SEC Comment Letter 0000000000-23-007285 to Solventum Corp (SOLV) (CIK 0001964738) (SOLV)
Solventum Corp (SOLV) (CIK 0001964738)
Date: July 10, 2023 · CIK: 0001964738 · Accession: 0000000000-23-007285
AI Filing Summary & Sentiment
Letter
United States securities and exchange commission logo July 7, 2023 Jeffrey Lavers President 3M Health Care Co 3M Center St. Paul , Minnesota 55144 Re:3M Health Care Co Amendment No. 2 to Draft Registration Statement on Form 10-12G Submitted June 23, 2023 CIK No. 0001964738 Dear Jeffrey Lavers: We have reviewed your amended draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter by providing the requested information and either submitting an amended draft registration statement or publicly filing your registration statement on EDGAR. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing the information you provide in response to these comments and your amended draft registration statement or filed registration statement, we may have additional comments. Draft Registration Statement Submitted June 23, 2023 Exhibit 99.1 Information Statement Summary Our Company, page 11 1.We acknowledge your revised disclosures in response to comment 1, but reissue to the extent you have not generally revised the summary to balance your numerous statements of leadership and strengths. The revisions on page 17 removed language that appeared to provide context for the statements that remain. In addition, you continue to refer to your "trusted solutions" and "trusted brands" and that your products "enable higher quality patient care, more efficient processes and workflows, and improved standards of safety"
FirstName LastNameJeffrey Lavers Comapany Name3M Health Care Co July 7, 2023 Page 2 FirstName LastName Jeffrey Lavers 3M Health Care Co July 7, 2023 Page 2 without stating these as your beliefs or clarifying the basis for these statements. Please refer to comments 2 and 4 of our March 15, 2023 letter. 2.We note the graphic on pages 12 and 88, and other statements throughout the summary and other sections of your prospectus regarding the safety and efficacy of your products and products into which your products are incorporated. Please revise the graphic to remove references to safety and efficacy, including as they relate to products you do not produce. As safety and efficacy determinations are solely within authority of the FDA or other regulatory agencies, please also revise the summary to explain which of your products' efficacy and safety claims have been approved by the FDA or similar regulatory authorities, and that efficacy or safety claims for your other products have not been approved by regulatory authorities. We note, for example, the broad statement on page 13 that your "solution shave been evaluated in numerous clinical studies, and results from these studies confirm the safety, efficacy and clinical benefit for their intended use." Unaudited Pro Forma Condensed Combined Financial Information, page 77 3.Please further clarify in note (j) how you determined the appropriate tax rate to use in arriving at the pro forma provision for income taxes. In this regard, we note that the pro forma effective tax rate on transaction accounting adjustments was approximately 12.5% compared to your historical effective tax rate of 20.6%. In addition the statutory effective tax rate also appears higher based on disclosures on page F-21. Refer to the guidance of Rule 11-02(b)(5)(i) of Regulation S-X. 4.In regards to autonomous entity adjustments, we remind you that Rule 11-02(b)(11)(iii) of Regulation S-X indicates that detailed disclosures should be provided which should include a description of the adjustment (including the material uncertainties), the material assumptions, the calculation of the adjustment, and additional qualitative information about the adjustments, if any, necessary to give a fair and balanced presentation of the pro forma financial information. Please expand your disclosures to appropriately address. 5.We note adjustment (o) to the pro forma balance sheet reflects the net impact of lease arrangements with third parties and sublease arrangements with ParentCo for facilities that will be entered into prior to the separation. Please address what consideration was given to reflecting the impact of these arrangements on your pro forma statement of income given that these arrangements do not appear to be included in adjustment (m). 6.Your disclosures on page 8 indicate that the company will also enter into a tax matters agreement, an employee matters agreement, and an intellectual property matters agreement with ParentCo. It appears that the employee matters agreement will also govern the terms of equity-based awards granted by ParentCo prior to the separation. Please help us understand what consideration was given as to whether the impact of these agreements should also be reflected in the pro forma financial information.
FirstName LastNameJeffrey Lavers Comapany Name3M Health Care Co July 7, 2023 Page 3 FirstName LastName Jeffrey Lavers 3M Health Care Co July 7, 2023 Page 3 7.We note that the Health Care Business entered into agreements in May 2023 to sell certain assets associated with its dental local anesthetic portfolio, which is expected to close in the third quarter of 2023. Please address what consideration was given to reflecting this transaction in the pro forma financial information. Intellectual Property, page 119 8.We reissue comment 4. Please revise each of the charts to quantify the patents for each indication in each jurisdiction, and for each jurisdiction, quantify the pending and issued patents. Also, please provide the expiration dates by jurisdiction. Regulation, page 124 9.We reissue comment 2. Please revise to provide materially complete disclosure of the regulations under which you operate. We note, for example, you have not described the classification process for Class I or II medical devices, stages of clinical trials for pharmaceuticals, have not described the medical device or pharmaceutical procedures in the EU or China, which appear to be material. In addition, please revise to summarize the "extensive laws and regulations protecting the privacy, security and integrity of patient medical information" you reference on page 128, including HIPAA, and the applicable environmental, health and safety laws on page 122. We note the statement on page 122 that the environmental, health and safety "laws, regulations, ordinances, requirements and standards affect a significant portion of [y]our activities globally across each of [y]our segments and product lines." You may contact Nudrat Salik at 202-551-3692 or Terence O'Brien at 202-551-3355 if you have questions regarding comments on the financial statements and related matters. Please contact Jordan Nimitz at 202-551-5831 or Abby Adams at 202-551-6902 with any other questions. Sincerely, Division of Corporation Finance Office of Industrial Applications and Services cc: Jenna Levine, Esq.
