October 23, 2018
Ban Lor
Chief Executive Officer
Powerbridge Technologies Co., Ltd.
1ST Floor, Building D2, Southern Software Park
Tangjia Bay, Zhuhai, Guangdong 519080, China
Re: Powerbridge Technologies Co., Ltd.
Draft Registration Statement on Form F-1
Submitted September 26, 2018
CIK No. 0001754323
Dear Mr. Lor:
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.
Draft Registration Statement on Form F-1
Cover Page
1. Please revise the registration statement cover page to include the
information required
by Form F-1 for your agent for service.
2. Please add to the registration statement cover page the delaying
amendment legend
required by Item 501 of Regulation S-K and remove the legend from the
prospectus cover
page.
Ban Lor
FirstName LastNameBan Lor Ltd.
Powerbridge Technologies Co.,
Comapany NamePowerbridge Technologies Co., Ltd.
October 23, 2018
October 23, 2018 Page 2
Page 2
FirstName LastName
Our Business, page 1
3. We note your disclosure in the eighth paragraph that you intend to
roll-out your
Powerbridge BaaS Services in the first quarter of fiscal 2019. We also
note your
disclosure elsewhere in the prospectus that this will be a pilot
program introduced on a
limited basis to select customers. Please revise the prospectus
summary to disclose this
additional information.
4. For each of the three sources of revenue that you identify on the
bottom of page 2, please
disclose the percentage of your total revenue that each source
contributes.
5. We note your disclosure in the last paragraph that you have a "total
of 3,470 corporate and
government customers." We also note your disclosure on page 74 that
this number
represents "accumulated" customers and not necessarily the number of
revenue generating
customers in the most recently completed fiscal year. Please revise
the disclosure here
and throughout the prospectus to clarify this metric. In this regard,
please include enough
information so investors can clearly understand if this number
represents current
customers, historic customers, revenue generating customers or some
combination of the
aforementioned groups.
Our Growth Strategy, page 4
6. Please disclose the actions you plan to take in order to "continually
increase revenue"
from your existing customers.
Our Corporate Structure, page 6
7. Please tell us how your corporate structure complies with Chinese
foreign investment laws
and regulations, such as restrictions on foreign ownership. In this
regard, we note your
disclosure beginning on page 84 regarding government regulation.
Emerging Growth Company Status , page 7
8. We note that, as an emerging growth company under the JOBS Act, you
have elected to
use the extended transition period for complying with new or revised
accounting standards
under Section 7(a)(2)(B) of the Securities Act. Please revise to
include a risk factor
disclosing this election and that, as a result of this election, your
financial statements may
not be comparable to companies that comply with public company
effective dates.
Use of Proceeds, page 37
9. Please revise to quantify the net proceeds if the overallotment option
is exercised in full.
Ban Lor
FirstName LastNameBan Lor Ltd.
Powerbridge Technologies Co.,
Comapany NamePowerbridge Technologies Co., Ltd.
October 23, 2018
October 23, 2018 Page 3
Page 3
FirstName LastName
10. Please refer to the second to last paragraph of this section. Please
quantify the estimated
net 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 this offering, please
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
Liquidity and Capital Resources, page 47
11. We note your disclosures in your dividend policy on page 37 regarding
the statutory
reserve requirements for your subsidiaries. Please revise your
disclosure here to include a
discussion of these reserve requirements and of their potential impact
on your liquidity.
Refer to Item 5.B.1(b) of Form 20-F.
12. Please expand your analysis of operating cash flows to include an
explanation for your
increase in accounts payable, including any significant changes
related to the timing of
your payments or supplier terms. Describe the terms and levels of any
significant
financing arrangements provided by your suppliers. Refer to Item 5.B.1
of Form 20-F and
Section III.C of SEC Release No. 33-6835.
13. We note the significant increase in your accounts receivable turnover
in days from 64
days in fiscal 2016 to 154 days in fiscal 2017. Please disclose the
factors that led to
slower collections during this period. Also, please elaborate on the
correlation between
the significant increase in accounts receivable and the increase in
contract volume and
contract progress for certain large contracts, considering the
percentage change in
revenue. In addition, please provide us with and tell us how you
considered disclosure of
an aging analysis of accounts receivable as of each balance sheet date
to highlight any
trends and uncertainties with respect to liquidity.
