United States securities and exchange commission logo
July 27, 2021
Maxim Melnikov
Chief Executive Officer
Solaredge Holdings Limited
64 Agiou Georgiou Makri
Anna Maria Lena Court, Flat 201
Larnaca, 6037
Cyprus
Re: Solaredge Holdings
Limited
Draft Registration
Statement on Form F-1
Submitted June 28,
2021
CIK No. 0001867752
Dear Mr. Melnikov:
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 F-1 submitted June 28, 2021
Cover Page
1. Please clarify whether
the company will be a controlled company after the offering. We
note that Elbrus
Capital Funds currently owns 65% of the ordinary shares. If appropriate,
please disclose on the
prospectus cover page that you will be a controlled company and
indicate the amount of
shares that will be held by Elbrus Capital Funds. In addition, add
appropriate risk factor
disclosure regarding the influence of Elbrus Capital Funds.
Maxim Melnikov
FirstName LastNameMaxim
Solaredge Holdings Limited Melnikov
Comapany
July NameSolaredge Holdings Limited
27, 2021
July 27,
Page 2 2021 Page 2
FirstName LastName
Presentation of Financial and Other Information
Unaudited Pro Forma Condensed Combined Financial Information, page vi
2. We note your disclosure here and on page 13 that you adjust for pro
forma adjustments
that are directly attributable to the N1 Acquisition and factually
supportable. Please revise
your disclosures to comply with the updated guidance in Article 11-02
of Regulation S-X.
Prospectus Summary, page 1
3. Please revise to disclose your net losses for the reporting periods to
balance your
discussion of revenues on page 3. Also disclose that you have
significant indebtedness and
quantify these for the reporting periods.
Risk Factors
Holders of our ADSs or ordinary shares have limited choice of forum, page 55
4. You state that "actions by holders of our ADSs or ordinary shares to
enforce any duty or
liability created by the Exchange Act, the Securities Act or the
respective rules and
regulations thereunder must be brought in a federal court in the city
of New York."
Because, as you noted, Section 22 of the Securities Act creates
concurrent jurisdiction for
federal and state courts over all lawsuits brought to enforce any duty
or liability created by
the Securities Act or the rules and regulations thereunder, please
revise to state that there
is uncertainty as to whether a court would enforce a provision that
provides exclusive
federal jurisdiction over all suits brought to enforce any duty or
liability created by the
Securities Act or the rules and regulations thereunder.
Capitalization, page 64
5. We note you disclose two significant changes to your capitalization
since December 31,
2020. Please tell us whether you intend to update your historical
financial statements, as
well as all related financial information, such as your presentation
here, for an interim
period. To the extent you do not intend to update, please revise this
presentation to reflect
these two events in the table. Such presentation should be reflected
separately from
impact of the offering.
Selected Consolidated Historical Financial and Other Data
Non-IFRS Measures, page 68
6. We note the following adjustments in your Consolidated Adjusted EBITDA
measure:
Capitalized development costs, Reclassification of lease related
amortization and interest,
and Reclassification of operating expense related to software licenses
to amortization. As
the consolidated measure is not the reportable segments measure of
profit or loss it is
considered a non-IFRS measure. Therefore, these adjustments appear to
substitute
individually tailored recognition methods for those of IFRS. Please
revise to remove
these adjustments from the Consolidated Adjusted EBITDA measure. Refer
to Questions
Maxim Melnikov
FirstName LastNameMaxim
Solaredge Holdings Limited Melnikov
Comapany
July NameSolaredge Holdings Limited
27, 2021
July 27,
Page 3 2021 Page 3
FirstName LastName
100.04 and 104.04 of the Non-GAAP C&DIs.
7. Revise to disclose the most directly comparable IFRS measure for
Consolidated Adjusted
EBITDA Margin with greater prominence throughout the filing. Refer to
Item
10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the Non-GAAP
C&DIs.
Other Data, page 70
8. Please tell us what consideration you gave to providing additional
disclosure regarding
Average UMV (Unique Monthly Visitors) by platform (websites
versus mobile apps)
and audience (users versus customers), listings by agents and
individual sellers for a
particular period, and average revenue per paying account by
residential and
commercial real estate verticals.. To the extent there are any known
trends or uncertainties
regarding these, please consider revising your results of operations
section to discuss.
Unaudited Pro Forma Condensed Combined Financial Information, page 72
9. You disclose that because the N1 Acquisition was completed on February
5, 2021, a pro
forma statement of financial position as of December 31, 2020 was not
presented. Please
tell us whether you intend to update the historical financial
statements for a 2021 interim
period. If not, please explain this disclosure and how it complies
with Article 11-02(c)(1).
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Credit Facilities, page 91
10. You state that iRealtor LLC breached its maintenance covenants under
the Facility
Agreement related to net assets and EBITDA and advertising expenses
which required
you to obtain a waiver from Raiffeisenbank with respect to this breach
of covenants.
