SEC Comment Letter for iQIYI, (IQ) — Feb 23, 2018
iQIYI, Inc.
Date: Feb. 23, 2018 · CIK: 0001722608 · Accession: 0000000000-18-006059
AI Filing Summary & Sentiment
Referenced dates: February 2, 2018
Letter
Mail Stop 3561 February 23, 2018 Dr. Yu Gong Chief Executive Officer iQIYI, Inc. 9/F, iQIYI Innovation Building No. 2 Haidian North First Street Haidian District, Beijing 100080 People’s Republic of China
Re: iQIYI, Inc. Amendment No. 2 to Draft Registration Statement on Form F-1 Submitted February 12 , 2018 CIK No. 0001722608
Dear Dr. Gong :
We have reviewed your amended draft registration statement 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 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 response to these comments and your amended draft registration statement or filed registration statement, we may have additional comments. Unless otherw ise noted, references to prior comments refer to comments in our letter dated February 2, 2018.
Management’s Discussion and Analysis
Non-GAAP Measures, page 87
1. We note your disclosure that the non -GAAP measures exclude items that are “infrequent or unus ual in nature.” Please note Item 10(e) of Regulation S -K prohibits adjusting a non-GAAP financial performance measure to eliminate or smooth items identified as infrequent or unusual when the nature of the charge or gain is such that it is reasonably likely to recur within two years or there was a similar charge or gain within the prior two
Dr. Yu Gong iQIYI, Inc. February 23, 2018 Page 2
years. Please revise your disclosure as appropriate. Also r efer to Question 102.03 of the staff’s Compliance and Disclosure Interpretations “Non -GAAP Financial Measur es” (“C&DI”) for guidance.
2. Your disclosure states the no n-GAAP measures are used to measure both your performance and your liquidity. In regards to the measure being presented as a liquidity measure, please tell us your consideration of also providing a reconciliation to operating cash flow as the most directly comparable GAAP measure to comply with Item 10(e)(1)(i)(B) of Regulation S -K.
Notes to Consolidated Financial Statements
19. Loss Per Share , page F -48
3. Please revise or clarify to us your disclosure on page F -48 which states upon “automatic conversion of all of the Company’s redeemable convertible preferred shares… and all outstanding shares are re -designated into 416,314,037 Class A ordinary shares and 2,640,621,681 Class B ordinary shares” with your tabular disclosure on page F -49 which reflects 1.2B Class A ordinary shares and 2. 8B Class B ordinary shares upon the automatic conversion of the redeemable convertible preferred shares.
You may contact Abe Friedman at (202) 551 -8298 or Theresa Brillant at (202) 551 -3307 if you have questions regarding comments on the financial statements and related matters. Please contact J. Nolan McWilliams, Attorney -Advisor , at (202) 551 -3217 or me at (202) 551 - 3469 with any other questions.
Sincerely,
/s/ Justin Dobbie
Show Raw Text
Mail Stop 3561 February 23, 2018 Dr. Yu Gong Chief Executive Officer iQIYI, Inc. 9/F, iQIYI Innovation Building No. 2 Haidian North First Street Haidian District, Beijing 100080 People’s Republic of China Re: iQIYI, Inc. Amendment No. 2 to Draft Registration Statement on Form F-1 Submitted February 12 , 2018 CIK No. 0001722608 Dear Dr. Gong : We have reviewed your amended draft registration statement 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 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 response to these comments and your amended draft registration statement or filed registration statement, we may have additional comments. Unless otherw ise noted, references to prior comments refer to comments in our letter dated February 2, 2018. Management’s Discussion and Analysis Non-GAAP Measures, page 87 1. We note your disclosure that the non -GAAP measures exclude items that are “infrequent or unus ual in nature.” Please note Item 10(e) of Regulation S -K prohibits adjusting a non-GAAP financial performance measure to eliminate or smooth items identified as infrequent or unusual when the nature of the charge or gain is such that it is reasonably likely to recur within two years or there was a similar charge or gain within the prior two Dr. Yu Gong iQIYI, Inc. February 23, 2018 Page 2 years. Please revise your disclosure as appropriate. Also r efer to Question 102.03 of the staff’s Compliance and Disclosure Interpretations “Non -GAAP Financial Measur es” (“C&DI”) for guidance. 2. Your disclosure states the no n-GAAP measures are used to measure both your performance and your liquidity. In regards to the measure being presented as a liquidity measure, please tell us your consideration of also providing a reconciliation to operating cash flow as the most directly comparable GAAP measure to comply with Item 10(e)(1)(i)(B) of Regulation S -K. Notes to Consolidated Financial Statements 19. Loss Per Share , page F -48 3. Please revise or clarify to us your disclosure on page F -48 which states upon “automatic conversion of all of the Company’s redeemable convertible preferred shares… and all outstanding shares are re -designated into 416,314,037 Class A ordinary shares and 2,640,621,681 Class B ordinary shares” with your tabular disclosure on page F -49 which reflects 1.2B Class A ordinary shares and 2. 8B Class B ordinary shares upon the automatic conversion of the redeemable convertible preferred shares. You may contact Abe Friedman at (202) 551 -8298 or Theresa Brillant at (202) 551 -3307 if you have questions regarding comments on the financial statements and related matters. Please contact J. Nolan McWilliams, Attorney -Advisor , at (202) 551 -3217 or me at (202) 551 - 3469 with any other questions. Sincerely, /s/ Justin Dobbie Justin Dobbie Legal Branch Chief Office of Transportation and Leisure cc: Z. Julie Gao, Esq. Skadden, Arps, Slate, Meagher & Flom LLP