United States securities and exchange commission logo
September 11, 2020
Peter Leav
Chief Executive Officer
Greenseer Holdings Corp.
2821 Mission College Blvd.
Santa Clara, CA 95054
Re: Greenseer Holdings
Corp.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted August
17, 2020
CIK No. 0001783317
Dear Mr. Leav:
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. References to prior comments are to comments in our September
4, 2019 letter.
Amendment No. 1 to Draft Registration Statement on Form S-1
Prospectus, page 1
1. We note you have
revised the bullet-pointed financial performance highlights on page 3 to
remove Net Loss Margin,
but that you continue to present Adjusted EBITDA Margin.
Please revise to either
include disclosure of Net Loss Margin with equal or greater
prominence or remove
Adjusted EBITDA Margin. Refer to Item 10(e)(1)(i)(A) of
Regulation S-K.
Peter Leav
FirstName LastNamePeter
Greenseer Holdings Corp. Leav
Comapany 11,
September NameGreenseer
2020 Holdings Corp.
September
Page 2 11, 2020 Page 2
FirstName LastName
Risk Factors
"The COVID-19 pandemic has affected how we are operating our business", page 26
2. You state that the COVID-19 pandemic has resulted in an increased
demand for your
solutions in recent quarters. Please revise this risk factor to
quantify the impact COVID-
19 has had on your subscriptions and number of end-user customers.
Industry and Market Data, page 78
3. We note the statement in this section that the market and industry
data included in the
prospectus, and estimates and beliefs based on that data, may not be
reliable. Please revise
your disclosure to remove any implication that you are not responsible
for the accuracy of
the information you elect to include in your prospectus.
Selected Consolidated and Combined Financial and Other Data
Non-GAAP Financial Measures, page 96
4. We believe that your presentation of Billings inclusive of purchase
accounting
adjustments substitutes individually tailored recognition and
measurement methods for
those of GAAP. Please revise to remove these adjustments from your
Billings measure on
both the total company and segment bases. Refer to Question 100.04 of
the Non-GAAP
Compliance and Disclosure Interpretations and Rule 100(b) of
Regulation G.
5. We note your response to prior comment 11. We continue to believe
making purchase
accounting adjustments for deferred revenue and deferred costs to your
total company and
segment measures substitutes individually tailored recognition and
measurement methods
for those of GAAP. Please revise to remove these adjustments. Refer to
Question 100.04
of the Non-GAAP Compliance and Disclosure Interpretations and Rule
100(b) of
Regulation G.
6. We note your response and revised disclosures related to prior comment
14. We continue
to believe that adjusting for the expenses allocated by Intel in
excess of estimated stand-
alone costs substitutes individually tailored recognition and
measurement methods for
those of GAAP. Please revise to remove these adjustments. Refer to
Question 100.04 of
the Non-GAAP Compliance and Disclosure Interpretations and Rule 100(b)
of Regulation
G.
7. We note your disclosure of Adjusted operating income margin, Adjusted
EBITDA
margin, and Adjusted net income margin. Please revise your disclosure
to present the
comparable GAAP margin for each non-GAAP margin measure. Refer to Item
10(e)(1)(i)(B) of Regulation S-K and footnote 27 of SEC Release No.
33-8176.
8. We note that you have defined free cash flow as net cash provided by
operating activities
less capital expenditures. Please clarify why your measure of free
cash flow also
contemplates Other investment activities. Considering your inclusion
of outflows related
to Other investment activities, please also re-title the measure to
distinguish it from free
Peter Leav
Greenseer Holdings Corp.
September 11, 2020
Page 3
cash flow. Refer to Question 102.07 of the Non-GAAP Compliance and
Disclosure
Interpretations and Rule 100(b) of Regulation G.
Management's Discussion and Analysis of Results of Operations and Financial
Condition
Key Operating Metrics, page 112
9. We note your response to prior comment 17 and related revised
disclosures on page 111.
