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United States securities and exchange commission logo
May 26, 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. 6 to
Draft Registration Statement on Form F-1
Submitted April 29,
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. 6 to Draft Registration Statement on Form F-1 Submitted
April 29, 2022
Cover Page
1. We note your response
to comment 1 and your amended disclosure on the cover page.
Please include
additional disclosure on your cover page acknowledging the risk that
Chinese regulatory
authorities could change the rules and regulations regarding foreign
ownership in the
industry in which you operate, 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
Larry Wu
FirstName
GigaCloud LastNameLarry
Technology Inc.Wu
Comapany
May NameGigaCloud Technology Inc.
26, 2022
May 26,
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and provide a specific cross-reference here to the individual risk
factor that discusses this
risk.
2. We note your discussion relating to how cash generated in your PRC
subsidiaries and
Hong Kong subsidiary may not be used to fund operations outside of the
PRC or Hong
Kong due to limitations placed by the PRC government. We also note
your disclosure
that there can be no assurance that the PRC government will not
intervene or impose
restrictions on GigaCloud Group s ability to transfer or distribute
cash within its
organization. Please include similar disclosure in your summary risk
factors and risk
factors sections and provide cross-references here to your discussions
of these issues
in your summary risk factors and risk factors sections.
As a related matter, we note that you have quantified the aggregate
transfers between the
holding company, its subsidiaries, and investors. To the extent
possible, please quantify
the amounts that specifically relate to your PRC and Hong Kong
entities.
3. Please amend your disclosure here and in the summary risk factors and
risk factors
sections to state that, to the extent assets (other than cash) in the
business are in the PRC
or Hong Kong or a PRC or Hong Kong entity, the assets may not be
available to fund
operations or for other use outside of the PRC or Hong Kong due to
interventions in or the
imposition of restrictions and limitations on the ability of you or
your subsidiaries by the
PRC government to transfer assets. On the cover page, provide
cross-references to these
other discussions.
4. Please discuss whether there are limitations on you or your
subsidiaries' ability to transfer
cash to investors. Where you discuss limitations on your ability to
transfer cash between
you, your subsidiaries or investors, provide a cross-reference to your
discussion of this
issue in your prospectus summary, summary risk factors, and risk
factors sections, as well.
5. To the extent you have cash management policies that dictate how funds
are transferred
between you, your subsidiaries, or investors, summarize the policies
on your cover page
and in the prospectus summary, and disclose the source of such
policies (e.g., whether
they are contractual in nature, pursuant to regulations, etc.);
alternatively, state on the
cover page and in the prospectus summary that you have no such cash
management
policies that dictate how funds are transferred. Provide a
cross-reference on the cover
page to the discussion of this issue in the prospectus summary.
Prospectus Summary
Recent Regulatory Development
Cybersecurity Measures and Potential CSRC Filing For Overseas Listing, page 12
6. We note your amended disclosure in response to comment 10, and we
reissue the
comment in part. In this regard, we note your disclosure that "[you]
may be" subject to
additional compliance requirements. Please affirmatively state whether
you believe that
you, your Hong Kong subsidiary, and/or your PRC subsidiaries would be
subject to
Larry Wu
GigaCloud Technology Inc.
May 26, 2022
Page 3
the CSRC s Draft Overseas Listing Rules if they were enacted before
the completion of
this offering and listing. To the extent that you do not believe that
you and such entities
would be subject to this regulation if it were enacted before the
completion of this offering
and listing, please explain why.
Conventions that Apply to this Prospectus, page 18
7. Please revise your disclosure on page 18 to remove the exclusion of
Taiwan, Hong Kong,
and Macau from the definition of "China" and the "PRC."
Risk Factors
Risks Related to Our Business and Industry
Our failure or the failure of third-party service providers to protect our
marketplace, networks
and systems against security breaches . . ., page 36
8. Your disclosure suggests you are subject to material cybersecurity
risks in your supply
chain based on third-party products, software, services, and business
and how a
cybersecurity incident in your supply chain could impact your
business. Discuss the
measures you have taken to mitigate these risks.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
107
9. We note that you have experienced disruptions to your supply chain and
logistics
networks. Revise to discuss known trends or uncertainties resulting
from mitigation
efforts undertaken, if any. Explain whether any mitigation efforts
introduce new material
risks, including those related to product quality, reliability, or
regulatory approval of
products.
10. Please expand your disclosure to discuss whether supply chain
disruptions materially
affect your outlook or business goals. Specify whether these
challenges have materially
impacted your results of operations or capital resources and quantify,
to the extent
possible, how your sales, profits, and/or liquidity have been
impacted.
Liquidity and Capital Resources
Operating Activities, page 125
11. We note your revisions in response to comment 12. Please consider
including a
comparative analysis that explains why operating cash flow in 2021 was
$25 million
FirstName LastNameLarry Wu
lower than 2020 as this appears it would be useful information to
investors. Additionally,
Comapany NameGigaCloud
discuss Technology
if you expect this Inc.of operating cash flow to
continue pursuant to Item
lower level
May 26,5.D of Form
2022 Page 320-F.
FirstName LastName
Larry Wu
FirstName
GigaCloud LastNameLarry
Technology Inc.Wu
Comapany
May NameGigaCloud Technology Inc.
26, 2022
May 26,
Page 4 2022 Page 4
FirstName LastName
Management, page 167
12. Please describe the extent and nature of the role of the board of
directors in overseeing
cybersecurity risks, including in connection with the company s
supply
chain/suppliers/service providers.
General
13. Your disclosure on page 149 suggests that the majority of your
employees are located in
China. Please disclose (1) whether your business segments, products,
lines of service,
projects, or operations are materially impacted by the
pandemic-related lockdowns in
China and (2) the impact of consumer demand declines in China. In
addition, discuss any
steps you are taking to mitigate adverse impacts to your business.
You may contact Keira Nakada at 202-551-3659 or Doug Jones at
202-551-3309 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Nicholas Lamparski at 202-551-4695 or Jennifer L pez Molina at
202-551-3792 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade
& Services
cc: Benjamin Su