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United States securities and exchange commission logo
September 6, 2023
Par Chadha
Executive Chairman
Exela Technologies, Inc.
2701 E. Grauwyler Rd.
Irving, TX 75061
Re: Exela Technologies,
Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2022
Filed April 3, 2023
Form 8-K Filed
August 14, 2023
File No. 001-36788
Dear Par Chadha:
We have reviewed your filings 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.
Form 10-K for the Fiscal Year Ended December 31, 2022
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Note Regarding Non-GAAP Financial Measures, page 51
1. We note that you make
adjustments for optimization and restructuring expenses,
transaction and
integration costs and contract costs in calculating Adjusted EBITDA and
that you have incurred
most of these costs in every period from 2016 on. Please tell us
how you determined that
these costs are not normal, recurring, cash operating expenses.
Refer to Question
100.01 of the Non-GAAP Financial Measures Compliance and
Disclosure
Interpretations.
2. We note your adjustment
for other charges including non-cash. Please quantify for us the
amount for each of the
categories included in this adjustment for the years provided.
Please tell us how you
determined that excluding the accelerated ASC 842 amortization of
Par Chadha
FirstName LastNamePar
Exela Technologies, Inc. Chadha
Comapany 6,
September NameExela
2023 Technologies, Inc.
September
Page 2 6, 2023 Page 2
FirstName LastName
operating lease ROU asset does not substitute an individually tailored
recognition and
measurement method for those of GAAP. For amounts related to
severance, retention
bonus, faciality consolidation, relocation and recruitment costs, loss
contracts, network
outage costs and other transition costs, please tell us how you
determined that these costs
are not normal, recurring, cash operating expenses. Refer to Questions
100.01 and 100.04
of the Non-GAAP Financial Measures Compliance and Disclosure
Interpretations.
Critical Accounting Policies and Estimates
Impairment of goodwill, long-lived and other intangible assets, page 63
3. Please provide information for investors to assess the probability of
future goodwill
impairment charges. For example, please disclose whether any of your
reporting units are
at risk of failing the quantitative impairment test or that the fair
value of each of your
reporting units are substantially in excess of carrying value and are
not at risk of failing.
If a reporting unit is at risk of failing, you should disclose:
the percentage by which fair value exceeded carrying value at
the date of the most
recent test;
the amount of goodwill allocated to the reporting unit;
a more detailed description of the methods and key assumptions
used and how the
key assumptions were determined;
a discussion of the degree of uncertainty associated with the
assumptions; and
a description of potential events and/or changes in
circumstances that could
reasonably be expected to negatively affect the key assumptions.
Please refer to Item 303(b)(3) of Regulation S-K.
Form 8-K Filed August 14, 2023
Exhibit 99.1, page 1
4. Reference is made to your disclosure of gross profit. We note this
measure does not
include depreciation and amortization. Please tell us your
consideration of SAB Topic
11:B.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Par Chadha
Exela Technologies, Inc.
September 6, 2023
Page 3
You may contact Tony Watson at (202) 551-3318 or Adam Phippen at (202)
551-3336 if
you have questions regarding comments on the financial statements and related
matters.
FirstName LastNamePar Chadha Sincerely,
Comapany NameExela Technologies, Inc.
Division of Corporation
Finance
September 6, 2023 Page 3 Office of Trade &
Services
FirstName LastName