United States securities and exchange commission logo
August 3, 2021
Jonathon M. Singer
Chief Financial and Operating Officer
Surgalign Holdings, Inc.
520 Lake Cook Road , Suite 315
Deerfield, Illinois 60015
Re: Surgalign Holdings,
Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2020
Filed March 16,
2021
Form 10-Q for the
Quarterly Period Ended March 31, 2021
Filed May 10, 2021
File No. 001-38832
Dear Mr. Singer:
We have limited our review of your filing to the financial
statements and related
disclosures 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2020
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
2020 Compared to 2019
Costs of Goods Sold , page 38
1. We note that you
present costs of goods sold adjusted for the impact of one-time purchase
accounting step-up and
inventory write-offs. Please note that this disclosure creates a non-
GAAP measure under Item
10(e) of Regulation S-K. Accordingly, please revise future
filings to provide the
disclosures required by Item 10(e) of Regulation S- K or revise the
discussion to avoid
presentation of the non-GAAP measure, costs of goods sold adjusted
for the impact of
one-time purchase accounting step-up and inventory write-offs.
Jonathon M. Singer
FirstName LastNameJonathon M. Singer
Surgalign Holdings, Inc.
Comapany
August NameSurgalign Holdings, Inc.
3, 2021
August
Page 2 3, 2021 Page 2
FirstName LastName
Non-GAAP Financial Measures , page 41
2. Please tell us and revise future filings to explain your basis for
including the net change in
your valuation allowance in your adjusted net loss. Refer to
Compliance and Disclosure
Interpretation 100.04.
Exhibits and Financial Statement Schedules, page 54
3. The consent of Deloitte & Touche LLP included in Exhibit 23.1 refers
to RTI Surgical
Holdings, Inc. Please amend your filing to have Deloitte & Touche LLP
provide a
consent that refers to the correct registrant.
2. Summary of Significant Accounting Policies
Inventories, page 71
4. You state that inventories are stated at the lower of cost or market,
with cost determined
using the first-in, first-out method. Please tell us why you believe
your accounting policy
is consistent with ASC 330-10-35-1B.
Notes to the Consolidated Financial Statements
6. Revenue from Contracts with Customers
Disaggregation of Revenue, page 78
5. Please tell us why disclosure of revenues by each product or group of
similar products is
not required to be disclosed pursuant to ASC 280-10-50-40. In this
respect, we note on
page 33 that you estimate that your current portfolio addresses nearly
87% of all surgeries
utilizing spinal hard implants and approximately 70% of the
biomaterials used in spine-
related uses.
9. Holo Surgical Acquisition, page 82
6. We note that you have accounted for the Holo Surgical transaction as
an asset acquisition.
Please address the following:
Tell us why your accounting treatment for contingent consideration
in the Holo
Surgical asset acquisition is appropriate. In this regard, please
address if the
contingent consideration is a derivative under ASC 815, including
a thorough
analysis thereof. If the contingent consideration is not a
derivative, please tell us why
accounting under ASC 450 is not appropriate.
You include Holo Surgical in your disclosure on page 70 as a
wholly-owned
subsidiary. Please tell us why that disclosure is appropriate if
the acquisition has been
accounted for as an asset acquisition.
Jonathon M. Singer
Surgalign Holdings, Inc.
August 3, 2021
Page 3
Form 10-Q for the Quarterly Period Ended March 31, 2021
Item 6 - Exhibits, page 33
7. We note that your Section 906 certifications refer to RTI Surgical
Holdings, Inc. Please
amend the filing to provide corrected Section 906 certifications that
refer to the correct
registrant.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Eric Atallah at (202) 551-3663 or Mary Mast, Senior
Accountant, at (202)
551-3613 with any questions.
FirstName LastNameJonathon M. Singer Sincerely,
Comapany NameSurgalign Holdings, Inc.
Division of
Corporation Finance
August 3, 2021 Page 3 Office of Life
Sciences
FirstName LastName