View:
March 20, 2019
Reinout Schakel
Chief Financial Officer
Luckin Coffee Inc.
17F Block A, Tefang Portman Tower
No. 81 Zhanhong Road
Siming District, Xiamen, Fujian
People's Republic of China, 361008
Re: Luckin Coffee Inc.
Draft Registration Statement on Form F-1
Submitted February 22, 2019
CIK No: 0001767582
Dear Mr. Schakel:
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.
DRS filed on February 22, 2019
General
1. Please provide us with copies of any additional graphics, maps,
photographs, and related
captions or other artwork including logos that you intend to use in the
prospectus. Keep in
mind, in scheduling printing and distributing of the preliminary
prospectus, that we may
have comments after reviewing the materials. For guidance, refer to
Securities Act Forms
Compliance and Disclosure Interpretation 101.02.
Reinout Schakel
FirstName LastNameReinout Schakel
Luckin Coffee Inc.
Comapany2019
March 20, NameLuckin Coffee Inc.
March 20, 2019 Page 2
Page 2
FirstName LastName
Our Challenges, page 2
2. Consistent with your disclosure on page 14, please disclose the fact
that your products are
not proprietary and briefly discuss the associated challenges.
Use of Proceeds, page 50
3. Refer to the second paragraph. Please quantify the estimated proceeds
which may be
loaned or contributed to your PRC subsidiaries without additional
registration or
approval. To the extent you will be required to obtain additional
approvals to loan or
contribute the proceeds of the offering, also discuss the anticipated
time frame for receipt
of and the likelihood you will obtain the necessary approvals.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 72
4. Please consider providing a note to the table presented on page 67 of
Key Metrics to
explain "cumulative".
Liquidity and Capital Resources, page 77
5. We note that cost of materials and store rental and other operating
costs exceed total
revenues, and we also note that you expect operating costs to continue
to increase as you
further increase brand awareness and expand your customer base and
store network. In
light of these factors, please include a discussion in the liquidity
section on whether you
consider this a trend that is expected to continue or change, and if
so, when, and also
discuss the specific factors that constrain management's ability to
reverse this trend. See
Part I, Item 5.D of Form 20-F.
6. We note per page 19 that you typically enter into purchase agreements
with suppliers for a
term of one year. Please disclose these agreements as a purchase
obligation in the Tabular
disclosure of contractual obligations pursuant to Part I, Item 5.F of
Form 20.
Capital Expenditures, page 78
7. Please revise to disclose the company's material commitments for
capital expenditures as
of the end of the latest fiscal year pursuant to Part I, Item 5.B of
Form 20-F
Quantitative and Qualitative Disclosures about Market Risk, page 84
8. We note your disclosure under Foreign Currency Risk that the
(depreciation) /
appreciation of the U.S. dollars against Renminbi was approximately
(3.9%) and 5.0% for
the period from June 16, 2017 (inception date) through December 31,
2017 and for the
year ended December 31, 2018, respectively, and that significant
revaluation of Renminbi
may materially and adversely affect your cash flows, revenues,
earnings and financial
position in U.S. dollars. Please revise to include the quantitative
disclosures about this
Reinout Schakel
Luckin Coffee Inc.
March 20, 2019
Page 3
risk in one of the suggested formats outlined in Part I, Item 11 of
Form 20-F, for this and
any other material market risk.
Licenses and Compliance, page 96
9. Please balance your disclosure here that you have standard internal
protocols in place
guiding city branches and strategic expansion teams in obtaining
necessary licenses and
permits before opening your stores, with the risk factor disclosure on
page 16 that some of
your stores have not obtained required licenses or completed required
regulatory filings.
User Privacy and Data Security, page 101
10. We note the disclosure here that you have adopted policies, procedures
and guidelines to
comply with cybersecurity laws and regulations and protect the
personal privacy of your
customers and the security of their data. We also note your risk
factor disclosure on page
22 that you "have in the past and are likely again in the future to be
subject to these types
of attacks, although to date no such attack has resulted in any
material damages or
remediation costs." Since it appears that cybersecurity risks are
material to your business,
please disclose the nature of the board's role in overseeing your
cybersecurity risk
management, the manner in which the board administers this oversight
function and any
effect this has on the board's leadership structure.
Note 19. Commitments and Contingencies, page F-38
11. We note from your disclosures in the last Risk Factor of page 16 that
you may be subject
to fines pertaining to non-compliance with property ownership
certificates, registered
leasing agreements, licenses, approvals and permits, that appear to be
potentially
material. Please tell us whether you believe there is at least a
reasonable possibility that a
loss may be incurred requiring ASC 450-20-50-3 disclosure.
You may contact Effie Simpson at 202-551-3346 or Theresa Brillant at
202-551-3307 if
you have questions regarding comments on the financial statements and related
matters. Please
contact John Stickel at 202-551-3324 or J. Nolan McWilliams at 202-551-3217
with any other
questions.
FirstName LastNameReinout Schakel Sincerely,
Comapany NameLuckin Coffee Inc.
Division of
Corporation Finance
March 20, 2019 Page 3 Office of
Transportation and Leisure
FirstName LastName