely affect our ability to attract new customers, healthcare providers, and other partners.

We have limited experience determining the optimal prices for our offerings. As competitors introduce new solutions that compete with our offerings, especially in the telehealth market where we face significant competition, we may be unable to attract new customers, providers or other partners at the same price or based on the same pricing models as we have used historically. Pricing decisions may also impact the mix of adoption among our services and products and negatively impact our overall revenue. As a result, in the future we may be required to reduce our prices, which could adversely affect our revenue, gross profit, profitability, financial position and cash flows.

 

51


Table of Contents

Our success depends on the continuing and collaborative efforts of our management team, and our business may be severely disrupted if we lose their services. Members of our management team may have interests in the Business Combination that conflict with interests of Hims stockholders.

Our success depends largely upon the continued services of our key executive officers. These executive officers are at-will employees and therefore they may terminate employment with us at any time with no advance notice. We rely on our leadership team in the areas of marketing, regulatory compliance, telehealth, operations, finance, public policy and government relations, and other general and administrative functions. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The replacement of one or more of our executive officers or other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.

Additionally, after the Closing of the Business Combination, the New Hims Board or a committee thereof may award bonuses to certain of our employees, including members of management, in an aggregate amount of up to $10.0 million. The bonuses are intended to reward significant contributions in connection with the Business Combination and may be awarded in the form of cash, stock, equity awards or a combination thereof. The New Hims Board or a committee thereof will have complete discretion whether or not to award these bonuses and how such bonuses, if any, are allocated among eligible employees, including members of management. The potential of a post-Closing bonus represents a personal and financial interest in the Business Combination for members of our management team. This may result in a conflict of interest between what members of our management team believe is in the best interests of Hims and its stockholders and what such members of management believe is best for themselves in connection with the Business Combination.

We depend on our talent to grow and operate our business, and if we are unable to hire, integrate, develop, motivate and retain our personnel, we may not be able to grow effectively.

Our success depends in large part on our ability to attract and retain high-quality management in marketing, engineering, operations, healthcare, regulatory, legal, finance and support functions. Competition for qualified employees is intense in our industry, and the loss of even a few qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of our business could harm our results of operations and impair our ability to grow. To attract and retain key personnel, we use various measures, including an equity incentive program for key executive officers and other employees. These measures may not be enough to attract and retain the personnel we require to operate our business effectively.

As we continue to grow, we may be unable to continue to attract or retain the personnel we need to maintain our competitive position. In addition to hiring new employees, we must continue to focus on retaining our best talent. Competition for these resources, particularly for engineers, is intense. We may need to invest significant amounts of cash and equity for new and existing employees and we may never realize returns on these investments. If we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely impacted, and our business will be harmed. The loss of one or more of our key employees, and any failure to have in place and execute an effective succession plan for key employees, could seriously harm our business. Employees may be more likely to leave us if the shares of our capital stock they own or the shares of our capital stock underlying their equity incentive awards have significantly reduced in value or the vested shares of our capital stock they own or vested shares of our capital stock underlying their equity incentive awards have significantly appreciated. Many of our employees may receive significant proceeds from sales of our equity in the public markets after the closing of the Business Combination, which may reduce their motivation to continue to work for us.

We also have a remote-first policy that permits most of our employees work to remotely should their particular positions allow. While we believe that most of our operations can be performed remotely, there is no guarantee that we will be as effective while working remotely because our team is dispersed and many

 

52


Table of Contents

employees may have additional personal needs to attend to or distractions in their remote work environment. To the extent our current or future remote work policies result in decreased productivity, harm our company culture, or otherwise negatively affect our business, our financial condition and results of operations could be adversely affected.

A significant portion of our non-prescription inventory is stored in our Ohio facility and any damage or disruption at this facility may harm our business.

A significant portion of our non-prescription inventory is located at a facility in Ohio. A natural disaster, fire, power interruption, work stoppage or other calamity at this facility would significantly disrupt our ability to deliver our products and operate our business. If any material amount of our facility, machinery, or inventory were damaged or unusable, we would be unable to meet our obligations to customers and wholesale partners, which could materially adversely affect our business, financial condition, and results of operations.

Risks Related to Governmental Regulation

Government regulation of healthcare creates risks and challenges with respect to our compliance efforts and our business strategies.

The healthcare industry is subject to changing political, economic and regulatory influences that may affect companies like ours. During the past several years, the healthcare industry has been subject to an increase in governmental regulation and subject to potential disruption due to legislative initiatives and government regulation, as well as judicial interpretations thereof. While these regulations may not directly impact us or our offerings in every instance, they will affect the healthcare industry as a whole and may impact customer use of our services. We currently accept payments only from our customers—not any third-party payors, such as government healthcare programs or health insurers. Because of this approach, we are not subject to many of the laws and regulations that impact many other participants in healthcare industry. If the government asserts broader regulatory control over companies like us or if we determine that we will facilitate payment from and/or participate in third-party payor programs, the complexity of our operations and our compliance obligations will materially increase.

If we fail to comply with applicable healthcare and other governmental regulations, we could face substantial penalties, our business, financial condition and results of operations could be adversely affected, and we may be required to restructure our operations.

The healthcare industry in general is subject to numerous federal, state and local laws and regulations that carry substantial criminal and civil fines and penalties. Under our current business model, we currently accept payments only from our customers, and not from any third party payors, such as government healthcare programs or health insurers. Because of this approach, we are not subject to many of the laws and regulations that impact many other participants in healthcare industry. If the government asserts broader regulatory control over companies like ours or if we determine that we will change our business model and accept payment from and/or participate in third-party payor programs, the complexity of our operations and our compliance obligations will materially increase. Failure to comply with any applicable federal, state and local laws and regulations could have a material adverse effect on our business, financial condition and results of operations.

Even within the narrowed band of applicable healthcare laws and regulations, because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our activities could be subject to challenge under one or more of such laws. Any action brought against us for violations of these laws or regulations, even if successfully defended, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

 

53


Table of Contents

Although we have adopted policies and procedures designed to comply with these laws and regulations and conduct internal reviews of our compliance with these laws, our compliance is also subject to governmental review. The growth of our business and sales organization and our future expansion outside of the United States may increase the potential of violating these laws or our internal policies and procedures. The risk of our being found in violation of these or other laws and regulations is further increased by the fact that many have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action brought against us for violation of these or other laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. If our operations are found to be in violation of any of the federal, state and foreign laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to penalties, including significant criminal, civil and administrative penalties, damages and fines, disgorgement, additional reporting requirements and oversight, imprisonment for individuals and exclusion from participation in government healthcare programs, such as Medicare and Medicaid, as well as contractual damages and reputational harm. We could also be required to curtail or cease our operations. Any of the foregoing consequences could seriously harm our business and our financial results.

Our ability to offer access to telehealth services internationally is subject to the applicable laws governing remote care and the practice of medicine in the applicable jurisdiction. Each country’s interpretation and enforcement of these laws is evolving and could vary significantly. We cannot provide assurance that we have accurately interpreted each such law and regulation. Moreover, these laws and regulations may change significantly as this manner of providing services and products evolves. New or revised laws and regulations (or interpretations thereof) could have a material adverse effect on our business, financial condition and results of operations.

If our business practices are found to violate federal or state anti-kickback, physician self-referral or false claims laws, we may incur significant penalties and reputations damage that could adversely affect our business.

The healthcare industry is subject to extensive federal and state regulation with respect to kickbacks, physician self-referral arrangements, false claims and other fraud and abuse issues. For example, the federal anti-kickback law (the “Anti-Kickback Law”) prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal healthcare program. “Remuneration” is broadly defined under the Auto-Kickback Law to include anything of value, such as, for example, cash payments, gifts or gift certificates, discounts, or the furnishing of services, supplies, or equipment. The Anti-Kickback Law is broad, and it prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry.

The penalties for violating the Anti-Kickback Law can be severe. These sanctions include criminal and civil penalties, imprisonment, and possible exclusion from the federal healthcare programs. Many states have adopted laws similar to the Anti-Kickback Law, and some apply to items and services reimbursable by any payor, including private insurers.

In addition, the federal ban on physician self-referrals, commonly known as the “Stark Law,” prohibits, subject to certain exceptions, physician referrals of Medicare patients to an entity providing certain “designated health services” if the physician or an immediate family member of the physician has any financial relationship with the entity. A “financial relationship” is created by an investment interest or a compensation arrangement. Penalties for violating the Stark Law include the return of funds received for all prohibited referrals, fines, civil monetary penalties, and possible exclusion from the federal healthcare programs. In addition to the Stark Law, many states have their own self-referral bans, which may extend to all self-referrals, regardless of the payor.

 

54


Table of Contents

Given our current operations and the current state of this federal law, the Anti-Kickback Law and False Claim Act should not apply to our business. If the scope of the Anti-Kickback Law, the Stark Law, or the False Claims Act changes or a state analog of the Anti-Kickback Law, the Stark Law, or the False Claims Act includes a broader spectrum of activities than the federal statutes or if we change our business model to accept payments from third-party payors such as a government program, our failure to comply with such laws, or an allegation that we have not complied, could have a material adverse effect on our business, financial condition and results of operations.

