August 25, 2015
Securities and Exchange Commission
Division of Corporate Finance
100 F Street, NE
Washington, D.C. 20549
Attn: Matthew Crispino, Staff Attorney
Re: | LookSmartGroup,Inc. | |
RegistrationStatementonForm 10-12G | ||
FiledMay4, 2015 | ||
FileNo.000-55440 |
DearMr.Crispino:
LookSmart Group, Inc. (the “Company”) hereby submits its response to Question 2 raised by the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) in its letter of comments dated May 19, 2015 (the “Comment Letter”) relating to the Company’s Registration Statement on Form 10-12G. Please note that based on conversations with the staff, we have not addressed comment #1 as the staff has advised that we can use a Form 10. Accordingly, we have a re-filed an updated Form 10-12G.
For your convenience, each of the Staff’s comments contained in the Comment Letter has been restated below in its entirety, with the Company’s response set forth immediately beneath such comment, with the Company’s responses being numbered to correspond to the Staff’s comments.
General
2.It appears thatthenotestoyour financial statementsinclude duplicated information withinyourdiscussion ofstock basedcompensation, beginning on page74,and omit incometaxinformation requiredbyASC740-10-50, within Note8 toyourfinancial statements. As such, itis unclearwhetheror notyou haveprovidedcompleteaudited financial statements asrequiredby Rule8-01 ofRegulationS-X.Inaddition, wenote that theaudited financial statements providedareidenticalto thoseofLookSmart,Ltd.In light of thefactthatLookSmart,Ltd. formedLookSmartGroup,Inc.and transferredallof the business, assets and liabilities toLookSmart Group,Inc., itis unclear howtheequity ofLookSmartGroup,Inc.,as currentlypresented intheconsolidated statementsofstockholders equityand balance sheets, wouldcontinue to be identicalto that ofLookSmart,Ltd.Therefore, wewillnot undertake areview ofthe related financial statements untilthe revisionsarecompletedandwe are assured that both theform andcontent of thefinancial statements provided meettherequirements within Rule 8-01 ofRegulationS-Xas wellas appropriatelyreflect all of thetransactionsassociated withthe spin-off.
Response 2:
The Company has reviewed the financial statements and notes to the financial statements contained in its Registration Statement on Form 10-12G originally filed with the Commission on May 19, 2015. The Company has structured its response in segments corresponding to the issues raised by Question 2 above.
Duplicated Information
The Company acknowledges that the notes to the financial statements included duplicated information within the discussion of stock based compensation, beginning on page 74. The duplicated information has been removed in the Form 10-12G filed simultaneously hereto.
Complete Audited Financial Statements
The Staff raised the question of whether the Company has provided complete audited financial statements as required by Rule 8-01 of Regulation S-X. The Staff’s noted the omission of certain income tax information required by ASC 740-10-50, which should be provided in Note 8 to the financial statements. The Company communicated with its auditor about this matter, and the auditor has revised Note 8 of the financial statements to include the missing information. Please see the financial statements contained within the simultaneously filed Form 10-12G.
Financial Statements Identical to LookSmart, Ltd.
The Staff noted that the financial statements contained in the Company’s registration statement on Form 10-12G are identical to those of LookSmart, Ltd., and asked how this could be the case given that LookSmart, Ltd. formed LookSmart Group, Inc. and transferred all the business. assets and liabilities to LookSmart Group, Inc. The Staff highlighted the question of how the equity of LookSmart Group, Inc., as presented in the consolidated statements of stockholders’ equity and balance sheets, could be identical to that of LookSmart, Ltd.
The Company notes that the information statement contains the following preamble to the financial statements:
This information statement describes the assets to be transferred to us by LS in the separation as if the transferred assets were our business for all historical periods described. References in this information statement to our historical assets, liabilities, products, businesses or activities of our business are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the transferred businesses as the businesses were conducted as part of LS and its subsidiaries prior to the separation.
The Company believes it is appropriate to provide identical financial information, because the Company acquired all the assets, operations and liabilities of LookSmart, Ltd. The Company was formed by LookSmart, Ltd. in anticipation of spinning out the shares of LookSmart Group, Inc. Each shareholder of LookSmart, Ltd. received one share of the Company for every share of LookSmart, Ltd. held. For this reason, the equity, in addition to the financial information, is identical to that of LookSmart, Ltd.
Based on this comment and changes to the Company’s corporate structure relating to the amended Assignment and Assumption Agreement between the Company and LookSmart, the Company has filed revised financial statements as part of its newRegistration Statement on Form 10-12G filed simultaneously hereto.
Should you have any questions regarding the foregoing, please do not hesitate to contact Arthur Marcus, Jay Kaplowitz or Jennifer Rodriguez, counsel for the undersigned at (212) 930-9700.
Yours truly, | ||
\s\ Michael Onghai | ||
Michael Onghai | ||
cc: Sichenzia Ross Friedman Ference LLP |