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United States securities and exchange commission logo
January 13, 2021
Barbara Guiterrez
Chief Financial Officer
TCO Group Holdings, Inc.
8950 E. Lowry Boulevard
Denver, Colorado 80230
Re: TCO Group Holdings,
Inc.
Draft Registration
Statement on Form S-1
Submitted December
17, 2020
CIK No. 0001834376
Dear Ms. Guiterrez:
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 S-1
Prospectus Summary, page 1
1. We note your statements
throughout the prospectus that the company is "the leading"
healthcare delivery
platform focused on providing all-inclusive, capitated care to high-
cost, dual eligible
seniors. Please substantiate this claim or revise to express the statement
as a belief.
Barbara Guiterrez
FirstName
TCO GroupLastNameBarbara
Holdings, Inc. Guiterrez
Comapany
January 13,NameTCO
2021 Group Holdings, Inc.
January
Page 2 13, 2021 Page 2
FirstName LastName
2. We note your statement on page 13 that the vast majority of the
company's direct
competitors are not-for-profit entities and the company is one of only
five for-profit PACE
providers in the country. Please balance your discussion of the
benefits of the for-profit
business model under which the company is currently operating with a
discussion of any
associated drawbacks, contrasting the for-profit business model with
the not-for-profit
business model in the managed healthcare industry.
3. Please revise page 17 of the Summary to highlight that, under the
Director Nomination
Agreement, your sponsors will have disproportionate representation on
your board, as
described on page 52.
Risk Factors, page 25
4. Given the length of your risk factor section, please revise to comply
with Regulation S-K
Item 105(a) by relocating risks that could generically apply to any
registrant or offering to
the end of the section under the caption General Risk Factors.
5. We note from the risk factor on page 57 that your forum selection
provision identifies the
federal district courts of the United States as the exclusive forum
for the resolution of any
complaint asserting a cause of action under the Securities Act, and
that your security
owners are deemed to have consented to this provision. We note that
Section 22 of the
Securities Act creates concurrent jurisdiction for federal and state
courts over all suits
brought to enforce any duty or liability created by the Securities Act
or the rules and
regulations thereunder. Therefore, please revise your prospectus to
state that there is
uncertainty as to whether a court would enforce such provision and
that investors cannot
waive compliance with the federal securities laws and the rules and
regulations
thereunder.
Forward-Looking Statements, page 61
6. On page 62, you state, [a]ll written and oral forward-looking
statements attributable to
us, or persons acting on our behalf, are expressly qualified in their
entirety by these
cautionary statements . . . . Provide your analysis of why you
believe this disclaimer
may apply to oral statements or statements made after the date of the
document.
Management's Discussion and Analysis and Results of Operations
Liquidity and Capital Resources, page 92
7. Please revise appropriate sections of your document to disclose that
the company used the
proceeds from the senior secured term loan and existing cash to pay
$66.1 million in
dividends in the fiscal year ended June 30, 2019, as disclosed in Note
18 to your financial
statements, on page F-29. Also disclose the amount paid in total and
the amount paid
from the credit agreement to repurchase 16,095,819 shares of common
stock and to cancel
almost 17 million options, as disclosed in Note 20 on page F-30.
Barbara Guiterrez
FirstName
TCO GroupLastNameBarbara
Holdings, Inc. Guiterrez
Comapany
January 13,NameTCO
2021 Group Holdings, Inc.
January
Page 3 13, 2021 Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies
Reported and Estimated Claims, page 97
8. You disclose on page 97 that you expect the range of your third-party
medical claims
expense estimating risk to be within +/- 5-10% of actual medical claim
expenses. Please
consider disclosing, to the extent material, details related to actual
and estimated member
utilization of health care services for each period presented, as this
appears to be a primary
driver of the variance.
9. With respect to the tables of your incurred and paid claims
development, please include
separate information about incurred claims and paid claims by year of
the incurred claim
and present the information for the number of years for which claims
incurred typically
remain outstanding and reconcile to the liability for reported and
estimated claims.
Certain Relationships and Related Party Transactions, page 144
10. Please revise this section to clarify the relationships between the
parties for the PWD loan
and the InnovoAge Sacramento MSA. Refer to Item 404(a)(1), (2) and (4)
of Regulation
S-K. For the loan agreement, disclose the highest aggregate amount of
principal
outstanding during the periods reported, and the amount and rate of
interest paid and the
amount of interest payable, as required by Item 404(a)(5) of
Regulation S-K. Please also
file the agreements as exhibits pursuant to Item 601(b)(10) of
Regulation S-K or tell us
why you believe such filing is not required.
General
11. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Michael Fay at (202) 551-3812 or Kate Tillan at (202)
551-3604 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Abby Adams at (202) 551-6902 or Laura Crotty at (202) 551-7614 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Robert M. Hayward, P.C.