View:
United States securities and exchange commission logo
May 21, 2024
Junkoo Kim
Chief Executive Officer
WEBTOON Entertainment Inc.
5700 Wilshire Blvd., Suite 220
Los Angeles, CA 90036
Re: WEBTOON
Entertainment Inc.
Amendment No. 3 to
Draft Registration Statement on Form S-1
Submitted May 10,
2024
CIK No. 0001997859
Dear Junkoo Kim:
We have reviewed your amended draft registration statement and have
the following
comments.
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 a comment applies 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 this
letter and your amended
draft registration statement or filed registration statement, we may
have additional
comments. Unless we note otherwise, any references to prior comments are
to comments in our
April 26, 2024 letter.
Amendment No. 3 to Draft Registration Statement on Form S-1
Summary Consolidated Financial and Other Data, page 23
1. We note your Income
before income tax for the three months ended March 31, 2024 is
presented as a loss.
Please revise the table to correct this inconsistency.
Management's Discussion and Analysis of Results of Operations and
Financial Condition
Overview, page 82
2. Please clarify or
correct the inconsistent dates in the last sentence of the first paragraph
under Overview.
Junkoo Kim
WEBTOON Entertainment Inc.
May 21, 2024
Page 2
How We Generate Revenue
Paid Content, page 84
3. We note disclosures under Paid Content that content is purchased by
users with Coins
which can be exchanged for access to content that is behind a paywall
or received by them
for free during in-app promotional events and that users may
receive up to a certain
number of Daily Passes for free each day . Please clarify or confirm
that Coins and Daily
Passes received for free are not included in Paid Content or explain
to us if and how they
are included.
Our Financial Model, page 85
4. We note you now present non-GAAP financial measures you identify as
Contribution
Profit (Loss) and Contribution Margin. You indicate the measures
reflect direct expenses
associated with generating revenue and exclude cost of revenue, other
than the creator
revenue share and third-party payment fees, that are included in GAAP
gross profit.
Please address the following:
Based on your disclosure on page 113, the costs you exclude from
GAAP gross profit
to calculate these non-GAAP financial measures are "cost of
revenue other than
creator revenue share and third-party payment fees, such as
payroll and related
personnel expenses related to content acquisition, licensing and
production".
Since you exclude normal, recurring, cash, operating expenses from
these non-GAAP
financial measures, it is not clear how you determined they are
appropriate and
comply with the guidance in Question 100.01 of the Division of
Corporation
Finance s Compliance & Disclosure Interpretations on Non-GAAP
Financial
Measures.
You present Contribution Margin in a graphic presentation without
presenting the
most directly comparable GAAP measure, gross profit margin, with
equal or greater
prominence. It is not clear how you determined your presentation
complies with the
guidance in Question 102.10(a) of the Division of Corporation
Finance s
Compliance & Disclosure Interpretations on Non-GAAP Financial
Measures.
Audited Financial Statements
Note 1. Description of Business and Summary of Significant Accounting Policies
Basis of Presentation, page F-8
FirstName LastNameJunkoo Kim
5. We note your disclosure regarding the revisions to your statement of
cash flows for the
Comapany
year NameWEBTOON Entertainment
ended December 31, 2023. PleaseInc.
explain to us how you considered
the presentation
May 21,and disclosure
2024 Page 2 requirements of ASC 250-10 in assessing the errors.
FirstName LastName
Junkoo Kim
FirstName LastNameJunkoo Kim
WEBTOON Entertainment Inc.
Comapany
May NameWEBTOON Entertainment Inc.
21, 2024
May 21,
Page 3 2024 Page 3
FirstName LastName
Unaudited Financial Statements
General, page F-74
6. Please provide the subsequent event disclosures, including the date
through with
subsequent events were evaluated and whether that date is the date the
financial
statements were issued or the date the financial statements were
available to be issued,
required by ASC 855-10-50-1.
Please contact Stephany Yang at 202-551-3167 or Anne McConnell at
202-551-3709 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Erin Donahue at 202-551-6063 or Evan Ewing at 202-551-5920 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing