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United States securities and exchange commission logo
December 3, 2021
Arturo Rodriguez
Chief Financial Officer
Aterian, Inc.
37 East 18th Street, 7th Floor
New York, New York 10003
Re: Aterian, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2020
Form 10-Q for the
Quarter Ended September 30, 2021
Filed March 16,
2021 and November 9, 2021
File No. 001-38937
Dear Mr. Rodriguez:
We have reviewed your September 24, 2021 response to our comment
letter 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. Unless we note otherwise, our references to prior comments are
to comments in our
September 2, 2021 letter.
Form 10-Q for the Quarterly Period Ended September 30, 2021
Notes to Financial Statements
2. Summary of Significant Accounting Policy
Goodwill, page 15
1. We have read your
response to prior comment five and your disclosure that you operate
under one reporting
unit because all your business components have similar economic
characteristics and are
managed on an aggregated basis. Please more fully explain to us
what your business
components are and how you determined they all have similar
economic
characteristics. In this regard, please specifically address the fact that the
fair
values related to
various contingent earn-out liabilities appear to change in disparate
directions and the fact
that, based on your disclosures of pro forma and historical revenue
Arturo Rodriguez
Aterian, Inc.
December 3, 2021
Page 2
amounts in note 10, the results of acquisitions appear to be
dissimilar, for example, it
appears to us that revenues related to Healing Solutions declined by
approximately 50% in
the current interim period relative to the comparative interim period.
10. Acqusition, page 28
2. We have read your response to prior comment seven and appreciate the
additional
information you provided; however, we note your acquisitions did not
include employees,
access to organized workforces, or manufacturing
capabilities/facilities. Please more fully
explain to us the specific acquired process or group of processes you
obtained and how
you determined they cannot be replaced without significant cost,
effort, or delay.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Non-GAAP Financial Measures, page 50
3. We have read your response to prior comment three and note the
revisions you included in
your 9/30/21 Form 10-Q related to the non-GAAP financial measure,
Contribution
Margin. Please tell us and revise future disclosures related to this
measure to more fully
address the following:
Explain how management uses the measure.
Explain the purpose of the measure.
Explain the specific nature of each adjustment to the measure,
including the reasons
for each adjustment. For example, explain how you determined what
selling and
distribution expenses to exclude from the measure, explain why you
believe
excluding those expenses from a non-GAAP gross profit measure is
meaningful and
appropriate, explain how you determined what selling and
distribution expenses and
other operating expenses to not reflect in the measure, and
explain why you believe
that is meaningful and appropriate.
Tell us why you revised the proposed reconciliation you provided
in your response
letter compared to the reconciliation you included in your Form
10-Q.
You may contact Andi Carpenter at 202-551-3645 or Anne McConnell at
202-551-
3645 if you have questions regarding comments.
FirstName LastNameArturo Rodriguez Sincerely,
Comapany NameAterian, Inc.
Division of
Corporation Finance
December 3, 2021 Page 2 Office of
Manufacturing
FirstName LastName