United States securities and exchange commission logo
April 8, 2021
David A. Steinberg
Chief Executive Officer and Chairperson
Zeta Global Holdings Corp.
3 Park Ave, 33rd Floor
New York, NY, 10016
Re: Zeta Global
Holdings Corp.
Draft Registration
Statement on Form S-1
Submitted March 12,
2021
CIK No. 0001851003
Dear Mr. Steinberg:
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 S-1 submitted March 12, 2021
Prospectus Summary
Overview, page 1
1. Please balance your
disclosure of fiscal year 2020 revenues and revenue growth with
corresponding
disclosure of fiscal year 2020 net loss and growth in net loss.
The Offering, page 10
2. We note that the shares
outstanding after completion of this offering assumes the
conversion of all
outstanding shares of your preferred stock into 39,233,195 shares of
common stock. However,
based on the disclosures in Note 14, it appears that only the
Series F redeemable
convertible preferred stock will automatically convert upon a
David A. Steinberg
Zeta Global Holdings Corp.
April 8, 2021
Page 2
Qualified IPO. Please explain your basis for assuming the conversion
of all preferred
shares and revise your disclosures as necessary. Lastly, to the extent
such conversion is
supportable, please provide pro forma per share information for the
most recent fiscal year
in your Summary Consolidated Financial and Operating Information
reflecting such
conversion and any related adjustments. Refer to Rule 11-01(a)(8) of
Regulation S-X.
Risk Factors
Risks Related to Our Business and Industry
General, page 14
3. We note that the interest rate for your revolving credit facility is
tied to LIBOR. Please
include a risk factor regarding the potential impact to your liquidity
and results operations
from the expected discontinuance of LIBOR, or explain.
Our success and revenue growth depends upon..., page 15
4. You state that individual marketing agencies that are owned by holding
companies are
considered to be separate customers. Considering a holding company may
choose to exert
control over its individual marketing agencies, please tell us whether
revenue from any of
your holding company customers, when combined with their individual
marketing
agencies, exceeded 10% of total revenue for any period presented. If
so, revise your
disclosures as necessary.
Selected Consolidated Financial and Operating Information, page 45
5. We note your measures of adjusted platform profit and adjusted
platform margin excludes
normal cash operating expenses necessary to operate your business.
Please tell us how you
determined that this measure complies with Question 100.01 of the
non-GAAP C&DIs.
Further tell us what this measure is intended to convey and how it is
useful to investors.
To the extent you are attempting to show a non-GAAP gross profit
measure, please
reconcile such measure to the most directly comparable GAAP measure of
gross profit
and ensure such measure includes depreciation and amortization expense
pursuant to SAB
Topic 11.B. Also, ensure you present the most directly comparable GAAP
measure of
gross profit margin. Refer to Item 10(e)(1)(A) of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Factors Affecting Results of Operations
Expand Sales
FirstName to Existing Customers,
LastNameDavid page 49
A. Steinberg
Comapany
6. NameZeta
Please revise toGlobal Holdings
disclose Corp. of revenue derived from your
political and
the percentage
April 8,advocacy customers
2021 Page 2 that are excluded from your annual net revenue
retention rate metric.
FirstName LastName
David A. Steinberg
FirstName
Zeta GlobalLastNameDavid
Holdings Corp. A. Steinberg
Comapany
April NameZeta Global Holdings Corp.
8, 2021
April 38, 2021 Page 3
Page
FirstName LastName
Key Performance Metrics
Scaled customers, page 50
7. You disclose that you serve more than 1,000 customers. Please revise
to disclose the
actual number of total customers as of each period end. Also, with
regard to scaled
customers, revise to disclose the percentage of revenue derived from
such customers for
each period presented. To the extent that scaled customers do not
represent a majority of
your total revenues, please revise to also provide ARPU and annual net
revenue retention
rate for all your customers or explain.
Results of Operations
Comparison of the Years Ended December 31, 2020 and 2019
Revenues, page 53
8. You state that your success and revenue growth are dependent on adding
new customers,
retaining existing customers and increasing customers usage of your
platform, however
these factors are not referenced in your discussion of revenue growth.
Please revise to
include a quantified discussion regarding the portion of revenue
growth attributable to
new versus existing customers as well as the contribution of acquired
businesses, if
material. Refer to Item 303(a)(3)(iii) of Regulation S-K and Section
III.D of SEC No.
Release No. 33-6835.
Liquidity and Capital Resources, page 58
9. Please file as an exhibit the Senior Secured Credit Facility entered
into on February 3,
2021.