However, we were unable to find disclosure of the definition of how
the recurring revenue
percentage is calculated. Please revise to include this definition,
and consider addressing
this metric within your Key Operating Metrics section here.
10. We note your disclosure that increases in Monthly Core Direct to
Consumer Customers
Average Revenue Per Customer (ARPC) are due primarily to package
upsales and
pricing. Please tell us how you track these two factors within the
context of this metric.
In this regard, tell us how you determine that increases in your
pricing do not offset
decreases in your customer purchases (e.g., purchasing fewer products
or downgrading
their services). To the extent you track pricing changes separately
from upselling efforts,
please revise to describe this and provide a discussion of
fluctuations in this metric from
period to period.
11. We note the new disclosure of your metric Trailing Twelve Months
Dollar Based
Retention Rate - Core Direct to Consumer Customers (TTM), which
measures the renewal
rate of your core direct to consumer customers. In response to prior
comment 21, you
stated that you do not separately track various drivers of revenue,
including changes in
revenues due to new versus existing customers. However, this metric
seems to indicate
that you do monitor renewals and the related revenue from renewing
customers. Please
revise to clarify whether you do track renewing versus new customers,
and include a
discussion of the fluctuations in this metric and/or your results of
operations due to these
factors.
12. We note your revised definition of Core Enterprise Customers on page
113. Please revise
to define an "end of life customer" in this context. Further, we note
this metric has been
declining slightly. Please revise to provide a discussion of the
fluctuations in this metric
from period to period. Explain whether management expects the decrease
in the number
of its Core Enterprise Customers and the increase in the number of its
Core Direct to
FirstName LastNamePeter Leav
Consumer Customers to continue in future periods. Also, please disclose
that your
Comapany NameGreenseer
Fortune 100, FortuneHoldings Corp. 2000 customers are Enterprise
customers and
500 and Global
explain
September 11, how
2020many
Page in
3 each cohort are Core Enterprise Customers.
FirstName LastName
Peter Leav
FirstName LastNamePeter
Greenseer Holdings Corp. Leav
Comapany 11,
September NameGreenseer
2020 Holdings Corp.
September
Page 4 11, 2020 Page 4
FirstName LastName
Results of Operations, page 123
13. We note your response to prior comment 20. We continue to believe that
the current
presentation does not comply with the guidance in Article 11 of
Regulation S-X and/or
with GAAP standards. As such, please revise or provide us with a
detailed analysis of
how you were able to conclude that providing a pro forma presentation
in compliance
with Article 11 would not be materially different from the current
presentation.
Notes to the Combined (Predecessor) / Consolidated (Successor) Financial
Statements
Note 2: Significant Accounting Policies
Revenue Recognition, page F-9
14. We note your response and revised disclosure to prior comment 29.
Please also similarly
revise your disclosure on page 118 related to the impact of adoption
of ASC 606.
Note 12: Employee Incentive / Benefit Plans, page F-32
15. Please revise to describe the nature of the qualifying liquidity event
that would trigger the
vesting requirements for your various equity-based employee plans.
16. Please revise to address how you determine the underlying fair value
of the units used in
determining the fair value of your equity awards using the
Black-Scholes model. In this
regard, you state on page F-14 that this requires significant
management judgment.
17. We note the fair value of your performance-based MEPUs decreased from
$55 million for
the fiscal year ended December 29, 2018 to $15 million for the fiscal
year ended
December 28, 2019, but that market data used for the fair value
determinations were based
on information available at March 2019 and June 2019, respectively.
Please tell us the
reason for the significant decline in fair value of these awards.
You may contact Brittany Ebbertt, Senior Staff Accountant, at (202)
551-3572 or Craig
Wilson, Senior Advisor, at (202) 551-3226 if you have questions regarding
comments on the
financial statements and related matters. Please contact Matthew Crispino,
Staff Attorney, at
(202) 551-3456 or Jan Woo, Legal Branch Chief, at (202) 551-3453 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Thomas Holden, Esq.