United States securities and exchange commission logo
September 3, 2021
Geoffrey McFarlane
Chief Executive Officer
Winc, Inc.
1745 Berkeley St, Studio 1
Santa Monica, CA 90404
Re: Winc, Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted August
18, 2021
CIK No. 0001782627
Dear Mr. McFarlane:
We have reviewed your amended 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.
Amendment No. 1 to Draft Registration Statement on Form S-1 Submitted
August 18, 2021
Prospectus Summary
Winc: We Bring Everyone to the Table, page 1
1. Please balance your
disclosure by addressing the impact of COVID-19 on your growth, if
applicable. In this
regard, we note your disclosure elsewhere in this filing that you have
"experienced a
significant increase in DTC demand due to changes to consumer behaviors
resulting from the
various stay-at-home and restaurant restriction orders . . . in response to
the COVID-19 pandemic."
Geoffrey McFarlane
FirstName
Winc, Inc. LastNameGeoffrey McFarlane
Comapany 3,
September NameWinc,
2021 Inc.
September
Page 2 3, 2021 Page 2
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Impact of COVID-19, page 86
2. We note your response to comment 3, and that you do not believe you
can reasonably
estimate the quantitative negative impact that the COVID-19 pandemic
has had on your
wholesale sales. Given that the pandemic began affecting your
operations in March 2020,
please tell us why you are unable to quantitatively assess the impact
of the pandemic on
your wholesale sales for the periods presented in your registration
statement. Consider the
staff's guidance, CF Disclosure Guidance: Topics No. 9 and 9A.
3. We note your disclosure that you "have not seen the DTC consumers
acquired during the
various stay-at-home orders behave in a materially different manner
than those consumers
acquired prior to the COVID-19 pandemic, indicative of a more
permanent shift in
consumer behavior." To provide context for this disclosure, please
disclose, if known, the
manner in which the DTC consumers acquired during the various
stay-at-home orders
have behaved as compared to those consumers acquired prior to the
pandemic, disclose
data that otherwise supports your disclosure, or revise to say this is
management's belief.
Key Factors Affecting Our Performance and Growth, page 87
4. We note that the increase in DTC net revenues from 2019 to 2020 was a
significant factor
contributing to your increase in net revenues for the same period. We
also note that the
increase in wholesale net revenues for the six months ended June 30,
2021 was a
significant factor contributing to your increase in net revenues for
the same period. Please
explain whether a 85.1% year-over-year increase in DTC net revenues
and a 90% period-
over-period increase in wholesale net revenues is in line with your
historical rate of
revenue growth from prior periods, or whether such an increase is
limited to
these periods. Please disclose whether you believe these increases are
trends that you
expect to continue in future periods. Please also indicate whether you
expect that your
DTC net revenues and wholesale net revenues will remain at the current
level if COVID-
19 restrictions are lifted.
Results of Operations
Comparison of the Six Months Ended June 30, 2021 and 2020, page 92
5. Please revise your results of operations discussion to quantify the
COVID-19 pandemic's
impact on your revenues and any COVID-related costs incurred during
the six months
ended June 30, 2021. In this regard, your current disclosure on page
86 that you believe
your wholesale net revenues growth rate was impaired from 2019 to 2020
due to the
pandemic and wholesale net revenues will be a source of growth for you
as quarantine
restrictions are lifted," suggests that the 90% increase in wholesale
net revenues for the
aforementioned period is due, at least in part, to the impact of
COVID. To the extent
applicable, please also make conforming changes to the disclosure in
your "Impact of
COVID-19" section on page 86.
Geoffrey McFarlane
Winc, Inc.
September 3, 2021
Page 3
Wholesale Cost of Revenues, page 92
6. You state that the increase in wholesale cost of revenues was entirely
attributable to the
increase in wholesale net revenues for the period. The wholesale net
revenue increase
of 90%, period to period, does not appear correlated to the wholesale
cost of
revenue increase of 59.3%. Please revise to discuss the comparative
changes in the
wholesale cost of revenue as a percentage of wholesale net revenue or
explain the
percentage increase variance. Please also revise your comparison of the
years ended
December 31, 2020 and 2019, accordingly.
Business
Growth Strategies, page 114
7. You acknowledge the risk elsewhere that your ability to grow your DTC
segment may be
hindered by the continued effects of the COVID-19 pandemic "[i]f remote
work
conditions end, more public venues reopen and consumers spend less time
at home."
Revise to acknowledge as much where you discuss your intent to grow your
DTC
segment.
Principal Stockholders, page 152
8. We note your amended disclosure in response to comment 9, and reissue the
comment.
Please revise your disclosure to identify each individual member on the
committee of
Sake Ventures, LLC and Rice Wine Ventures, LLC, which you state are
responsible for
the "[v]oting and disposition decisions" at Cool Japan Fund Inc. In the
alternative, tell us
why you believe that such individuals are not deemed to be the beneficial
owner of the
shares.
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
September 3, 2021 Page 3
cc: Drew Capurro
FirstName LastName