State-based laws governing kickbacks and physician self-referrals can apply in some cases regardless of whether it is a third-party payor or the customer paying. The interpretation, application, and enforcement of these laws by governmental authorities is a developing area, and there is little precedent to determine how these laws would be applied to companies like ours. Moreover, the safe harbors and exceptions to these laws are often not as well developed as they are at the federal level. Our business practices and marketing activities include certain components that are common among e-commerce and other technology companies, such as the use of social media influencers. While we have structured our business practices and marketing activities in ways that we believe comply with state laws governing kickbacks and physician self-referrals and the policies behind those laws, given the lack of healthcare regulatory precedent specific to these practices, a governmental authority could disagree with our position. If a governmental authority alleged or determined we are not in compliance with these laws, or if new laws or changes to these laws created additional limits on our business practices or marketing activities, we could face fines or other penalties or damages and we may need to modify or terminate certain arrangements, any of which could have a material adverse effect on our business, financial condition, and results of operations.

State legislative and regulatory changes specific to the area of telehealth law may present the Affiliated Medical Groups on our platform with additional requirements and state compliance costs, which may create additional operational complexity and increase costs.

The Affiliated Medical Groups and their providers’ ability to provide telehealth services to patients in a particular jurisdiction is dependent upon the laws that govern the provision of remote care, the practice of medicine and healthcare delivery in general in that jurisdiction. Laws and regulations governing the provision of telehealth services are evolving at a rapid pace and are subject to changing political, regulatory, and other influences. Some states’ regulatory agencies or medical boards may have established rules or interpreted existing rules in a manner that limits or restricts providers’ ability to provide telehealth services or for physicians to supervise nurse practitioners and physician assistants remotely. Additionally, there may be limitations placed on the modality through which telehealth services are delivered. For example, some states specifically require synchronous (or “live”) communications and restrict or exclude the use of asynchronous telehealth modalities, which is also known as “store-and-forward” telehealth. However, other states do not distinguish between synchronous and asynchronous telehealth services. Because this is a developing area of law and regulation, we continually monitor our compliance in every jurisdiction in which we operate. However, we cannot be assured that our or the Affiliated Medical Groups’ or providers’ activities and arrangements, if challenged, will be found to be in compliance with the law or that a new or existing law will not be implemented, enforced, or changed in manner that is unfavorable to our business model. We cannot predict the regulatory landscape for those jurisdictions in which we operate and any significant changes in law, policies, or standards, or the interpretation or enforcement thereof, could occur with little or no notice. The majority of the consultations provided through our platform are asynchronous consultations for customers located in jurisdictions that permit the use of asynchronous telehealth. If there is a change in laws or regulations related to our business, or the interpretation or enforcement thereof, that adversely affects our structure or operations, including greater restrictions on the use of asynchronous telehealth or remote supervision of nurse practitioners or physician assistants, it could have a material adverse effect on our business, financial condition, and results of operations.

 

55


Table of Contents

Evolving government regulations and enforcement activities may require increased costs or adversely affect our results of operations.

In a regulatory climate that is uncertain, our operations may be subject to direct and indirect adoption, expansion or reinterpretation of various laws and regulations. This risk is especially acute in the healthcare industry given the level of government spending, oversight and control over the industry as a whole. Compliance with these evolving laws, regulations and interpretations may require us to change our practices at an undeterminable and possibly significant initial monetary and annual expense. These additional monetary expenditures may increase future overhead, which could have a material adverse effect on our results of operations.

There could be laws and regulations applicable to our business that we have not identified or that, if changed, may be costly to us, and we cannot predict all the ways in which implementation of such laws and regulations may affect us.

In the states in which we operate, we believe we are in material compliance with all applicable material regulations, but, due to the uncertain regulatory environment, certain states may determine that we are in violation of their laws and regulations. If we must remedy such violations, we may be required to modify our business and services in such states in a manner that undermines our platform’s attractiveness to customers, we may become subject to fines or other penalties or, if we determine that the requirements to operate in compliance in such states are overly burdensome, we may elect to terminate our operations in such states. In each case, our revenue may decline and our business, financial condition, and results of operations could be adversely affected.

Additionally, the introduction of new products, services or solutions to our platform may require us to comply with additional, yet undetermined, laws and regulations. Compliance may require obtaining appropriate federal, state, or local licenses or certificates, increasing our security measures and expending additional resources to monitor developments in applicable rules and ensure compliance. The failure to adequately comply with these future laws and regulations may delay or possibly prevent our products or services from being offered to customers, which could have a material adverse effect on our business, financial condition, and results of operations.

Changes in public policy that mandate or enhance healthcare coverage could have a material adverse effect on our business, operations and/or results of operations.

Our mission is to make healthcare accessible, affordable, and convenient for everyone. It is reasonably possible that our business operations and results of operations could be materially adversely affected by public policy changes at the federal, state, or local level, which include mandatory or enhanced healthcare coverage. Such changes may present us with new marketing and other challenges, which may, for example, cause use of our products and services to decrease or make doing business in particular states less attractive. If we fail to adequately respond to such changes, including by implementing effective operational and strategic initiatives, or do not do so as effectively as our competitors, our business, operations, and results of operations may be materially adversely affected.

We cannot predict the enactment or content of new legislation and regulations or changes to existing laws or regulations or their enforcement, interpretation or application, or the effect they will have on our business or results of operations, which could be materially adverse. Even if we could predict such matters, we may not be able to reduce or eliminate the potential adverse impact of public policy changes that could fundamentally change the dynamics of our industry.

 

56


Table of Contents

Changes in insurance and healthcare laws, as well as the potential for further healthcare reform legislation and regulation, have created uncertainty in the healthcare industry and could materially affect our business, financial condition, and result of operations.

The Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act, each enacted in March 2010, generally known as the “Health Care Reform Law,” significantly expanded health insurance coverage to uninsured Americans and changed the way healthcare is financed by both governmental and private payers. Since then, the Health Care Reform Law has prompted legislative efforts to significantly modify or repeal the Health Care Reform Law, which may impact how the federal government responds to lawsuits challenging the Health Care Reform Law. We cannot predict what further reform proposals, if any, will be adopted, when they may be adopted, or what impact they may have on our business. While we currently only accept payments from customers—not any third parties or insurance providers—and our business model may not be directly impacted by healthcare reform, healthcare reform will impact the healthcare industry in which we operate. If we are required to comply with the Health Care Reform Law and fail to comply or are unable to effectively manage such risks and uncertainties, our financial condition and results of operations could be adversely affected.

The products we sell and our third-party suppliers are subject to FDA regulations and other state and local requirements and if we or our third party suppliers fail to comply with federal, state, and local requirements, our ability to fulfill customers’ orders through our platform could be impaired.

The products available through our platform, and the third-party suppliers and manufacturers of these products, are subject to extensive regulation by the FDA and state and local authorities, including pharmaceuticals, over-the-counter drugs, over-the-counter devices, cosmetics, and dietary supplements. These authorities can enforce regulations related to methods and documentation of the testing, production, compounding, control, quality assurance, labeling, packaging, sterilization, storage, and shipping of products. Government regulations specific to pharmaceuticals are wide ranging and govern, among other things: the ability to bring a pharmaceutical to market, the conditions under which it can be sold, the conditions under which it must be manufactured, and permissible claims that may be made for such product. Failure to meet—or significant changes to—any federal, state, or local requirements attendant to the sales and marketing of a regulated product could result in enforcement actions, impede our ability to provide access to affected products, and have a material adverse effect on our business, financial condition and results of operations.

We may be subject to fines, penalties, and injunctions if we are determined to be promoting the use of products for unapproved uses.

Certain of the products available through our platform require approval by the FDA and are subject to the limitations placed by FDA on the approved uses in the product prescribing information. Some of these products are prescribed by providers on the platform for “off-label” uses (i.e., for a use other than that specifically authorized by the FDA for the medication in question). While providers are legally permitted to prescribe medications for off-label uses, and although we believe our product promotion is conducted in material compliance with FDA and other regulations, if the FDA determines that our product promotion constitutes promotion of an unapproved use of an approved product or of an unapproved product, the FDA could request that we modify our product promotion or subject us to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties. It is also possible that other federal, state, or foreign enforcement authorities might take action if they consider the product promotion to constitute promotion of an unapproved use of an approved product or of an unapproved product, which could result in significant fines or penalties under other statutes, such as laws prohibiting false claims for reimbursement.

 

57


Table of Contents

The information that we provide to healthcare providers, customers, and our partners could be inaccurate or incomplete, which could harm our business, financial condition, and results of operations.

We collect and transmit healthcare-related information to and from our customers, providers and partner pharmacies in connection with the telehealth consultations conducted by the providers and prescription medication fulfillment by our partner pharmacies. If the data that we provide to our customers, providers, or partner pharmacies are incorrect or incomplete or if we make mistakes in the capture or input of these data, our reputation may suffer and we could be subject to claims of liability for resulting damages. While we maintain insurance coverage, this coverage may prove to be inadequate or could cease to be available to us on acceptable terms, if at all. Even unsuccessful claims could result in substantial costs and the diversion of management resources. A claim brought against us that is uninsured or under-insured could harm our business, financial condition, and results of operations.

Our use, disclosure, and other processing of personally identifiable information, including health information, is subject to federal, state, and foreign privacy and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our customers, providers, and revenue.

Numerous state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability, integrity, and other processing of health information and other types of personal data or personally identifiable information (“PII”). We believe that, because of our operating processes, we are not a covered entity or a business associate under HIPAA, which establishes a set of national privacy and security standards for the protection of protected health information by health plans, healthcare clearinghouses and certain healthcare providers, referred to as covered entities, and the business associates with whom such covered entities contract for services. Notwithstanding that we do not believe that we meet the definition of a covered entity or business associate under HIPAA, we have executed business associate agreements with certain other parties and have assumed obligations that are based upon HIPAA-related requirements.

We have developed and maintained policies and procedures with respect to health information and personal information that we use or disclose in connection with our operations, including the adoption of administrative, physical and technical safeguards to protect such information.

