View:
Mail Room 3233
September 12, 2017
Via E-mail
David Ross Sisk
Property President
Studio City International Holdings Limited
36/F, The Centrium
60 Wyndham Street
Hong Kong
Re: Studio City International Holdings Limited
Draft Registration Statement on Form F-1
Submitted August 14, 2017
CIK No. 0001713334
Dear Mr. Sisk:
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.
General
1. Please supplementally provide us with copies of all written
communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your
behalf, present to potential investors in reliance on Section 5(d) of the
Securities Act,
whether or not they retain copies of the communications, as applicable.
2. We note that you have included images in the prospectus. If there are
other graphics,
maps, photographs, and related captions or other artwork including logos
that you intend
to use in the prospectus, please provide us with copies and note that
such graphics and
David Ross Sisk
Studio City International Holdings Limited
September 12, 2017
Page 2
pictorial representations should not be included in any preliminary
prospectus distributed
to prospective investors prior to our review.
3. We note your disclosure on page 63 that, in a concurrent transaction with
the public
offering, Melco International intends to purchase ordinary shares from
you in the form of
ADSs needed for the distribution in specie and that the purchases will be
at the public
offering price of the ADSs. Please provide us with your analysis as to
how this separate
transaction and distribution will be exempt from registration and
consistent with Section
5 of the Securities Act.
4. We note your disclosure on page 24 that you are in the early stages of
development of the
remaining project. Please revise your disclosure, where applicable, to
provide the
anticipated completion date, scope of development, costs incurred to date
and budgeted
costs. Finally, please tell us the status of the extension on the land
concession contract
you requested with the Macau government.
Use of Proceeds, page 54
5. Please revise to describe the interest rate and maturity of the
indebtedness. If any of the
indebtedness was incurred within the past year, please revise to disclose
the uses to which
the proceeds of such indebtedness were put. Refer to Item 3.C.4 of Form
20-F.
Dilution, page 57
6. Please revise to provide the information required by Item 9.E.1. of Form
20-F or tell us
why such revisions are not necessary.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
67
Description of Certain Statements of Operations Items, page 70
7. We note your disclosure on pages 70-71 in regards to Studio City Casino's
gross gaming
revenues and the recognized revenue after the Gaming Operator deducted
tax and costs
incurred in connection with its operation of Studio City Casino. Please
revise your
disclosure here and elsewhere to discuss in greater detail the deducted
tax and costs
incurred along with any relevant terms of the agreements between Studio
City and Melco
Resorts related to the tax and costs.
Statement of Operations, page F-4
8. Please revise your Statements of Operations to disclose related party
amounts associated
with the line items presented. Reference is made to Rule 4-08(k) of
Regulation S-X.
David Ross Sisk
Studio City International Holdings Limited
September 12, 2017
Page 3
Note 2. Summary of Significant Accounting Policies
(n) Revenue Recognition, page F-12
9. It appears that you recognize revenues from gaming operations on a net
basis in the line
item "provision of gaming related services". Please tell us how you
considered the
guidance in ASC 605-45 in your determination that this presentation is
appropriate.
10. We note your disclosure that you recognize the residual amount of gaming
revenues as a
result of the Services and Rights to Use Arrangements with Melco Crown
Macau
(Gaming Operator). Please tell us how you considered the guidance in ASC
810 in
determining that Gaming Operator is not a variable interest entity and
you should not
consolidate it. Include in your analysis the following:
An explanation of the design and purpose of Gaming Operator
and the
Company along with the effect regulations had on the designs
of the
respective entities;
Your consideration of the Company and Gaming Operator being
under
common control on your analysis; and
Your consideration of ASC 810-10-55-37 in determining that
the fees do not
represent a variable interest in Gaming Operator.
Recent Accounting Pronouncements not yet adopted, page F-14
11. You state that you are in the process of evaluating the impact that the
amended revenue
recognition guidance in Topic 606 will have on your consolidated
financial statements.
Please revise to provide qualitative financial statement disclosures of
the potential impact
that this standard will have on your financial statements when adopted.
In this regard,
include a description of the effects of the accounting policies that you
expect to apply, if
determined, and a comparison to your current revenue recognition
policies. Describe the
status of your process to implement the new standard and the significant
implementation
matters yet to be addressed. In addition, to the extent that you
determine the quantitative
impact that adoption of Topic 606 is expected to have on your financial
statements,
please also disclose such amounts. Please refer to ASC 250-10-S99-6 and
SAB Topic
11.M
Item 7. Recent Sales of Unregistered Securities, page II-1
12. Please tell us what consideration you gave to providing the information
required by Item
701 of Regulation S-K with respect to Melco International's concurrent
private
placement.
David Ross Sisk
Studio City International Holdings Limited
September 12, 2017
Page 4
Exhibit Index, page II-5
13. Please include as exhibits the Subscription Agreement with Melco
International, the
Employment Agreements, and the agreements relating to the Services and
Right to Use
Arrangement and Management and Shared Services Arrangement or advise.
14. If you are not in a position to file the legal and tax opinions in your
next amendment,
please provide draft copies for our review.
You may contact William Demarest, Staff Accountant, at (202) 551-3432
or Sharon
Sobotka, Staff Accountant, at (202) 551-3856 if you have questions regarding
comments on the
financial statements and related matters. Please contact Folake Ayoola, Senior
Counsel, at (202)
551-3673 or me at (202) 551-3233 with any other questions.
Sincerely,
/s/ Tom Kluck
Tom Kluck
Legal Branch Chief,
Office of Real
Estate and
Commodities