A Frequent SEC Comment – “Can You Prove it?”

In both offering documents and periodic reports companies frequently make assertions like the following, which appears in a Form S-1 Registration Statement for Doximity:

Overview

We are the leading digital platform for medical professionals, with over____ million members as of March 31, 2021, including more than ____% of physicians across all 50 states and every medical specialty.

(Note:  The numbers were left blank in the first draft registration statement submitted to the SEC.)

When companies make these sorts of assertions, the SEC will invariably ask for support, as the staff did in this comment:

Draft Registration Statement on Form S-1 submitted March 5, 2021

Prospectus Summary Overview, page 1

  1. You describe yourself as the “leading digital platform for U.S. medical professionals.” Please provide the basis for your characterization that you have a leading software platform and describe how this leadership is defined and/or determined. For example, it is not clear whether you are basing this on objective criteria such as market share based on revenues for competing software platforms in your industry.

As long as the company can support their assertion, these types of statements are acceptable disclosures.  In this case Doximity supported their assertion with this response and clarified disclosure:

Prospectus Summary

Overview, page 1

1.You describe yourself as the “leading digital platform for U.S. medical professionals.” Please provide the basis for your characterization that you have a leading software platform and describe how this leadership is defined and/or determined. For example, it is not clear whether you are basing this on objective criteria such as market share based on revenues for competing software platforms in your industry.

RESPONSE: The Company respectfully acknowledges the Staff’s comment, and advises the Staff that it has revised the disclosure on pages 1, 63, and 91 of the Amended Draft Registration Statement to address the Staff’s comment. The Company also advises the Staff that the Company is basing this on the number of U.S. physicians utilizing its platform compared to competing software platforms in its industry.

The clarified disclosure, which was included in an amended Form S-1, appropriately describes the measure the company uses to support its “leading” status:

Overview

We are the leading digital platform for U.S. medical professionals, as measured by the number of U.S. physician members, with over 1.8 million medical professional members as of March 31, 2021. Our members include more than 80% of physicians across all 50 states and every medical specialty.

As always, your thoughts and comments are welcome!

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