June 4, 2019
Shaochai Yang
Chief Financial Offier
ZK International Group Co., Ltd.
No.678 Dingxiang Road
Binhai Industrial Park
Wenzhou, Zhejiang Province
People's Republic of China 325025
Re: ZK International Group Co., Ltd.
Form 20-F For the Year Ended September 30, 2018
Filed January 31, 2019
File No. 001-38146
Dear Ms. Yang:
We have limited our review of your filing to the financial statements
and related
disclosures 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 these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 20-F For the Year Ended September 30, 2018
Item 3 Key Information
A. Selected Financial Data , page 5
1. We note that you only presented selected financial data for the years
ended September 30,
2016, 2017 and 2018 and you did not explain the reasons for the omission
in the filing of
financial data for the year ended September 30, 2015 which was the
earliest audited period
presented in your initial registration statement. Please revise future
filings to comply fully
with Item 3(A) of Form 20-F and the related instructions or tell us why
you believe no
such revision is required.
Item 15. Controls and Procedures , page 74
2. We note that your disclosure of remediation plans appears to replicate
the disclosure
Shaochai Yang
FirstName LastNameShaochai Yang
ZK International Group Co., Ltd.
Comapany NameZK International Group Co., Ltd.
June 4, 2019
June 4, 2019 Page 2
Page 2
FirstName LastName
provided in the prior year's 20-F. Please revise to discuss the status
of your remediation
activities, what remediation steps have yet to be taken and the
approximate timeline for
those plans for each category of material weaknesses.
Notes to Financial Statements
Note 2 Significant Accounting Policies
Accounts Receivable , page F-10
3. We note you appear to have removed certain accounts receivable
disclosures, including
discussion of your detailed allowance determination methodology (e.g.,
you previously
disclosed you provide an allowance of 5% for accounts receivable
balances that have been
outstanding between 1 year and 2 years, 20% for balances that have
been outstanding
between 2 years and 3 years, 40% for balances that have been
outstanding between 3
years to 5 years, and 100% for balances older than 5 years), aging
schedule, subsequent
collections and when you expect the outstanding amounts to be
collected. We note this
information was included in your initial registration statement, and
certain disclosures were added in direct response to comment 12 in our
letter dated
February 10, 2017. As accounts receivable remains your most
significant asset and
continues to increase over time, we continue to believe you should
present in future filings
the expanded accounts receivable disclosures that were previously
included in your initial
registration statement, to better assist investors in assessing
collectability of your accounts
receivable.
4. You indicate on page 9 that some of your accounts receivable have
carried a balance owed
for more than three years. Please tell us how you considered
reclassifying the portion of
accounts receivable that are not expected to be collected within one
year as non-current on
your balance sheet.
Recent Accounting Pronouncements , page F-13
5. We note your disclosures in prior filings and on page 20 of this Form
20-F, that you have
irrevocably elected not to avail yourself of the exemption from
delaying the adoption of
new or revised accounting standards and that you will be subject to
the same new or
revised accounting standards as other public companies that are not
emerging growth
companies. We also note your disclosure on pages F-13 and F-15 that
you have not
adopted ASC 606 as of September 30, 2018 because you are an EGC.
Please revise to
clearly indicate the date on which you will adopt the new revenue
guidance.
Note 16 Segment Reporting , page F-22
6. You state that management, including the CODM, reviews operating
results by the
revenue of different products. Tell us what consideration you have
given to presenting
disaggregated revenue information consistent with the product category
information
provided to and reviewed by your management. Refer to ASC
280-10-50-40.
Shaochai Yang
ZK International Group Co., Ltd.
June 4, 2019
Page 3
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact SiSi Cheng at 202-551-5004 or Kevin Stertzel at
202-551-3723 with
any questions.
Sincerely,
FirstName LastNameShaochai Yang
Division of
Corporation Finance
Comapany NameZK International Group Co., Ltd.
Office of
Manufacturing and
June 4, 2019 Page 3 Construction
FirstName LastName