September 27,
2019
Andreas Spiegler
Chairman, Chief Executive Officer and Interim Chief Financial Officer
Industrial Technical Holdings Corporation
Huanxiu Street Office, Shuanglong Industrial Park
266201 Jimo
Qingdao, China
Re: Industrial Technical Holdings Corporation
Registration Statement on Form F-1
Filed September 4, 2019
File No. 333-233613
Dear Mr. Spiegler:
We have reviewed your 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 amending your registration statement
and providing the
requested information. 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 any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Form F-1 filed September 4, 2019
Prospectus Cover Page, page 3
1. We note the reference to the Nasdaq Global Market. If you have not yet
begun the
application process for a listing or if you do not meet the listing
criteria, please revise to
remove reference or move the reference to a less prominent section of
your document
where you can explain in context that you have not begun the application
process or do
not meet the listing criteria. You may, instead, revise your prospectus
cover to refer
generically to a national securities exchange, the OTC Bulletin Board,
or the OTCQX or
OTCQB marketplace of OTC Link, as appropriate .
Andreas Spiegler
FirstNameTechnical Holdings Corporation
Industrial LastNameAndreas Spiegler
Comapany 27, 2019
September NameIndustrial Technical Holdings Corporation
September 27, 2019 Page 2
Page 2
FirstName LastName
Prospectus, page 3
2. Please revise your prospectus substantially to comply with the
requirements of Items 1, 2
and 3 of Form F-1. In this regard, note that your risk factors
disclosure must immediately
follow your one-page prospectus cover or prospectus summary, and any
such prospectus
summary should be brief as required by Regulation S-K Item 503. Also
note the
requirements of Regulation S-K Item 502. When you revise in response
to this comment,
if you elect to retain the current graphics in an appropriate section
of your document,
please ensure that they clearly and accurately reflect your business.
For example, the first
graphic appears to suggest that you make robots. Also, it appears from
subsequent
disclosure that many of the products depicted have not yet been
manufactured and sold by
you.
Prospectus Summary, page 15
3. Please expand the disclosure on page 17 to clarify what is "[y]our
proposed business
plan." Also clarify how the $10 million to which you refer will
advance that plan,
including the purposes to which those funds will be put. Include
specifics about what you
hope to accomplish and hurdles to what you plan to achieve.
Our Company, page 17
4. Please clarify the "continual growth" and "German standards"
referenced in the first
paragraph. Also, in the paragraph numbered 1, explain how Fortschritt
is a "long-tenured
and well-known German company" when the preceding sentence indicates
that you
recently founded it.
Company Profile, page 18
5. Disclose the source of the "exclusive use, manufacturing, and sales
and marketing rights"
referenced in the first paragraph. Also clarify the nature of the
rights you say you hold.
For example, do you hold or license patents from the entity you refer
to as MAFA? File
any material contracts as exhibits. It is unclear from your disclosure
how you hold
"exclusive" rights related to Fortschritt, given your disclosure
regarding the break-up and
shutdown of the original companies, that MAFA holds all intellectual
property of the
original companies and disclosure on page 22 that MAFA has used
designs for OEM
products for other companies.
6. We note comparative statements of product superiority to existing
Chinese equipment,
such as on page 22. Clarify whether the basis of these statements
relate to products you
currently produce.
7. Given the nature of your operations, please tell us the impact of
seasonality on your
business.
Andreas Spiegler
FirstNameTechnical Holdings Corporation
Industrial LastNameAndreas Spiegler
Comapany 27, 2019
September NameIndustrial Technical Holdings Corporation
September 27, 2019 Page 3
Page 3
FirstName LastName
Initial Product, page 26
8. If the pictures on this and the following page are not your actual
facilities, as indicated by
the first sentence on page 27, please revise to remove any implication
to the contrary.
9. Refer to the disclosures on pages 31 and 32, which appear to be in a
foreign language.
Please see Rule 403 regarding requirements as to language. Please also
describe the scope
and duration of the patent and clarify whether and, if so, the amount
of subsidies you
receive.
