United States securities and exchange commission logo
August 1, 2022
Eiji Nagahara
President and Chief Executive Officer
LEAD REAL ESTATE CO., LTD.
6F, MFPR Shibuya Nanpeidai Building 16-11
Nampeidai-cho, Shibuya-ku
Tokyo, 150-0036, Japan
Re: LEAD REAL ESTATE
CO., LTD.
Amended Draft
Registration Statement on Form F-1
Submitted July 22,
2022
CIK No. 0001888980
Dear Mr. Nagahara:
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. Unless we note otherwise, our references to prior comments are
to comments in our
June 27, 2022 letter.
DRS/A filed on July 22, 2022
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Critical Accounting Policies and Estimates, page 54
1. We note your response
to comment 2 and revised disclosure on page 54. Given your
disclosure on page F-8
that the adoption of ASC 606 did not have a material effect on
your consolidated
financial statements, it is still not clear to us how the adoption of ASC
606 in July 2019
resulted in an increase in your revenue and receivables for the reported
periods. To the extent
you continue to believe that the adoption of ASC 606 did have an
impact by increasing
your revenue and receivables for the reported periods, please clarify
Eiji Nagahara
LEAD REAL ESTATE CO., LTD.
August 1, 2022
Page 2
and further expand your disclosures to discuss the significant changes
the adoption of
ASC 606 had on your revenue recognition policies when compared to the pre
ASC 606
periods.
1. Nature of Operations and Significant Accounting Policies
Revenue Recognition, page F-8
2. We note your response to comment 3 that the Company is using the input
method and
recognize revenue based on costs incurred through the construction
process relative to the
total expected costs of construction. We further note that the Company
uses
certain measures of progress during the construction process. Please
clarify how the
Company is using such measures of progress and how, if any, such measures
of progress
impact the amount of revenue recognized on any given contract. In that
regard, we note
that such measures of progress appear to be similar to milestones which
are
more consistent with use of an output method rather than an input method.
3. We note your response to comment 4 where you indicate that you do not
believe that the
disclosure requirements related to contract assets and contract
liabilities in ASC 606-10-
50-8 are applicable. However, we note that the Company recognizes
customer deposits
related to amounts billed upon execution of your Land Sales and
Construction Contracts.
Therefore, it would appear that such amounts represent a contract
liability consistent with
the guidance in ASC 606-10-45-2. Please clarify and/or provide the
disclosures outlined
in ASC 606-10-50-8(b) for the periods presented.
7. Debt, page F-43
4. We note your response to comment 7. We note that you present 1,892,468
JPY of short
term land borrowings as due in 2023 in your contractual obligations table
disclosed on
page 53. Please tell us why such an amount should not be included in the
column due in
2022 considering that your short term land borrowings are all classified
as short term on
your consolidated balance sheets and have a maturity of 3 to 6 months
based on your
disclosures on page F-43. Please revise or advise.
You may contact Ameen Hamady at 202-551-3891 or Wilson Lee at
202-551-3468 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Ruairi Regan at 202-551-3269 or Pam Long at 202-551-3765 with any other
questions.
Sincerely,
FirstName LastNameEiji Nagahara
Division of
Corporation Finance
Comapany NameLEAD REAL ESTATE CO., LTD.
Office of Real
Estate & Construction
August 1, 2022 Page 2
cc: Ying Li, Esq.
FirstName LastName