View:
United States securities and exchange commission logo
April 5, 2021
Sagi Niri
Chief Financial Officer and Director
Tremor International Ltd.
Hashmonaim 121, 2nd Floor
Tel Aviv, 6713328, Israel
Re: Tremor
International Ltd.
Draft Registration
Statement on Form F-1
Submitted March 11,
2021
CIK No. 0001849396
Dear Mr. Niri:
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 F-1 submitted March 11, 2021
Prospectus Summary, page 1
1. Please revise to
provide equal discussion about the full-year 2020 along with the full-year
2019 throughout the
filing. In this regard, we note you refer to results and information for
the six-months ended
June 30, 2020 and the six-months ended December 31, 2020. Please
balance these
discussions by including similar information for the full fiscal years.
2. You disclose here and
elsewhere in the document that you have over approximately 1,000
active customers.
However, we note from your disclosure on page 61 that actual active
customers decreased
from 931 in 2019 to 889 in 2020. Please revise this disclosure to
more accurately reflect
your total number of active users.
Sagi Niri
FirstName LastNameSagi
Tremor International Ltd. Niri
Comapany
April NameTremor International Ltd.
5, 2021
April 25, 2021 Page 2
Page
FirstName LastName
3. You disclose that you have approximately 1,500 publishers and 800
unique users. Please
revise to define these terms, and to disclose the actual number of
publishers and unique
users for each period presented.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Performance Indicators and Other Operating Metrics, page 57
4. We note your discussion of CTV revenue and video revenue, including
the percentage of
total programmatic revenue that each represent. However, we note the
sum of such
revenues does not equal total programmatic revenue for either period.
Further, we are
unable to recalculate the disclosure on page 6 regarding video, CTV,
and mobile video
revenue as a percentage of total revenue from the information
provided. Please revise to
clarify how video, CTV, and mobile revenue relate to each other and to
programmatic and
performance revenue, as reported, and how you determined the various
percentages and
dollar amounts you disclose. Also, explain why you have chosen to
disclose and discuss
these two revenue streams separately from either your total revenue or
your programmatic
and performance revenues. Lastly, consider providing tabular
disclosure showing the
breakdown of these types of revenue to better clarify and support the
various percentages
and metrics you provide.
5. Your presentation of Net revenue includes an adjustment for
programmatic media costs
that are included in revenue in fiscal 2019. You also include
adjustments for traffic
acquisition costs to both fiscal 2019 and 2020. Similarly, you present
non-IFRS cost of
revenue, excluding the media costs in fiscal 2019. Please explain to
us why you believe
these non-IFRS measures do not substitute individually tailored
revenue recognition and
cost of revenue methods for IFRS measures or revise to remove such
measures throughout
your filing. Refer to Question 100.04 of the Non-GAAP Compliance and
Disclosure
Interpretations (C&DIs) and Rule 100(b) of Regulation G. Also, since
your non-IFRS
measures of Adjusted EBITDA Margin and Average net revenue per active
customer use
Net revenue in the calculations, these measures should be revised to
comply with the non-
GAAP guidance. Refer to Item 10(e)(4)(ii) of Regulation S-K.
Similarly, your discussion
of net revenue (including CTV and Video net revenue) and net revenue
growth in the
prospectus summary and elsewhere should be revised accordingly.
6. Please reconcile your non-GAAP measure of adjusted EBITDA to the most
directly
comparable GAAP measure of net income. Refer to Question 103.02 of the
non-GAAP
C&DIs. Alternatively, consider changing the name of this measure to,
for example, non-
GAAP operating profit (loss). In this regard, it appears that you do
not adjust this
measure for interest expense or taxes, which are implied by the name
"EBITDA."
7. We note you present Adjusted EBITDA Margin throughout the filing
without presenting
the most directly comparable IFRS measure of net profit margin with
equal or greater
prominence. Similarly, we note you include discussions of
period-over-period changes in
adjusted EBITDA without presenting a discussion of the most directly
comparable IFRS
measure with equal or greater prominence. Please revise your
disclosures throughout the
Sagi Niri
FirstName LastNameSagi
Tremor International Ltd. Niri
Comapany
April NameTremor International Ltd.
5, 2021
April 35, 2021 Page 3
Page
FirstName LastName
filing as necessary. Refer to Question 102.10 of the Non-GAAP C&DIs
and Item
10(e)(1)(i)(A) of Regulation S-K.
8. We note you consider the non-IFRS measure Net cash to be a performance
measure. As
this is reconciled to cash and cash equivalents, an indicator of your
liquidity, please
explain further how you determined that this is a measure of your
financial and operating
performance and not a measure of your liquidity. Further, it appears
that you have short-
term interest bearing lease liabilities. Please explain why these are
not excluded from this
measure as the definition implies. Lastly, please clarify what this
measure is intended to
convey and revise to explain how this information is useful to
investors. Refer to Item
10(e)(i)(C) of Regulation S-K.
