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United States securities and exchange commission logo
August 27, 2021
Scott R. Zemnick
Founder Holder
VPC Impact Acquisition Holdings III, Inc.
150 North Riverside Plaza, Suite 5200
Chicago, IL 60606
Re: VPC Impact
Acquisition Holdings III, Inc.
Draft Registration
Statement
Submitted August 2,
2021
CIK No. 0001841408
Dear Mr. Zemnick:
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 submitted August 2, 2021
Questions and Answers about the Business Combination, page 1
1. Please add a new Q&A
discussing the material U.S. federal income tax consequences of
the Mergers and the
associated opinion of White & Case LLP.
Summary of the Proxy Statement/Prospectus
The Parties to the Business Combination, page 16
2. Please balance the
disclosure in your summary by prominently disclosing Dave s limited
operating history,
accumulated deficit, history of losses and expectation of future losses.
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings III, Inc.
Comapany
August 27, NameVPC
2021 Impact Acquisition Holdings III, Inc.
August
Page 2 27, 2021 Page 2
FirstName LastName
The Business Combination and the Merger Agreement, page 17
3. Please revise these diagrams to clearly identify ownership percentages
of the different
security holder groups, including the Founder Holders, VPCC public
shareholders, the
Dave Interest Holders, and the PIPE investors under both no and
maximum redemption
scenarios.
Interests of Certain Persons in the Business Combination, page 26
4. Please summarize and quantify as practicable each category of
interests of insiders in the
Business Combination including any related out-of-pocket expenses to
be reimbursed.
Risk Factors
Risks Related to Dave's Business and Industry
Cyberattacks and other security breaches or disruptions suffered by us . . . ,
page 50
5. We note that your risk factor references security breaches in May and
June 2020. Please
revise to clarify whether you have experienced any material adverse
impact to your
business as a result of such incidents. If so, please also quantify
the amount by which such
incidents have increased your costs and expenses.
Risks Related to the Business Combination and VPCC
Since the Sponsor and the members of VPCC's management team have interests that
are
different . . . , page 69
6. Please revise to highlight the risk that the sponsor will benefit from
the completion of a
business combination and may be incentivized to complete an
acquisition of a less
favorable target company or on terms less favorable to shareholders
rather than liquidate.
The Business Combination and the Merger Agreement
Background to the Business Combination, page 135
7. Please clarify your disclosure about the persons involved in
negotiations. For example,
where the disclosure refers to certain members of VPCC s
management team and
VPCC s management team, clarify which individuals were present
for the meeting.
VPCC's Board of Directors' Reasons for the Approval of the Business
Combination, page 142
8. The factors you list appear conclusory in nature or generically
stated. Please revise each
factor to provide insight into and context for how the factor supports
the board s
recommendation. For example, disclose what in the prospective
financial information of
Dave, in the due diligence and in the financial and operating metrics
specifically
supported the recommendation. Also, ensure that you address all
material factors, positive
and negative and revise as appropriate.
9. Please disclose whether and how the board took into account the
consideration to be paid
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings III, Inc.
Comapany
August 27, NameVPC
2021 Impact Acquisition Holdings III, Inc.
August
Page 3 27, 2021 Page 3
FirstName LastName
for the target company in the transaction in recommending the
transaction and, if not, why
not.
Certain Forecasted Financial Information for Dave, page 150
10. We note the language in the second paragraph of this section that
shareholders "are
cautioned not to rely on the projections in making a decision
regarding the Business
Combination. You may not disclaim a shareholder s reliance on the
disclosure in the
filing. Please revise accordingly.
Projected Financial Metrics, page 151
11. We note that you provide financial forecasts for certain non-GAAP
financial measures
including Adjusted EBITDA and Adjusted EBITDA pre-Marketing. Please
revise to
include reconciliations to the most directly comparable GAAP measure
or explain to us
why you believe reconciliations are not required. Refer to Item
10(e)(1)(i) of Regulation
S-K.
Material United States Federal Income Tax Considerations, page 156
12. We note this discussion is limited to the tax consequences of the
redemption to
existing VPCC Class A Common Stock securityholders. Revise to clearly
discuss,
and provide an opinion that covers, the material U.S. federal income
tax consequences of
the Mergers. State clearly whether the revised tax disclosure is
intended to constitute such
opinion or whether you will be providing a separate long form tax
opinion. For guidance,
please refer to Staff Legal Bulletin No. 19.
Information About Dave
Company Overview, page 197
13. Please substantiate these statements:
[t]he legacy financial system has been unable to deliver access
to reasonably priced
products for the tens of millions of Americans who need it most
;
legacy financial services incumbents have bloated cost
structures related to
antiquated technology and expensive branch network ; and
[l]egacy financial institutions and new challengers commonly
require an onerous
banking relationship and weeks of wait times to access their
features and services.
14. Please substantiate your statement that you have inexpensive Member
acquisition
and best-in-class user satisfaction and clarify by what metrics you
are measuring
acquisition cost and this industry position.
Generating a virtual "flywheel", page 199
15. Please substantiate the statement that the cost of Member acquisition
is 90% lower than
other banking innovators.
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings III, Inc.
Comapany
August 27, NameVPC
2021 Impact Acquisition Holdings III, Inc.
August
Page 4 27, 2021 Page 4
FirstName LastName
16. You state that Dave enjoys the highest user impression among
competing brands 73%
favorable with other bank innovators at 45-50% based on third party
surveys. Please
identify the third party surveys and tell us whether you commissioned
this research for use
in connection with this offering. If so, please file the third party's
consent as an exhibit or
tell us why this is not required required by Section 7 of the
Securities Act and Rule 436.
