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December 17, 2018
James E. Hohmann
Chief Executive Officer
Vericity, Inc.
8700 W. Bryn Mawr Avenue
Suite 900S
Chicago, Illinois 60631
Re: Vericity, Inc.
Amendment No. 2 to Draft Registration Statement on Form S-1
Submitted December 4, 2018
CIK No. 0001575434
Dear Mr. Hohmann:
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.
DRS/A Submitted December 4, 2018
Cover Page
1. Please revise the first paragraph of the cover page to disclose: (1)
that the offering
proceeds may not be invested in the company but may be used to pay a the
special
dividend, including that maximum amount of the proceeds that could be
used for this
purpose; (2) that all investors may be eligible for a special dividend;
and (3) the maximum
potential per share special dividend assuming your risk based capital
continues to comply
with the minimum capital surplus requirements.
James E. Hohmann
FirstName LastNameJames E. Hohmann
Vericity, Inc.
Comapany17, 2018
December NameVericity, Inc.
December 17, 2018 Page 2
Page 2
FirstName LastName
Use of Proceeds, page 33
2. We note your response to prior comment 2 and note that the standby
purchase agreement
provides that within six months of the closing of this offering, you
must complete a capital
needs assessment to project the amount of capital needed to support
adequate capital
levels and may make a special dividend to stockholders to the extent
that your risk based
capital exceeds the minimum capital and surplus requirements.
Additionally, we note that
as of December 31, 2017, your risk based capital exceeded the minimum
and capital
surplus requirements by $2 million. Please revise your disclosure to
quantify the
maximum amount of the special dividend assuming you continue to comply
with the
minimum capital and surplus requirements and quantify the minimum
capital and surplus
deficit that would result an inability to pay a special dividend.
Quantify the special
dividend per share assuming you continue to have a $2 million surplus
when the capital
needs assessment is completed based on the minimum number of shares
and the maximum
number of shares are sold.
Apex Holdco Equity Incentive Plan, page 126
3. We note your response to prior comment 4 and we disagree with your
belief that the EI
Plan is not required to be filed. Specifically, we note that the
general partner of the
standby purchaser may grant awards to employees, directors and service
providers,
entitling holders to participate in the appreciation in value of the
standby purchaser.
Given your statement that the plan is intended to align the interests
of the participants with
those of your stockholders and to promote employee retention and
ownership, it is clear
that the EI Plan is a compensation plan pursuant to Item
402(a)(6)(ii)-(iii). As a
compensation plan, the EI Plan is required to be filed pursuant to
Item 601(b)(10)(iii)(A)
of Regulation S-K. Please note that Item 601(b)(10)(iii)(A) does not
distinguish
between agreements between compensation plans in which the registrant
is a party and
compensation plans in which another party is providing compensation to
the registrant's
employees.
4. We note your indication that the EI agreement does not present
conflicts of interest.
Please describe the affiliations and agreements between Apex Holdco
L.P., Apex Holdco
GP LLC and J.C. Flowers & Co. LLC, including the identification of
individuals who
serve in management roles in more than one of these entities. Please
also explain your
statement that the EI Plan is intended to promote the long-term growth
and profitability of
the standby purchaser.
Condensed Consolidated Balance Sheet of Members Mutual Holding Company, page
F-2
5. Please address the following regarding your various disclosures that
you plan to conduct a
capital needs assessment within six months following the closing of
this offering. You
disclose that if you determine that the amount of capital at Vericity
is in excess of the
capital requirements, you may recommend for the board of directors to
declare a special
James E. Hohmann
Vericity, Inc.
December 17, 2018
Page 3
cash dividend.
To the extent a planned distribution to owners, regardless of whether
it has been
declared or whether it will be paid from proceeds, is not reflected in
the latest balance
sheet but would be significant relative to reported equity, a pro
forma balance sheet
reflecting the distribution accrual (but not giving effect to the
offering proceeds)
should be presented alongside the historical balance sheet in the
filing. Otherwise, tell
us how you determined that such disclosure is not appropriate at this
time. As part of
your support, clearly identify the stage of your capital planning and
the likelihood that
you will issue a special dividend. Identify any parameters or targets
for the special
dividend in your current planning.
Similarly revise to add separate columns for your pro forma balance
sheet on page 39.
If a distribution to owners, regardless of whether it is declared or
whether it is
reflected already in the balance sheet, is to be paid out of proceeds
of the offering
rather than from the current year's earnings, pro forma per share data
should be
presented (for the latest year and interim period only) giving effect
to the number of
shares whose proceeds would be necessary to pay the dividend (but only
the amount
that exceeds current year's earnings) in addition to historical EPS.
The number of
shares to be added to the denominator for purposes of pro forma per
share data should
not exceed the total number of shares to be issued in the offering.
Please revise your
interim and annual historical statements of operations on pages F-3
and F-29, or tell us
how you determined such disclosure is not appropriate.
Similarly revise to add separate columns for your pro forma income
statements on
page 40.
General
6. Please include the information required by Item 403 of Regulation S-K.
Please see Item
11 of Form S-1.
You may contact Ibolya Ignat at 202-551-3636 or Kevin Vaughn at
202-551-3494 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jeffrey Gabor at 202-551-2544 or Erin Jaskot at 202-551-3442 with any
other questions.
Sincerely,
FirstName LastNameJames E. Hohmann
Division of
Corporation Finance
Comapany NameVericity, Inc.
Office of
Healthcare & Insurance
December 17, 2018 Page 3
cc: J. Brett Pritchard, Esq.
FirstName LastName