In addition to HIPAA, numerous other federal, state, and foreign laws and regulations protect the confidentiality, privacy, availability, integrity and security of health information and other types of PII, including the California Confidentiality of Medical Information Act. These laws and regulations in many cases are more restrictive than, and may not be preempted by, HIPAA and its implementing rules. These laws and regulations are often uncertain, contradictory, and subject to changed or differing interpretations, and we expect new laws, rules and regulations regarding privacy, data protection, and information security to be proposed and enacted in the future. This complex, dynamic legal landscape regarding privacy, data protection, and information security creates significant compliance issues for us, the Affiliated Medical Groups and the providers and potentially exposes us to additional expense, adverse publicity, and liability. While we have implemented data privacy and security measures in an effort to comply with applicable laws and regulations relating to privacy and data protection, some health information and other PII or confidential information is transmitted to us by third parties, who may not implement adequate security and privacy measures, and it is possible that laws, rules, and regulations relating to privacy, data protection, or information security may be interpreted and applied in a manner that is inconsistent with our practices or those of third parties who transmit health information and other PII or confidential information to us. If we or these third parties are found to have violated such laws, rules or regulations, it could result in government-imposed fines, orders requiring that we or these third parties change our or their practices, or criminal charges, which could adversely affect our business. Complying with these various laws and regulations could cause us to incur substantial costs or require us to change our business practices, systems and compliance procedures in a manner adverse to our business.

 

58


Table of Contents

We also publish statements to our customers through our privacy policy that describe how we handle health information or other PII. If federal or state regulatory authorities or private litigants consider any portion of these statements to be untrue, we may be subject to claims of deceptive practices, which could lead to significant liabilities and consequences, including, without limitation, costs of responding to investigations, defending against litigation, settling claims, and complying with regulatory or court orders. Any of the foregoing consequences could seriously harm our business and our financial results. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations and policies that are applicable to us may limit customers’ use and adoption of, and reduce the overall demand for, our platform. Any of the foregoing consequences could have a material adverse impact on our business and our financial results.

Public scrutiny of internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing services to our customers, thereby harming our business.

The regulatory framework for privacy and security issues worldwide is evolving and is likely to remain in flux for the foreseeable future. Various government and consumer agencies have also called for new regulation and changes in industry practices. Practices regarding the registration, collection, processing, storage, sharing, disclosure, use and security of personal and other information by companies offering an online service like our platform have recently come under increased public scrutiny.

For example, the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020, requires, among other things, covered companies to provide new disclosures to California consumers and afford such consumers new abilities to opt-out of certain sales of personal information. Similar legislation has been proposed or adopted in other states. Aspects of the CCPA and these other state laws and regulations, as well as their enforcement, remain unclear, and we may be required to modify our practices in an effort to comply with them. Additionally, a new privacy law, the California Privacy Rights Act (“CPRA”), recently was certified by the California Secretary of State to appear on the ballot for the November 3, 2020 election. If this initiative is approved by California voters, the CPRA would significantly modify the CCPA, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses.

Our business, including our ability to operate and to expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted, or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, mobile applications, solutions, features, or our privacy policies. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly gather and use data from data subjects. Therefore, our business could be harmed by any significant change to applicable laws, regulations, or industry standards or practices regarding the storage, use, or disclosure of data our customers or providers share with us, or regarding the manner in which the express or implied consent of customers or providers for such collection, analysis and disclosure is obtained. Such changes may require us to modify our platform, possibly in a material manner, and may limit our ability to develop new offerings, functionality or features.

Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or customers, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.

In the ordinary course of our business, we collect, store, use and disclose sensitive data, including health information and other types of PII. We also process and store, and use additional third parties to process and store, confidential and proprietary information such as intellectual property and other proprietary business information, including that of our customers, providers and partners. Our customer information is encrypted but not always de-identified. We manage and maintain our platform and data utilizing a combination of managed data center systems and cloud-based computing center systems.

 

59


Table of Contents

We are highly dependent on information technology networks and systems, including the internet, to securely process, transmit and store this critical information. Security breaches of this infrastructure, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, and employee or contractor error, negligence or malfeasance, can create system disruptions, shutdowns or unauthorized disclosure or modifications of information, causing sensitive, confidential or proprietary information to be accessed or acquired without authorization or to become publicly available. We utilize third-party service providers for important aspects of the collection, storage, transmission, and verification of customer information and other confidential, and sensitive information, and therefore rely on third parties to manage functions that have material cybersecurity risks. Because of the nature of the sensitive, confidential and proprietary information that we and our service providers collect, store, transmit, and otherwise process, the security of our technology platform and other aspects of our services, including those provided or facilitated by our third-party service providers, are important to our operations and business strategy. We take certain administrative, physical and technological safeguards to address these risks, such as requiring outsourcing subcontractors who handle customer, user, and patient information for us to enter into agreements that contractually obligate those subcontractors to use reasonable efforts to safeguard sensitive, confidential and proprietary information. Measures taken to protect our systems, those of our third-party service providers, or sensitive, confidential and proprietary information that we or our third-party service providers process or maintain, may not adequately protect us from the risks associated with the collection, storage and transmission of such information. Although we take steps to help protect sensitive, confidential and proprietary information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses, failures or breaches due to third-party action, employee negligence or error, malfeasance, or other disruptions.

A security breach or privacy violation that leads to disclosure or unauthorized use or modification of, or that prevents access to or otherwise impacts the confidentiality, security, or integrity of, sensitive, confidential, or proprietary information we or our third-party service providers maintain or otherwise process, could harm our reputation, compel us to comply with breach notification laws, and cause us to incur significant costs for remediation, fines, penalties, notification to individuals and governmental authorities, implementation of measures intended to repair or replace systems or technology and to prevent future occurrences, potential increases in insurance premiums, and forensic security audits or investigations. As a result, a security breach or privacy violation could result in increased costs or loss of revenue. If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, or if it is perceived that we have been unable to do so, our operations could be disrupted, we may be unable to provide access to our platform, and could suffer a loss of customers or providers or a decrease in the use of our platform, and we may suffer loss of reputation, adverse impacts on customer, provider and partner confidence, financial loss, governmental investigations or other actions, regulatory or contractual penalties, and other claims and liability. In addition, security breaches and other inappropriate access to, or acquisition or processing of, information can be difficult to detect, and any delay in identifying such incidents or in providing any notification of such incidents may lead to increased harm.

Any such breach or interruption of our systems or any of our third-party information technology partners, could compromise our networks or data security processes and sensitive, confidential, or proprietary information could be inaccessible or could be accessed by unauthorized parties, publicly disclosed, lost, or stolen. Any such interruption in access, improper access, disclosure or other loss of such information could result in legal claims or proceedings, liability under laws and regulations that protect the privacy of customer information or other personal information, such as the California Consumer Privacy Act or the General Data Protection Regulation, and regulatory penalties. Unauthorized access, loss or dissemination could also disrupt our operations, including our ability to perform operate our platform and perform our services, provide customer assistance services, conduct research and development activities, collect, process, and prepare company financial information, provide information about our current and future offerings and engage in other user and clinician education and outreach efforts. Any such breach could also result in the compromise of our trade secrets and other proprietary information, which could adversely affect our business and competitive position. While we maintain insurance

 

60


Table of Contents

covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address the reputational damage that could result from a security incident.

Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences.

We are subject to the FCPA and other anti-corruption, anti-bribery, and anti-money laundering laws in the jurisdictions in which we do business, both domestic and abroad. These laws generally prohibit us and our employees from improperly influencing government officials or commercial parties in order to obtain or retain business, direct business to any person or gain any improper advantage. The FCPA and similar applicable anti-bribery and anti-corruption laws also prohibit our third-party business partners, representatives, and agents from engaging in corruption and bribery. We and our third-party business partners, representatives, and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, channel partners, and agents, even if we do not explicitly authorize such activities. These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. While we have policies and procedures to address compliance with such laws, we cannot assure that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible. Our exposure for violating these laws will increase as we expand internationally and as we commence sales and operations in foreign jurisdictions. Any violation of the FCPA or other applicable anti-bribery, anti-corruption, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, severe criminal or civil sanctions, or suspension or debarment from U.S. government contracts, substantial diversion of management’s attention, drop in stock price, or overall adverse consequences to our business, all of which may have an adverse effect on our reputation, business, financial condition, and results of operations.

Risks Related to Intellectual Property and Legal Proceedings

Failure to protect or enforce our intellectual property rights could harm our business and results of operations.

Our intellectual property includes the content of our website, our application, our software code, our electronic medical record system, our unregistered copyrights, and our trademarks. We believe that our intellectual property is an essential asset of our business. If we do not adequately protect our intellectual property, our brand and reputation could be harmed and competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could materially harm our business, negatively affect our position in the marketplace, limit our ability to commercialize our technology and delay or render impossible our achievement of profitability. A failure to protect our intellectual property in a cost-effective and meaningful manner could have a material adverse effect on our ability to compete. We regard the protection of our trade secrets, copyrights, trademarks, trade dress, databases, and domain names as critical to our success. We strive to protect our intellectual property rights by relying on federal, state and common law rights and other rights provided under foreign laws. These laws are subject to change at any time and could further restrict our ability to protect or enforce our intellectual property rights. In addition, the existing laws of certain foreign countries in which we operate may not protect our intellectual property rights to the same extent as do the laws of the United States. We also have a practice of entering into confidentiality and invention assignment agreements with our employees and contractors, and often enter into confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information. In addition, from time to time we make our technology and other intellectual property available to others under license agreements, including open source license agreements and trademark licenses under agreements with our partners for the purpose of co-branding or co-marketing our products or services. However, these contractual

 

61


Table of Contents

arrangements and the other steps we have taken to protect our intellectual property rights may not prevent the misappropriation of our proprietary information, infringement of our intellectual property rights, disclosure of trade secrets, and other proprietary information, or deter independent development of similar or competing technologies or duplication of our technologies, and may not provide an adequate remedy in the event of such misappropriation or infringement.

