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United States securities and exchange commission logo
February 11, 2021
Mars Guangyuan Cai
Chief Executive Officer
Smart Share Global Ltd
6th Floor, 799 Tianshan W Road
Changning District, Shanghai 200335
People's Republic of China
Re: Smart Share Global
Ltd
Draft Registration
Statement on Form F-1
Submitted January
15, 2021
CIK No. 0001834253
Dear Mr. Cai:
We have reviewed your 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.
Draft Registration Statement on Form F-1 submitted January 15, 2021
Prospectus Summary, page 1
1. Please explain what you
mean by the statement that you have a massive online and offline
network. It is unclear
how this relates to your primary business of renting mobile device
chargers.
Mars Guangyuan Cai
FirstName
Smart ShareLastNameMars
Global Ltd Guangyuan Cai
Comapany11,
February NameSmart
2021 Share Global Ltd
February
Page 2 11, 2021 Page 2
FirstName LastName
2. Please disclose how you define a "registered user" and how this number
is calculated.
Please also tell us whether you use the number of registered users as
a key variable when
managing the business. If so, please disclose the number of registered
users in prior
periods and for the current period. If not, please tell us why
management does not use this
variable.
3. Please disclose how you define "prominent key accounts," whether by
contribution to
revenue, or otherwise. To the extent you are substantially dependent
on any such key
account, please disclose the account holder and discuss any agreements
with the KA.
4. Please balance your disclosure regarding your deep market expertise
and proven business
model with disclosure stating that you have only been in operation
since 2017.
5. We note your reference to "extensive coverage." Please revise your
disclosure here and
elsewhere in your prospectus to indicate the geographic areas in China
where your
cabinets are located.
Our Industry, page 5
6. Please balance your disclosure in this section to indicate that there
is increasing
availability of complimentary charging devices and that mobile devices
may be available
without charging docks in 8-10 years, as you disclose on page 122.
Use of Proceeds, page 82
7. We note that you intend to use proceeds from the offering for the
exploration of potential
mergers and acquisitions. To the extent that you have identified any
acquisition targets,
please provide the information required by Item 3.C of Form 20-F.
Capitalization, page 84
8. Please revise the second bullet point on page 84 to disclose the
amount of compensation
expense that will be recognized in your financial statements upon the
vesting of
20,250,000 of your founder's restricted shares upon the completion of
the offering.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
99
9. Please revise to disclose the impact of your direct operation model
versus your network
partner model on revenues, including how costs vary for your direct
operations and
network partnerships.
Key Factors Affecting Our Results of Operations
Our ability to efficiently control the overall incentive fees, page 100
10. You state that the increase in the incentive fee rate in 2020 was due
to an increase in
incentive fees paid as well as a decrease in revenues. However, we
note that incentive
Mars Guangyuan Cai
Smart Share Global Ltd
February 11, 2021
Page 3
fees consist of entry fees as well as commissions, and a decrease in
revenues would
suggest a decrease in commissions as well, which would result in a
decrease in the
incentive fee rate. So that investors can understand why the incentive
fee rate increased
despite the decrease in revenue, please disclose the percentage of
incentive fees that come
from entry fees versus commissions.
Impact of COVID-19 Pandemic on our Business, page 102
11. Please update and expand your discussion of the COVID-19 pandemic on
your results of
operations and operating income to include quantifying the decreases
in employee
headcount in the first and second quarters of 2020, reduced
commissions paid to local
network partners, and the improvement of your key financial and
operating metrics in the
third quarter of 2020. Refer to Item 303(a)(3)(ii) and (iii) of
Regulation S-K and the
Commission's CF Disclosure Guidance: Topic No. 9 and 9A.
Contractual Obligations, page 111
12. Please revise your table of contractual obligations to include the
contractual maturities of
the financing payables disclosed in your balance sheet.
Critical Accounting Policies and Significant Judgements and Estimates
Revenue Recognition
Mobile Device Charging Business, page 115
13. For your network partner model, please explain to us and expand your
disclosure to
discuss the method used to amortize incentive fees for entry fees and
commissions paid
to your partners. Refer to ASC 340-40-50-2.
Industry
Lagging battery technology breakthrough, page 121
14. We note your statement that "[a]ccording to the iResearch Report,
there are two main
ways for mobile devices, primarily smartphones, to increase their
battery capacities:
increasing physical sizes of the batteries, or increasing battery
energy density, neither of
which is feasible in the near term." Please provide additional support
for the statement
that "neither of which is feasible in the near term" or tell us why
iReseach is qualified to
make such a claim.
