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United States securities and exchange commission logo
September 4, 2020
Tigran Sinanyan
Chief Financial Officer
MediaAlpha, Inc.
700 South Flower Street, Suite 640
Los Angeles, CA 90017
Re: MediaAlpha, Inc.
Draft Registration
Statement on Form S-1
Submitted August
11, 2020
CIK No. 0001818383
Dear Mr. Sinanyan:
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
General
1. Please provide us with
supplemental 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, have presented
or expect to present to potential investors in reliance on
Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain, copies
of those
communications. Please contact the staff member associated with the review of
this filing to discuss
how to submit the materials, if any, to us for our review.
2. Please confirm in a
cover letter to the nonpublic draft submission that you will publicly
file your registration
statement and nonpublic draft submissions at least 15 days prior to
any road show, or in
absence of a road show, at least 15 days prior to the requested
Tigran Sinanyan
FirstName LastNameTigran Sinanyan
MediaAlpha, Inc.
Comapany 4,
September NameMediaAlpha,
2020 Inc.
September
Page 2 4, 2020 Page 2
FirstName LastName
effective date of the registration statement.
Cover Page
3. Please revise the front cover page of your prospectus to separately
state the title and
amount of securities offered by the selling stockholder. Please make
conforming changes
to the Fee Table. Refer to Item 501(b)(2) of Regulation S-K for
guidance.
4. Please revise the cover page of your prospectus to disclose the
respective percentage of
the economic interests of your subsidiary, QuoteLab, LLC, that will be
owned, either
directly or indirectly, by investors in this offering, the other
owners of QuoteLab, LLC,
Insignia and the Senior Executives. Please make conforming changes to
your description
of The Offering beginning on page 13. In this regard we note your
disclosure on page 69,
Voting and Economic Rights of Members, that net profits and losses of
QuoteLab, LLC
will be allocated and distributed to its members pro rata in
accordance with the number of
QuoteLab units held by such members.
Financial statements and basis of presentation, page ii
5. Please tell us how you determined financial statements of the
registrant, MediaAlpha Inc.,
are not required.
Prospectus summary
Our market opportunity, page 4
6. Please revise to provide support for the statement in the second
sentence on page 6 that
you "provide the leading technology platform that enables insurance
carriers and
distributors to efficiently acquire customers online at scale." Please
make conforming
revisions to the Business section on page 106.
Summary consolidated financial and operating data, page 18
7. Please tell us which entity you have identified as the accounting
acquirer and your basis in
U.S. GAAP for your determination. Please clarify the facts and
circumstances considered
in arriving at your conclusion. Your response should address the
factors outlined within
paragraphs 10-15 of ASC 805-10-55; Business Combinations.
Management's discussion and analysis of financial condition and results of
operations
Key business and operating metrics
Adjusted EBITDA less capital expenditures, page 92
8. You disclose adjusted EBITDA less capital expenditures which you
define as net cash
provided by operating activities, as adjusted for changes in operating
assets and liabilities,
cash paid for interest, cash paid for transaction expenses, cash paid
for redemption of
Class B units of QL Holdings LLC in excess of fair value, and capital
expenditures.
Please tell us how you determined this measure complies with Item
10(e)(ii)(A) of
Tigran Sinanyan
MediaAlpha, Inc.
September 4, 2020
Page 3
Regulation S-K, including your consideration of the prohibition
regarding the exclusion of
charges or liabilities that require, or will require, cash settlement
therein. Alternatively,
remove this measure from your filing.
Contribution and Contribution Margin, page 93
9. We note your reconciliation of non-GAAP Contribution and Contribution
Margin to
revenue, which you have identified as the most directly comparable
GAAP measure. We
do not believe revenue, which excludes expenses, is the most directly
comparable GAAP
measure. Please revise to present GAAP gross profit as the starting
point of your
reconciliation. Additionally, revise to present a GAAP gross profit
percentage. Refer to
Item 10(e)(1)(i)(B) of Regulation S-K and footnote 27 of non-GAAP
adopting Release
No. 33-8176.
10. You state that you use contribution and contribution margin to measure
the return on your
relationships with your supply partners, excluding certain fixed
costs, the financial return
on your online advertising, and your operating leverage and that you
present contribution
and contribution margin because they are used extensively by your
management and
board of directors to manage your operating performance, including
evaluating your
operational performance against budget and assessing your overall
operating efficiency
and operating leverage. Please tell us in more detail how you use
contribution and
contribution margin in evaluating your business and making operating
decisions.
Liquidity and capital resources, page 100
11. You disclose that you aim to align your payment obligations to supply
partners and traffic
acquisition sources with the timing of payments from demand partners
and that if you
were to experience a delay in receiving a payment from a demand
partner within a quarter,
your operating cash flows for that quarter could be adversely impact.
You also state that
you have separate agreements with demand partners and suppliers and
that suppliers are
not party to the contractual arrangements with your demand partners,
nor are the suppliers
the beneficiaries of your demand partner agreements. In situations
where the demand
partner is the same as the supply partner, revise to clarify if you
still hold separate
agreements and if there is the ability to offset demand and supply
payments under those
contracts and the potential impact to operating cash flows.
Quantitative and qualitative disclosures about market risk
Concentrations of credit risk and of significant demand and supply partners,
page 103
FirstName LastNameTigran Sinanyan
12. Please expand your disclosure to identify the name of the customer
referenced in your
Comapany NameMediaAlpha,
discussion Inc.
of customer concentrations in the third paragraph. Please
also disclose the
names of the two
September 4, 2020 Page 3 suppliers referenced in the fourth paragraph.
FirstName LastName
Tigran Sinanyan
FirstName LastNameTigran Sinanyan
MediaAlpha, Inc.
Comapany 4,
September NameMediaAlpha,
2020 Inc.
September
Page 4 4, 2020 Page 4
FirstName LastName
Business
Our platform
We connect insurance companies with websites where consumers shop for
insurance, page 112
13. Please revise to disclose how average cost-per-click for your
high-quality insurance
partners of $40 is calculated.
Principal and selling stockholders, page 138
14. Please identify the natural person(s) with voting and/or dispositive
power over the shares
owned by Insignia Capital Group, LP.
Description of capital stock, page 141
15. We note your disclosure on page 70 under The reorganization of our
corporate
structure Coordination of MediaAlpha, Inc. and QuoteLab, LLC, that
the net proceeds
from the sale of one share of your Class A common stock will be
contributed to Holdco
and then to QuoteLab or transferred to a holder of Class B units of
QuoteLab. Please
expand your disclosure under this section to describe the rights,
privileges and preferences
to which holders of QuoteLab Class B units will be entitled.
Forum selection, page 148
16. We note that your amended and restated certificate of incorporation
contains exclusive
forum provisions providing that the state courts in the State of
Delaware or, if no state
court located within the State of Delaware has jurisdiction, the
federal court for the
District of Delaware, will be the sole and exclusive forum for certain
actions including
derivative actions. Noting your disclosure here and in the related
risk factor appearing on
page 58, it is not clear to us whether such provisions will apply to
claims brought under
the Securities Exchange Act of 1934, particularly if such claims are
brought in addition to
a claim or claims under Delaware law. Please revise your disclosure
here and in the
related risk factor to clarify.
You may contact Michelle Miller at 202-551-3368 or Sharon Blume at
202-551-3474 if
you have questions regarding comments on the financial statements and related
matters. Please
contact David Gessert at 202-551-2326 or Michael Clampitt at 202-551-3434 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Finance
cc: C. Daniel Haaren, Esq.