Obtaining and maintaining effective intellectual property rights is expensive, as is the costs of defending our rights. We make business decisions about when to file applications or registrations to protect our intellectual property and rely upon trade secret protection, and the approach we select may ultimately prove to be inadequate. We are seeking or may seek to protect certain of our intellectual property rights through filing applications for copyrights, trademarks, and domain names in a number of jurisdictions, a process that is expensive and may not be successful in all jurisdictions. Even where we have intellectual property rights, they may later be found to be unenforceable or have a limited scope of enforceability. In addition, we may not seek to pursue such protection in every jurisdiction. In particular, we believe it is important to maintain, protect and enhance our brands.

Accordingly, we pursue the registration of domain names and our trademarks and service marks in the United States and in some jurisdictions outside of the United States. We may, over time, increase our investment in protecting innovations through investments in filings, registrations or similar steps to protect our intellectual property, and these processes are expensive and time-consuming.

In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. We may not always detect infringement of our intellectual property rights, and defending or enforcing our intellectual property rights, even if successfully detected, prosecuted, enjoined, or remedied, could result in the expenditure of significant financial and managerial resources. Litigation may be necessary to enforce our intellectual property rights, protect our proprietary rights, or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and results of operations. We may also incur significant costs in enforcing our trademarks against those who attempt to imitate our brand and other valuable trademarks and service marks. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, countersuits, and adversarial proceedings such as oppositions, inter partes review, post-grant review, re-examination, or other post-issuance proceedings, that attack the validity and enforceability of our intellectual property rights. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. In addition, during the course of litigation there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

If we fail to maintain, protect and enhance our intellectual property rights, our business, financial condition, and results of operations may be harmed.

We may be in the future subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.

Companies in our industry, and other intellectual property rights holders seeking to profit from royalties in connection with grants of licenses, own large numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. Our future success depends in part on not infringing upon the intellectual property rights of others. We have in the past and may in the future receive notices that claim we have misappropriated, infringed, or otherwise misused other parties’ intellectual property rights. We may be unaware of the intellectual property rights of others that may cover some or all of our technology. Because patent applications can take years to issue and are often afforded confidentiality for some period of time there may currently be pending applications, unknown to us, that later result in issued patents that could cover our technology.

 

62


Table of Contents

Any intellectual property claim against us or parties indemnified by us, regardless of merit, could be time consuming and expensive to settle or litigate and could divert our management’s attention and other resources. These claims also could subject us to significant liability for damages and could result in our having to stop using technology, content, branding or business methods found to be in violation of another party’s rights. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, content, branding or business methods, which could require significant effort and expense, be infeasible or make us less competitive in the market. Such disputes could also disrupt our business, which would adversely impact our customer satisfaction and ability to attract customers. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. If we cannot license or develop technology, content, branding or business methods for any allegedly infringing aspect of our business, we may be unable to compete effectively. Additionally, we may be obligated to indemnify our customers in connection with litigation and to obtain licenses or refund subscription fees, which could further exhaust our resources. In the case of infringement or misappropriation caused by technology that we obtain from third parties, any indemnification or other contractual protections we obtain from such third parties, if any, may be insufficient to cover the liabilities we incur as a result of such infringement or misappropriation. Any of these results could harm our results of operations.

We may be subject to legal proceedings and litigation, including intellectual property disputes, which are costly to defend and could materially harm our business and results of operations.

We may be party to lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We may face allegations, lawsuits, and regulatory inquiries, audits, and investigations regarding data privacy, security, labor and employment, consumer protection, practice of medicine, and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights, and other rights. A portion of the technologies we use incorporates open source software, and we may face claims claiming ownership of open source software or patents related to that software, rights to our intellectual property or breach of open source license terms, including a demand to release material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. We may also face allegations or litigation related to our acquisitions, securities issuances or business practices, including public disclosures about our business. Litigation and regulatory proceedings, and particularly the healthcare regulatory and class action matters we could face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters may include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our solution or require us to stop offering certain features, all of which could negatively impact our acquisition of customers and revenue growth. We may also become subject to periodic audits, which could likely increase our regulatory compliance costs and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.

The results of regulatory proceedings, litigation, claims, and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our reputation, business, financial condition and results of operations.

 

63


Table of Contents

We face the risk of product liability claims and may not be able to maintain or obtain insurance.

Our business involves third-party medical providers performing medical consultations and, if warranted, prescribing medication to our customers. This activity, as well as the sale of other products on our platform, exposes us to the risk of product liability claims. We may be subject to product liability claims if products obtained or prescribed through our platform cause, or merely appear to have caused, an injury. Claims may be made by customers, third-party service providers or manufacturers of products and services we make available. Although we have product liability insurance that we believe is appropriate, this insurance is subject to deductibles and coverage limitations. Our current product liability insurance may not continue to be available to us on acceptable terms, if at all, and, if available, the coverages may not be adequate to protect us against any future product liability claims. If we are unable to obtain insurance at an acceptable cost or on acceptable terms with adequate coverage or otherwise protect against potential product liability claims, we will be exposed to significant liabilities, which may harm our business. A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could result in significant costs and significant harm to our business.

We may be subject to claims against us even if the apparent injury is due to the actions of others or misuse of the prescribed medication or other product. These liabilities could prevent or interfere with our growth and expansion efforts. Defending a suit, regardless of merit, could be costly, could divert management attention, and may result in adverse publicity or result in reduced acceptance of our platform and offerings.

Our business could be disrupted by catastrophic events and man-made problems, such as power disruptions, data security breaches, and terrorism.

Our systems are vulnerable to damage or interruption from the occurrence of any catastrophic event, including earthquake, fire, flood, tsunami, or other weather event, power loss, telecommunications failure, software or hardware malfunction, cyber-attack, war, terrorist attack, or incident of mass violence, which could result in lengthy interruptions in access to our platform. In addition, acts of terrorism, including malicious internet-based activity, could cause disruptions to the internet or the economy as a whole. Even with our disaster recovery arrangements, access to our platform could be interrupted. If our systems were to fail or be negatively impacted as a result of a natural disaster or other event, our ability to deliver our platform and solution to our customers would be impaired or we could lose critical data. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business, financial condition, and results of operations could be harmed.

We have implemented a disaster recovery program that allows us to move website traffic to a backup data center in the event of a catastrophe. This allows us the ability to move traffic in the event of a problem, and the ability to recover in a short period of time. However, to the extent our disaster recovery program does not effectively support the movement of traffic in a timely or complete manner in the event of a catastrophe, our business and results of operations may be harmed.

We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to our business, financial condition and results of operations that may result from interruptions in access to our platform as a result of system failures.

Risks Related to Our Results of Operations and Additional Capital Requirements

We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to achieve or maintain profitability.

We have incurred net losses on an annual basis since our inception. We incurred net losses of $75.2 million, $72.1 million, and $12.9 million in the years ended December 31, 2018 and 2019 and the nine months ended

 

64


Table of Contents

September 30, 2020, respectively. We had an accumulated deficit of $166.1 million as of September 30, 2020. We expect our costs will increase substantially in the foreseeable future and we expect our losses will continue as we expect to invest significant additional funds towards growing our platform, growing our provider network, enhancing our pharmacy fulfillment system and operating as a public company and as we continue to invest in increasing our customer base, hiring additional employees, and developing new products and technological capabilities to enhance our customers’ experience on our platform. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. To date, we have financed our operations principally from the sale of our equity, revenue from our platform, and the incurrence of indebtedness. Our cash flows from operations were negative for the years ended December 31, 2018 and 2019 and nine months ended September 30, 2020. We may not generate positive cash flows from operations or achieve profitability in any given period, and our limited operating history may make it difficult to evaluate our current business and our future prospects.

We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing and highly regulated industries, including increasing expenses as we continue to grow our business. If we are not able to achieve or maintain positive cash flow in the long term, we may require additional financing, which may not be available on favorable terms or at all and/or which would be dilutive to our stockholders. If we are unable to successfully address these risks and challenges as we encounter them, our business, results of operations, and financial condition would be adversely affected.

Our quarterly results of operations, as well as our key metrics, may fluctuate on a quarterly and annual basis, which may result in us failing to meet the expectations of industry and securities analysts or our investors.

Our results of operations have in the past and could in the future vary significantly from quarter-to-quarter and year-to-year and may fail to match the expectations of securities analysts because of a variety of factors, many of which are outside of our control and, as a result, should not be relied upon as an indicator of future performance. As a result, we may not be able to accurately forecast our results of operations and growth rate. Any of these events could cause the market price of our common stock to fluctuate. Factors that may contribute to the variability of our results of operations include:

 

   

new developments on our platform or in our product offerings;

 

   

our ability to attract and retain providers to our platform;

 

   

changes in our pricing policies and those of our competitors;

 

   

our ability to execute our plans to add treatment options and provider expertise for additional medical conditions;

 

   

long-term treatment outcomes of customers on our platform;

 

   

medical, technological, or other innovations in our industry or in connection with specific products that we make available on our platform;

 

   

our ability to maintain relationships with customers, partners, and suppliers;

 

   

our ability to retain key members of our executive leadership team;

 

   

breaches of security or privacy;

 

   

the amount and timing of operating costs and capital expenditures related to the expansion of our business;

 

   

costs related to litigation, investigations, regulatory enforcement actions, or settlements;

 

   

changes in the legislative or regulatory environment, including with respect to practice of medicine, telehealth, privacy or data protection, or enforcement by government regulators, including fines, orders, or consent decrees;

 

65


Table of Contents
   

announcements by competitors or other third parties of significant new products or acquisitions or entrance into certain markets;

 

   

our ability to make accurate accounting estimates and appropriately recognize revenue for our platform and offerings for which there are no relevant comparable products;

 

   

instability in the financial markets;

 

   

global economic conditions;

 

   

the duration and extent of the COVID-19 pandemic; and

 

   

political, economic and social instability, including terrorist activities, and any disruption these events may cause to the global economy.