The Fortschritt K868 In Comparison to Competitors, page 58
10. Disclose the basis for comparative graphics on this page and page 59.
Company Profile, page 60
11. Please clarify the relationship between CSSC-Technical Products Ltd.
and Qingdao CSSC
Co. Ltd. Also clarify the relationship between Fortschritt Ltd.
mentioned on page 17,
Fortschritt Agritech mentioned on page 18, Fortschritt China mentioned
on page 28, and
Fortschritt mentioned on page 31.
Risk Factors, page 74
12. As a public company, your auditor is required by law to undergo
regular Public Company
Accounting Oversight Board (PCAOB) inspections to assess its
compliance with U.S. law
and professional standards in connection with its audits of financial
statements filed with
the SEC. The PCAOB, however, is currently unable to inspect the audit
work and
practices of your auditor (see
http://pc
aobus.org/International/Inspections/Pages/IssuerClientsWithoutAccessList.aspx).
As a result of this obstacle, investors in U.S. markets who rely on
your auditor's audit
reports are deprived of the benefits of PCAOB inspections of auditors.
Therefore, please
state this fact under a separate risk factor heading. Explain that
this lack of inspection
prevents the PCAOB from regularly evaluating your auditor's audits and
its quality
control procedures.
13. Please provide us your analysis of whether you face risks of being a
resident enterprise
under laws in the jurisdiction you operate. Also:
Tell us whether laws in the jurisdiction you operate governing your
industry or
structure create material risks.
In an appropriate section of your document, provide the disclosure
required by Form
20-F Item 10.E.
Andreas Spiegler
FirstNameTechnical Holdings Corporation
Industrial LastNameAndreas Spiegler
Comapany 27, 2019
September NameIndustrial Technical Holdings Corporation
September 27, 2019 Page 4
Page 4
FirstName LastName
Results of Operations, page 84
14. Please revise to clarify the impact that changes in price, volume and
new products had on
your revenues for each period presented. Please also revise to clarify
the relative
proportion of your revenues and gross profit attributable to each of
the businesses in
which you are engaged, including Fortschritt, CSSC and PlanET.
Cash Flows and Working Capital, page 87
15. Please reconcile your disclosure in the second paragraph regarding
sufficiency of funds
with your other disclosures, such as on page 74, that you need $10
million to finance
planned operations for the next 12 months.
Lease commitments, page 89
16. In an appropriate section of your document, please provide the
disclosure required by
Form 20-F Item 4.D. Also file as exhibits related contracts as
required by Regulation S-K
Item 601(b)(10).
Capital Expenditures, page 90
17. Please clarify the nature of the capital expenditures you made for the
periods presented.
Exemptions Under the Jumpstart Our Business Startups Act, page 96
18. 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.
Business Experience, page 98
19. Please clarify the nature of the business experience that you
disclose. We note, for
example, that you highlight Dr. Scholz's experience with Tesla but it
is unclear in what
role he served. Please also revise to clarify the "multiple publicly
traded companies" for
which Mr. Befumo served and the dates of the business experience
listed for Messrs.
Gallo, Krueger and Benoliel. Also, the first name of Dr. Scholz, as
disclosed here, differs
from the name on pages 82, 90 and 113. Please revise or advise.
Audit Committee and Financial Expert, page 101
20. Please revise to identify the members of your audit committee.
Summary Compensation Table, page 102
21. Please include all compensation disclosure required by Form 20-F Item
6.B.
Andreas Spiegler
Industrial Technical Holdings Corporation
September 27, 2019
Page 5
Selling Shareholders, page 103
22. Please identify which selling shareholders are broker-dealers, and
tell us whether those
selling shareholders received the offered securities as compensation
for underwriting
activities. Also, please tell us which selling shareholders are
affiliates of a broker-dealer,
and disclose, if true, that such selling shareholders acquired the
offered securities in the
ordinary course of business and, at the time they acquired the
securities, had no
agreements or understandings, directly or indirectly, with any person
to distribute the
securities.
