SEC Comment Letter for GoPro, Inc. (GPRO) (CIK 0001500435) (GPRO) — May 12, 2016
GoPro, Inc. (GPRO) (CIK 0001500435)
Date: May 12, 2016 · CIK: 0001500435 · Accession: 0000000000-16-076091
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3030 May 1 2, 2016 Via E -mail Brian McGee Chief Financial Officer GoPro, Inc. 3000 Clearview Way San Mateo, CA 94402
Re: GoPro, Inc. Form 10 -K for the Fiscal Year Ended December 31 , 2015 Filed February 2 9, 2016 File No. 001 -36514
Dear Mr. McGee :
We have limited our review of your filing to the financial statements and related disclosures 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 busine ss days by providing the requested information or advis e 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, 2015
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources, page 42
1. We note your disclosure on pages 14 and 34 of your expected substantial first quarter net loss and your weaker sell th rough trends and product repricing. Please tell us how you considered these known trends and uncertainties in your disclosure under Item 303(A)(1) of Regulation S -K and Section IV of SEC Release 34 -48960.
Brian McGee GoPro, Inc. May 1 2, 2016 Page 2
Non-GAAP Financial Measures, page 47
2. We note that you exclude POP display advertising from adjusted EBITDA. Please explain to us the reason you make this adjustment and revise future filings to clarify in your disclosure under Items 10(e)(1)(i)(C) and (D) of Regulation S -K.
Item 8. Financial S tatements
Note 2. Summary of Significant Accounting Policies
Point of purchase (POP) displays, page 58
3. We note you amortize your POP displays over 24 to 36 months. Please clarify for us how you determined the appropriate period of amortization. As pa rt of your response, please address whether the retailers are under contractual obligation to use the POP displays provided to them, whether notice is provided to you after any discontinuation of use, and whether ownership of the displays rests with you or the retailers. In addition, clarify for us how the cash outflows and amortization related to POP displays are presented in your statements of cash flows.
Note 8. Income Taxes
Uncertain income tax positions, page 73
4. You disclose that it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase within the next 12 months. In future filings, please provide the disclosure required by ASC 740 -10-50-15(d)(1) and (2).
Note 10. Commitments, Contingencies and Guarantees
Legal proceedings, page 75
5. We note the 2016 class action lawsuits discussed on page 29. Please tell us why you did not include a discussion of your 2016 lawsuits either here or in your subsequent events footnote. Refer to ASC 450 -20-50-9.
Product warranty, page 75
6. Please explain to us the reason for the increase in the amount charged to warranty claims during 2015.
Brian McGee GoPro, Inc. May 1 2, 2016 Page 3
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the compa ny and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In responding to our comments, please provide a written statement from the co mpany acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
You may contact Michael Fay at 202 -551-3812 , or Kate Tillan, Assistant Chief Accountant, at 202 -551-3604 with any questions . You may also reach me at 202-551-3671.
Sincerely,
/s/ Kate Tillan for
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Mail Stop 3030 May 1 2, 2016 Via E -mail Brian McGee Chief Financial Officer GoPro, Inc. 3000 Clearview Way San Mateo, CA 94402 Re: GoPro, Inc. Form 10 -K for the Fiscal Year Ended December 31 , 2015 Filed February 2 9, 2016 File No. 001 -36514 Dear Mr. McGee : We have limited our review of your filing to the financial statements and related disclosures 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 busine ss days by providing the requested information or advis e 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, 2015 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources, page 42 1. We note your disclosure on pages 14 and 34 of your expected substantial first quarter net loss and your weaker sell th rough trends and product repricing. Please tell us how you considered these known trends and uncertainties in your disclosure under Item 303(A)(1) of Regulation S -K and Section IV of SEC Release 34 -48960. Brian McGee GoPro, Inc. May 1 2, 2016 Page 2 Non-GAAP Financial Measures, page 47 2. We note that you exclude POP display advertising from adjusted EBITDA. Please explain to us the reason you make this adjustment and revise future filings to clarify in your disclosure under Items 10(e)(1)(i)(C) and (D) of Regulation S -K. Item 8. Financial S tatements Note 2. Summary of Significant Accounting Policies Point of purchase (POP) displays, page 58 3. We note you amortize your POP displays over 24 to 36 months. Please clarify for us how you determined the appropriate period of amortization. As pa rt of your response, please address whether the retailers are under contractual obligation to use the POP displays provided to them, whether notice is provided to you after any discontinuation of use, and whether ownership of the displays rests with you or the retailers. In addition, clarify for us how the cash outflows and amortization related to POP displays are presented in your statements of cash flows. Note 8. Income Taxes Uncertain income tax positions, page 73 4. You disclose that it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase within the next 12 months. In future filings, please provide the disclosure required by ASC 740 -10-50-15(d)(1) and (2). Note 10. Commitments, Contingencies and Guarantees Legal proceedings, page 75 5. We note the 2016 class action lawsuits discussed on page 29. Please tell us why you did not include a discussion of your 2016 lawsuits either here or in your subsequent events footnote. Refer to ASC 450 -20-50-9. Product warranty, page 75 6. Please explain to us the reason for the increase in the amount charged to warranty claims during 2015. Brian McGee GoPro, Inc. May 1 2, 2016 Page 3 We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the compa ny and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provide a written statement from the co mpany acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. You may contact Michael Fay at 202 -551-3812 , or Kate Tillan, Assistant Chief Accountant, at 202 -551-3604 with any questions . You may also reach me at 202-551-3671. Sincerely, /s/ Kate Tillan for Martin James Senior Assistant Chief Accountant Office of Electronics and Machinery