SEC Comment Letter for Cheetah Mobile (CMCM) — Apr 11, 2014
Cheetah Mobile Inc.
Date: April 11, 2014 · CIK: 0001597835 · Accession: 0000000000-14-018537
AI Filing Summary & Sentiment
File numbers found in text: 333-194996
Letter
April 11, 2014 Via Email Ka Wai Andy Yeung Chief Financial Officer Cheetah Mobile Inc. 12/F, Fosun International Center Tower No. 237 Chaoyang North Road Chaoyang District, Beijing 100022 People’s Republic of China
Re: Cheetah Mobile Inc. (formerly known as Kingsoft Internet Software Holdings Limited ) Registration Statement on Form F -1 Filed April 2 , 2014 File No . 333-194996
Dear Mr. Yeung :
We have reviewed your draft registration statement and response letter and have the following comment . Unless ot herwise noted, where prior comments are referred to they refer to our letter dated April 1 , 2014 .
Please respond to this letter by amending your registration statement and providing the requested information. If you do not believe our comments apply to y our facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have addit ional comments.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Policies
Share -based Compensation, p age 94
1. We note your response to prior comment 2. Please provide us with a more detailed response as to how your financial forecasts increased so significantly between January 2014 and March 2014. In this regard, please provide us with comparative information fo r the significant assumptions used in your financial forecast for the January versus the March valuation. Also, your response appears to indicate that the increase in mobile
Ka Wai Andy Yeung Chief Financial Officer Cheetah Mobile Inc. April 11, 2014 Page 2
monthly active users was a significant factor considered. However, we note that mobile revenues were only 12% of revenue in the quarter ended December 2013 slightly up from 8% of revenue for the quarter ended September 2013. We also note that the increase in mobile monthly active users has been generally consistent in the last few qu arters with increases ranging from 35 million to 45 million per quarter and the most significant increase between the quarter ended September 2013 and December 2013. Please tell us how the increase in mobile active users contributed to the increase in fina ncial forecast.
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 Act of 193 3 and all applicable Securities Act rules require. Since the company 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.
Notwithstanding our comments, in the event you request acceleration of the effective date of the pending regist ration statement please provide a written statement from the company acknowledging that:
should the Commission or the staff, acting pursuant to delegated authority, declare the filing ef fective, it does not foreclose the Commission from taking any action with respect to the filing;
the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its f ull responsibility for the adequacy and accuracy of the disclosure in the filing; and
the company may not assert staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.
Please refer to Rules 460 and 461 regarding requests for acceleration . We will consider a written request for acceleration of the effective date of the registration statement as confirmation of the fact that those requesting acceleration are aware of their respective responsibilities under the Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed public offering of the securities specified in the above registration statement. Please allow adequate time for us to review any amendment prior to the requested effective date of the registration statement.
Ka Wai Andy Yeung Chief Financial Officer Cheetah Mobile Inc. April 11, 2014 Page 3
You may contact Eiko Yaoita Pyles, Staff Accountant, at (202) 551 -3587 or Christine Davis, Assistant Chief Accountant , at (202) 551 -3408 if you have questions regarding comments on the financial statements and related matters. Please contact Jan Woo, Attorney -Adviser, at (202) 551 -3453 with any other questions. If you need further assistance, please contact me at (202) 551 -3730.
Sincerely,
/s/ Barbara C. Jacobs
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April 11, 2014 Via Email Ka Wai Andy Yeung Chief Financial Officer Cheetah Mobile Inc. 12/F, Fosun International Center Tower No. 237 Chaoyang North Road Chaoyang District, Beijing 100022 People’s Republic of China Re: Cheetah Mobile Inc. (formerly known as Kingsoft Internet Software Holdings Limited ) Registration Statement on Form F -1 Filed April 2 , 2014 File No . 333-194996 Dear Mr. Yeung : We have reviewed your draft registration statement and response letter and have the following comment . Unless ot herwise noted, where prior comments are referred to they refer to our letter dated April 1 , 2014 . Please respond to this letter by amending your registration statement and providing the requested information. If you do not believe our comments apply to y our facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have addit ional comments. Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies Share -based Compensation, p age 94 1. We note your response to prior comment 2. Please provide us with a more detailed response as to how your financial forecasts increased so significantly between January 2014 and March 2014. In this regard, please provide us with comparative information fo r the significant assumptions used in your financial forecast for the January versus the March valuation. Also, your response appears to indicate that the increase in mobile Ka Wai Andy Yeung Chief Financial Officer Cheetah Mobile Inc. April 11, 2014 Page 2 monthly active users was a significant factor considered. However, we note that mobile revenues were only 12% of revenue in the quarter ended December 2013 slightly up from 8% of revenue for the quarter ended September 2013. We also note that the increase in mobile monthly active users has been generally consistent in the last few qu arters with increases ranging from 35 million to 45 million per quarter and the most significant increase between the quarter ended September 2013 and December 2013. Please tell us how the increase in mobile active users contributed to the increase in fina ncial forecast. 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 Act of 193 3 and all applicable Securities Act rules require. Since the company 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. Notwithstanding our comments, in the event you request acceleration of the effective date of the pending regist ration statement please provide a written statement from the company acknowledging that: should the Commission or the staff, acting pursuant to delegated authority, declare the filing ef fective, it does not foreclose the Commission from taking any action with respect to the filing; the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its f ull responsibility for the adequacy and accuracy of the disclosure in the filing; and the company may not assert staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States. Please refer to Rules 460 and 461 regarding requests for acceleration . We will consider a written request for acceleration of the effective date of the registration statement as confirmation of the fact that those requesting acceleration are aware of their respective responsibilities under the Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed public offering of the securities specified in the above registration statement. Please allow adequate time for us to review any amendment prior to the requested effective date of the registration statement. Ka Wai Andy Yeung Chief Financial Officer Cheetah Mobile Inc. April 11, 2014 Page 3 You may contact Eiko Yaoita Pyles, Staff Accountant, at (202) 551 -3587 or Christine Davis, Assistant Chief Accountant , at (202) 551 -3408 if you have questions regarding comments on the financial statements and related matters. Please contact Jan Woo, Attorney -Adviser, at (202) 551 -3453 with any other questions. If you need further assistance, please contact me at (202) 551 -3730. Sincerely, /s/ Barbara C. Jacobs Barbara C. Jacobs Assistant Director cc: Via Email Z. Julie Gao, Esq. Skadden, Arps, Slate, Meagher & Flom LLP