Determination of Offering Price, page 110
23. Please reconcile your disclosure here and under the following heading
regarding the
offering price with your disclosure on your prospectus cover page.
Outstanding Share Data, page 112
24. Please ensure that your disclosure is current and complete. We note
for example the
convertible and exercisable securities mentioned on pages F-18 and
F-21.
Ordinary Shares, page 113
25. Please disclose Section 2.2 on the second page numbered 1 in Exhibit
3.1, including any
material risks that provision presents to shareholders.
Major Shareholders and Related Party Transactions, page 113
26. Please provide all disclosure required by Item 7.B of Form 20-F. We
note for example the
transactions mentioned on page F-18.
Security Ownership . . .,, page 113
27. Please update the information in this section to be as of the most
recent practicable date.
We note the reference to November 10, 2018. Please also revise to
include a row for each
person mentioned in Form 20-F Item 6.E, and ensure that the
information on this table is
reconcilable to the information in your table beginning on page 104.
Further, please tell us
which directors received the 2,000 shares mentioned on page 118.
Financial Statements
Combined Statements of Operations and Comprehensive Income (Loss), page F-4
FirstName LastNameAndreas Spiegler loss per share information to two decimal
places to avoid
28. Please revise to only reflect your
Comapany NameIndustrial Technical precision than exists.
giving the impression of more Holdings Corporation
September 27, 2019 Page 5
FirstName LastName
Andreas Spiegler
FirstNameTechnical Holdings Corporation
Industrial LastNameAndreas Spiegler
Comapany 27, 2019
September NameIndustrial Technical Holdings Corporation
September 27, 2019 Page 6
Page 6
FirstName LastName
General, page F-8
29. We note that you do not have any disclosures or an accounting policy
for segment
reporting. Please revise to provide the disclosures required by ASC
280-10-50-20 or
explain to us the reason these disclosures are not required.
Note 2 - Summary of significant accounting policies
Principle of Consolidation , page F-8
30. We note that you have a 100% ownership in each of your four
subsidiaries. Please explain
to us why you have presented combined rather than consolidated
financial statements of
the registrant and its subsidiaries. Refer to ASC 810-10-55-1B. In
addition, clarify for us
any changes in the ownership interests of these subsidiaries during
the periods presented
prior to the March 16, 2018 share exchange.
Recently issued accounting pronouncments, page F-15
31. The effective dates you have identified for ASC 842 are not consistent
with the
accounting standard and the extended transition period which you
elected. Please revise
your disclosure to identify the correct effective dates for your
adoption of ASC 842. In
addition, revise your disclosure to indicate whether or not you have
adopted the
accounting pronouncements described below.
Note 13 - Subsequent Event, page F-21
32. We note that you disclose issuances of convertible promissory notes at
a discount to the
market price of your shares and the sale of common shares that may
result in the issuance
of additional shares based on the closing price of your stock on the
first day of trading on
any major U.S. stock exchange. Please explain to us your expected
accounting treatment
for these transactions.
Undertakings, page 119
33. Please provide the undertaking required by Regulation S-K Item 512(h).
Signatures, page 120
34. Please include the signatures of a majority of your board of directors
below the second
paragraph of text required on the Form F-1 Signatures page. Also:
indicate below that paragraph of text who is signing your document
in the capacity of
controller or principal accounting officer;
include the signature of your authorized representative in the
United States.
Andreas Spiegler
FirstNameTechnical Holdings Corporation
Industrial LastNameAndreas Spiegler
Comapany 27, 2019
September NameIndustrial Technical Holdings Corporation
September 27, 2019 Page 7
Page 7
FirstName LastName
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.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Michael Fay at (202) 551-3812 or Brian Cascio,
Accounting Branch
Chief, at (202) 551-3676 if you have questions regarding comments on the
financial statements
and related matters. Please contact Geoff Kruczek at (202) 551-3641 or Russell
Mancuso, Legal
Branch Chief, at (202) 551-3617 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Electronics and Machinery
cc: Andrew J. Befumo, Esq.