United States securities and exchange commission logo
July 30, 2021
Geoffrey McFarlane
Chief Executive Officer
Winc, Inc.
1745 Berkeley St, Studio 1
Santa Monica, CA 90404
Re: Winc, Inc.
Draft Registration
Statement on Form S-1
Submitted July 2,
2021
CIK No. 0001782627
Dear Mr. McFarlane:
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 July 2, 2021
Prospectus Summary, page 1
1. Please balance the
disclosure in the summary by addressing the challenges that you face.
In this regard, we note
that you have been operating at a net loss each year since your
inception, you appear
to be carrying debt and you have been dependent on debt, equity
financing, and your PPP
loan to fund your operations.
Geoffrey McFarlane
FirstName
Winc, Inc. LastNameGeoffrey McFarlane
Comapany
July NameWinc, Inc.
30, 2021
July 30,
Page 2 2021 Page 2
FirstName LastName
Risk Factors
Risks Related to Production, Supply and Service Providers
Our business, including our costs and supply chain, is subject to risks...,
page 38
2. We note your reference to key suppliers in your risk factor spanning
pages 38-39, and that
you purchase significant amounts of product supply from a limited
number of suppliers
with limited supply capabilities. Please elaborate upon why these
suppliers are considered
key ones and, if material to an understanding of your agreements with
these suppliers,
revise your disclosure to discuss the material terms of any agreements
with these entities.
If they are your principal suppliers, please also revise to identify
the names of such
suppliers, as required by Item 101(h)(4)(v) of Regulation S-K.
Further, if your business is
substantially dependent upon any of your agreements with these key
suppliers, please file
any such agreements as exhibits pursuant to Item 601(b)(10) of
Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Impact of COVID-19, page 83
3. Please revise your disclosure here, and elsewhere as appropriate, to
quantify the negative
impact the COVID-19 pandemic has had on your wholesale sales,
particularly with
respect to on-premise sales. As a related matter, please revise this
section to discuss, as
you do on page 112, how you believe on-premise wine sales will be a
source of growth as
quarantine restrictions are lifted by states and on-premise
consumption resumes. For
guidance, please refer to CF Disclosure Guidance: Topics No. 9 and 9A.
Key Financial and Operating Metrics, page 84
4. We note that you discuss several metrics such as retail account
growth, sales
velocity, consumer acquisition cost ("CAC"), average monthly consumer
retention
rate, consumer lifetime revenue ("LTR"), consumer lifetime value
("LTV"), and
LTV/CAC ratio in your Business section. However, you have not
discussed these metrics
in your Management's Discussion and Analysis nor have you identified
these metrics in
your Key Financial and Operating Metrics section. Please
advise/revise. Based on your
disclosure, these metrics would appear to be key performance
indicators necessary to an
understanding of trends in your business. Refer to Section III.B.1 of
SEC Release 33-
8350.
Results of Operations
Comparison of the Years Ended December 31, 2019 and 2020, page 88
5. You attribute the changes in net revenues, cost of revenues, and gross
profit in each of
your reportable segments over the reporting periods to multiple
factors. Please expand
your discussion of the results of operations to quantify the amount of
the changes
contributed by each underlying factor that you identified. Please
refer to
Item 303 of Regulation S-K and SEC Release No. 33-8350 for guidance.
Geoffrey McFarlane
FirstName
Winc, Inc. LastNameGeoffrey McFarlane
Comapany
July NameWinc, Inc.
30, 2021
July 30,
Page 3 2021 Page 3
FirstName LastName
6. Please similarly disclose, with quantification, the business reasons
for changes between
periods in your other non-reportable operations.
Business, page 99
7. We note your disclosure on page F-27 that in May 2021, the company
entered into
an Asset Purchase Agreement to purchase certain assets of Natural
Merchants, Inc. Please
expand your disclosure in the Business section to provide the material
terms of the asset
purchase agreement, and include a description of the assets that were
purchased in this
transaction. In the alternative, explain to us why such disclosure is
not material to
investors.
Omni-Channel Platform
Wholesale, page 112
8. We note that your "largest retail accounts through distributors . . .
as of June 30, 2021 are
Whole Foods, the Pennsylvania Liquor Control Board, or PLCB, the
Liquor Control
Board of Ontario, or LCBO, Albertsons, Fresh Market, Target, Binny s
and HEB." Please
include a description of the general terms of your agreements with
these distributors,
including the general fee structure, duration and termination
provisions of such
agreements. In this regard, we note your risk factor disclosure on
page 31 highlighting
how the loss of shelf space with Whole Foods or any other large
retailer could have a
significant impact on your revenue.
Principal Stockholders, page 144
9. Please revise footnote (4) to your beneficial ownership table to
identify the natural
person(s) with voting and/or investment control over Cool Japan Fund
Inc. Refer to Item
403 of Regulation S-K.
General
10. Please revise your prospectus cover page to disclose that your
officers, directors, and
certain principal shareholders will be able to control the management
and affairs of your
company and most matters requiring stockholder approval following the
offering. As a
related matter, please disclose whether you will be deemed a
"controlled company" as
defined by the market on which you intend to list your common stock
and, if so, whether
you intend to rely on any exemptions as a controlled company. If
applicable, please
disclose on the prospectus cover page and in the prospectus summary
that you are a
controlled company, and include a risk factor that discusses the
effect, risks and
uncertainties of being designated a controlled company.
11. 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. Please contact the staff
member associated
Geoffrey McFarlane
Winc, Inc.
July 30, 2021
Page 4
with the review of this filing to discuss how to submit the materials, if
any, to us for our
review.
You may contact Suying Li at 202-551-3335 or Joel Parker at 202-551-3651
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Nicholas Lamparski at 202-551-4695 or Jacqueline Kaufman at 202-551-3797 with
any other
questions.
Sincerely,
FirstName LastNameGeoffrey McFarlane
Division of
Corporation Finance
Comapany NameWinc, Inc.
Office of Trade &
Services
July 30, 2021 Page 4
cc: Drew Capurro
FirstName LastName