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November 27, 2018
Prof. Arndt Rolfs, MD
Chief Executive Officer
Centogene B.V.
Am Strande 7
18055 Rostock
Germany
Re: Centogene B.V.
Draft Registration Statement on Form F-1
Submitted October 31, 2018
CIK 0001757097
Dear Prof. Arndt Rolfs:
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 October 31, 2018
General
1. 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.
2. You state on page 35 of the draft registration statement that you have
contracts with
several laboratories in Iran through which you provide diagnostic tests
You do not
quantify this activity. You state on pages 28 and 29 of the draft
registration statement that
you derived 27.9% of your 2017 revenues from the Middle East, and you
state on pages
Prof. Arndt Rolfs, MD
FirstName LastNameProf. Arndt Rolfs, MD
Centogene B.V.
Comapany 27, 2018
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November 27, 2018 Page 2
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FirstName LastName
80 and 117 that major markets for your diagnostics business include
the "Middle East and
North Africa region." North Africa and the Middle East include Sudan
and Syria.
Iran, Sudan and Syria are designated by the U.S. Department of State
as state sponsors of
terrorism, and are subject to U.S. economic sanctions and/or export
controls. Please
describe to us the nature and extent of your past, current, and
anticipated contacts with
Iran, Sudan and Syria, including contacts with their governments,
whether through
subsidiaries, affiliates, distributors, partners, customers, joint
ventures or other direct or
indirect arrangements. Please also discuss the materiality of those
contacts, in quantitative
terms and in terms of qualitative factors that a reasonable investor
would deem important
in making an investment decision. Tell us the approximate dollar
amounts of revenues,
assets and liabilities associated with those countries for the last
two fiscal years and the
subsequent interim period. Address for us the potential impact of the
investor sentiment
evidenced by divestment and similar initiatives that have been
directed toward companies
that have operations associated with U.S.-designated state sponsors of
terrorism.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Financial Operations Overview
Pharmaceutical, page 79
3. You state that you can experience different revenue patterns
quarter-to-quarter and year-
over-year due to the significant upfront payments or investments made
by our
pharmaceutical partners. Please tell us how you are accounting for
these upfront
payments.
Results of Operations
Year Ended December 31, 2016 Compared to Year Ended December 31, 2017, page 82
4. Your disclosure under Note 7, Segment Information, indicates that you
evaluate
performance based on Adjusted EBITDA for each segment. Please expand
your
discussion of the results of operations for each of your reportable
segments to describe the
underlying drivers for the changes in segment Adjusted EBITDA between
reporting
periods. If there are multiple drivers that are responsible for the
changes, please discuss
and quantify the effect of each driver that you have identified.
Please refer to Item 4 of
Form F-1 and Item 5 of Form 20-F for guidance.
Contractual Obligations and Commitments, page 87
5. We note your disclosure in the risk factors section that you received
waivers for the
breach of equity and net debt ratio covenants under the Syndicated
Loan Facility and that
you are in the process of obtaining a further waiver from, or
amendment of, the financial
covenant terms of the facility for the year ended December 31, 2019.
Please disclose the
steps that the company intends to take to cure, obtain waivers of or
otherwise address any
Prof. Arndt Rolfs, MD
FirstName LastNameProf. Arndt Rolfs, MD
Centogene B.V.
Comapany 27, 2018
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FirstName LastName
expected breach in 2019. For guidance, refer to Section IV.C of SEC
Release 33-8350
(December 29, 2003).
Certain Relationships and Related Party Transactions, page 141
6. We note your disclosure on page F-39 that remuneration of EUR 476k
(2016: EUR
1,242k) was provided to an entity controlled by key management
personnel in respect of
IT and consulting services. Please provide the disclosure required by
Item 4 of Form F-1
and Item 7.B of Form 20-F or advise.
Description of Share Capital and Articles of Association, page 142
7. Please include discussion of how management may make calls on
shareholders for
amounts owed. See Item 10.B.3(g) of Form 20-F.
Information Reporting and Backup Withholding, page 178
8. If applicable and material, please include discussion of the foreign
financial assets
requirements under the Hiring Incentives to Restore Employment Act of
2010.
Consolidated Statements of Comprehensive Loss for the Years Ended December 31,
2016 and
2017, page F-3
9. Please revise your financial statements to separately present loss for
the year attributable
to equity holders of the parent and non-controlling interests as
required by paragraph
81B(a) of IAS 1.
5 Accounting and Measurement Principles
Revenue, page F-9
10. We note that you recognize revenue from clinical diagnostic services
based on the
percentage of completion method. Please expand your accounting policy
disclosure to
describe the terms of the transactions and explain to us how these
transactions meet the
conditions in paragraph 20 of IAS 18. Please also disclose how you
assess the percentage
of completion of the service on the reporting date based on the work
rendered. Refer to
paragraph 35 of IAS 18.
11. Please expand your disclosure to describe the terms of fixed fee
partnership agreements
under your pharmaceutical segment and explain to us how you have
determined
recognizing revenue with a fixed service fee on the pro rata basis
over the contract period
is consistent with IAS 18.
Notes to the Consolidated Financial Statements, Centogene AG
19 Share-Based Payments, page F-31
12. Please reconcile the total expenses arising from share-based payment
transactions for
Prof. Arndt Rolfs, MD
Centogene B.V.
November 27, 2018
Page 4
2017 disclosed on page F-33 to the share-based payments amount presented
in your
consolidated statement of changes in equity for the year ended December
31, 2017.
Undertakings, page II-4
13. Please provide the undertaking required by Item 512(a)(6) of Regulation
S-K. Item
512(a)(6) is required for any offering that involves an initial
distribution of securities
pursuant to Rule 159A.
Exhibit Index, page II-6
14. Please file your lease agreement for your Cambridge, Massachusetts
facility described on
page 130 or advise. Refer to Item 8 of Form F-1.
You may contact Suying Li at 202-551-3335 or Joel Parker at 202-551-3651
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Jonathan Burr at 202-551-5833 or Brigitte Lippmann at 202-551-3713 with any
other questions.
Sincerely,
FirstName LastNameProf. Arndt Rolfs, MD Division of
Corporation Finance
Office of
Beverages, Apparel and
Comapany NameCentogene B.V.
Mining
November 27, 2018 Page 4
cc: Leo Borchardt
FirstName LastName