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United States securities and exchange commission logo
May 11, 2022
Eric Lefkofsky
Chief Executive Officer
Tempus Labs, Inc.
600 West Chicago Avenue, Suite 510
Chicago, Illinois 60654
Re: Tempus Labs, Inc.
Amendment No. 3 to
Draft Registration Statement on Form S-1
Submitted April 27,
2022
CIK No. 0001717115
Dear Mr. Lefkofsky:
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.
Amendment No. 3 to Draft Registration Statement on Form S-1
Dilution, page 102
1. Please revise to more
clearly disclose how you calculated historical net tangible book
value per share as of
December 31, 2021.
Eric Lefkofsky
FirstName LastNameEric Lefkofsky
Tempus Labs, Inc.
Comapany
May NameTempus Labs, Inc.
11, 2022
May 11,
Page 2 2022 Page 2
FirstName LastName
Management's Discussion and Analysis
Payor Coverage and Reimbursement, page 112
2. We note your disclosure here and on pages 33-36. Your disclosure on
page 112
references only payments received for clinical oncology NGS tests
performed from
January 1, 2020 through June 30, 2021. Please revise to address the
following:
Clarify if you continued performing the NGS oncology tests from
July 1, 2021 to
December 31, 2021.
If you continued performing these tests, please revise to also
disclose payments
received for those tests or explain why no payments have been
received.
In your prior amendment, you disclosed that beginning in the
second quarter of 2021,
you estimated the reimbursement rate for tests performed as zero
percent for these
tests. You now disclose that you estimate a reimbursement rate
that is "significantly
reduced". Please revise to disclose how you accounted for this
change and quantify
the financial statement impact of this change on the periods
presented. Please also
refer to Item 303(b)(3) of Regulation S-K and revise disclosures
on page 121
accordingly.
Comparison of the Years Ended December 31, 2020 and 2021
Revenue, page 115
3. Please revise your discussion of revenue and cost of revenue for both
genomics and data
and other so that the historical GAAP amounts are presented first,
followed by any
discussion of the results adjusted for the impact of COVID-19 PCR
testing. To the extent
that your revenue or cost of revenue trends were different on a GAAP
basis as compared
to adjusted for the impact of COVID-19 PCR testing, please ensure that
your MD&A
addresses those differences in trends and describes the extent to
which they are expected
to continue. For example, it appears that in 2020, genomics revenues
from COVID testing
exceeded cost of revenues while that does not seem to be the case for
other genomics
revenues.
Data and Other, page 116
4. Please revise your discussion of changes in data and other revenue to
describe in greater
detail the specific reasons for the $36 million (74%) increase from
2020 to 2021. For
example, please provide greater context by quantifying the extent to
which your business
was impacted by new customers and quantifying the extent to which
existing customers
increased their adoption of products and services.
Quarterly Results of Operations, page 117
5. Your disclosures on page 118 indicate that revenue and costs
associated with COVID-19
testing begin to impact results in the second quarter of 2020.
However, the table on page
117 only quantifies the impacts of COVID-19 testing beginning with the
third quarter of
2020. Please revise accordingly.
Eric Lefkofsky
Tempus Labs, Inc.
May 11, 2022
Page 3
6. Please revise your discussion of quarterly costs and operating expense
trends on page 118
to explain what caused the significant decline in genomics cost of
revenue associated with
COVID-19 testing relative to genomics revenue from COVID-19 testing
during the last
three quarters of fiscal 2021 compared to the previous three quarters.
Consolidated Financial Statements
2. Summary of Significant Accounting Policies
Revenue Recognition, page F-13
7. We note your discussion of the November 2021 Master Services Agreement
with
AstraZeneca on pages 110 and F-15. Please tell us if AstraZeneca will be
required to pay
any penalties to you if they do not meet the $200 minimum purchase
commitment. Please
also tell us how you considered if this agreement provides the customer
with a material
right. Please refer to ASC 606-10-55-41 through 55-45.
You may contact Lisa Etheredge, Senior Staff Accountant, at
202-551-3424 or Robert
Littlepage, Accounting Branch Chief, at 202-551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact Kyle
Wiley, Staff
Attorney, at 202-344-5791 or Jan Woo, Legal Branch Chief, at 202-551-3453 with
any other
questions.
Sincerely,
FirstName LastNameEric Lefkofsky
Division of
Corporation Finance
Comapany NameTempus Labs, Inc.
Office of Technology
May 11, 2022 Page 3
cc: Nicole Brookshire
FirstName LastName