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United States securities and exchange commission logo
September 13, 2021
Vafa Jamali
President and Chief Executive Officer
ZB SpinCo Holdings, Inc.
10225 Westmoor Drive
Westminster, CO 80021
Re: ZB SpinCo Holdings,
Inc.
Draft Registration
Statement on Form 10
Submitted August 9,
2021
CIK No. 0001876588
Dear Mr. Jamali:
We have reviewed your 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 on Form 10 submitted August 9, 2021
Exhibit 99.1 Information Statement
Market, Industry and Other Data, page i
1. Please amend your
disclosure to clarify that you are liable for the market and industry data
you included in your
registration statement.
Information Statement Summary
Business Overview, page 10
2. Please revise your
summary to provide a more balanced discussion of your company and
products. Balance the
discussion of your market leadership and your strengths on page 10
with an equally
prominent discussion of your weaknesses, including your plan to incur
Vafa Jamali
FirstName
ZB SpinCoLastNameVafa
Holdings, Inc. Jamali
Comapany 13,
September NameZB
2021 SpinCo Holdings, Inc.
September
Page 2 13, 2021 Page 2
FirstName LastName
indebtedness prior to or at the time of the distribution.
Risk Factors
If we fail to comply with healthcare fraud and abuse laws and regulations, we
could face
substantial penalties, page 32
3. Please expand your risk factor here to discuss briefly the FCPA
matter and its
consequences, including expenses related to the independent compliance
monitoring.
We are increasingly dependent on sophisticated information technology, page 34
4. We note that you "have experienced instances of successful phishing
attacks" and "are
also subject to other cyber-attacks." To the extent you have been
materially impacted by a
cybersecurity breach, please include a description of the incident,
costs, and other
consequences. For additional guidance, please refer to CF Disclosure
Guidance Topic No.
2 on Cybersecurity.
If the distribution, together with certain related transactions, does not
qualify as a transaction that
is generally tax-free , page 39
5. Please revise to clarify that the conditions that you obtain a private
letter ruling from the
IRS and opinion(s) from tax advisors are waivable conditions.
Until the separation and distribution occur, the Zimmer Biomet board of
directors has sole and
absolute discretion to change the terms, page 40
6. We note your disclosure on page 56 that "Zimmer Biomet will have sole
and absolute
discretion to waive any of the conditions to the distribution." Please
consider expanding
your risk factor disclosure here to discuss potential consequences if
certain conditions to
the distribution are waived.
Sales and Distribution, page 80
7. Please supplement your disclosure to include the approximate
headcount of the number of
independent sales agents and exclusive distributors in your network,
as referenced on page
27.
Intellectual Property, page 81
8. To the extent that you consider any of your patents, or series of
related patents, material to
your business, please disclose the specific products, product groups
and technologies to
which such patents relate, whether they are owned or licensed, the
type of patent
protection you have, the expiration dates, the applicable
jurisdictions and whether there
are any contested proceedings or third-party claims.
Properties, page 84
Vafa Jamali
FirstName
ZB SpinCoLastNameVafa
Holdings, Inc. Jamali
Comapany 13,
September NameZB
2021 SpinCo Holdings, Inc.
September
Page 3 13, 2021 Page 3
FirstName LastName
9. Please expand your disclosure to include the locations of your five
manufacturing sites,
whether you own or lease these properties and to describe the general
character of these
facilities. Refer to Item 102 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Non-GAAP Operating Performance Measures, page 96
10. Please address the following regarding your Non-GAAP adjustments and
related
disclosures:
Please clarify the nature of the costs included in your adjustment
for "Costs that are
not essential to ongoing operations" and provide an analysis for
each component of
this adjustment as to whether or not this adjustment complies
with Item 10(e) of
Regulation S-K. Specifically address Non-GAAP Financial Measures
Compliance
and Disclosure Interpretations, Question 100.01 in detail for
those components in
your response.
As part of your response, clearly discuss the extent to which you
would have been
able to continue selling certain products in Europe without
incurring the costs of
compliance with the European Union Medical Device Regulations.
Provide a similar
discussion addressing how the Deferred Prosecution Agreement
referred to here
relates to your revenue generating activities.
Description of our Capital Stock
Exclusive Forum, page 134
11. We note that your forum selection provision identifies a state or
federal court located
within the State of Delaware as the exclusive forum for certain
litigation, including any
derivative action. Please disclose here as well as in your risk
factor on page 34 whether
this provision applies to actions arising under the Exchange Act. If
this provision does not
apply to actions arising under the Exchange Act, please also ensure
that the exclusive
forum provision in the governing documents states this clearly, or
tell us how you will
inform investors in future filings that the provision does not apply
to any actions arising
under the Securities Act or Exchange Act.
Combined Financial Statements of the Spine and Dental Businesses of Zimmer
Biomet
Holdings, Inc.
Note 16. Segment Data, page F-27
12. You disclose here that your CODM evaluates performance based upon
segment operating
profit exclusive of related party transactions, expenses incurred by
you related to your
Parent s products and operating expenses pertaining to share-based
compensation,
intangible asset amortization, goodwill impairment, integration
expenses, restructuring
expenses and "other various charges that are not considered essential
to the ongoing
operations of spine and dental" businesses. However, we note that a
number of these
expenses including but not limited to share-based compensation and
intangible asset
Vafa Jamali
ZB SpinCo Holdings, Inc.
September 13, 2021
Page 4
amortization appear essential to certain of your revenue streams.
Further, tell us and
revise to clarify whether you are backing out the expenses related to
European Union
Medical Device Regulations and Deferred Prosecution Agreement referred to
in footnote
(3) on page 96. Revise your segment disclosure here to acknowledge that
certain of these
expenses appear essential to the generation of revenue streams reflected
in your segment
measure and not to imply that all such expenses are not essential to your
ongoing
operations.
You may contact Christine Torney at 202-551-3652 or Kevin Vaughn at
202-551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jessica Ansart at 202-551-4511 or Suzanne Hayes at 202-551-3675 with
any other
questions.
Sincerely,
FirstName LastNameVafa Jamali
Division of
Corporation Finance
Comapany NameZB SpinCo Holdings, Inc.
Office of Life
Sciences
September 13, 2021 Page 4
cc: Mort Pierce
FirstName LastName