Correspondence 0001493152-24-050512 from DataMeds AI, Inc. (WGRX)
DataMeds AI, Inc.
Date: Dec. 17, 2024 · CIK: 0002030763 · Accession: 0001493152-24-050512
AI Filing Summary & Sentiment
File numbers found in text: 333-280945
Show Raw Text
CORRESP
1
filename1.htm
Dykema
Gossett PLLC
111
E. Kilbourn Ave.
Suite
1050
Milwaukee,
WI 53202
www.dykema.com
Tel:
414-488-7300
Kate
Bechen
Direct
Dial: (414) 488-7333
Email:
KBechen@dykema.com
December
17, 2024
U.S.
Securities and Exchange Commission
Division
of Corporate Finance
Office
of Trade & Services
100
F Street, N.E.
Washington,
D.C. 20549
Attention:
Rucha Pandit
Re:
Wellgistics
Health, Inc.
Amendment
No. 5 to Registration Statement on Form S-1
Filed
December 6, 2024
File
No. 333-280945
Dear
Ms. Pandit:
This
response letter (this “Response”) is submitted on behalf of Wellgistics Health, Inc. (the “Company”)
in response to the comments that the Company received from the staff of the Division of Corporation Finance (the “Staff”)
of the U.S. Securities and Exchange Commission (the “SEC”) in a letter addressed to Mr. Canning, dated December 16,
2024 (the “Comment Letter”), with respect to the Company’s Amendment No. 5 to Registration Statement on Form
S-1 (the “Registration Statement”), filed with the SEC on December 6, 2024. The Company is concurrently submitting
a sixth amendment to the Registration Statement (“Amendment No. 6”), which reflects the changes discussed in this
Response that the Company made to address the Staff’s comments.
For
reference purposes, each of the Staff’s numbered comments from the Comment Letter is set forth in bold text below, followed by
the Company’s response to each comment. All capitalized terms used but not defined in this Response have the meanings ascribed
to them in Amendment No. 6.
The
responses below are based on information provided to Dykema Gossett PLLC by the Company.
Amendment
No. 5 to Registration Statement on Form S-1
Wellgistics
LLC Membership Interest Purchase Agreement, page 49
1.
Please
disclose here the financial metrics used to determine whether the earn out shares will vest. We note these metrics appear to be set
forth in Section 3 of the 5th amendment to the Membership Interest Purchase Agreement, dated November 4, 2024.
Response:
In response the Staff’s comment, the Company has revised the applicable disclosure on page 49 of Amendment No. 6.
California
| Illinois | Michigan | Minnesota | Texas | Washington, D.C. | Wisconsin
U.S.
Securities and Exchange Commission
Division
of Corporate Finance
December
17, 2024
Page
2
Wellgistics
Health, Inc
Unaudited
Interim Financial Statements
Note
3. Business Combinations, page F-30
2.
We
reviewed your response to prior comment 2. Since you have completed the acquisition, please tell us now whether the transaction compensates
employees or former owners of Wellgistics, LLC for future services to be provided to you. In your response, please explain to us
why some of the restricted shares vest over a period of time and other shares vest upon achievement of future financial metrics.
Refer to FASB ASC 805-10-25-21b and ASC 805-10-55-24 through 26.
Response:
In response the Staff’s comment, the Company respectfully advises the Staff that the transaction does not compensate employees
or former owners of Wellgistics, LLC for the performance of future services. As a result of the transaction, certain key employees of
Wellgistics, LLC continue to provide services as employees of the Company. These key employees include members of senior management of
Wellgistics, LLC, who held substantially all of the beneficial ownership interests of Wellgistics, LLC prior to acquisition by the Company
(the “Sellers”). However, the consideration provided in the transaction is not tied to these individuals’ current
or ongoing employment with the Company pursuant to the factors set forth in ASC 805-10-55-25. The purchase consideration, including,
without limitation, the Closing Cash Payment, the principal under the Promissory Notes, any applicable Earn-Out Payments, and any applicable
Bonus Payments, shall be payable to the Sellers pursuant to the terms of the Membership Interest Purchase Agreement, as amended, and
are not forfeited upon the termination of any Seller’s employment relationship with the Company, regardless of whether the termination
of employment is the result of the Company or the employee’s decision. The purchase consideration shall be paid pro rata based
on each Seller’s proportional ownership of Wellgistics, LLC at the time of the acquisition, without regard to whether the Seller
is or is affiliated with a continuing key employee of Company. Any Wellgistics, LLC employee continuing as an employee of the Company
shall be compensated for ongoing and future services to the Company pursuant to separate employment arrangements, without regard to whether
or not such individual had a beneficial ownership interest in Wellgistics, LLC prior to its acquisition by the Company.
With
respect to the differing vesting criteria for the restricted shares, this was the result of arms-length negotiations between the Company
and the Sellers in the course of finalizing the fourth amendment to the Membership Interest Purchase Agreement. Prior to such amendment,
all earn-out payments for which the Sellers may be eligible were tied to achievement of future financial metrics. In consideration for
the Sellers’ agreement to defer a portion of the Closing Cash Payment until after the Company’s completion of its initial
public offering, the Company agreed to separate a portion of the earn-out payments from the achievement of those metrics, instead making
such share awards over the three-year earnout period. The fifth amendment to the Membership Interest Purchase Agreement converted these
awards from future awards of unrestricted shares to current awards of restricted stock, subject to repurchase on the terms set forth
therein.
*
* *
Thank
you for your review and consideration of the matters set forth in this Response and in Amendment No. 6. If you have any questions, please
contact the undersigned at (414) 488-7333 or KBechen@dykema.com.
Sincerely,
Dykema Gossett PLLC
/s/
Kate Bechen
Kate Bechen, Esq.
cc:
Tim Canning
Chief Executive Officer
Wellgistics Health, Inc.