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United States securities and exchange commission logo
May 16, 2023
Oran Holtzman
Chief Executive Officer
ODDITY Tech Ltd.
8 Haharash Street
Tel Aviv-Jaffa, 6761304, Israel
Re: ODDITY Tech Ltd.
Amendment No. 6 to
Draft Registration Statement on Form F-1
Submitted May 1,
2023
CIK No. 0001907085
Dear Oran 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. 6 to Draft Registration Statement on Form F-1, submitted
May 1, 2023
Prospectus Summary
Who We Are, page 1
1. We note your response
to prior comment 2 and re-issue in part. Please revise the
Prospectus Summary,
where appropriate, to disclose SpoiledChild's revenues for the year
ended December 31,
2022.
2. Your disclosure on page
119 indicates that the acquisition of Revela has not yet closed.
However, disclosure
throughout the prospectus appears to assume that the acquisition has
closed. For example, we
note your statement on page 7 that you are incorporating
Revela's molecules into
your current and future brands and your disclosure on page 119
Oran Holtzman
FirstName LastNameOran Holtzman
ODDITY Tech Ltd.
Comapany
May NameODDITY Tech Ltd.
16, 2023
May 16,
Page 2 2023 Page 2
FirstName LastName
identifies Revela's products ProCelinyl and Fibroquin as owned by
ODDITY LABS.
Please tell us why it is appropriate for you to prominently discuss
Revela's business and
its integration with your business, including the establishment of
ODDITY LABS, if the
acquisition has not been consummated. To the extent the acquisition
has closed, please
revise the prospectus, where appropriate, to describe the material
terms of the acquisition
and file the definitive agreement as an exhibit to your registration
statement.
3. We note your disclosure on page 1 that you "established ODDITY LABS to
bring
artificial intelligence-based molecule discovery for the development
of science-backed,
highly efficacious beauty and wellness products." Please revise this
disclosure here and
elsewhere to clarify, if true, that the products you currently offer
are not drugs, biological
products, or devices that have been determined by the FDA or similar
foreign regulators to
be "efficacious" in treating diseases or other conditions. In this
regard, please explain to
us why it is appropriate for you to use the terms "efficacious" and
"safe" to describe
Revela's molecules and revise your disclosure to describe what is
meant by the term
"efficacious."
Please also revise your prospectus, where appropriate, to describe the
science that was
performed, and the clinical trials that were conducted, to develop
Revela's molecules.
4. We note your references here and throughout to Revela's "extensive
multi-category
pipeline of novel molecules." Please revise the prospectus, where
appropriate, to describe
these molecules and the categories they address.
Capitalization, page 80
5. Please revise to include indebtedness, such as your loans and digital
security liability, as
part of your capitalization table.
Management's Discussion and Analysis
Driving Customer Acquisition, Retention, and Repeat Purchases, page 85
6. Refer to the prior comment number 4 and your response relating to the
presentation of net
revenue repeat purchase rate, average order value, order billings from
paid and unpaid
sources, and number of active customers. You state that you do not
believe the measures
constitute material information necessary for an understanding or
evaluation of the
Company's financial condition, changes in financial condition and
results of operations
and you would not identify these measures as key performance
indicators as described in
SEC Release No. 33-10751. You also state that you do not currently
intend to regularly
disclose net revenue repeat purchase rate, average order value, order
billings from unpaid
sources and paid sources, or number of active customers in future
periodic filings.
However, you continue to include the disclosures prominently in the
filing. Please
address the following:
Based on the disclosure in the filing, it appears the measures
represent metrics for
which the metric guidance would be applicable. In this regard, we
note that the net
Oran Holtzman
ODDITY Tech Ltd.
May 16, 2023
Page 3
revenue repeat purchase rate is disclosed throughout the filing,
including on page 4,
which appears to emphasize the measure is a metric. In addition,
the presentation of
charts for order billings from paid and unpaid sources appears to
provide emphasis on
the measure. Please revise the filing to include the disclosures
requested, including a
clear definition of each measure, the reason the measure is
useful to investors, how
management uses the measure, and whether or not there are any
estimates or
assumptions underlying the measure.
Tell us how "net revenue" in "net revenue repeat purchase rate"
is calculated and if
not consistent with GAAP, consider revising the nomenclature.
Clarify the difference between average order value and average
order billings. If the
terms are synonymous, revise the terms to be consistent
throughout.
Results of Operations
Comparison of Years Ended December 31, 2022 and 2021, page 88
7. In order to provide a better understanding of your operations, please
quantify each factor
noted related to the change in Revenues and Selling, General and
Administrative
Expenses line items from the prior year. For example, you state that
the increase in net
revenue is primarily due to increased orders from new customers,
increased orders from
repeat customers, contribution from new brand and product categories.
Please quantify
each of these factors in revised disclosure.
Non-GAAP Financial Measures, page 90
8. We note your presentation of non-GAAP measures includes adjustments to
remove one-
time bonuses, founder incentive plan and new brand launch related
costs. Please clarify
for us the nature of these costs and tell us how you considered the
guidance in
Question 100.01 of the Non-GAAP Financial Measures Compliance and
Disclosure
Interpretation.
Founder's Letter
ODDITY LABS is Bringing Pharma-Grade AI-Based Molecule Discovery to Beauty and
Wellness, page 106
9. We note your disclosure on page 106 regarding ODDITY LABS and your
focus on
"science-backed product development." Please revise this disclosure to
clarify whether
you anticipate obtaining FDA approval for the products developed
through ODDITY
LABS. If not, please remove your references to "Pharma-Grade . . .
Molecule Discovery"
and explain what is meant by "science-backed product development."
10. Please provide the basis for the statement that ODDITY LABS will
redefine product
FirstName LastNameOran Holtzman
efficacy. In your revisions, please explain what is meant by product
efficacy and how the
Comapany NameODDITY
launch of ODDITY LABSTech Ltd.
will redefine it. To the extent this
statement is based on
May 16,management s
2023 Page 3 belief, please so state.
FirstName LastName
Oran Holtzman
FirstName LastNameOran Holtzman
ODDITY Tech Ltd.
Comapany
May NameODDITY Tech Ltd.
16, 2023
May 16,
Page 4 2023 Page 4
FirstName LastName
11. Please revise to explain why the combination of your consumer platform
with Revela is a
"game changer." To the extent this statement is based on management
s belief, please so
state.
12. Please revise to provide the basis for your statements that (i) legacy
businesses have
underinvested in science, (ii) ingredient innovation has fallen behind
the curve, (iii)
consumers are suffering and (iv) your competitors are doing more of
the same for
decades.
Business
Launching ODDITY LABS to Build the Future of Product Development, page 119
13. We note your disclosure that "Procelinyl's powerful efficacy has been
validated in clinical
studies." Please revise to clarify whether this product has been
approved by the FDA. To
the extent this product has not been approved by the FDA, please tell
us why this language
is appropriate. Additionally, please revise your disclosure to provide
further details
regarding the clinical studies and consumer studies referenced in this
section, including
the studies in which formulations with ProCelinyl outperformed
market-leading
competitors and the clinical study related to Fibroquin.
Notes to the Consolidated Financial Statements
Note 2: Significant Accounting Policies
g. Digital Securities, page F-9
14. Please revise to separately classify the Digital security liability on
the face of the financial
statements. In addition, please tell us why presentation as a
long-term liability at
December 31, 2022 is appropriate considering the securities will
convert into Class A
ordinary shares upon your pending initial public offering. Please
disclose in Note 16 the
number of securities issued and the issuance price per security.
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,
Division of
Corporation Finance
Office of
Industrial Applications and
Services
cc: Alison Haggerty