SEC Comment Letter for Mercurity Fintech Holding Inc. (MFH) (CIK 0001527762) (CD) — Dec 19, 2014
Mercurity Fintech Holding Inc. (MFH) (CIK 0001527762)
Date: Dec. 19, 2014 · CIK: 0001527762 · Accession: 0000000000-14-065826
AI Filing Summary & Sentiment
Reasoning
Referenced dates: November 12, 2014
Letter
December 19, 2014 Via E -mail Maodong Xu, CEO Wowo Limited Third Floor, Chuangxin Building No. 18 Xinxi Road, Haidian District, Beijing People's Republic of China
Re: Wowo Limited Amendment No. 2 to Confidential Draft Registration Statement on Form F -1 Submitted December 5, 2014 CIK No . 0001527762
Dear Mr. Xu :
We have reviewed your amended confidential draft registration statement and have the following comments. References to prior comments are to those in our letter dated November 12, 2014.
Summary
Our Value Proposition, page 4
1. We note the disclosure on page 9 that Mr. Xu currently owns approximately 37 .35% of the company’s outstanding shares. We note furth er the disclosure in this section that as of November 30, 2014, Mr. Xu has loaned the company US$61.0 million and that the company will convert all of its indebtedness owed to him to ad ditional ordinary shares at the initial offering price upon the complet ion of the offering. Please revise this section of the prospectus to disclose the total number of shares expected to be issued to Mr. Xu as a result of the conversion of his outstanding loans to the company and the percentage of outstanding shares he is e xpected to own following the offering.
Dilution, page 61
2. Please refer to prior comment 3. We note your response; however it is unclear how your presentation of total assets per share meets the disclosure requirements of Item 506 of Regulation S -K. In this regard, the measure of net tangible book value should be a conservative measure of your net worth, approximating liquidation value. Please add the measure of net tangible book value, as previously requested. If you believe an alternative presentatio n is more meaningful, please present this measure in addition to net tangible book value and provide appropriate explanation as to why the presentation is meaningful.
Maodong Xu, CEO Wowo Limited December 19 , 2014 Page 2
Management's Discussion and Analysis of Financial Condition and Results of Operations
Operating Metrics , page 76
3. We note the statement s here and in footnote 2 to the table on page 73 that the “number of merchant clients with an open online store reflects the number of merchant clients who have opened an online store in our WoWo Mall at any point during the given period no matter the online stores are still open at the end of the given period.” Please revise to indicate that the metric shows the number of merchant clients that had a store open, not opened a store, during the quarter, or advise. Also, tell us why management believes this metric is more useful than one that tracks the number of merchants that had a store open in the WoWo Mall at the end of each period.
4. We note your response to prior comment 5 regarding the number of cumulative customers and the number of cumulative repeat customers and it remains unclear how these metrics relate to the contribution of the company’s revenue each period. Please explain how the number of cumulative cust omers and the number of cumulative repeat customers correlate to the changes in revenue from period to period. As part of your response, please also tell us your consideration for disclosing the actual number of customers who have made at least one purcha se during each period presented as this would appear to be more meaningful and provide better insight into revenue trends each period.
Nine Months ended Se ptember 30, 2013 compared to Nine Months ended September 30, 2014
Net Revenues , page 92
5. We note the statement in this section that your commission revenues decreased year - over-year due, in part, to the fact that you “continue to offer attractive take rate to increase our merchant client base. ” Please clarify if this statement means that you charged lower take rates in the quarter ended September 30, 2014 than in the quarter ended September 30, 2013. If so, please quantify the changes in your take rates over the last year .
You may contact Rebekah Lindsey , Staff Accountant, at (202) 551 -3303 or Pat rick Gilmore, Accounting Branch Chief, at (202) 551 -3406 if you have questions regarding comments on the financial statements and related matters. Please contact Matthew Crispino, Staff Attorney, at (202) 551 -3456 or me at (202) 551 -3730 with any other qu estions.