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United States securities and exchange commission logo
July 7, 2023
Jeffrey Lavers
President
3M Health Care Co
3M Center
St. Paul , Minnesota 55144
Re:3M Health Care Co
Amendment No. 2 to
Draft Registration Statement on Form 10-12G
Submitted June 23, 2023
CIK No. 0001964738
Dear Jeffrey Lavers:
We have reviewed your amended draft registration statement and have the following
comments. In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.
Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement Submitted June 23, 2023
Exhibit 99.1
Information Statement Summary
Our Company, page 11
1.We acknowledge your revised disclosures in response to comment 1, but reissue to the
extent you have not generally revised the summary to balance your numerous statements
of leadership and strengths. The revisions on page 17 removed language that appeared to
provide context for the statements that remain. In addition, you continue to refer to your
"trusted solutions" and "trusted brands" and that your products "enable higher quality
patient care, more efficient processes and workflows, and improved standards of safety"
FirstName LastNameJeffrey Lavers
Comapany Name3M Health Care Co
July 7, 2023 Page 2
FirstName LastName
Jeffrey Lavers
3M Health Care Co
July 7, 2023
Page 2
without stating these as your beliefs or clarifying the basis for these statements. Please
refer to comments 2 and 4 of our March 15, 2023 letter.
2.We note the graphic on pages 12 and 88, and other statements throughout the summary
and other sections of your prospectus regarding the safety and efficacy of your products
and products into which your products are incorporated. Please revise the graphic to
remove references to safety and efficacy, including as they relate to products you do not
produce. As safety and efficacy determinations are solely within authority of the FDA or
other regulatory agencies, please also revise the summary to explain which of your
products' efficacy and safety claims have been approved by the FDA or similar regulatory
authorities, and that efficacy or safety claims for your other products have not been
approved by regulatory authorities. We note, for example, the broad statement on page 13
that your "solution shave been evaluated in numerous clinical studies, and results from
these studies confirm the safety, efficacy and clinical benefit for their intended use."
Unaudited Pro Forma Condensed Combined Financial Information, page 77
3.Please further clarify in note (j) how you determined the appropriate tax rate to use in
arriving at the pro forma provision for income taxes. In this regard, we note that the pro
forma effective tax rate on transaction accounting adjustments was approximately 12.5%
compared to your historical effective tax rate of 20.6%. In addition the statutory effective
tax rate also appears higher based on disclosures on page F-21. Refer to the guidance of
Rule 11-02(b)(5)(i) of Regulation S-X.
4.In regards to autonomous entity adjustments, we remind you that Rule 11-02(b)(11)(iii) of
Regulation S-X indicates that detailed disclosures should be provided which should
include a description of the adjustment (including the material uncertainties), the material
assumptions, the calculation of the adjustment, and additional qualitative information
about the adjustments, if any, necessary to give a fair and balanced presentation of the pro
forma financial information. Please expand your disclosures to appropriately address.
5.We note adjustment (o) to the pro forma balance sheet reflects the net impact of lease
arrangements with third parties and sublease arrangements with ParentCo for facilities that
will be entered into prior to the separation. Please address what consideration was given
to reflecting the impact of these arrangements on your pro forma statement of income
given that these arrangements do not appear to be included in adjustment (m).
6.Your disclosures on page 8 indicate that the company will also enter into a tax matters
agreement, an employee matters agreement, and an intellectual property matters
agreement with ParentCo. It appears that the employee matters agreement will also
govern the terms of equity-based awards granted by ParentCo prior to the
separation. Please help us understand what consideration was given as to whether the
impact of these agreements should also be reflected in the pro forma financial
information.
FirstName LastNameJeffrey Lavers
Comapany Name3M Health Care Co
July 7, 2023 Page 3
FirstName LastName
Jeffrey Lavers
3M Health Care Co
July 7, 2023
Page 3
7.We note that the Health Care Business entered into agreements in May 2023 to sell certain
assets associated with its dental local anesthetic portfolio, which is expected to close in the
third quarter of 2023. Please address what consideration was given to reflecting this
transaction in the pro forma financial information.
Intellectual Property, page 119
8.We reissue comment 4. Please revise each of the charts to quantify the patents for each
indication in each jurisdiction, and for each jurisdiction, quantify the pending and issued
patents. Also, please provide the expiration dates by jurisdiction.
Regulation, page 124
9.We reissue comment 2. Please revise to provide materially complete disclosure of the
regulations under which you operate. We note, for example, you have not described the
classification process for Class I or II medical devices, stages of clinical trials for
pharmaceuticals, have not described the medical device or pharmaceutical procedures in
the EU or China, which appear to be material. In addition, please revise to summarize the
"extensive laws and regulations protecting the privacy, security and integrity of patient
medical information" you reference on page 128, including HIPAA, and the applicable
environmental, health and safety laws on page 122. We note the statement on page 122
that the environmental, health and safety "laws, regulations, ordinances, requirements and
standards affect a significant portion of [y]our activities globally across each of [y]our
segments and product lines."
You may contact Nudrat Salik at 202-551-3692 or Terence O'Brien at 202-551-3355 if
you have questions regarding comments on the financial statements and related matters. Please
contact Jordan Nimitz at 202-551-5831 or Abby Adams at 202-551-6902 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Industrial Applications and
Services
cc: Jenna Levine, Esq.