View:
United States securities and exchange commission logo
May 27, 2022
Oran Holtzman
Chief Executive Officer
ODDITY Tech Ltd.
8 Haharash Street
Tel Aviv-Jaffa, 6761304, Israel
Re: ODDITY Tech Ltd.
Amendment No. 2 to
Draft Registration Statement on Form F-1
Submitted May 13,
2022
CIK No. 0001907085
Dear Mr. Holtzman:
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.
Amendment No. 2 to Draft Registration Statement on Form F-1, submitted
May 13, 2022
Prospectus Summary, page 1
1. Please revise this
section, where appropriate, to disclose, if true, that you have identified a
material weakness in
your internal control over financial reporting which caused you to
restate your previously
issued 2020 financial statements.
Management's Discussion and Analysis of Financial Condition and Results
of Operations, page
82
2. We note your response
to prior comment 2 and disagree with the analysis presented in
your response. Please
revise this section, where appropriate, to present your separate LTV
and CAC calculations
for new U.S. customers acquired during the year ended December
Oran Holtzman
FirstName LastNameOran Holtzman
ODDITY Tech Ltd.
Comapany
May NameODDITY Tech Ltd.
27, 2022
May 27,
Page 2 2022 Page 2
FirstName LastName
31, 2020. Alternatively, please remove the LTV:CAC ratio from your
disclosure.
Driving Customer Acquisition, Retention, and Repeat Purchases, page 83
3. You disclose on page 85 that "gross revenue" is a non-GAAP measure.
Please revise your
discussion on page 83, and throughout the filing as necessary, to
precede the disclosure of
your non-GAAP measures with a discussion of the comparable GAAP
measure.
Non-GAAP Financial Measures, page 85
4. We noted your revised presentation using the term "Gross Revenue" as a
non-GAAP
measure. Presenting a measure entitled Gross Revenue before
discounts or other
incentives that reduce revenue under US GAAP would not be appropriate.
Accordingly,
please revise the name of this non-GAAP measure here and throughout
the filing where
applicable. In this regard, you may present such a measure and call it
billings or
"bookings" if it is consistent with amounts invoiced to customers
before discounts and
returns.
Business
The Scarce Combination of Scale, Growth, and Profitability, page 96
5. We note your response to prior comment 3 and revised disclosure.
Please revise the
"Profitability" bullet to disclose the identities of the companies
used for the comparison.
Please also revise the first sentence of the bullet to clarify, if
true, that the comparison is
limited to DTC businesses that are publicly-reporting companies and
does not include
privately-owned DTC businesses.
Management
Incentive Plans with Respect to SpoiledChild, page 133
6. We note your response to prior comment 6 and disagree with the
analysis presented in
your response. Please describe the revenue thresholds and any other
material terms
associated with the incentive bonuses described in this section.
Digital Securities, page 147
7. Please revise to provide a complete description of the offering
process for the digital
securities, including the exemption relied upon to conduct the
offering. Please also
provide us with your analysis as to how the offering complied with the
relevant
exemption.
8. Please provide a complete description of the digital securities and
the documentation
establishing the terms of the securities. In your revisions, please
disclose the number of
securities sold and the offering price per security. Please also file
the offering materials
prepared in connection with the offering and used to conduct the
offering as exhibits to
your registration statement.
Oran Holtzman
FirstName LastNameOran Holtzman
ODDITY Tech Ltd.
Comapany
May NameODDITY Tech Ltd.
27, 2022
May 27,
Page 3 2022 Page 3
FirstName LastName
Notes to Consolidated Financial Statements
Note 3- Acquisitions, page F-16
9. Please clarify in the filing the methodology used to determine the
fair value of the
technology acquired in the acquisition of Voyage81 Ltd.
Note 16- Subsequent Events, page F-28
10. You state that you issued and sold digital securities in a private
placement which will
automatically convert into Class A ordinary shares at the closing of
this offering at a
conversion price equal to 80% of the initial public offering price per
share. Please address
the following:
Provide us a thorough analysis of how you intend to account for
the digital securities,
citing all applicable GAAP literature.
Clarify in the filing all of the terms of the digital securities,
including the
functionality of the securities. For example, clarify if the
holder receives any product
discounts, promotional giveaways or order priority that are not
otherwise available.
We note your disclosure in the Capitalization and Dilution table
disclosures on pages
78 and 80 as of December 31, 2021. Please tell us how you
determined to present the
securities in the tables. Clarify if you intend to account for
the digital securities as
equity securities and why.
Tell us how you intend to account for the conversion feature,
which is at 80% of the
initial public offering price.
Based on the disclosure in the filing, the digital securities will
convert upon the initial
public offering. Clarify in the filing the current and future
business purpose of
forming and issuing the digital securities.
Once you have an estimated offering price or range, please explain
to us how you
determined the fair value of the common stock underlying your
digital and/or equity
security issuances and the reasons for any differences between
the recent valuations
of your common stock leading up to the IPO and the estimated
offering price. This
information will help facilitate our review of your accounting
for digital and/or equity
security issuances including stock compensation. If the value of
the digital securities
is not determined based on the common stock, tell us how you
determined the value
of the digital securities. Please discuss with the staff how to
submit your response.
Tell us how you accounted for the costs of research and developing
the tokens
providing us your basis for the accounting treatment.
Clarify in the filing the forms of payment received for the
digital securities, the
amount of each form, the number of digital securities sold, and
the accounting
treatment for any form of payment received if other than cash,
including the
accounting basis.
Tell us if the digital securities were issued to third parties at
arms' length or if they
were issued to related parties. In addition, tell us your
consideration of accounting
for any issuance in accordance with ASC 718.
You state that the digital securities are redeemable, in whole or
in part, at your option
Oran Holtzman
ODDITY Tech Ltd.
May 27, 2022
Page 4
at the cash redemption price equal to the original purchase price of
the digital
securities. Clarify the original purchase price at which the digital
securities may be
redeemed.
You state that upon conversion of the digital securities into Class
A ordinary shares,
the tokens previously representing such digital securities will be
decommissioned.
Clarify in the filing what you mean by "decommissioned" and your
consideration of
any accounting implications of the decommissioned digital securities.
For example,
if the digital securities are authorized, but none are outstanding,
tell us your
consideration of including that disclosure on the balance sheet and
the terms of the
securities in the notes to the financial statements.
Clarify in the filing what happens to the digital securities if the
IPO does not occur
and how it will be accounted for.
11. We noted in Item 7 within the Part II information provided, you state "In
May 2021, we
issued and sold an aggregate of [blank] of digital securities in a
private placement." As
the year you issued and sold these digital securities appears to be a
discrepancy, please
revise accordingly. If not, please advise.
General
12. With reference to the guidance contained in Compliance and Disclosure
Interpretations,
Securities Act Forms, Question 101.02, we note that graphic presentations
should not
obscure other prospectus disclosure. Accordingly, please tell us why you
believe it is
appropriate to include ten pages of graphics and accompanying text in a
narrative that
precedes the Summary section. In addition, please refer to the above
referenced
Compliance and Disclosure Interpretation and revise the text so that it
does not focus on
only the most favorable aspects of your business.
You may contact Sasha Parikh at 202-551-3627 or Mary Mast at
202-551-3613 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Joshua Gorsky at 202-551-7836 or Alan Campbell at 202-551-4224 with any
other
questions.
Sincerely,
FirstName LastNameOran Holtzman
Division of
Corporation Finance
Comapany NameODDITY Tech Ltd.
Office of Life
Sciences
May 27, 2022 Page 4
cc: Alison A. Haggerty, Esq.
FirstName LastName