United States securities and exchange commission logo
March 16, 2021
Robert Reffkin
Founder and Chief Executive Officer
Compass, Inc.
90 Fifth Avenue, 3rd Floor
New York, New York 10011
Re: Compass, Inc.
Registration
Statement on Form S-1
Filed March 1, 2021
File No. 333-253744
Dear Mr. Reffkin:
We have reviewed your amended 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
letter dated February 26,
2021.
Registration Statement on Form S-1
Summary Consolidated Financial and Other Data
Key Business Metrics and Non-GAAP Financial Measures, page 17
1. Your presentation of
Adjusted EBITDA margin should be accompanied by the measure
calculated using the
most directly comparable GAAP measure. Accordingly, please also
disclose Net Loss
Margin for each period presented. This comment applies throughout
your filing where you
present Adjusted EBITDA margin. Please refer to the
Commissions "Conditions
for Use of Non-GAAP Financial Measures" Release No. 33-
8176, footnote 27.
Robert Reffkin
FirstName LastNameRobert Reffkin
Compass, Inc.
Comapany
March NameCompass, Inc.
16, 2021
March2 16, 2021 Page 2
Page
FirstName LastName
Risk Factors
Our restated certificate of incorporation and amended and restated bylaws...,
page 48
2. You state that the Federal Forum Provision will not apply to suits
brought to enforce any
duty or liability created by the Exchange Act. Article XII of your
Restated Certificate of
Incorporation, however, states that "the federal district courts of
the United States of
America shall be the exclusive forum for the resolution of any
complaint asserting a cause
of action arising under the Securities Act, or any successor thereto
or, to the fullest extent
permitted by law, under the Exchange Act." Please revise your risk
factor or advise.
Management s Discussion and Analysis of Financial Condition and Results of
Operations
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin, page 73
3. Your disclosure includes explanations for changes in Adjusted EBITDA
between periods
but does not include explanations for changes in net loss, the most
directly comparable
GAAP measure. Please revise your disclosures accordingly. Refer to
Item 10(e)(1)(i) of
Regulation S-K and the Division of Corporation Finance's Non-GAAP
Compliance and
Disclosure Interpretation 102.10.
Components of Results of Our Operations, page 78
4. Please disclose the amount of compensation expense that will be
recognized immediately
upon the effectiveness of your IPO, related to both equity grants
prior to December 31,
2020 and equity grants issued subsequent to December 31, 2020. Please
also disclose the
total unrecognized compensation expense associated with these grants
and the period over
which it will be recognized. Please refer to ASC 855-10-50-2.
Commissions and other transaction-related expense, page 79
5. Your disclosure indicates that commissions and other
transaction-related expense
primarily consists of commissions paid to your agents as well as
stock-based
compensation expense related to your agent equity program. As such, it
does not appear to
actually include other transaction related expenses associated with
the purchase and sale
of a home. Tell us how you considered naming this expense category
commissions and
other agent expenses, in order to more appropriately describe the
components.
Critical Accounting Policies and Estimates
Common Stock Valuations, page 96
6. In your letter dated March 3, 2021 you indicate that you reassessed
the historical
estimated fair value of your common stock for financial reporting
purposes and
determined that you would apply a linear interpolation for the value
per share of common
stock between the August 2020 valuation and the midpoint of your
preliminary price
range to determine the fair value of your common stock for accounting
purposes for the
Robert Reffkin
Compass, Inc.
March 16, 2021
Page 3
stock options and RSUs granted subsequent to the August 2020 Valuation.
Please clarify
your disclosure accordingly.
Consolidated Financial Statements
Notes to Consolidated Financial Statements
2 Summary of Significant Accounting Policies
Revenue Recognition, page F-17
7. We continue to consider your response to prior comment 3.
You may contact Laura Veator, Staff Accountant, at (202) 551-3716 or
Craig Wilson,
Senior Advisor, at (202) 551-3226 if you have questions regarding comments on
the financial
statements and related matters. Please contact Matthew Crispino, Staff
Attorney, at (202) 551-
3456 or Jan Woo, Legal Branch Chief, at (202) 551-3453 with any other
questions.
Sincerely,
FirstName LastNameRobert Reffkin
Division of
Corporation Finance
Comapany NameCompass, Inc.
Office of
Technology
March 16, 2021 Page 3
cc: Jamie Evans
FirstName LastName