Principal Stockholders, page 102
10. You indicate that the Class B common stock will have ten votes per
share. Please add a
column to the beneficial ownership table that discloses the percentage
voting power held
by each person.
Consolidated Statements of Operations and Comprehensive Loss, page F-4
11. We note that your cost of revenue does not include depreciation and
amortization expense.
Please revise to state separately the amount of such costs that have
been excluded from
cost of revenue, if material. Refer to Rule 5-03(b)(3) of Regulation
S-X.
12. We note that you do not present a line-item for net income (loss)
available to common
shareholders on the face of this statement. Notwithstanding the
disclosures in Note 20,
please tell us how you considered the guidance in SAB Topic 6.B to
report income (loss)
applicable to common shareholders on the face of the income statement
when it is
materially different than reported net income or loss.
David A. Steinberg
FirstName
Zeta GlobalLastNameDavid
Holdings Corp. A. Steinberg
Comapany
April NameZeta Global Holdings Corp.
8, 2021
April 48, 2021 Page 4
Page
FirstName LastName
Notes to Consolidated Financial Statements
Note 2 - Basis of Presentation and Significant Accounting Policies
Revenue Recognition, page F-8
13. You disclose that you derive revenue on your technology platform via
subscription fees,
volume-based utilization fees and fees for professional services.
Please tell us the amount
of revenue derived from each service type for the periods presented.
To the extent
material, revise to include a discussion of your accounting for
professional fee revenue.
Also, clarify when the performance obligations are satisfied for your
subscription fees.
Refer to ASC 606-10-50-12(a).
Disaggregation of revenues from contract with customers, page F-10
14. We note your disclosure of revenue disaggregated by U.S. vs.
international. Please tell us
your consideration to provide additional forms of disaggregated
revenue such as
disaggregation based on the timing of transfer or by type of service,
customer, or contract.
Refer to ASC 606-10-55-89 through 55-91.
Note 13 - Stock-Based Compensation
Restricted shares, page F-32
15. Please provide us with a breakdown of all equity-based awards granted
in fiscal 2020 and
to date in fiscal 2021, including the fair value of the underlying
common stock used to
value such awards. To the extent there were significant fluctuations
in the fair values from
period-to-period, describe for us the factors that contributed to
these fluctuations,
including any intervening events within the company or changes in your
valuation
assumptions or methodology used to value such award. Please continue
to update this
analysis through effectiveness of the registration statement.
16. You state that the restricted share awards vest 25% upon a change in
control. Please
explain further when the remaining 75% of the restricted share awards
vest. In this
regard, it is unclear whether vesting is over a five-year term
beginning from the date of
issuance, as your disclosures appear to imply, or whether vesting for
such awards does not
begin until there is a change of control. To the extent vesting begins
from the date of
issuance, tell us why you have not recognized any compensation expense
related to such
awards. Also, tell us whether you anticipate changing the vesting
terms for the 25% in
contemplation of this offering and revise your disclosures as
necessary to clarify all terms
of these awards. Lastly, tell us the accounting guidance considered
when including these
shares in issued and outstanding common stock on your balance sheet
and specifically
address how you considered the definition of "Issued, Issuance, or
Issuing of an Equity
Instruments" in ASC 718-10-20.
David A. Steinberg
FirstName
Zeta GlobalLastNameDavid
Holdings Corp. A. Steinberg
Comapany
April NameZeta Global Holdings Corp.
8, 2021
April 58, 2021 Page 5
Page
FirstName LastName
Note 20 - Net Loss per Share, page F-41
17. You state that holders of non-vested restricted stock have similar
dividend and voting
rights as common stockholders. Please clarify whether the holders of
unvested restricted
stock have non-forfeitable rights to dividends or dividend
equivalents. If so, tell us
whether you consider these awards to be participating securities that
should be included in
your computation of earnings per share under the two-class method.
Refer to ASC 260-
10-45-61(A). Also, tell us how you determined the weighted average
number of Series A
common stock used in the denominator of your per share calculations
and why such
amounts differ so significantly from the actual Series A common shares
outstanding at
both December 31, 2019 and 2020. To the extent this difference relates
to the restricted
stock awards, please revise to clearly indicate as such and clarify
the number of unvested
restricted share awards that are excluded from your per shares
calculations for each period
presented.
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 David Edgar, Senior Staff Accountant, at 202-551-3459
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 Kathleen Krebs,
Special Counsel,
at 202-551-3350 or Jan Woo, Legal Branch Chief, at 202-551-3453 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Joel H. Trotter, Esq.