The impact of one or more of the foregoing and other factors may cause our results of operations to vary significantly. As such, we believe that quarter-to-quarter comparisons of our results of operations may not be meaningful and should not be relied upon as an indication of future performance.

We rely significantly on revenue from customers purchasing subscription-based prescription products and may not be successful in expanding our offerings.

To date the vast majority of our revenue has been, and we expect it to continue to be, derived from customers who purchase subscription-based prescription products through the platform. In our subscription arrangements, customers select a cadence at which they wish to receive product shipments. These customers generate a substantial majority of our revenue. The introduction of competing offerings with lower prices for consumers, fluctuations in prescription prices, changes in consumer purchasing habits, including an increase in the use of mail-order prescriptions, changes in the regulatory landscape, and other factors could result in changes to our contracts or a decline in our revenue, which may have an adverse effect on our business, financial condition and results of operations. Because we derive a vast majority of our revenue from customers who purchase subscription-based prescription products, any material decline in the use of such offerings could have a pronounced impact on our future revenue and results of operations, particularly if we are unable to expand our offerings overall.

We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, results of operations, and financial condition.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the listing standards of The New York Stock Exchange (the “NYSE”), and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, results of operations, and financial condition. Although we have already hired additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as

 

66


Table of Contents

new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest substantial resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this proxy statement/prospectus and in filings required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, results of operations, and financial condition.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new products or services, or enhance our existing platform and associated offerings, enhance our operating infrastructure and acquire complementary businesses and technologies. In order to achieve these objectives, we may make future commitments of capital resources. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with U.S. GAAP and our key metrics require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes and amounts reported in our key metrics. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Hims’ Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, valuation of warrant liability, fair value of stock-based compensation, and consolidation of variable interest entities. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors.

 

67


Table of Contents

New Hims may not be able to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it after the Business Combination is consummated.

We are not currently subject to Section 404 of the Sarbanes-Oxley Act. However, following the consummation of the Business Combination and the transactions related thereto, New Hims will be required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of us as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the Business Combination. If New Hims is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its shares of common stock.

Adverse tax laws or regulations could be enacted or existing laws could be applied to us or our customers, which could subject us to additional tax liability and related interest and penalties, increase the costs of our solution and adversely impact our business.

The application of federal, state, local, and international tax laws to services provided electronically is evolving. New income, sales, use, value-added, or other tax laws, statutes, rules, regulations, or ordinances could be enacted at any time (possibly with retroactive effect), and could be applied solely or disproportionately to services provided over the internet or could otherwise materially affect our financial position and results of operations.

In addition, state, local and foreign tax jurisdictions have differing rules and regulations governing sales, use, value-added and other taxes, and these rules and regulations can be complex and are subject to varying interpretations that may change over time. Existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us (possibly with retroactive effect). If we are required to collect and pay back taxes and associated interest and penalties, and if the amount we are required to collect and pay exceeds our estimates and reserves, or if we are unsuccessful in collecting such amounts from our customers , we could incur potentially substantial unplanned expenses, thereby adversely impacting our results of operations and cash flows. Imposition of such taxes on our services going forward or collection of sales tax from our customers in respect of prior sales could also adversely affect our sales activity and have a negative impact on our results of operations and cash flows.

One or more states may seek to impose incremental or new sales, use, value added, or other tax collection obligations on us, including for past sales by us or our resellers and other partners. A successful assertion by a state, country or other jurisdiction that we should have been or should be collecting additional sales, use, value added, or other taxes on our solutions could, among other things, result in substantial tax liabilities for past sales, create significant administrative burdens for us, discourage users from utilizing our solutions or otherwise harm our business, results of operations, and financial condition.

Certain U.S. state tax authorities may assert that we have a state nexus and seek to impose state and local income taxes which could harm our results of operations.

There is a risk that certain state tax authorities where we do not currently file a state income tax return could assert that we are liable for state and local income taxes based upon income or gross receipts allocable to such states. States are becoming increasingly aggressive in asserting a nexus for state income tax purposes. If a state tax authority successfully asserts that our activities give rise to a nexus, we could be subject to state and local taxation, including penalties and interest attributable to prior periods. Such tax assessments, penalties and interest may adversely impact our results of operations.

 

68


Table of Contents

Risks Related to the Business Combination and Integration of Businesses

Each of OAC and Hims have incurred and will incur substantial costs in connection with the Business Combination and related transactions, such as legal, accounting, consulting, and financial advisory fees.

As part of the Business Combination, each of OAC and Hims are utilizing professional service firms for legal, accounting and financial advisory services. Although the parties have been provided with estimates of the costs for each advisory firm, the total actual costs may exceed those estimates. In addition, each of OAC and Hims are retaining consulting services to assist in the integration of the businesses, including but not limited to organizational decisions, New Hims business process design, cultural integration and go-to-market integration. These consulting services may extend beyond the current estimated time frame thus resulting in higher than expected costs.

Risks Related to the Business Combination and OAC

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to the “OAC,” “we,” “us” or “our” refers to OAC prior to the Business Combination and to New Hims and its subsidiaries following the Business Combination.

Our Sponsor has entered into a letter agreement with us to vote in favor of the Business Combination, regardless of how our public shareholders vote.

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, our Sponsor, pursuant to the Sponsor Agreement, has agreed, among other things, to vote all of its public shares and Class B ordinary shares in favor of all the proposals being presented at the extraordinary general meeting, including the Business Combination Proposal and the transactions contemplated thereby (including the Merger). As of the date of this proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement warrants).

Neither the OAC Board nor any committee thereof obtained a third-party valuation in determining whether or not to pursue the Business Combination.

Neither the OAC Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that OAC is paying for Hims is fair to OAC from a financial point of view. Neither the OAC Board nor any committee thereof obtained a third-party valuation in connection with the Business Combination. In analyzing the Business Combination, the OAC Board and management conducted due diligence on Hims and researched the industry in which Hims operates. The OAC Board reviewed, among other things, financial due diligence materials prepared by professional advisors, financial and market data information on selected comparable companies, the implied purchase price multiple of Hims and the financial terms set forth in the Merger Agreement, and concluded that the Business Combination was in the best interest of its shareholders. Accordingly, investors will be relying solely on the judgment of the OAC Board and management in valuing Hims, and the OAC Board and management may not have properly valued Hims’ business. The lack of a third-party valuation may also lead an increased number of shareholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination.

The COVID-19 pandemic triggered an economic crisis which may delay or prevent the consummation of the Business Combination.

In December 2019, the COVID-19 outbreak was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. Since being initially reported in China, the coronavirus has spread

 

69


Table of Contents

throughout the world and has resulted in unprecedented restrictions and limitations on operations of many businesses and governmental entities, including in the United States and the United Kingdom. Given the ongoing and dynamic nature of the COVID-19 crisis, it is difficult to predict the impact on the businesses of OAC, Hims and New Hims, and there is no guarantee that efforts by OAC, Hims and New Hims to address the adverse impact of COVID-19 will be effective. If OAC or Hims are unable to recover from a business disruption on a timely basis, the Business Combination and New Hims’ business and financial conditions and results of operations following the completion of the Business Combination could be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus pandemic, and become more costly. Each of OAC and Hims may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

Since the Sponsor, including OAC’s directors and executive officers, has interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Hims is appropriate as our initial business combination. Such interests include that the Sponsor, as well as our executive officers and directors, will lose their entire investment in us if our business combination is not completed.

When you consider the recommendation of the OAC Board in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor, including OAC’s directors and executive officers, have interests in such proposal that are different from, or in addition to (which may conflict with), those of OAC shareholders and warrant holders generally.

These interests include, among other things, the interests listed below:

 

   

the fact that the Sponsor has agreed not to redeem any Class A ordinary shares held by it in connection with a shareholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the 5,031,250 Class B ordinary shares it currently owns and such securities will have a significantly higher value at the time of the Business Combination;

 

   

the fact that Sponsor paid $6,025,000 for its private placement warrants, and the Class A ordinary shares and private placement warrants underlying those units would be worthless if a business combination is not consummated by July 22, 2021 (unless such date is extended in accordance with the Existing Governing Documents);

 

   

the fact that the Sponsor and OAC’s other current officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if OAC fails to complete an initial business combination by July 22, 2021;

 

   

the fact that the Sponsor Registration Rights Agreement will be entered into by the Sponsor;

 

   

the fact that the Sponsor entered into the Sponsor Agreement pursuant to which the lock-up period to which our Sponsor and our directors and executive officers are subject was amended to provide for termination of the lock-up subsequent to our initial business combination upon the closing price of New Hims Class A Common Stock equaling or exceeding $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 10 trading days within any 20-trading day period commencing at least 150 days after the Closing;

 

   

the continued indemnification of OAC’s directors and officers and the continuation of OAC’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”);

 

   

the fact that the Sponsor and OAC’s officers and directors will lose their entire investment in OAC and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by July 22, 2021; and

 

70


Table of Contents
   

the fact that if the trust account is liquidated, including in the event OAC is unable to complete an initial business combination by July 22, 2021, the Sponsor has agreed to indemnify OAC to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which OAC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to OAC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account.

