SEC Comment Letter for SOS Ltd (SOS) (CIK 0001346610) (SOS) — Mar 9, 2017
SOS Ltd (SOS) (CIK 0001346610)
Date: March 9, 2017 · CIK: 0001346610 · Accession: 0000000000-17-007938
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 4720 March 9, 2017 Dr. Zane Wang Chief Executive Officer and Executive Director China Rapid Finance Limited 5th Floor, Building D, BenQ Plaza 207 Songhong Road Changning District, Shanghai 200335 People’s Republic of China
Re: China Rapid Finance Limited Amendment No. 10 to Draft Registration Statement on Form F -1 Submitted February 21, 2017 CIK No. 0001346610
Dear Dr. Wang :
We have reviewed your amended draft registration statement and have the following comments. In some of our comme nts, 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 re sponse to these comments and your amended draft registration statement or filed registration statement, we may have additional comments.
Market Opportunity and Our Marketplace, page 6
1. Please tell us the basis for your statement that your mobile -based loans accounted for 43% of the total number of online consumer finance loans in China facilitated by consumer market places from J anuary 2016 to September 2016.
Dr. Zane Wang China Rapid Finance Limited March 9, 2017 Page 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Genera l
2. Please revise to disclose the changes in financial position for the periods presented.
3. Please disclose why your percentage of loan origination for Application Score Category 3 decreased from 53.4% in 2015 to 30.4% in 2016. Please also disclose why yo ur percentage of loan origination for the Application Score Category 1 increased from 27.5% in 2015 to 48.3% in 2016.
Revenue, page 98
4. Please disclose why your provision for loan losses decreased from $3,424 in 2015 to $0 in 2016 .
Operating Expenses, pa ge 98
5. Please disclose the nature of the expenses and the sources for the improvements in operating efficiency in sales and marketing expenses and general and administrative expenses.
6. Please revise to disclose the share -based compensation expense recognized for each of the periods presented.
Liquidity and Capital Resources, page 102
7. You disclose that the cash outflow from operating activities was due to a net loss of US$33.4 million as adjusted by non -cash items of US$2.7 million, and an increase in accrued liabilities of US$0.8 million and a decrease in investments held for trading of US$2.8 million. The increase in accrued liabilities would be a source of operating cash flows. How ever, you appear to disclose that the cash outflow from operating activities was due to an increase in accrued liabilities. Please revise.
Consolidated Statement of Cash Flows, page F -6
8. Please tell us where the customer acquisition incentive payments h ave been reflected within the statement of cash flows or revise the statement, as necessary.
9. Please tell us how the statement of cash flows reflects the receipt of the promissory note from the Chief Executive Officer for the issuance of Series C converti ble redeemable preferred shares in August of 2016. Please also tell us how the subsequent transfer of these shares to an institutional investor and the resulting partial payment on the
Dr. Zane Wang China Rapid Finance Limited March 9, 2017 Page 3
promissory note by the CEO has been reflected within the statement of cash flows and the statement of financial position. Revise your filing, if necessary.
Note 3. Loans Receivable, net, page F -19
10. You disclose that loans in non -accrual status were $202,000 in 2015 and 2016. Please confirm that the amount of loans in non -accrual status were the same in 2015 and in 2016 or revise the filing, if necessary.
Note 1 7. Unaudited pro forma balance sheets and loss per share, page F -32
11. Please tell us whether there are any differences between the Class A and Class B ordinary shares into which the preferred shares will be convertible into in conjunction with the IPO (e.g. voting rights, etc.).
You may contact Marc Thomas at (202) 551 -3452 or Gus Rodriguez at (202) 551 -3752 if you have questions regarding comments on the financial statements and related matters. Please contact William H. Dorton at (202) 551 -3107 or me at (202) 551 -3552 with any other questions.
Sincerely,
/s/ David Lin
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Mail Stop 4720 March 9, 2017 Dr. Zane Wang Chief Executive Officer and Executive Director China Rapid Finance Limited 5th Floor, Building D, BenQ Plaza 207 Songhong Road Changning District, Shanghai 200335 People’s Republic of China Re: China Rapid Finance Limited Amendment No. 10 to Draft Registration Statement on Form F -1 Submitted February 21, 2017 CIK No. 0001346610 Dear Dr. Wang : We have reviewed your amended draft registration statement and have the following comments. In some of our comme nts, 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 re sponse to these comments and your amended draft registration statement or filed registration statement, we may have additional comments. Market Opportunity and Our Marketplace, page 6 1. Please tell us the basis for your statement that your mobile -based loans accounted for 43% of the total number of online consumer finance loans in China facilitated by consumer market places from J anuary 2016 to September 2016. Dr. Zane Wang China Rapid Finance Limited March 9, 2017 Page 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations Genera l 2. Please revise to disclose the changes in financial position for the periods presented. 3. Please disclose why your percentage of loan origination for Application Score Category 3 decreased from 53.4% in 2015 to 30.4% in 2016. Please also disclose why yo ur percentage of loan origination for the Application Score Category 1 increased from 27.5% in 2015 to 48.3% in 2016. Revenue, page 98 4. Please disclose why your provision for loan losses decreased from $3,424 in 2015 to $0 in 2016 . Operating Expenses, pa ge 98 5. Please disclose the nature of the expenses and the sources for the improvements in operating efficiency in sales and marketing expenses and general and administrative expenses. 6. Please revise to disclose the share -based compensation expense recognized for each of the periods presented. Liquidity and Capital Resources, page 102 7. You disclose that the cash outflow from operating activities was due to a net loss of US$33.4 million as adjusted by non -cash items of US$2.7 million, and an increase in accrued liabilities of US$0.8 million and a decrease in investments held for trading of US$2.8 million. The increase in accrued liabilities would be a source of operating cash flows. How ever, you appear to disclose that the cash outflow from operating activities was due to an increase in accrued liabilities. Please revise. Consolidated Statement of Cash Flows, page F -6 8. Please tell us where the customer acquisition incentive payments h ave been reflected within the statement of cash flows or revise the statement, as necessary. 9. Please tell us how the statement of cash flows reflects the receipt of the promissory note from the Chief Executive Officer for the issuance of Series C converti ble redeemable preferred shares in August of 2016. Please also tell us how the subsequent transfer of these shares to an institutional investor and the resulting partial payment on the Dr. Zane Wang China Rapid Finance Limited March 9, 2017 Page 3 promissory note by the CEO has been reflected within the statement of cash flows and the statement of financial position. Revise your filing, if necessary. Note 3. Loans Receivable, net, page F -19 10. You disclose that loans in non -accrual status were $202,000 in 2015 and 2016. Please confirm that the amount of loans in non -accrual status were the same in 2015 and in 2016 or revise the filing, if necessary. Note 1 7. Unaudited pro forma balance sheets and loss per share, page F -32 11. Please tell us whether there are any differences between the Class A and Class B ordinary shares into which the preferred shares will be convertible into in conjunction with the IPO (e.g. voting rights, etc.). You may contact Marc Thomas at (202) 551 -3452 or Gus Rodriguez at (202) 551 -3752 if you have questions regarding comments on the financial statements and related matters. Please contact William H. Dorton at (202) 551 -3107 or me at (202) 551 -3552 with any other questions. Sincerely, /s/ David Lin David Lin Staff Attorney Office of Financial Services cc: Kerry Shen Alan Seem, Esq.