Overdraft Protection: "ExtraCash", page 200
17. We note your disclosure that the timing of repayment of the advance is
determined when
the advance is made and is based on when the Member will receive his
or her next
paycheck. Please expand this disclosure to describe the typical
contractual loan
repayment terms of your ExtraCash advance product and to better
describe the
relationship between the timing of repayment and a Members next
paycheck. In addition,
please include an enhanced discussion of the collection process and
the percentage of
customers that paid in full on or before their due date for each
period presented.
18. Please revise your disclosure to address whether there is a limit to
the number of advances
a Member can obtain and whether a Member can have more than one
advance outstanding
at a time.
19. Please disclose the fee or range of fees to expedite an ExtraCash
request, the percentage of
Members who expedite rather than use the free product delivered in two
to five days, and
the maximum and average length of time you provide this ExtraCash
before
reimbursement is due or collected.
Our Business Model, page 201
20. We note your disclosure that you originate ExtraCash advances directly
and service all the
advances that you originate. We also note your disclosure that
advances are originated at
Dave and sold to Dave OD Funding for servicing. Lastly, we note your
disclosure on
page F-43 that Dave OD Funding wasn t formed until December 9, 2020
and had no
activity during fiscal year 2020. Please reconcile these disclosures
which appear
inconsistent in describing the servicing of ExtraCash advances.
21. Please file the agreements with each of Evolve and Galileo as exhibits
to the registration
statement or tell us why this is not required by Item 601(b)(10) of
Regulation S-K.
Operating revenues, page 218
22. Please revise the operating revenues tables on pages 216 and 218 to
breakout service
revenue by subscriptions charged to Members, optional tips, optional
express processing
fees, lead generation fees from the Side Hustle advertising partners,
and fees earned
related to the Rewards Product for Members who make debit card
spending transactions at
participating merchants. In addition, please revise your discussion of
results of operations
to discuss the changes for the periods presented, and any related
trends, for each of these
revenue streams.
Scott R. Zemnick
VPC Impact Acquisition Holdings III, Inc.
August 27, 2021
Page 5
23. Please revise your discussion to provide the following information as
it relates to Member
Advances for each period presented:
the percentage of customers receiving an advance that chose to
pay a fee to expedite
the advance;
a description of how the expedited transfer fee is determined;
the weighted average fee paid to expedite these advances;
the percentage of customers that chose to leave a tip; and
the weighted average amount of tip.
Operating Expenses, page 219
24. We note your disclosure that the increase in provision for
unrecoverable advances was
primarily attributable to the aging of receivables and default volume
associated with the
increase in advance volume. Please enhance this disclosure to provide
the volume of
advances for each period presented accompanied by the relevant aging
and default data so
a reader can better understand the relationship between these factors
and the provision. In
preparing your revised disclosures, consider the need to disaggregate
this information by
type of Member advance (i.e., non-recourse cash advances, tips and
processing fees).
25. Please revise your disclosure here, or elsewhere in MD&A, to provide a
tabular roll-
forward of Member advances for each period presented depicting
advances, repayments,
charge-offs, etc. In addition, please revise your discussion to
describe the underlying
reasons for any significant changes between periods and any related
trends that are likely
to impact operations going forward. In preparing your revised
disclosures, consider the
need to disaggregate this information by type of Member advance (i.e.,
non-recourse cash
advances, tips and processing fees).
26. We note your disclosure that the increase in processing and servicing
fees was primarily
attributable to the increase in advance and subscription volume year
over year. In order to
better understand this relationship, please quantify the advance and
subscription volume
for each period presented. In addition, please revise your discussion
to describe the
underlying reasons for any significant changes between periods and any
noteworthy
trends.
2020 Bonuses, page 252
27. We note that you use Non-GAAP in your description of Revenue and
Gross Margin
FirstName LastNameScott R. Zemnick
metrics in the table on page 252. Please revise to disclose how those
amounts are
Comapany NameVPC
calculated from Impact Acquisition
your audited Holdings
financial III, Inc.
statements. Refer to Instruction
5 to Item 402(b) of
AugustRegulation S-K.5
27, 2021 Page
FirstName LastName
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings III, Inc.
Comapany
August 27, NameVPC
2021 Impact Acquisition Holdings III, Inc.
August
Page 6 27, 2021 Page 6
FirstName LastName
Description of Securities, page 258
28. Please disclose here your exclusive forum and federal forum provisions
including scope,
risks and whether these provisions apply to actions arising under the
Securities Act or
Exchange Act.
Financial Statements of Dave, Inc.
Notes to Financial Statements
Note 2 Significant Accounting Policies
Revenue Recognition, page F-44
29. We note your disclosure on page F-44 that service based revenue, net
primarily consists of
tips, express processing fees, and subscriptions charged to Members,
net of certain
processor-related costs. We also note your disclosure on page F-45,
which states that all
processing and service fees are expensed as incurred. Please revise
your disclosure to
explain the difference between the processor related costs that are
netted against revenue
versus those that are expensed as incurred.
Note 4 Member Cash Advances, Net, page F-55
30. Please enhance your disclosure here, or in MD&A, to include a detail
of gross Member
cash advances disaggregated by outstanding non-recourse cash advances,
tips and
processing fees and reconcile this amount to Member cash advances,
net.
You may contact William Schroeder at 202-551-3294 or Ben Phippen at
202-551-3697 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jessica Livingston at 202-551-3448 or J. Nolan McWilliams at
202-551-3217 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of
Finance
cc: Era Anagnosti