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United States securities and exchange commission logo
February 28, 2022
Larry Wu
Chairman and Chief Executive Officer
GigaCloud Technology Inc.
Unit A, 12/F, Shun Ho Tower
24-30 Ice House Street
Central
Hong Kong
Re: GigaCloud
Technology Inc.
Amendment No. 4 to
Draft Registration Statement on Form F-1
Submitted January
31, 2022
CIK No. 0001857816
Dear Mr. Wu:
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.
Amendment No. 4 to Draft Registration Statement on Form F-1 Submitted
January 31, 2022
Cover Page
1. We note your amended
disclosure in response to Comment 1, but the disclosure does not
fully comply with the
comment. Please revise the disclosure on your prospectus cover
page to more
prominently disclose that you are not a Chinese operating company but a
Cayman Islands holding
company, with operations conducted by your subsidiaries based
in China and Hong Kong,
and that this structure involves unique risks to investors. The
current disclosure on
your prospectus cover page only indicates that your "corporate
structure involves
unique risks to investors" based on the fact that "they are purchasing
Larry Wu
GigaCloud Technology Inc.
February 28, 2022
Page 2
equity securities in a Cayman Islands holding company." Disclose that
investors may
never directly hold equity interests in your China- and Hong
Kong-based subsidiaries and,
in doing so, ensure that you explicitly reference your China- and Hong
Kong-
based subsidiaries. In this regard, we note the current disclosure on
the prospectus cover
page only refers to your "subsidiaries" in general, without explicitly
referencing your
China- and Hong Kong-based subsidiaries. Your disclosure should
acknowledge that
Chinese regulatory authorities could disallow this structure, which
would likely result in a
material change in your operations and/or a material change in the
value of the securities
you are registering for sale, including that it could cause the value
of such securities to
significantly decline or become worthless. Include similar disclosure
in your risk factors
and provide specific cross-references here to your detailed discussion
of each of the risks
facing the company and the offering as a result of this structure.
2. We note your amended disclosure in response to Comment 2, but we note
that it does not
fully comply with the comment. Please further revise the prospectus
cover page to more
prominently disclose the legal and operational risks associated with
being based in or
having the majority of your operations in Hong Kong and thereby
subject to political and
economic influence from China. In this regard, the current disclosure
on your prospectus
cover page only addresses how the Chinese government has authority to
exert political
and economic influence on a company with operations in mainland China.
Please also
revise your disclosure to make clear that these risks could result in
a material change in
your operations and/or the value of the securities you are registering
for sale or could
significantly limit or completely hinder your ability to offer or
continue to offer securities
to investors and cause the value of such securities to significantly
decline or be worthless.
Your disclosure should also address how recent statements and
regulatory actions by
China s government related to China s extension of authority into
Hong Kong, have or
may impact the company s ability to conduct its business, accept
foreign investments, or
list on a U.S. or other foreign exchange. In addition, please disclose
whether your auditor
is subject to the determinations announced by the PCAOB on December
16, 2021 and
whether and how the Holding Foreign Companies Accountable Act and
related
regulations will affect your company. Your prospectus summary should
address, but not
necessarily be limited to, the risks highlighted on the prospectus
cover page.
3. Clearly disclose how you will refer to the holding company and
subsidiaries when
providing the disclosure throughout the document so that it is clear to
investors which
entity the disclosure is referencing and which subsidiaries or entities
are conducting the
business operations. We note your disclosure that "[i]n this prospectus,
'we,' 'us,' 'our
company,' 'our,' 'our group,' 'GigaCloud,' or 'GigaCloud Technology'
refer to GigaCloud
Technology Inc, our Cayman Islands holding company, its predecessor
entity, its
FirstName LastNameLarry Wu
subsidiaries, its consolidated VIEs and any subsidiaries of its
consolidated VIEs, as the
Comapany NameGigaCloud
context Technology
requires." Refrain Inc. terms such as we or
our when describing
from using
activities
February 28, 2022or Page
functions
2 of a PRC or Hong Kong subsidiary.
FirstName LastName
Larry Wu
FirstName
GigaCloud LastNameLarry
Technology Inc.Wu
Comapany28,
February NameGigaCloud
2022 Technology Inc.
February
Page 3 28, 2022 Page 3
FirstName LastName
4. Provide a description of how cash is transferred through your
organization. State whether
any transfers, dividends, or distributions have been made to date
between the holding
company, its subsidiaries, or to investors, and quantify the amounts
where applicable.
Prospectus Summary
Risks Related to Doing Business in China, page 8
5. We note your response to Comment 3, and the amended disclosure you
provided in your
summary discussion of the risks related to doing business in China.
Please enhance your
disclosure in this section to include a more complete discussion of
the significant
regulatory, liquidity, and enforcement risks that being based in Hong
Kong and having the
majority of your operations in China and Hong Kong, poses to
investors. For example,
specifically discuss risks arising from the legal system in China,
including risks and
uncertainties regarding the enforcement of laws as well as China's
extension of authority
into Hong Kong, and that rules and regulations in China can change
quickly with little
advance notice. In addition, expand the fourth bullet point on page 8
to clarify that you
are based in Hong Kong and the majority of your operations are in
China and Hong Kong,
if true. Please also expand this bullet point to clarify that the
Chinese government
may exert more control over offerings conducted overseas and/or
foreign investment in
China- and Hong Kong-based issuers, which could result in a material
change in your
operations and/or the value of the securities you are registering for
sale. Further, please
add disclosure in this section acknowledging any risks that any
actions by the Chinese
government to exert more oversight and control over offerings that are
conducted overseas
and/or foreign investment in China- and Hong Kong-based issuers could
significantly
limit or completely hinder your ability to offer or continue to offer
securities to investors
and cause the value of such securities to significantly decline or be
worthless. Further,
with respect to the risks you discuss here and that were identified in
Comment 3, please
provide specific cross-references to the individual risk factors that
discuss the risks in
greater detail.
