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United States securities and exchange commission logo
May 19, 2020
Harry Stylli, Ph.D.
Chief Executive Officer
Progenity, Inc
4330 LaJolla Village Drive, Suite 200
San Diego, CA 92122
Re: Progenity, Inc.
Draft Registration
Statement on Form S-1/A
Amended on May 11,
2020
CIK No. 0001580063
Dear Dr. Stylli:
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 #4 to Draft Registration Statement on Form S-1 submitted on
May 11, 2020
Financial Statements
March 31, 2020
Note 4. Revenue, page F-52
1. You state "During the
three months ended March 31, 2020, the Company updated its
estimate of the
variable consideration recognized for previously delivered performance
obligations which
resulted in a reduction of $12.8 million of revenue for the three months
ended March 31, 2020."
We note that revenue from Government Health Benefit
Programs was $29.4
million in 2018, $0.2 million in 2019, and $(6.1) million in 2020.
Clarify in the
disclosure:
if this relates to
the March 31, 2020 agreement on the monetary terms with DOJ and
Harry Stylli, Ph.D.
Progenity, Inc
May 19, 2020
Page 2
the State of New York;
where this amount is reported in the statement of operations;
in what periods;
if available, disaggregate the $49.0 million into the periods
affected; and
why this matter is not the correction of an error.
Note 12. Income Taxes, page F-67
2. You state "During the three months ended March 31, 2020, we recorded a
discrete tax
benefit of $37.7 million related to the NOL carryback provisions
available under the
CARES Act legislation." Please tell us how you are able to utilize the
NOL carryback
provisions when you have reported losses in 2018 and 2019 and revise the
disclosure as
necessary to clarify.
You may contact Erik Atallah at 202-551-3663, or Lisa Vanjoske at
202-551-3614, if you
have questions regarding comments on the financial statements and related
matters. Please
contact Paul Fischer at 202-551-3415, or Celeste M. Murphy at 202-551-3257,
with any other
questions.
Sincerely,
FirstName LastNameHarry Stylli, Ph.D.
Division of
Corporation Finance
Comapany NameProgenity, Inc
Office of Life
Sciences
May 19, 2020 Page 2
cc: Branden C. Berns, Esq.
FirstName LastName