See “Business Combination Proposal—Interests of OAC’s Directors and Executive Officers in the Business Combination” for additional information on interests of OAC’s directors and executive officers.

The exercise of OAC’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in OAC’s shareholders’ best interest.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Merger Agreement, would require OAC to agree to amend the Merger Agreement, to consent to certain actions taken by Hims or to waive rights that OAC is entitled to under the Merger Agreement. Such events could arise because of changes in the course of Hims’ business, a request by Hims to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Hims’ business and would entitle OAC to terminate the Merger Agreement. In any of such circumstances, it would be at OAC’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors may result in a conflict of interest on the part of such director(s) between what he or they may believe is best for OAC and its shareholders and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, OAC does not believe there will be any changes or waivers that OAC’s directors and executive officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, OAC will circulate a new or amended proxy statement/prospectus and resolicit OAC’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

The dual class structure of New Hims’ common stock will have the effect of concentrating voting power with the New Hims’ Chief Executive Officer and Co-Founder, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control.

Shares of New Hims Class V Common Stock will have 175 votes per share, while shares of New Hims Class A Common Stock will have one vote per share. Upon the consummation of the Business Combination, Mr. Dudum, the Chief Executive Officer and Co-Founder of Hims, including his affiliates and permitted transferees, will hold all of the issued and outstanding shares of New Hims Class V Common Stock. Accordingly, upon the consummation of the Business Combination, Mr. Dudum will hold, directly or indirectly, approximately 90% of the voting power of New Hims’ capital stock on a fully-diluted basis and will be able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. Mr. Dudum may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of New Hims, could deprive our shareholders of an opportunity to receive a premium for their capital stock as part of a sale of New Hims, and might ultimately affect the market price of shares of New Hims Class A Common Stock. For information about our dual class structure, see the section titled “Description of New Hims Securities.

 

71


Table of Contents

We cannot predict the impact New Hims’ dual class structure may have on the stock price of New Hims Class A Common Stock.

We cannot predict whether New Hims’ dual class structure will result in a lower or more volatile market price of New Hims Class A Common Stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. In July 2017, FTSE Russell and S&P Dow Jones announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in New Hims Class A Common Stock. These policies are still fairly new and it is as of yet unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations compared to those of other similar companies that are included. Because of our dual class structure, we will likely be excluded from certain of these indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment by many of these funds and could make shares of New Hims Class A Common Stock less attractive to other investors. As a result, the market price of shares of New Hims Class A Common Stock could be adversely affected.

As a “controlled company” within the meaning of NYSE listing standards, New Hims will qualify for exemptions from certain corporate governance requirements. New Hims has the opportunity to elect any of the exemptions afforded a controlled company.

Because Mr. Dudum will control more than a majority of the total voting power of the New Hims Class A Common Stock following the consummation of the Business Combination, New Hims will be a “controlled company” within the meaning of NYSE listing standards. Under NYSE Listing Rules, a company of which more than 50% of the voting power is held by another person or group of persons acting together is a “controlled company” and may elect not to comply with the following NYSE rules regarding corporate governance:

 

   

the requirement that a majority of its board of directors consist of independent directors;

 

   

the requirement to have a nominating and corporate governance committee composed entirely of independent directors and a written charter addressing the committee’s purpose and responsibilities;

 

   

the requirement to have a compensation committee composed entirely of independent directors and a written charter addressing the committee’s purpose and responsibilities; and

 

   

the requirement of an annual performance evaluation of the nominating, corporate governance and compensation committees.

New Hims currently expects that upon consummation of the Business Combination, six of its seven directors will be independent directors, and it is expected that the New Hims Board will have an independent compensation committee (in addition to an independent audit committee). New Hims does not expect to have a nominating committee upon consummation of the Business Combination. The typical functions of this committee are expected to be addressed by the full New Hims Board or one of its committees. For as long as the “controlled company” exemption is available, the New Hims Board in the future may not consist of a majority of independent directors and may not have an independent nominating committee or compensation committee. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE rules regarding corporate governance.

 

72


Table of Contents

Subsequent to consummation of the Business Combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the share price of our securities, which could cause you to lose some or all of your investment.

We cannot assure you that the due diligence conducted in relation to Hims has identified all material issues or risks associated with Hims, its business or the industry in which it competes. As a result of these factors, we may incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or New Hims. Accordingly, any shareholders of OAC who choose to remain New Hims stockholders following the Business Combination could suffer a reduction in the value of their shares and warrants. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the warrant agreement do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants will be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.

If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder will be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

 

73


Table of Contents

Our ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of key personnel of New Hims, including those from Hims, and some of whom may join New Hims following the Business Combination. The loss of key personnel or the hiring of ineffective personnel after the Business Combination could negatively impact the operations and profitability of New Hims.

Our ability to successfully effect the Business Combination and be successful thereafter will be dependent upon the efforts of our key personnel. We expect New Hims’ current management to remain in place. We cannot assure you that we will be successful in integrating and retaining such key personnel, or in identifying and recruiting additional key individuals we determine may be necessary following the Business Combination.

The unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what New Hims’ actual financial position or results of operations would have been.

The unaudited pro forma financial information in this proxy statement/prospectus is presented for illustrative purposes only and may not be indicative of what the combined company’s actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. As described in the “Unaudited Pro Forma Condensed Combined Financial Information,” the transaction will be accounted for as a reverse recapitalization.

The ability of our public shareholders to exercise redemption rights with respect to a large number of our public shares may not allow us to complete the most desirable business combination or optimize the capital structure of New Hims.

At the time of entering into the Merger Agreement, we did not know how many shareholders may exercise their redemption rights, and therefore, we needed to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. The consummation of the Business Combination is conditioned upon, among other things, (i) the approval of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Merger Agreement having expired or been terminated; and (iii) the Minimum Available Cash Condition. Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated.

The Sponsor, as well as Hims, our directors, executive officers, advisors and their affiliates may elect to purchase public shares prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our Class A ordinary shares.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, our Sponsor, Hims and/or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, Hims and/or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposal A, the NYSE Proposal, the Incentive Equity Plan Proposal, the Employee Stock Purchase Plan Proposal, and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in

 

74


Table of Contents

person or represented by proxy at the extraordinary general meeting and entitled to vote on such matters, (ii) the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D, the Governing Documents Proposal E, and the Governing Documents Proposal F are approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matters, (iii) the Minimum Available Cash Condition is met and otherwise limit the number of public shares electing to redeem and (iv) New Hims’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

Entering into any such arrangements may have a depressive effect on the ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he or she owns, either at or prior to the Business Combination.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved.

In addition, if such purchases are made, the public “float” of our public shares and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price in our initial public offering).

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per share redemption amount received by

 

75


Table of Contents

public shareholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors. In order to protect the amounts held in the trust account, the Sponsor has agreed to be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduces the amount of funds in the trust account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the trust account or to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, even in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and we have not asked the Sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that the Sponsor would be able to satisfy those obligations. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our public shareholders $10.00 per share (which was the offering price in our initial public offering).

If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board of directors may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution

 

76


Table of Contents

was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons.

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares or, after the Business Combination, the New Hims Class A Common Stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our ordinary shares or, after the Business Combination, the New Hims Class A Common Stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares or, after the Business Combination, the New Hims Class A Common Stock held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

 

77


Table of Contents

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate the Business Combination, require substantial financial and management resources and increase the time and costs of completing a business combination.

The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies. Hims is not a publicly reporting company required to comply with Section 404 of the Sarbanes-Oxley Act and New Hims management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to New Hims after the Business Combination. If we are not able to implement the requirements of Section 404, including any additional requirements once we are no longer an emerging growth company, in a timely manner or with adequate compliance, we may not be able to assess whether its internal control over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of New Hims Class A Common Stock. Additionally, once we are no longer an emerging growth company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.

The price of New Hims Class A Common Stock and New Hims’ warrants may be volatile.

Upon consummation of the Business Combination, the price of New Hims Class A Common Stock and New Hims’ warrants may fluctuate due to a variety of factors, including:

 

   

changes in the industries in which New Hims and its customers operate;

 

   

variations in its operating performance and the performance of its competitors in general;

 

   

material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy;

 

   

actual or anticipated fluctuations in New Hims’ quarterly or annual results of operation;

 

   

publication of research reports by securities analysts about New Hims or its competitors or its industry;

 

   

the public’s reaction to New Hims’ press releases, its other public announcements and its filings with the SEC;

 

   

New Hims’ failure or the failure of its competitors to meet analysts’ projections or guidance that New Hims or its competitors may give to the market;

 

   

additions and departures of key personnel;

 

   

changes in laws and regulations affecting its business;

 

   

commencement of, or involvement in, litigation involving New Hims;

 

   

changes in New Hims’ capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of shares of New Hims Class A Common Stock available for public sale;

 

   

sales of shares of New Hims Class A Common Stock by the PIPE Investors; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.

These market and industry factors may materially reduce the market price of New Hims Class A Common Stock and New Hims’ warrants regardless of the operating performance of New Hims.

 

78


Table of Contents

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of New Hims Class A Common Stock to drop significantly, even if New Hims’ business is doing well.

Sales of a substantial number of shares of New Hims Class A Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New Hims Class A Common Stock.