Continued expansion into lower-tier cities ..., page 124
FirstName LastNameMars Guangyuan Cai
15. We note your distinction between lower-tier cities, higher-tier cities,
Tier 1, Tier 2, and
Comapany
Tier NameSmart Share
3 cities. Please Global
revise Ltd each of these terms and clarify
which of your
to define
operating
February 11, 2021 models
Page 3are used in each city.
FirstName LastName
Mars Guangyuan Cai
FirstName
Smart ShareLastNameMars
Global Ltd Guangyuan Cai
Comapany11,
February NameSmart
2021 Share Global Ltd
February
Page 4 11, 2021 Page 4
FirstName LastName
Business, page 126
16. We note that you engage with a number of third parties, including
suppliers,
manufacturers, assembly partners, network partners, location partners,
and co-owners of
your advanced hardware and software technologies. To the extent you
have entered into
material agreements with any of these parties, please file copies of
such agreements as
exhibits. In particular, we note that ZMI accounts for a substantial
amount of your
purchases, and that you have amounts due of RMB 89.4 million from ZMI.
Please file
your agreements with ZMI. In addition, please file the notes you have
issued to ZMI, or
tell us why you are not required to do so. See Form 20-F, Instruction
2(b)(i) to Exhibits.
Relentless focus on technology, page 128
17. You disclose that you hold 23 patents related to power bank
technologies and design, and
own all patents relating to your devices except for two patents which
you co-own with
ZMI. Please revise to disclose the expiration dates for your material
issued patents, the
applicable jurisdictions, and clarify the nature of protection
provided by such patents.
Please also file the co-ownership agreement with ZMI, or tell us why
you are not required
to do so.
Direct Operation, page 134
18. Please disclose the general terms of your agreements with location
partners and with
network partners, including the duration and termination provisions.
Where you state that
your contracts are exclusive, please clarify if this prohibits the
partner from entering into
an agreement with any other mobile charging service provider.
19. Please indicate the percentage of POIs which operate under the direct
operation versus the
network partners model in prior periods so that investors are able to
determine any trends
in these models. Please provide similar information on the number of
network partners.
Our Operational Expertise, page 136
20. Where you state that you have achieved a larger market share than
those of your
competitors, please define the market and disclose your market share
for a particular
period as well as the market share for your competitors.
Description of Share Capital, page 183
21. Your authorized ordinary shares, convertible redeemable series A
preferred shares,
convertible redeemable series A-1 preferred shares, convertible
redeemable series B-1
preferred shares and convertible redeemable series C-2 preferred
shares as disclosed in the
second paragraph on page 183 are inconsistent with those disclosed in
your balance sheet
on page F-4. Please reconcile and revise these disclosures.
Mars Guangyuan Cai
FirstName
Smart ShareLastNameMars
Global Ltd Guangyuan Cai
Comapany11,
February NameSmart
2021 Share Global Ltd
February
Page 5 11, 2021 Page 5
FirstName LastName
22. We note your risk factor disclosure on page 67 regarding your
dual-class structure,
including the description of the provisions associated with your Class
B holder's
ownership of ordinary shares. Please revise your Description of Share
Capital section to
include a description of each of the provisions set forth in the risk
factor and also disclose
the percentage of outstanding shares that Class B ordinary
shareholders must keep to
continue to control the outcome of matters submitted to shareholders
for approval.
Exclusive Forum, page 187
23. We note that your post-offering memorandum and articles of association
and the deposit
agreement will include forum selection provisions that identify the
United States District
Court for the Southern District of New York (or, if the United States
District Court for the
Southern District of New York lacks subject matter jurisdiction over a
particular dispute,
the state courts in New York County, New York) as the exclusive forum
within the United
States for the resolution of any complaint asserting a cause of action
arising out of or
relating in any way to the federal securities laws of the United
States. With respect to
Securities Act claims, please state that investors cannot waive
compliance with the federal
securities laws and the rules and regulations thereunder. In that
regard, we note that
Section 22 of the Securities Act creates concurrent jurisdiction for
federal and state courts
over all suits brought to enforce any duty or liability created by the
Securities Act or the
rules and regulations thereunder.
You may contact Robert Shapiro at (202) 551-3273 or Linda Cvrkel at
(202) 551-3813 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Cara Wirth at (202) 551-7127 or Erin Jaskot at (202) 551-3442 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade
& Services
cc: Z. Julie Gao