July 25, 2006
Mail Stop 4561
By U.S. Mail and facsimile to (312) 558-5700
Steven E. Zuccarini
Chief Executive Officer
Innerworkings, Inc.
600 West Chicago Avenue - Suite 850
Chicago, Illinois 60610
Re: Innerworkings, Inc.
Amendment Number Three to Registration Statement on Form S-1
Filed on July 19, 2006
File Number 333-133950
Dear Mr. Zuccarini:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Summary Consolidated Financial and Other Data, page 7
1. Please revise to include the unaudited pro forma basic and
diluted
net income per share of common stock and shares used in unaudited
pro
forma basic and diluted per share calculations.
2. We note that under the consolidated balance sheet data, the
actual
working capital and total asset amounts do not agree with the
amounts, or calculation based on the amounts, included in the
condensed consolidated balance sheet as of June 30, 2006 presented
on
pages F-22 and F-23. Please revise your disclosure accordingly.
Also, please complete the pro forma as adjusted column of
consolidated balance sheet data.
Capitalization, page 20
3. Please revise to include the pro forma as adjusted amounts in
the
Capitalization table.
MD&A - Quarterly Results of Operations, page 38
4. Please revise to include the unaudited pro forma basic and
diluted
net income per share of common stock amounts.
Financial Statements for the year ended December 31, 2005
Notes to the Financial Statements for the six months ended June
30,
2006
Note 2. Earnings per Share
- - Pro Forma Earnings Per Share
5. Please revise to include the effect of the pro forma earnings
per
share adjustment for the preferential distribution and liquidation
of
debt and to complete the calculation of the pro forma basic
earnings
per share and pro forma diluted earnings per share amounts for the
six months ended June 30, 2006.
Note 5. Graphography Acquisition
6. We note from your response to our prior comment 5 that you will
account for the $3 million contingent payments as goodwill to the
extent that payments are made. Please revise Note 5 to the
interim
financial statements for the six months ended June 30, 2006 to
include disclosure of this accounting treatment. See paragraph
51(f)
of SFAS No. 141. Also, please revise to include the weighted-
average
amortization period of the customer list and non-compete
agreements
acquired, and amount of goodwill that is expected to be deductible
for tax purposes. See paragraph 52 of SFAS No. 141.
Unaudited Pro Forma Condensed Consolidated Financial Statements,
page
F-47
Unaudited Pro Forma Condensed Consolidated Income Statement, pages
F-
48 to F-49
7. We note that in the unaudited pro forma income statement for
the
six months ended June 30, 2006, on page F-49, there is an
adjustment
to eliminate the interest expense of both Innerworkings and
Graphography. However, in the unaudited pro forma income
statement
for the year ended December 31, 2005, on page F-48, the adjustment
relates only to the interest expense of Innerworkings. Please
explain the reason for the difference in these two adjustments.
Revise your notes to the pro forma financial statements to clearly
explain any adjustments made to Graphography`s interest expense.
Other
8. Please update the financial statements, as necessary, to comply
with Rule 3-12 of Regulation S-X at the effective date of the
registration statement.
9. Please include currently dated consents of your independent
registered accountants in any amendments to your Form S-1
registration statement.
* * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
??should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
??the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
??the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in connection with our review
of
your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
You may contact Claire L. Erlanger at (202) 551-3301 or
Lynwood
F. Shenk at (202) 551-3380 if you have questions regarding
comments
on the financial statements and related matters. Please contact
Timothy Geishecker at (202) 551-3422 or me at (202) 551-3698 with
any
other questions.
Sincerely,
Mark S. Webb
Legal Branch Chief
cc: Matthew F. Bergmann, Esq.
Winston & Strawn LLP
35 West Wacker Drive
Chicago, Illinois 60601