Material PRC Income Tax Considerations, page 103
14. Please revise your discussion of PRC tax consequences here and in your
risk factor
disclosure on page 30 to emphasize, if true, the potential personal
liability investors could
have for paying PRC income tax in certain circumstances.
Notes to Consolidated Financial Statements, page F-7
15. We note your dividend policy disclosure on page 37 describes
restrictions which limit the
payment of dividends. Please revise to provide the footnote
disclosures outlined in Rule
4-08(e) of Regulation S-X. We note that pursuant to PRC regulations
each of your
subsidiaries in China is required to set aside at least 10% of its
after-tax profits each year,
if any, to fund a statutory reserve funds until the accumulative
amount of such funds
reaches 50% of its registered capital. Please tell us where the
statutory reserve is
presented in your financial statements. Also, revise to include a
footnote to separately
disclose for each subsidiary the registered capital, the amount of
after-tax profits set aside
Ban Lor
FirstName LastNameBan Lor Ltd.
Powerbridge Technologies Co.,
Comapany NamePowerbridge Technologies Co., Ltd.
October 23, 2018
October 23, 2018 Page 4
Page 4
FirstName LastName
for each year presented, and the funded status of the statutory
reserve as of each balance
sheet date. In addition, if applicable, please revise to include the
Schedule I information
required by Rule 5-04 of Regulation S-X.
Note 2 - Summary of Significant Accounting Policies
Revenue Recognition, page F-12
16. We note from your disclosure on page F-21 that as of December 31,
2017, your unbilled
accounts receivable increased to $8.5 million, representing 39% of
total revenues for the
year. Please disclose when you expect these amounts to be billed and
collected from
customers. In this regard, we note your disclosure that you have the
enforceable right on
payments for the work performed. Expand your revenue recognition
policy disclosure to
describe the billing contract terms associated with your fixed fee
projects.
17. We note from your disclosure on page 48 that as of August 27, 2018,
$2.9 million or 64%
of your $4.6 million billed accounts receivable balance as of December
31, 2017 was
collected. Please describe the payment terms for those arrangements
for which you have
not collected the full amount for the services billed. Please tell us
how the payment terms
compare to payment terms normally provided, as well as any concessions
provided to
these customers. To the extent your arrangements include extended
payment terms or
concessions, tell us what impact this has on your ability to make
reasonably dependable
estimates of total contract revenue in your application of the
percentage-of-completion
method of contract accounting. Refer to ASC 605-35-25-57.
18. We note that your application development service contracts include
post-contract
customer support ("PCS") for a period of three months to three years.
Please clarify the
nature of the services included in the specified PCS and the
unspecified PCS. Please tell
us and revise your filing to clarify your accounting for PCS included
in these contracts,
including whether or not you have established vendor-specific
objective evidence of fair
value ("VSOE") for your PCS. To the extent you do not have VSOE for
specified and/or
unspecified PCS, explain how you recognize revenue for the entire
arrangement.
Note 3 Accounts Receivable, page F-21
19. Please revise to disclose the amount of billed and unbilled accounts
receivable that are
expected to be collected after one year. We refer you to Item
5.02(3)(c)(4) of Regulation
S-X.
Ban Lor
Powerbridge Technologies Co., Ltd.
October 23, 2018
Page 5
General
20. Please 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.
21. Please provide us with copies of any graphical materials or artwork
you intend to use in
your prospectus. Upon review of such materials, we may have further
comments. For
guidance, refer to Question 101.02 of the Securities Act Forms
Compliance and
Disclosure Interpretations.
You may contact Diane Fritz, Staff Accountant, at 202-551-3331 or
Melissa Walsh, Staff
Accountant, at 202-551-3224 if you have questions regarding comments on the
financial
statements and related matters. Please contact Donald Field, Attorney-Advisor,
at 202-551-3680
or Dietrich King, Attorney-Advisor, at 202-551-8071 with any other questions.
Sincerely,
FirstName LastNameBan Lor
Division of
Corporation Finance
Comapany NamePowerbridge Technologies Co., Ltd.
Office of
Information Technologies
October 23, 2018 Page 5 and Services
FirstName LastName