United States securities and exchange commission logo
August 5, 2020
Peter Anthony Bordes, Jr.
Chief Executive Officer
Kubient, Inc.
330 Seventh Avenue, 10th Floor
New York, NY 10011
Re: Kubient, Inc.
Amendment No. 2 to
Registration Statement on Form S-1
Filed July 30, 2020
File No. 333-239682
Dear Mr. Bordes, Jr.:
We have reviewed your amended 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our July
27, 2020 letter.
Amendment No. 2 to Registration Statement on Form S-1
Capitalization, page 35
1. Please revise to only
give effect to the debt conversions in the pro forma column. The pro
forma as adjusted
column should reflect the pro forma capitalization after giving effect to
the offering, including
the repayment of certain notes with offering proceeds.
2. The disclosure
accompanying your capitalization table indicates that your notes will
convert into an
aggregate of 1,174,281 units in this offering. Please advise how these
units are being
included in this offering. We note similar disclosure on page F-13.
Peter Anthony Bordes, Jr.
FirstName LastNamePeter Anthony Bordes, Jr.
Kubient, Inc.
Comapany
August NameKubient, Inc.
5, 2020
August
Page 2 5, 2020 Page 2
FirstName LastName
Dilution, page 36
3. Revise your calculation of pro forma net tangible book value and pro
forma net tangible
book value per share to only give effect to the conversion of the
Notes. Pro forma as
adjusted net tangible book value should represent pro forma net
tangible book value, plus
the effects of the public offering.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
COVID-19, page 38
4. We note your response to prior comment 4 and your revised disclosures
on page 38.
Please revise to address the following:
describe how your advertising impression volume trends have
continued to be
affected since the 80% decline you noted in April 2020;
explain how your business specifically has been recently impacted
by the lower cost
of advertising spots as a result of COVID-19; and
quantify both the number of common shares issued in connection
with the salary
reduction program, the types of employees impacted by the program
and explain how
you determined the fair value per share.
Liquidity and Capital Resources, page 41
5. We note your response to prior comment 9. It is unclear if the
accounts receivable
balance pertaining to beta testing revenues has not yet been collected
due to a billing
dispute, customer financial difficulties, or some other reason. To the
extent there is
a significant uncertainty surrounding your ability to collect the
amounts due, please
address this uncertainty in your MD&A since the failure to collect
these amounts would
materially impact your cash flows from operations.
Business
Customers and Revenue, page 46
6. We note your response to prior comment 7 and your disclosure on page
46 that 2019
revenue was generated from 49 customers while revenue for the quarter
ended March 31,
2020 was derived from 35 customers. To help give context to your
customer trends,
please revise to explain how you define your customer base from period
to period. For
example, it is unclear if you consider customers to be all advertisers
with an active twelve
month master service agreement or only those advertisers that
purchased an impression on
your platform during the period.
Peter Anthony Bordes, Jr.
FirstName LastNamePeter Anthony Bordes, Jr.
Kubient, Inc.
Comapany
August NameKubient, Inc.
5, 2020
August
Page 3 5, 2020 Page 3
FirstName LastName
Unaudited Condensed Consolidated Financial Statements
Note 1 - Business Organization, Nature of Operations, Risks and Uncertainties
and Basis of
Presentation, page F-5
7. We note your response to comments 8 and 11 and your revised
disclosures on page F-13
regarding the July 13, 2020 amended terms of your notes payable to
related parties. It
appears that your pro forma column on page F-1 gives effect to the
automatic conversion
of Senior Notes and Junior Notes upon closing of your public offering
but does not
include the conversion of $525,000 of Related Party Notes which are
included in your pro
forma presentation on page 35. Please advise or revise accordingly.
Note 4 - Intangible Assets, page F-9
8. We note your response to prior comment 10. It is unclear why your
amortization period
for capitalized software costs associated with KAI is based upon the
useful life of the
testing data acquired and why you are amortizing before your KAI
product is released to
customers. Please refer to ASC 985-20-35-1 through 35-3 and advise or
revise your
disclosures accordingly.
Note 11 - Subsequent Events, page F-13
9. Please revise your disclosures here and on page F-40 to address the
recent impact of
COVID-19 on your business. Your revised disclosures should address the
matters described on page 38 including but not limited to the
significant decline in
advertising impression volumes subsequent to March 31, 2020, the
delayed release of KAI
as a stand-alone product and the implementation of your employee
salary reduction
program.
General
10. Please note the updating requirements of Rule 8-08 of Regulation S-X.
If
interim financial statements for the recently completed quarter are
available or become
available before effectiveness or mailing, they should be included in
the filing. If interim
financial statements are not available but the Company reasonably
expects a material
change in liquidity, financial condition or operating performance,
please revise your
MD&A to address those expectations.
Peter Anthony Bordes, Jr.
FirstName LastNamePeter Anthony Bordes, Jr.
Kubient, Inc.
Comapany
August NameKubient, Inc.
5, 2020
August
Page 4 5, 2020 Page 4
FirstName LastName
You may contact Lisa Etheredge, Staff Accountant, at (202) 551-3424 or
Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Matthew Crispino,
Staff Attorney, at (202) 551-3456 or Larry Spirgel, Office Chief, at (202)
551-3815 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Marc J. Adesso