As a related matter, we note your disclosure in the fourth bullet
point on page 8 that, "The
PRC government may . . . intervene in or influence our operations at
any time, which
could result in a material change in our operations and/or the value
of our securities."
Please revise the language stating "value of our securities" to
indicate "the value of the
securities" you "are registering for sale."
Recent Regulatory Development
Cybersecurity Measures and Potential CSRC Filing For Overseas Listing, page 9
6. We note your amended disclosure on pages 9-10 in response to Comment
4, and we
reissue our comment in part. While you state on page 10 that you do
not believe you are
required to file with the Cyberspace Administration of China (CAC) for
a cybersecurity
review, your disclosure in this section does not affirmatively state
whether you or your
subsidiaries are required to obtain any other permissions or approvals
from any Chinese
Larry Wu
FirstName
GigaCloud LastNameLarry
Technology Inc.Wu
Comapany28,
February NameGigaCloud
2022 Technology Inc.
February
Page 4 28, 2022 Page 4
FirstName LastName
authorities to operate your business and to offer the securities being
registered to foreign
investors. Please also state whether you or your subsidiaries are
covered by permissions
requirements from the China Securities Regulatory Commission (CSRC),
CAC or any
other governmental agency that is required to approve your operations,
and state
affirmatively whether you have received all requisite permissions or
approvals and
whether any permissions or approvals have been denied. In instances
where the
regulations governing such permissions or approvals have yet to go
into effect, such
as the CSRC s Draft Overseas Listing Rules, please disclose whether
you believe you
would be subject to such rules and regulations if they were enacted,
as currently
proposed. In this regard, we note your risk factor disclosure on pages
54, 56, and 58
seems to suggest that you may be subject to the Draft Overseas Listing
Rules if they were
enacted. Further, please also describe the consequences to you and
your investors if you
or your subsidiaries: (i) do not receive or maintain such permissions
or approvals, (ii)
inadvertently conclude that such permissions or approvals are not
required, or (iii)
applicable laws, regulations, or interpretations change and you are
required to obtain such
permissions or approvals in the future.
7. Please also revise this section to affirmatively state whether you and
your subsidiaries are
covered by each of the laws and regulations of the People's Republic
of China you discuss
in this section, such as the NDRC's and MOFCOM's Measures for the
Security Review of
Foreign Investments. Additionally, if you do not believe you would be
subject to any of
the rules or regulations discussed in this section, please explain
why. As applicable, make
conforming revisions to the disclosure in your risk factors.
Risk Factors
Risks Related to Doing Business in China
We operate our GigaCloud Marketplace through our Hong Kong subsidiary . . .,
page 48
8. We note your response to Comment 6, and your amended disclosure
included on page 48.
Please revise your disclosure in this risk factor to highlight the
risk that the Chinese
government may intervene or influence your operations in Hong Kong at
any time, which
could result in a material change in your operations and/or the value
of the securities you
are registering.
The PRC government may exercise significant oversight and discretion over . .
.., page 53
9. Please revise your disclosure in this risk factor to specifically
highlight the risk that the
Chinese government may intervene or influence your operations at any
time, which could
result in a material change in your operations and/or the value of the
securities you are
registering. In this regard, please also revise the phrase "the value
of our securities" in the
heading of this risk factor to specifically state "the value of the
securities" you "are
registering." Also, given recent statements by the Chinese government
indicating an
intent to exert more oversight and control over offerings that are
conducted overseas
and/or foreign investment in China- and Hong Kong-based issuers,
acknowledge the risk
Larry Wu
GigaCloud Technology Inc.
February 28, 2022
Page 5
that any such action could significantly limit or completely hinder your
ability to offer or
continue to offer securities to investors and cause the value of such
securities to
significantly decline or be worthless.
Risks Related to the ADSs and this Offering
Our ADSs may be delisted under the HFCA Act if the PCAOB is . . ., page 72
10. We note your disclosure that the United States Senate has passed the
Accelerating
Holding Foreign Companies Accountable Act, which, if enacted, would
decrease the
number of non-inspection years from three years to two years.
Please add disclosure
that provides that, if enacted, this would reduce the time before your
securities may be
prohibited from trading or delisted. Please make conforming revisions to
your disclosure
on page 11.
Regulation, page 148
11. We note your response to Comment 7, and the amended disclosure on pages
148-51
and 154-58. However, your amended disclosure is only partially responsive
to the
comment. Please further revise your disclosure in this section to discuss
the effects of
each of the various regulations that you describe here on your business,
so that investors
can understand how the regulations are applicable to you, as well as the
nature and degree
of impact of such regulations on your business.
Please contact Nicholas Lamparski at 202-551-4695 or Jennifer L pez at
202-551-3792
with any other questions.
Sincerely,
FirstName LastNameLarry Wu
Division of
Corporation Finance
Comapany NameGigaCloud Technology Inc.
Office of Trade &
Services
February 28, 2022 Page 5
cc: Benjamin Su
FirstName LastName