View:
January 28, 2020
Rajeev Singh
Chief Executive Officer
Accolade, Inc.
1201 Third Avenue
Suite 1700
Seattle, WA 98101
Re: Accolade, Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted January 13, 2020
CIK No. 1481646
Dear Mr. Singh:
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.
Amended Draft Registration Statement on Form S-1
Prospectus Summary, page 1
1. We note your response to comment 4. Please revise the "Risks Associated
with Our
Business" section in the prospectus summary to specifically disclose the
outstanding
balance of your debt.
Rajeev Singh
FirstName Inc.
Accolade, LastNameRajeev Singh
Comapany NameAccolade, Inc.
January 28, 2020
Page 2
January 28, 2020 Page 2
FirstName LastName
Summary Consolidated Financial and Other Data
Certain Non-GAAP Financial Measures, page 17
2. Refer to prior comment 6 and your response. It appears the comparable
GAAP measures
to "adjusted gross profit" and "adjusted gross margin" are "gross
profit" and "gross
margin," respectively. Please revise your presentation to add the
comparable GAAP
measures with equal or greater prominence pursuant to Item
10(e)(1)(i)(A) of Regulation
S-K. Also include a reconciliation of "gross profit" to "adjusted
gross profit" pursuant to
Item 10(e)(1)(i)(B) of Regulation S-K."
Management's Discussion and Analysis of Financial Condition and Results of
Operation
Our Business Model, page 74
3. You disclose on pages 75 and 81 you earned approximately 98% and 96%
for the fiscal
years ended February 28, 2018 and 2019, respectively, of the maximum
potential revenue
under your contracts measured for the corresponding calendar year.
Please clarify in your
disclosure how you calculate this percentage. Include how the amounts
due to customers,
adjustments to the measure of progress used to recognize revenue for
differences between
actual and estimated experience, and other adjustments made to arrive
at reported revenue
are factored into the computation. In this regard, advise how amounts
reported in the
financial statements for fiscal 2018 and 2019 are representative of
the
associated percentage amounts.
Choice of Forum, page 149
4. We note your response to comment 17, as well as your revised
disclosure. Please further
revise your disclosure specifically to clarify whether you intend the
exclusive forum
provision to apply to claims under the Securities Act. In this regard,
we note that
ambiguity exists because, on the one hand, you disclose that the
provision is limited to
claims under Delaware law and, on the other, you discuss case law that
appears to suggest
the provision could be interpreted as applying to federal law. In
addition, please revise
and make fully consistent your descriptions of the exclusive forum
provision throughout
the prospectus. For example, the description in the risk factor on
pages 58 and 59 does
not appear to include the numbered clauses (iv) and (v) in the
description of the provision
on page 149.
Notes to Consolidated Financial Statements
(2) Summary of Significant Accounting Policies
(j) Revenue and Deferred Revenue, page F-10
5. You disclose the reporting performance obligation is performed
separately over regular
intervals during the term of the contract. Accordingly, it appears the
amount of revenue
recognized for this is not related to the number of members. In view
of this, please explain
to us why it is appropriate to recognize revenue for it in a similar
pattern as that for the
Rajeev Singh
Accolade, Inc.
January 28, 2020
Page 3
stand ready services which is based on the number of members, rather
than on some other
basis (for example, straight line).
Additionally, please tell us, and disclose pursuant to ASC
606-10-50-20, information
about assumptions you use in allocating the transaction price between
the stand ready and
reporting performance obligations, including allocation of the
variable portion of the fee
to each.
6. On page F-12, you use the term "served" in the first paragraph in
regard to revenue
associated with pre-launch open enrollment and in the fourth paragraph
in regard to your
performance obligations during the term of the contract. Please
clarify what is meant by
this term, in particular, whether or not it refers to members that
have actually enrolled in
or used your service as the basis for any amount of revenue
recognized.
You may contact Keira Nakada at (202) 551-3659 or Doug Jones at (202)
551-3309 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Eric Envall at (202) 551-3234 or Dietrich King at (202) 551-8071 with
any other
questions.
FirstName LastNameRajeev Singh Sincerely,
Comapany NameAccolade, Inc.
Division of
Corporation Finance
January 28, 2020 Page 3 Office of Trade
& Services
FirstName LastName