SEC Comment Letter for SRx Health Solutions, Inc. (SRXH) (CIK 0001471727) (SRXH) — Aug 8, 2019
SRx Health Solutions, Inc. (SRXH) (CIK 0001471727)
Date: Aug. 8, 2019 · CIK: 0001471727 · Accession: 0000000000-19-012185
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-161943
Letter
August 7, 2019 Damian Dalla-Longa Chief Executive Officer Better Choice Company Inc. 4025 Tampa Road, Suite 1117 Oldsmar, FL 34677 Re:Better Choice Company Inc. Form 10-K for the Fiscal Year ended August 31, 2018 Filed December 21, 2018 Form 8-K filed May 10, 2019 Form 8-K filed May 23, 2019 Form 8-K filed July 12, 2019 Form 8-K/A filed July 23, 2019 Response dated July 12, 2019 File No. 333-161943 Dear Mr. Dalla-Longa: We have reviewed your July 12, 2019 response to our comment letter and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our June 17, 2019 letter. Form 8-K/A filed July 23, 2019 Exhibit 99.5 Unaudited Pro Forma Combined Financial Information, page 1 1.We note that your pro forma balance sheet adjustment of $45.9 million to goodwill has been derived from a valuation of the 14.1 million shares issued in exchange for the 93.3% interest in TruPet LLC, as described in footnote (f). However, since you have identified TruPet LLC as the accounting acquirer and the transaction as a reverse merger, it appears
FirstName LastNameDamian Dalla-Longa Comapany NameBetter Choice Company Inc. August 7, 2019 Page 2 FirstName LastName Damian Dalla-Longa Better Choice Company Inc. August 7, 2019 Page 2 that any adjustments to recognize the fair value of assets and liabilities acquired should be based on a valuation of the 3.1 million Better Choice Company, Inc. common shares that were outstanding just prior to the reverse merger, as if these were issued by TruPet LLC to complete the acquisition. Please revise your pro forma financial presentation accordingly. 2.Please expand your disclosure in footnote (d) to include a qualitative description of the factors that make up the $52.9 million pro forma adjustment to goodwill for Bona Vida Inc., consistent with the disclosure requirements outlined in FASB ASC 805-30-50-1. Tell us how you have considered the requirements of FASB ASC 805-20-25-10, and the examples in FASB ASC 805-20-55-11 through 55-45, in determining that you did not acquire any identifiable intangible assets, if this is your view. 3.We note that you filed a transition report on Form 10-KT for the period September 1, 2018 to December 31, 2018 of Better Choice Company Inc. prior to the reverse merger. We also see that you have utilized certain financial information for the first quarter of the newly adopted fiscal year, on a partially recast basis, in your pro forma presentation. Given the foregoing, it appears that you intend to file a corresponding interim report on Form 10-Q, for the quarter ended March 31, 2019, of Better Choice Company Inc. prior to the reverse merger. Tell us your plans and rationale if this is not the case. 4.Given that you have identified TruPet LLC as the accounting acquirer, we understand that you will include historical financial statements of this entity in subsequent periodic reports, for certain comparative periods that preceded the reverse merger. Generally, you will need to recast share and per share figures and share activity of this entity in a manner that is consistent with the capital structure acquired in your merger with Better Choice Company, Inc., similar to a forward or reverse stock split. We understand that the initial periodic filing by the post-merger company will be a Form 10-Q for the quarter ended June 30, 2019, in which TruPet LLC will be depicted as the accounting acquirer, and the historical financial statements prior to the merger will be those of TruPet LLC. Please contact us by telephone if you require further clarification or guidance. You may contact Joseph Klinko at (202) 551-3824 or Lily Dang at (202) 551-3867 if you have questions regarding comments on the financial statements and related matters. Please contact Karl Hiller, Branch Chief, at 202-551-3686 with any other questions. Sincerely, Division of Corporation Finance Office of Natural Resources
Show Raw Text
August 7, 2019
Damian Dalla-Longa
Chief Executive Officer
Better Choice Company Inc.
4025 Tampa Road, Suite 1117
Oldsmar, FL 34677
Re:Better Choice Company Inc.
Form 10-K for the Fiscal Year ended August 31, 2018
Filed December 21, 2018
Form 8-K filed May 10, 2019
Form 8-K filed May 23, 2019
Form 8-K filed July 12, 2019
Form 8-K/A filed July 23, 2019
Response dated July 12, 2019
File No. 333-161943
Dear Mr. Dalla-Longa:
We have reviewed your July 12, 2019 response to our comment letter and have the
following comments. In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional
comments. Unless we note otherwise, our references to prior comments are to comments in our
June 17, 2019 letter.
Form 8-K/A filed July 23, 2019
Exhibit 99.5
Unaudited Pro Forma Combined Financial Information, page 1
1.We note that your pro forma balance sheet adjustment of $45.9 million to goodwill has
been derived from a valuation of the 14.1 million shares issued in exchange for the 93.3%
interest in TruPet LLC, as described in footnote (f). However, since you have identified
TruPet LLC as the accounting acquirer and the transaction as a reverse merger, it appears
FirstName LastNameDamian Dalla-Longa
Comapany NameBetter Choice Company Inc.
August 7, 2019 Page 2
FirstName LastName
Damian Dalla-Longa
Better Choice Company Inc.
August 7, 2019
Page 2
that any adjustments to recognize the fair value of assets and liabilities acquired should be
based on a valuation of the 3.1 million Better Choice Company, Inc. common shares that
were outstanding just prior to the reverse merger, as if these were issued by TruPet LLC to
complete the acquisition. Please revise your pro forma financial presentation accordingly.
2.Please expand your disclosure in footnote (d) to include a qualitative description of the
factors that make up the $52.9 million pro forma adjustment to goodwill for Bona Vida
Inc., consistent with the disclosure requirements outlined in FASB ASC 805-30-50-1.
Tell us how you have considered the requirements of FASB ASC 805-20-25-10, and the
examples in FASB ASC 805-20-55-11 through 55-45, in determining that you did not
acquire any identifiable intangible assets, if this is your view.
3.We note that you filed a transition report on Form 10-KT for the period September 1,
2018 to December 31, 2018 of Better Choice Company Inc. prior to the reverse merger.
We also see that you have utilized certain financial information for the first quarter of the
newly adopted fiscal year, on a partially recast basis, in your pro forma presentation.
Given the foregoing, it appears that you intend to file a corresponding interim report on
Form 10-Q, for the quarter ended March 31, 2019, of Better Choice Company Inc. prior to
the reverse merger. Tell us your plans and rationale if this is not the case.
4.Given that you have identified TruPet LLC as the accounting acquirer, we understand that
you will include historical financial statements of this entity in subsequent periodic
reports, for certain comparative periods that preceded the reverse merger. Generally, you
will need to recast share and per share figures and share activity of this entity in a manner
that is consistent with the capital structure acquired in your merger with Better Choice
Company, Inc., similar to a forward or reverse stock split. We understand that the initial
periodic filing by the post-merger company will be a Form 10-Q for the quarter ended
June 30, 2019, in which TruPet LLC will be depicted as the accounting acquirer, and the
historical financial statements prior to the merger will be those of TruPet LLC. Please
contact us by telephone if you require further clarification or guidance.
You may contact Joseph Klinko at (202) 551-3824 or Lily Dang at (202) 551-3867 if you
have questions regarding comments on the financial statements and related matters. Please
contact Karl Hiller, Branch Chief, at 202-551-3686 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Natural Resources