April 14, 2020
Adam Clammer
President
Nebula Parent Corp.
Four Embarcadero Center, Suite 2100
San Francisco, CA 94111
Re: Nebula Parent Corp.
Registration Statement on Form S-4
Filed March 18, 2020
File No. 333-237264
Dear Mr. Clammer:
We have reviewed your 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 amending your registration statement
and providing the
requested information. 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 any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4
Prospectus Cover Page, page 1
1. Please disclose here (i) the aggregate number of ParentCo's shares you
are offering in
connection with the Business Combination, (ii) the aggregate amount of
cash that the
Open Lending unitholders will receive, (iii) the aggregate value of the
consideration that
the Open Lending unitholders will receive, (iv) the number of shares of
ParentCo's
common stock and the amount of cash that will be exchanged for each unit
of Open
Lending, (v) the aggregate number of shares of ParentCo's common stock
that the Nebula
shareholders will receive, and (vi) the aggregate amount of cash that
the Nebula
warrantholders will receive if the warrant amendment proposal is
approved. Also, include
disclosure regarding the 15,000,000 Contingency Shares and the 1,250,000
Earn-Out
Shares.
Adam Clammer
Nebula Parent Corp.
April 14, 2020
Page 2
Questions and Answers About the Business Combination
What equity stake will current Nebula stockholders and Open Lending unitholders
have in
ParentCo after the closing, page 8
2. Please add columns to the table on page 8 to show the number of shares
that will be held
by and the percentage of ownership of each party listed in the table
if the Open Lending
unitholders receive the 15,000,000 Contingency Shares and if the
Sponsor and affiliates
receive the 1,250,000 Earn-Out Shares pursuant to the Founder Support
Agreement.
Who will be the officers and directors of ParentCo if the Business Combination
is consummated,
page 9
3. Please disclose here that Nebula, Blocker Holder and Open Lending will
be able to select
directors to serve for five years from the date of closing subject to
certain stock ownership
requirements. In addition, please disclose here that Blocker Holder
will be entitled to
appoint certain directors to ParentCo's board of directors so long as
it beneficially owns at
least 40% of the shares of ParentCo's common stock it owned
immediately following the
consummation of the Business Combination. In this regard, we note your
disclosure on
pages 200 and 201.
What is the Debt Financing, page 11
4. Please reconcile your disclosure on page 11 that "Open Lending intends
to incur an
additional $30,000,000 in debt (up to $200,000,000 in the aggregate)
through such
secured credit facilities from a syndicate of financial institutions"
with your disclosure on
page 25 that "debt Financing is the incurrence by Open Lending and/or
its subsidiaries of
up to $225,000,000 senior secured credit facilities from a syndicate
of financial
institutions." In addition, disclose here the amount of the loan that
will be used to finance
distributions to Open Lending's equity investors, and file the Credit
Agreement, dated
March 11, 2020, that governs Open Lending's term loan of $170,000,000
as an exhibit to
your registration statement.
Summary of the Proxy Statement/Prospectus
Parties to the Business Combination
Open Lending, page 23
5. Please reconcile your disclosure on page 23 and elsewhere that Open
Lending currently
caters to over 320 active automotive lenders with your disclosure on
page 158 that Open
Lending has 77 contracts signed with automotive lenders and two
contracts signed with
FirstName LastNameAdam Clammer
OEM Captives. In addition, provide quantitative disclosure regarding
what you consider
Comapany NameNebulaautomotive lender. In this regard, we note your disclosure
that your
to be an "active" Parent Corp.
April 14, 2020 Page 2strongly correlated with transaction volume.
profitability is
FirstName LastName
Adam Clammer
FirstName LastNameAdam Clammer
Nebula Parent Corp.
Comapany NameNebula Parent Corp.
April 14, 2020
Page 14,
April 3 2020 Page 3
FirstName LastName
Selected Historical Financial Data of Open Lending, page 38
6. Please revise your filing to disclose the date of adoption of ASC 606
as we note reference
to an adoption date of January 1, 2018 in the accompanying footnote to
the table on page
38 but an adoption date of January 1, 2019 elsewhere in your filing.
Risk Factors
Open Lending has partnered with two major insurance carriers that underwrite,
page 46
7. We note your disclosure that AmTrust and CNA can terminate their
agreements with
Open Lending upon written notice after a change of control without
prior written consent.
Please disclose whether the merger qualifies as a change of control
under these
agreements, and, if so, whether Open Lending has obtained written
consent.
The Combined Company's amended and restated bylaws designate specific courts,
page 70
8. Refer to your disclosure on page 70 that the Delaware Forum Provision
does not apply to
any causes of action arising under the Securities Act. Please clarify
that it also does not
apply to any causes of action arising under the Exchange Act. In
addition, address this
provision in the Description of ParentCo's Securities section and
Comparison of
Stockholder Rights section.
The Business Combination
The Background of the Business Combination, page 100
9. We note your disclosure on page 101 that, on September 25, 2019,
Nebula provided Open
Lending with a presentation illustrating the mechanics of a potential
business
combination. Please describe the material terms that Nebula proposed.
Similarly, to the
extent material, disclose the terms of any counter proposals made by
Open Lending and
Nebula while negotiating the terms of the agreement, including the
merger consideration,
management of the combined company, the Debt Financing and the PIPE
Transaction. In
addition, disclose any other offers or transactions considered and
briefly discuss why
those transactions were not pursued.