Please discuss the specific covenants that were breached.
Industry
Our Total Addressable Market, page 128
11. Please discuss the assumptions and limitations underlying your
estimated addressable
market of RUB 410 billion.
Principal and Selling Shareholders, page 146
12. Please disclose the natural person or persons who exercise the voting
and/or dispositive
powers with respect to the securities owned by entities.
Related Party Transactions, page 148
13. We note that a board member, Dmitri Krukov, is the founder and a
senior partner at
Elbrus Capital, which is the controlling shareholder of the company.
Please disclose
whether there is an agreement between the company and Elbrus for
representation on the
board of directors.
Maxim Melnikov
FirstName LastNameMaxim
Solaredge Holdings Limited Melnikov
Comapany
July NameSolaredge Holdings Limited
27, 2021
July 27,
Page 4 2021 Page 4
FirstName LastName
Consolidated Financial Statements
Note 2.4 Summary of significant accounting policies
(c) Revenue from contracts with customers, page F-10
14. Please revise your policy disclosure for listing revenue to include
the new subscription-
based model discussed on page 75 and explain how that differs from the
cost per time
basis arrangements. Also, revise to discuss your policy related to the
value-added services
listed on page 109.
Note 5. Segment Information, page F-22
15. We note that you currently manage and operate your business as two
reportable segments:
Core Business and Adjacent Services. Please address the following:
Provide us with details about your management structure and how
your company is
organized.
Describe the role of your CODM and each of the individuals
reporting to the CODM.
Identify and describe the role of each of your segment managers.
Describe the key operating decisions, who makes these decisions,
how performance
is assessed and how resources are allocated within your business.
Tell us how often the CODM meets with his direct reports, the
financial information
the CODM reviews in conjunction with those meetings, and the other
participants at
those meetings.
Explain how budgets are prepared, who approves the budget at each
step of the
process, the level of detail discussed at each step, and the level
at which the CODM
makes changes to the budget.
Describe the basis for determining the compensation for each
individual that reports
to the CODM.
16. Additionally, please describe the financial information reviewed by
the CODM for the
purpose of allocating resources and assessing performance. Tell us how
frequently that
information is prepared and reviewed. Also, describe the financial
information reviewed
by your Board of Directors and how frequently that information is
reviewed. In this
regard, we note that you present Core Business Adjusted EBITDA for
Moscow and the
Moscow region and Core Business Adjusted EBITDA for Other Regions and
you disclose
on page 68 that these measures are used by [y]our management to
monitor the underlying
performance of the business and the operations. We also note that
you disclose several
metrics on page 88 for Moscow and the Moscow region separately from
Other Regions.
Tell us whether the CODM or the Board of Directors receives any
profitability
information for Moscow and the Moscow region separately from the Other
region. If so,
describe the nature, type and frequency of that information.
17. You disclose the Adjacent Services segment contains three separate
operating segments
that are aggregated to a single reportable segment. Please tell us
what the operating
segments are and provide us with a detailed analysis that supports the
aggregation of these
operating segments in accordance with paragraph 12 of IFRS 8.
Maxim Melnikov
Solaredge Holdings Limited
July 27, 2021
Page 5
Note 16. Share-based Compensation, page F-30
18. You disclose that participants in your long-term incentive program are
entitled to a cash
payment upon occurrence of some liquidity events such as an initial
public offering.
Please revise to disclose the estimated amount of such payment and the
related expense
that will be recognized upon closing of this initial public offering.
19. Please tell us and revise your disclosures to clarify whether the
difference in the sum of
the fair values of each award outstanding and the amount of the
share-based payment
liabilities as of December, 31, 2020 relates to the liquidity event
payments.
Note 21. Events After the Reporting Period, page F-38
20. Revise to disclose the fair value of the 32.1 share-based compensation
awards granted in
January and March 2021.
General
21. Please file the following agreements as exhibits to the registration
statement or tell us why
you believe they are not material:
The share purchase agreement for the sale and purchase of the entire
share capital of
the N1 Group;
The framework agreement related to the advertising with HeadHunter,
an associate of
Elbrus Capital; and
The Investment Agreement with Onlypiece Trading Limited, Stonebridge
2020
Offshore Holdings II, L.P., Stonebridge 2020 L.P., ELQ Investors II
Ltd and Otaga
Limited.
22. 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 Melissa Kindelan, Senior Staff Accountant, at
202-551-3564 or
Christine Dietz, Senior Staff Accountant, at 202-551-3408 if you have questions
regarding
comments on the financial statements and related matters. Please contact Folake
Ayoola, Senior
Counsel, at 202-551-3673 or Jan Woo, Legal Branch Chief, at 202-551-3453 with
any other
questions.
Sincerely,
FirstName LastNameMaxim Melnikov
Division of
Corporation Finance
Comapany NameSolaredge Holdings Limited
Office of
Technology
July 27, 2021 Page 5
cc: J. David Stewart
FirstName LastName