Sincerely,
/s/ Barbara C. Jacobs
Show Raw Text
December 19, 2014
Via E -mail
Maodong Xu, CEO
Wowo Limited
Third Floor, Chuangxin Building
No. 18 Xinxi Road, Haidian District, Beijing
People's Republic of China
Re: Wowo Limited
Amendment No. 2 to Confidential Draft Registration Statement on Form F -1
Submitted December 5, 2014
CIK No . 0001527762
Dear Mr. Xu :
We have reviewed your amended confidential draft registration statement and have the
following comments. References to prior comments are to those in our letter dated November
12, 2014.
Summary
Our Value Proposition, page 4
1. We note the disclosure on page 9 that Mr. Xu currently owns approximately 37 .35% of
the company’s outstanding shares. We note furth er the disclosure in this section that as
of November 30, 2014, Mr. Xu has loaned the company US$61.0 million and that the
company will convert all of its indebtedness owed to him to ad ditional ordinary shares at
the initial offering price upon the complet ion of the offering. Please revise this section of
the prospectus to disclose the total number of shares expected to be issued to Mr. Xu as a
result of the conversion of his outstanding loans to the company and the percentage of
outstanding shares he is e xpected to own following the offering.
Dilution, page 61
2. Please refer to prior comment 3. We note your response; however it is unclear how your
presentation of total assets per share meets the disclosure requirements of Item 506 of
Regulation S -K. In this regard, the measure of net tangible book value should be a
conservative measure of your net worth, approximating liquidation value. Please add the
measure of net tangible book value, as previously requested. If you believe an alternative
presentatio n is more meaningful, please present this measure in addition to net tangible
book value and provide appropriate explanation as to why the presentation is meaningful.
Maodong Xu, CEO
Wowo Limited
December 19 , 2014
Page 2
Management's Discussion and Analysis of Financial Condition and Results of Operations
Operating Metrics , page 76
3. We note the statement s here and in footnote 2 to the table on page 73 that the “number of
merchant clients with an open online store reflects the number of merchant clients who
have opened an online store in our WoWo Mall at any point during the given period no
matter the online stores are still open at the end of the given period.” Please revise to
indicate that the metric shows the number of merchant clients that had a store open, not
opened a store, during the quarter, or advise. Also, tell us why management believes this
metric is more useful than one that tracks the number of merchants that had a store open
in the WoWo Mall at the end of each period.
4. We note your response to prior comment 5 regarding the number of cumulative
customers and the number of cumulative repeat customers and it remains unclear how
these metrics relate to the contribution of the company’s revenue each period. Please
explain how the number of cumulative cust omers and the number of cumulative repeat
customers correlate to the changes in revenue from period to period. As part of your
response, please also tell us your consideration for disclosing the actual number of
customers who have made at least one purcha se during each period presented as this
would appear to be more meaningful and provide better insight into revenue trends each
period.
Nine Months ended Se ptember 30, 2013 compared to Nine Months ended September 30, 2014
Net Revenues , page 92
5. We note the statement in this section that your commission revenues decreased year -
over-year due, in part, to the fact that you “continue to offer attractive take rate to
increase our merchant client base. ” Please clarify if this statement means that you
charged lower take rates in the quarter ended September 30, 2014 than in the quarter
ended September 30, 2013. If so, please quantify the changes in your take rates over the
last year .
You may contact Rebekah Lindsey , Staff Accountant, at (202) 551 -3303 or Pat rick
Gilmore, Accounting Branch Chief, at (202) 551 -3406 if you have questions regarding
comments on the financial statements and related matters. Please contact Matthew Crispino,
Staff Attorney, at (202) 551 -3456 or me at (202) 551 -3730 with any other qu estions.
Sincerely,
/s/ Barbara C. Jacobs
Barbara C. Jacobs
Assistant Director
Maodong Xu, CEO
Wowo Limited
December 19 , 2014
Page 3
cc: Via E -mail
Julian Lin, Esq.
Jones Day