Accounting Treatment of the Business Combination, page 108
10. We note disclosure on page 109 that the pre-combination equity holders
of Open Lending
will hold the majority, between 54.3% and 64.4%, of voting rights in
the combined
company. Please revise your filing for consistent disclosure of Open
Lending's equity
holding percentages as we note different percentages disclosed on
pages 32, 35, and 86.
Regulatory Approval Required for the Business Combination, page 108
11. Please disclose the status of all HSR Act filings and the waiting
period.
Adam Clammer
FirstName LastNameAdam Clammer
Nebula Parent Corp.
Comapany NameNebula Parent Corp.
April 14, 2020
Page 14,
April 4 2020 Page 4
FirstName LastName
The Business Combination Agreement
Board of Directors, page 117
12. Please revise your disclosure regarding the three classes of directors
on page 117 to clarify
that the "Company Initial Director" in Class I, the "Company Initial
Director" in Class II
and all three directors in Class III will be Open Lending Initial
Directors. In this regard,
we note your disclosure on page 9 that "Nebula, Blocker Holder and
Open Lending will
each select one director to serve on each of the Class I and Class II
slates of directors,"
and that "Open Lending will select all three of the Class III
directors."
Certain U.S. Federal Income Tax Considerations, page 127
13. Please clarify that this section describes the "material" U.S. federal
income tax
consequences. In addition, file a tax opinion as an exhibit to your
registration statement
and set forth the counsel's opinion for each material tax consequence.
For example, the
disclosure on page 127 assumes that the the exchange of Nebula Common
Stock for
shares of ParentCo Common Stock pursuant to the Business Combination
will be treated
as a tax deferred transaction under Section 351 of the Code for U.S.
federal income tax
purposes.
Information About Open Lending
Company Overview, page 140
14. Refer to your disclosure on page 141 that Open Lending has one-way
exclusivity
agreements with two insurance carriers through 2022. Please disclose
that the two
insurance carriers are AmTrust Financial Services and CNA Financial
Corp., and describe
the material terms of the agreements with each, including any change
of control
provisions. In addition, file each agreement as an exhibit or tell us
why you believe you
are not substantially dependent on these agreements.
Our Business Model, page 145
15. You state on page 145 that "with the future certified loan volume Open
Lending
anticipates from OEM Captives, Open Lending does anticipate
concentration risk for
some period into the future." Please clarify that you expect to have
significant concentration in your largest automotive lender
relationships for the
foreseeable future and that, in 2020, you anticipate that your
business will
experience significant concentration with OEM Captives. In addition,
describe the
material terms of the agreements with the two OEM Captives.
16. We note your disclosure that Open Lending's payments to its
distribution partners
are based on a percentage of program fees. Please provide quantitative
information
regarding the compensation paid to such distribution partners.
Adam Clammer
FirstName LastNameAdam Clammer
Nebula Parent Corp.
Comapany NameNebula Parent Corp.
April 14, 2020
Page 14,
April 5 2020 Page 5
FirstName LastName
Key Factors Affecting Operating Results
Concentration, page 160
17. We note disclosure that your largest insurance partner accounted for
the vast majority of
your profit share and claims administrative service fee revenue for
the year ended
December 31, 2019. Please revise your filing to disclose the name of
this insurance
company along with quantifying amounts or percentages of revenues
earned. Please refer
to ASC 275-10-50-18.
Certain Open Lending Relationships and Related Person Transactions
Director Relationships, page 176
18. Please disclose whether the agreements with HireBetter, LLC, Objective
Advisors, Inc.
and EWMW, LP will still be in effect as of the close of the Business
Combination, and, if
so, please disclose the material terms of these agreements and file
each as an exhibit to the
registration statement or tell us why you believe this is not
required.
General
19. You state that you have obtained commitments from interested investors
to purchase
20,000,000 shares of Nebula Class A Common Stock for $10.00 per share.
Please provide
your analysis as to why Nebula may issue 20,000,000 shares of common
stock without
obtaining the approval of its shareholders. In this regard, we note
your disclosure that
there are currently 34,375,000 shares of Nebula Common Stock issued
and outstanding.
20. Please present separately on your form of proxy each material
provision in ParentCo's
organizational documents that represents a material change from
Nebula's organizational
documents if the change would require approval of Nebula's
shareholders under state law,
the rules of a national securities exchange, or the Nebula
organizational documents if
proposed to be made directly in its own organizational documents. We
note by way of
example, the change in vote from a majority to a vote of not less than
two-thirds of the
outstanding shares of capital stock to remove a director and the
change of a majority vote
of all outstanding shares to amend the bylaws to the affirmative vote
of not less than two-
thirds to change the bylaws. For guidance, refer to the Proxy Rules
and Schedule 14A
Compliance and Disclosure Interpretations Regarding Unbundling under
Rule 14a-4(a)(3)
in the M&A Context on our website.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Adam Clammer
Nebula Parent Corp.
April 14, 2020
Page 6
You may contact William Schroeder at 202-551-3294 or John Spitz at
202-551-3484 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Sonia Bednarowski at 202-551-3666 or J. Nolan McWilliams at
202-551-3217 with any
other questions.
FirstName LastNameAdam Clammer Sincerely,
Comapany NameNebula Parent Corp.
Division of
Corporation Finance
April 14, 2020 Page 6 Office of Finance
FirstName LastName