9. If you continue to include Net cash in your filing, please revise to
present the most
comparable IFRS measure with equal or greater prominence everywhere
this measure is
presented. Refer to Question 102.10 of the Non-GAAP C&DIs and Item
10(e)(1)(i)(A) of
Regulation S-K. Further, revise to rename this measure as the title
Net cash is similar to
net cash as discussed in your Liquidity section and as shown on the
face of your Statement
of Cash Flows. Refer to Item 10(e)(ii)(E) of Regulation S-X.
Key Operating Metrics, page 61
10. Please revise to clarify how you define and calculate net revenue
retention rate. In this
regard, explain which of your revenue streams are considered to be
"recurring" and
therefore, factored into this metric. To the extent this measure is
not based on all revenue
streams, revise to explain why. Also, clarify what is meant by
"revenue retained from
existing customers in a defined period of time." For instance,
disclose whether you start
with revenue for all recurring revenue customers from a prior period
end and compare that
to revenue from the same set of customers as of the current period end
and clarify what
periods were used. Lastly, explain what this measure is intended to
represent and whether
customer attrition and/or renewal is reflected in such measure.
JOBS Act, page 74
11. You state that you have elected to take advantage of the extended
transition period for
new or revised accounting pronouncements. As IFRS does not have
separate adoption
dates for public and private companies, please explain further this
election or revise your
disclosures as necessary.
Description of Share Capital and Articles of Association
Exclusive Forum, page 113
12. We note that your forum selection provision identifies the federal
district courts of the
United States of America as the exclusive forum for claims arising
under the Securities
Act. Please revise here or in your risk factor section to highlight
enforceability concerns
arising from the fact that Section 22 of the Securities Act creates
concurrent jurisdiction in
federal and state courts over all suits brought to enforce any duty or
liability created by the
Sagi Niri
FirstName LastNameSagi
Tremor International Ltd. Niri
Comapany
April NameTremor International Ltd.
5, 2021
April 45, 2021 Page 4
Page
FirstName LastName
Securities Act or the rules and regulations thereunder. Additionally,
state that investors
cannot waive compliance with the federal securities laws and the rules
and regulations
thereunder.
Notes to Consolidated Financial Statements
Note 3: Significant Accounting Policies
k. Revenue Recognition, page F-19
13. We note that prior to fiscal 2020 you recognized revenue from your
Programmatic
activities on a gross basis, and beginning in fiscal 2020 you began
recognizing such
revenue net of programmatic media costs. Please provide us with a
detailed analysis of
how you considered the guidance in paragraphs B34 B38 of IFRS 15
in determining that
you were principal in these arrangements in fiscal 2019 and agent in
fiscal 2020. At a
minimum, ensure your response addresses the following:
how the company s manual operations in the execution process
impacted your
analysis and the specific guidance considered;
why the accounting changed in fiscal 2020 when the Rhythm
acquisition was
consummated in April 2019 and how integration of such business is
relevant to your
analysis;
how the terms of each of your arrangements (both demand side
supply side
customers) support your accounting; and
whether there were any changes in the terms of the arrangements
from fiscal 2019 to
fiscal 2020.
14. You state that you typically invoice buyers at the end of each month
for the full purchase
price of ad impressions monetized in that month. Please revise to
clarify how
monetization is determined for each of your pricing solutions (e.g.
percentage of spend,
flat fees and CPM).
l. Classification of expenses, page F-21
15. We note you present a measure of gross profit on the face of your
Statement of Operation
and Other Comprehensive Income. Please clarify whether any
amortization or
depreciation expense directly attributable to cost of sales is
included in gross profit. To the
extent you do not allocate any depreciation and amortization to cost
of revenue, you
should remove the gross profit subtotal and relabel the cost of
revenue line item to
indicate that it excludes depreciation and amortization. Refer to SAB
Topic 11B.
Note 7. Intangible Assets, Net, page F-34
16. You state that your qualitative assessment during the years ended
December 31, 2020, and
2019, did not indicate that it is more likely than not that the fair
value of its goodwill is
less than the aggregate carrying amount. Please explain further your
reference to a
"qualitative assessment." Tell us how you considered the guidance in
paragraphs 10 and
90 of IAS 36 and specifically address how you determined the
recoverable amount of the
Sagi Niri
Tremor International Ltd.
April 5, 2021
Page 5
cash-generating unit. Also, tell us when you perform your goodwill
impairment analysis
and confirm that such evaluation is done at the same time each year.
Refer to IAS 36.96.
Lastly, revise to include the disclosure required by IAS 36.134(a)-(f)
or explain why you
believe such disclosure in not necessary.
Exhibits
17. Please file your material leases, employment agreements, and deposit
agreement between
the registrant, the depositary and holders of the American Depositary
Shares as exhibits to
the registration statement. See Item 601(b)(4) and (10) of Regulation
S-K.
General
18. 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 Brittany Ebbertt, Senior Staff Accountant, (202)
551-3572 or Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 if you have questions
regarding comments
on the financial statements and related matters. Please contact Alexandra
Barone, Staff
Attorney, at (202) 551-8816 or Larry Spirgel, Office Chief, at (202) 551-3815
with any other
questions.
FirstName LastNameSagi Niri Sincerely,
Comapany NameTremor International Ltd.
Division of
Corporation Finance
April 5, 2021 Page 5 Office of
Technology
FirstName LastName