It is anticipated that, upon completion of the Business Combination and after giving effect to the surrender and forfeiture of 25.0% of the Class B ordinary shares and 25.0% of the private placement warrants held by the Sponsor, and subsequent issuance of a number of securities equal to such surrendered and forfeited Class B ordinary shares and private placement warrants to Hims Equityholders as New Hims Class A Common Stock (or equivalent equity awards in respect thereof) and warrants to acquire shares of New Hims Class A Common Stock (or equivalent equity awards in respect thereof) in the Business Combination, (i) the Hims Stockholders will own approximately 82.3% of the outstanding New Hims Common Stock and (ii) our Sponsor will own approximately 2.1% of the outstanding New Hims Common Stock, in each case, assuming that none of OAC’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 86.1% and 2.2%, respectively, assuming that 7,822,956 of OAC’s outstanding public shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Available Cash Condition based on a per share redemption price of $10.16 per share) are redeemed in connection with the Business Combination. These percentages assume that (i) 145,464,420 shares of New Hims Class A Common Stock are issued to the holders of shares of capital stock of Hims at the Closing; (ii) all shares of New Hims Class V Common Stock that will be held by Andrew Dudum, the Chief Executive Officer and Co-Founder of Hims, including his affiliates and permitted transferees, immediately following Closing have been converted into New Hims Class A Common Stock on a one-for-one basis; (iii) no shares of Hims capital stock are repurchased in the Hims Pre-Closing Redemption; (iv) 7,500,000 shares of New Hims Class A Common Stock will be issued in the PIPE Financing; (v) no public warrants or private placement warrants to purchase New Hims Class A Common Stock that will be outstanding immediately following the Closing have been exercised; (vi) no vested or unvested options to acquire New Hims Class A Common Stock that will be held by Hims Equityholders immediately following Closing have been exercised; (vii) no restricted stock unit awards that will be held by Hims Equityholders immediately following the Closing have been settled; and (viii) no Earn Out Shares (or equivalent equity awards in respect thereof) that will be held by Hims Equityholders immediately following the Closing will have vested and such shares are excluded from the calculation of the percentages above. If the actual facts are different than these assumptions, the ownership percentages in New Hims will be different.

Although the Sponsor and certain Hims Stockholders will be subject to certain restrictions regarding the transfer of New Hims Class A Common Stock, these shares may be sold after the expiration of the respective applicable lock-ups under the Sponsor Agreement and the Amended and Restated Investors’ Rights Agreement, respectively. We intend to file one or more registration statements prior to or shortly after the closing of the Business Combination to provide for the resale of such shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of New Hims Class A Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

The public shareholders will experience immediate dilution as a consequence of the issuance of New Hims Class A Common Stock as consideration in the Business Combination and in the PIPE Financing.

In accordance with the terms and subject to the conditions of the Merger Agreement, following the Hims Recapitalization and at the Effective Time, (i) each share of Hims common stock and restricted stock outstanding as of immediately prior to the Effective Time (other than dissenting shares and shares held by Hims as treasury stock (which treasury shares will be cancelled for no consideration as part of the Merger)) will be cancelled and

 

79


Table of Contents

converted into the right to receive the applicable portion of the merger consideration comprised of New Hims Class A Common Stock, Earn Out Shares and warrants to acquire shares of New Hims Class A Common Stock, each as determined in the Merger Agreement, (ii) all equity awards of Hims will be assumed by OAC and converted into comparable equity awards that are settled or exercisable for shares of New Hims Class A Common Stock, earn out restricted stock unit awards and warrant restricted stock unit awards with a value as if such Hims equity awards were exercised or settled immediately prior to the Closing and (iii) each warrant of Hims that is unexercised will be assumed by OAC and represent the right to receive the applicable portion of the merger consideration upon exercise of such warrant as if such warrant was exercised prior to the Closing. Each Hims Equityholder will receive its applicable portion of the 16 million Earn Out Shares (or equivalent equity award) described above that will vest (in part) in equal thirds if the trading price of New Hims Class A Common Stock is greater than or equal to $15, $17.50 and $20 for any 10 trading days within any 20-trading day period and will also vest in connection with any Company Sale if the applicable thresholds are met in such Company Sale, in each case, during the Earn Out Period.

The issuance of additional New Hims Class A Common Stock will significantly dilute the equity interests of existing holders of OAC securities, and may adversely affect prevailing market prices of New Hims Class A Common Stock and/or New Hims warrants.

Warrants will become exercisable for New Hims Class A Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

If the Business Combination is completed, outstanding warrants to purchase an aggregate of 10,725,000 shares of New Hims Class A Common Stock will become exercisable in accordance with the terms of the warrant agreement governing those securities. These warrants will become exercisable 30 days after the completion of the Business Combination. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of New Hims Class A Common Stock will be issued, which will result in dilution to the holders of New Hims Class A Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the prevailing market prices of New Hims Class A Common Stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. See “—Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.”

Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.

The warrants were issued in registered form under a warrant agreement between Continental, as warrant agent, and OAC. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or correct any mistake, but requires the approval by the holders of at least 50% of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of New Hims Class A Common Stock purchasable upon exercise of a warrant.

 

80


Table of Contents

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the New Hims Class A Common Stock equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to: (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants.

In addition, we may redeem your warrants at any time after they become exercisable and prior to their expiration at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants. None of the private placement warrants will be redeemable by us, subject to certain circumstances, so long as they are held by our Sponsor or its permitted transferees.

The NYSE may not list New Hims’ securities on its exchange, which could limit investors’ ability to make transactions in New Hims’ securities and subject New Hims to additional trading restrictions.

An active trading market for New Hims’ securities following the Business Combination may never develop or, if developed, it may not be sustained. In connection with the Business Combination, in order to continue to maintain the listing of our securities on NYSE, we will be required to demonstrate compliance with NYSE’s listing requirements. We will apply to have New Hims’ securities listed on NYSE upon consummation of the Business Combination. We cannot assure you that we will be able to meet all listing requirements. Even if New Hims’ securities are listed on NYSE, New Hims may be unable to maintain the listing of its securities in the future.

If New Hims fails to meet the listing requirements and NYSE does not list its securities on its exchange, Hims would not be required to consummate the Business Combination. In the event that Hims elected to waive this condition, and the Business Combination was consummated without New Hims’ securities being listed on the NYSE or on another national securities exchange, New Hims could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for New Hims’ securities;

 

   

reduced liquidity for New Hims’ securities;

 

   

a determination that New Hims Class A Common Stock is a “penny stock” which will require brokers trading in New Hims Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New Hims’ securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

 

81


Table of Contents

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If New Hims’ securities were not listed on NYSE, such securities would not qualify as covered securities and we would be subject to regulation in each state in which we offer our securities because states are not preempted from regulating the sale of securities that are not covered securities.

Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of New Hims Class A Common Stock.

Securities research analysts may establish and publish their own periodic projections for New Hims following consummation of the Business Combination. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. While we expect research analyst coverage following consummation of the Business Combination, if no analysts commence coverage of us, the market price and volume for shares of New Hims Class A Common Stock could be adversely affected.

We are subject to and New Hims will be subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both OAC’s costs and the risk of non-compliance and will increase both New Hims’ costs and the risk of non-compliance.

We are and New Hims will be subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in, and New Hims’ efforts to comply likely will result in, increased general and administrative expenses and a diversion of management time and attention.

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to New Hims’ disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

Risks Related to the Consummation of the Domestication

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “we,” “us” or “our” refers to OAC prior to the Business Combination and to New Hims and its subsidiaries following the Business Combination.

The Domestication may result in adverse tax consequences for holders of public shares.

U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders”) may be subject to U.S. federal income tax as a result of the Domestication. Because the Domestication will occur immediately prior to the redemption of New Hims Class A Common Stock, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. Additionally, non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—Non-U.S. Holders” below) may become subject to withholding tax on any dividends paid or deemed paid on shares of New Hims Class A Common Stock after the Domestication.

As discussed more fully under “U.S. Federal Income Tax Considerations,” the Domestication generally should constitute a reorganization within the meaning of Section 368(a)(1)(F) of the Code. However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as OAC, this result is not entirely clear. Accordingly, due to the absence of such

 

82


Table of Contents

guidance, it is not possible to predict whether the IRS or a court considering the issue would take a contrary position. If the Domestication fails to qualify as a reorganization under Section 368(a)(1)(F) of the Code, a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders”) generally would recognize gain or loss with respect to its public shares or public warrants in an amount equal to the difference, if any, between the fair market value of the New Hims Class A Common Stock or New Hims Warrants received in the Domestication and the U.S. Holder’s adjusted tax basis in its public shares and public warrants surrendered in exchange therefor.

In the case of a transaction, such as the Domestication that should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code, so qualifies, U.S. Holders will be subject to Section 367(b) of the Code and, as a result: a U.S. Holder who on the day of the Domestication beneficially owns (actually and constructively) public shares with a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of OAC’s earnings in income in respect of the Domestication; a U.S. Holder who on the day of the Domestication beneficially owns (actually and constructively) public shares with a fair market value of $50,000 or more, but less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% or more of the total value of all classes of our stock, generally will recognize gain (but not loss) in respect of the Domestication as if such U.S. Holder exchanged its public shares for shares of New Hims Class A Common Stock in a taxable transaction, unless such U.S. Holder elects in accordance with applicable Treasury Regulations to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to the public shares held directly by such U.S. Holder; and a U.S. Holder who on the day of the Domestication beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock, will generally be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to the public shares held directly by such U.S. Holder; however, any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code.

In the case of a transaction, such as the Domestication, that should qualify as a “reorganization” under Section 368(a)(1)(F) of the Code, a U.S. Holder of public shares may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its public shares for shares of New Hims Class A Common Stock pursuant to the Domestication under PFIC, rules of the Code equal to the excess, if any, of the fair market value of the shares of New Hims Class A Common Stock received in the Domestication over the U.S. Holder’s adjusted tax basis in the corresponding public shares surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see the discussion in the section entitled “U.S. Federal Income Tax Considerations.

