United States securities and exchange commission logo
June 10, 2022
Aneil Manhas
Chief Executive Officer
Bruush Oral Care Inc.
30 Wellington Street West, 5th Floor
Toronto, ON M5L 1E2
Canada
Re: Bruush Oral Care
Inc.
Amendment No. 1 to
Draft Registration Statement on Form F-1
Submitted May 26,
2022
CIK No. 0001913210
Dear Mr. Manhas:
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 F-1
The Opportunity, page 3
1. We note your responses
to comments 6 and 8. Please identify which studies have shown
that brushing with an
electric toothbrush is superior to using a manual brush and which
"[i]ndependent studies
have shown that over 40% of people do not change their
toothbrush as
frequently as they should" in the filing itself.
Use of Proceeds, page 23
2. Please describe the
uses to which the proceeds of the bridge loans were put.
Aneil Manhas
FirstName
Bruush OralLastNameAneil Manhas
Care Inc.
Comapany
June NameBruush Oral Care Inc.
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Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 27
3. As previously requested in prior comment 15, please expand your
discussion and analysis
of revenues for all periods presented to quantify the extent to which
changes in volume,
pricing and mix of products (i.e., starter kits versus refill kits)
sold had on revenues for
each period presented. Refer to Item 303(b)(2)(iii) of Regulation S-K
and Sections 501.04
and 501.12 of the Financial Reporting Codification. In this regard, we
noted no changes
to your analysis of revenues for any of the periods presented.
4. We note your disclosure on page 27 that discounts to the gross selling
price were 12% for
both the nine-months ended October 31, 2021 and also for the 12-months
ended January
31, 2021. However, on page 28 you state that the significant decline
in gross profit
margin is primarily due to multiple flash sales and influencer
collaborations that featured
substantial product discounts. Please address this potential
inconsistency and provide a
discussion and analysis of all material factors impacting the decline
in gross profit
margin. To the extent that there are multiple factors, please quantify
the extent to which
each factor contributed to the decline.
5. We note the expanded disclosure you provided in response to prior
comment 17. Please
disclose the factors contributing to the significant increase in fair
value of the common
shares underlying the warrants from the issuance of the July/August
2020 units (i.e.,
CAD$0.48 per share) to the issuance of the August/September 2020 units
(i.e., CAD$1.46
per share). In other words, explain why investors were willing to pay
a significantly
higher price for the units with the August/September 2020 unit
offering versus the
July/August 2020 unit offering.
Liquidity and Capital Resources, page 30
6. We note your response to prior comment 18, in which you note that
management focuses
on overall inventory levels and does not utilize any measures, such as
inventory turnover
ratios. Considering the significance of inventory to your financial
position and also to
operating cash flows, please provide a more comprehensive analysis of
your inventories
that is specific to your facts and circumstances and how the current
level is expected to
meet future sales. In this regard, we note that revenues more than
doubled for the 9-
months ended October 31, 2021 compared to the 12-months ended January
31, 2021,
while inventory declined 34%. This compares to an inventory level as
of January 31,
2021 that exceeded the amount of revenues recognized for fiscal year
2021. Please
address this comment for all periods presented.
Brand Strategy, page 39
7. We note your response to comment 24. Please reconcile your statement
that you
have collaborated with over 200 on-brand influencers, mostly in an
unpaid capacity, with
your statement that you continue to invest in top performing
collaborations. To the extent
Aneil Manhas
FirstName
Bruush OralLastNameAneil Manhas
Care Inc.
Comapany
June NameBruush Oral Care Inc.
10, 2022
June 10,
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FirstName LastName
that any of these collaborations were not entered into in the course
of ordinary
business, provide a summary of any material contract. Refer to Item
10.C. of Form 20.
Intellectual Property, page 41
8. We note that one of your issued patents expires in 2023. Please revise
your disclosure to
explain the material impact, if any, of the patent expiration on your
business.
Employment, Consulting and Management Agreements,, page 46
9. Please disclose any termination provisions in the employment
agreements between the
company and Matthew Kavanagh and Alan MacNevin.
Index to Financial Statements, page F-1
10. In your next amendment, please provide audited financial statements
for the fiscal year
ended January 31, 2022 in accordance with Item 4.b. of Form F-1 with
reference to Item
8.A.4. of Form 20-F. In addition, ensure all of the audit reports are
dated in consideration
of Rule 2-02 of Regulation S-X and PCAOB 3101.10.d.
Notes to the Financial Statements
3. Summary of Significant Accounting Policies and Use of Estimates and
Judgments
Share capital, page F-13
11. We note your response to prior comment 39 and continue to request that
you enhance your
accounting policy to clarify the differences in measurement of
warrants issued as part of a
unit. For example, warrants may be treated as an equity classified
instrument, which is
what the current policy appears to be, as compared to a liability
classified instrument,
which is reflective of the majority of the warrants that have been
issued to date but not
included in your current accounting policy. Refer to IAS 32.
Critical accounting estimates and significant management judgments
Fair value measurement of broker warrants and warrant derivative, page F-14
12. As previously requested in prior comment 40, please include a
discussion of the
significant estimates and judgments management made to estimate the
fair value of the
Class B common shares that are underlying and drive the fair value of
warrants and stock-
based compensation either here or in one of the related footnote
disclosures. Specifically,
disclose the valuation techniques used and the material
assumptions/estimates used for
those valuation techniques. In this regard, we did not note any cash
transactions during
the nine-months ended October 31, 2021.
15. Segmented Information, page F-22
13. We note your response to prior comments 35 and 37. However, the
disclosure
requirements of IFRS 8.32 and IFRS 15.114-.115 are distinct from one
another.
Additionally the disclosure proscribed in IFRS 8.32 is applicable to
all entities, even those
Aneil Manhas
Bruush Oral Care Inc.
June 10, 2022
Page 4
with one operating and/or reportable segment. Accordingly, please
specifically address
each of the following:
Provide us a comprehensive explanation as to how you concluded
starter kits and
refills kits should not be disaggregated under IFRS 15.114-.115 and
B87-B89. This
assessment should focus on how the nature, amount, timing and
uncertainty of
revenue and cash flows are affected by economic factors.
Identify your products and their differences under IFRS 8.32, provide
us the
associated revenues for each product in all periods and tell us how
you concluded
your products were considered similar such that separate disclosure
was not required.
We note your response to prior comment 37 identifies the products as
"related."
Describe to us in detail the revenue information regularly reviewed
by the chief
operating decision maker for evaluating financial performance or
making resource
allocation decisions. We note, for example, the first bullet point in
your company
highlights on page 27 references that 30% of your revenue in the nine
months ended
October 31, 2021 was from refill kits.
You may contact Tracey Houser at 202-551-3736 or Kevin Kuhar at
202-551-3662 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Dillon Hagius at 202-551-7967 or Christopher Edwards at 202-551-6761
with any other
questions.
Sincerely,
FirstName LastNameAneil Manhas
Division of
Corporation Finance
Comapany NameBruush Oral Care Inc.
Office of Life
Sciences
June 10, 2022 Page 4
cc: Lahdan S. Rahmati
FirstName LastName