All holders are urged to consult their tax advisor for the tax consequences of the Domestication to their particular situation. For a more detailed description of the U.S. federal income tax consequences associated with the Domestication, see “U.S. Federal Income Tax Considerations.”

Upon consummation of the Business Combination, the rights of holders of New Hims Class A Common Stock arising under the DGCL as well as Proposed Governing Documents will differ from and may be less favorable to the rights of holders of Class A ordinary shares arising under Cayman Islands law as well as our current memorandum and articles of association.

Upon consummation of the Business Combination, the rights of holders of New Hims Class A Common Stock will arise under the Proposed Governing Documents as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in the Existing Governing Documents and Cayman Islands law and, therefore, some rights of holders of New Hims Class A Common Stock could differ from the rights that holders of Class A ordinary shares currently possess. For instance, while class actions are generally not available to shareholders under Cayman Islands law, such actions are generally available under the DGCL. This change could increase the likelihood that New Hims becomes involved in costly litigation, which could have a material adverse effect on New Hims.

 

83


Table of Contents

In addition, there are differences between the Proposed Governing Documents of New Hims and the current constitutional documents of OAC. For a more detailed description of the rights of holders of New Hims Class A Common Stock and how they may differ from the rights of holders of Class A ordinary shares, please see “Comparison of Corporate Governance and Shareholder Rights.” The forms of the Proposed Certificate of Incorporation and the Proposed Bylaws of New Hims are attached as Annex C and Annex D, respectively, to this proxy statement/prospectus, and we urge you to read them.

Delaware law and New Hims’ Proposed Governing Documents contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

The Proposed Governing Documents that will be in effect upon consummation of the Business Combination, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the New Hims Board and therefore depress the trading price of New Hims Class A Common Stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of the New Hims board of directors or taking other corporate actions, including effecting changes in our management. Among other things, the Proposed Governing Documents include provisions regarding:

 

   

New Hims Class V Common Stock that is entitled to 175 votes per share;

 

   

the ability of New Hims stockholders to take action by written consent in lieu of a meeting for so long as Mr. Dudum and his affiliates and permitted transferees beneficially own a majority of the voting power of the then-outstanding shares of capital stock of New Hims;

 

   

the ability of the New Hims Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 

   

the limitation of the liability of, and the indemnification of, New Hims’ directors and officers;

 

   

the requirement that a special meeting of stockholders may be called only by a majority of the entire New Hims Board, the Chairman of the New Hims Board or the Chief Executive Officer of New Hims which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;

 

   

controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;

 

   

the ability of the New Hims Board to amend the bylaws, which may allow the New Hims Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and

 

   

advance notice procedures with which stockholders must comply to nominate candidates to the New Hims Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the New Hims Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of New Hims.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the New Hims Board or management.

In addition, the Proposed Certificate of Incorporation includes a provision substantially similar to Section 203 of the DGCL, which may prohibit certain stockholders holding 15% or more of New Hims’ outstanding capital stock from engaging in certain business combinations with us for a specified period of time.

 

84


Table of Contents

New Hims’ Proposed Certificate of Incorporation will designate a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between New Hims and its stockholders, which could limit New Hims’ stockholders’ ability to obtain a favorable judicial forum for disputes with New Hims or its directors, officers, stockholders, employees or agents.

The Proposed Certificate of Incorporation, which will be in effect upon consummation of the Business Combination, provides that, unless New Hims consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of New Hims, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or agent of New Hims to New Hims or New Hims’ stockholders, (iii) any action arising pursuant to any provision of the DGCL or the Proposed Certificate of Incorporation or Proposed Bylaws (as either may be amended from time to time), or (iv) any action asserting a claim against New Hims governed by the internal affairs doctrine. The forgoing provisions will not apply to any claims arising under the Securities Act and, unless New Hims consents in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act. Notwithstanding the foregoing, the provisions of Article XII of the Proposed Certificate of Incorporation will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum.

These choice of forum provisions in our Proposed Certificate of Incorporation may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New Hims or any of New Hims’ directors, officers, or other employees, which may discourage lawsuits with respect to such claims. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find the choice of forum provision contained in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in an action, New Hims may incur additional costs associated with resolving such action in other jurisdictions, which could harm New Hims’ business, results of operations and financial condition.

Risks Related to the Redemption

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “we,” “us” or “our” refers to OAC prior to the Business Combination and to New Hims and its subsidiaries following the Business Combination.

Public Shareholders who wish to redeem their public shares for a pro rata portion of the trust account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their public shares for a pro rata portion of the funds held in the trust account.

A public shareholder will be entitled to receive cash for any public shares to be redeemed only if such public shareholder: (i)(a) holds public shares, or (b) if the public shareholder holds public shares through units, the public shareholder elects to separate its units into the underlying public shares and public warrants prior to exercising its redemption rights with respect to the public shares; (ii) submits a written request to Continental, OAC’s transfer agent, in which it (a) requests that New Hims redeem all or a portion of its public shares for cash, and (b) identifies itself as a beneficial holder of the public shares and provides its legal name, phone number and address; and (iii) delivers its public shares to Continental, OAC’s transfer agent, physically or electronically through DTC. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on January 14, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. In order to obtain a physical share certificate, a shareholder’s broker and/or clearing broker, DTC and Continental, OAC’s transfer agent, will need to act to facilitate this request. It is OAC’s understanding that shareholders should generally allot at least two

 

85


Table of Contents

weeks to obtain physical certificates from the transfer agent. However, because OAC does not have any control over this process or over DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, public shareholders who wish to redeem their public shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, OAC’s transfer agent, New Hims will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering, calculated as of two business days prior to the consummation of the Business Combination. Please see the section entitled “Extraordinary General Meeting of OAC—Redemption Rights” for additional information on how to exercise your redemption rights.

If a public shareholder fails to receive notice of OAC’s offer to redeem public shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

If, despite OAC’s compliance with the proxy rules, a public shareholder fails to receive OAC’s proxy materials, such public shareholder may not become aware of the opportunity to redeem his, her or its public shares. In addition, the proxy materials that OAC is furnishing to holders of public shares in connection with the Business Combination describes the various procedures that must be complied with in order to validly redeem the public shares. In the event that a public shareholder fails to comply with these procedures, its public shares may not be redeemed. Please see the section entitled “Extraordinary General Meeting of OAC—Redemption Rights” for additional information on how to exercise your redemption rights.

OAC does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete the Business Combination with which a substantial majority of OAC’s shareholders do not agree.

The Existing Governing Documents do not provide a specified maximum redemption threshold, except that OAC will not redeem public shares in an amount that would cause OAC’s net tangible assets to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act).

As a result, OAC may be able to complete the Business Combination even though a substantial portion of public shareholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to Sponsor, directors or officers or their affiliates. As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of public shares by OAC or the persons described above have been entered into with any such investor or holder. OAC will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

If you or a “group” of shareholders of which you are a part are deemed to hold an aggregate of more than 15% of the public shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the public shares.

A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the public

 

86


Table of Contents

shares. In order to determine whether a shareholder is acting in concert or as a group with another shareholder, OAC will require each public shareholder seeking to exercise redemption rights to certify to OAC whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other public information relating to stock ownership available to OAC at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which OAC makes the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over OAC’s ability to consummate the Business Combination and you could suffer a material loss on your investment in OAC if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if OAC consummates the Business Combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the public shares and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. OAC cannot assure you that the value of such excess shares will appreciate over time following the Business Combination or that the market price of the public shares will exceed the per-share redemption price. Notwithstanding the foregoing, shareholders may challenge OAC’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

However, OAC’s shareholders’ ability to vote all of their shares (including such excess shares) for or against the Business Combination is not restricted by this limitation on redemption.

There is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the trust account will put the shareholder in a better future economic position.

OAC can give no assurance as to the price at which a shareholder may be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the Business Combination, may cause an increase in OAC share price, and may result in a lower value realized now than a shareholder of OAC might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a shareholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A shareholder should consult the shareholder’s own financial advisor for assistance on how this may affect his, her or its individual situation.

Risks if the Adjournment Proposal is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination and the Domestication, the OAC Board will not have the ability to adjourn the extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved, and, therefore, the Business Combination may not be consummated.

The OAC Board is seeking approval to adjourn the extraordinary general meeting to a later date or dates if, at the extraordinary general meeting, based upon the tabulated votes, there are insufficient votes to approve each of the Condition Precedent Proposals. If the Adjournment Proposal is not approved, the OAC Board will not have the ability to adjourn the extraordinary general meeting to a later date and, therefore, will not have more time to solicit votes to approve the Condition Precedent Proposals. In such events, the Business Combination would not be completed.

Risks if the Domestication and the Business Combination are not Consummated

References in this section to “we,” “us,” and “our” refer to OAC.

 

87


Table of Contents

If we are not able to complete the Business Combination with Hims nor able to complete another business combination by July 22, 2021, in each case, as such date may be extended pursuant to our Existing Governing Documents, we would cease all operations except for the purpose of winding up and we would redeem our Class A ordinary shares and liquidate the trust account, in which case our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

If we are not able to complete the Business Combination with Hims nor able to complete another business combination by July 22, 2021, in each case, as such date may be extended pursuant to our Existing Governing Documents we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to fund our Regulatory Withdrawals and/or to pay our income taxes, if any, (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or public warrants, potentially at a loss.

Our public shareholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of a business combination (including the closing of the Business Combination), and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Existing Governing Documents (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with a business combination o