United States securities and exchange commission logo
June 5, 2023
Zhihua Wu
Chief Executive Officer
Linkage Global Inc
2-23-3 Minami-Ikebukuro, Toshima-ku
Tokyo, Japan 171-0022
Re: Linkage Global Inc
Draft Registration
Statement on Form F-1
Submitted May 9,
2023
CIK No. 0001969401
Dear Zhihua Wu:
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 discuss whether
there are 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. Please
additionally amend your
disclosure here as well as in the summary risk factors and risk
factors sections to
state that, to the extent cash in the business is in the PRC/Hong Kong or
a PRC/Hong Kong entity,
the funds may not be available to fund operations or for other
use outside of the
PRC/Hong Kong due to interventions in or the imposition of restrictions
and limitations on the
ability of you or your subsidiaries by the PRC and Hong
Kong governments to
transfer cash. On the cover page, provide cross-references to these
Zhihua Wu
Linkage Global Inc
June 5, 2023
Page 2
other discussions. Lastly, 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 disclose the source of such policies
(e.g., whether they
are contractual in nature, pursuant to regulations, etc.);
alternatively, state on the cover
page 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
Summary of Risk Factors, page 6
2. Please revise your disclosure so that each summary risk factor related
to your operations
in Hong Kong and China includes a cross-reference to the individual
detailed risk factor,
including the title and page, of the relevant risk factor.
Risk Factors, page 16
3. Please revise your disclosure here and in your summary risk factors
section to include a
risk factor discussing your related party transactions with Qi Xiaoyu,
Fuyunishiki
Ryo, Wu Zhihua, Wu Shunyu and Ishiyama Real Estate Co. Ltd. In this
regard, the
disclosure on page 118 appears to suggest that the value of
transactions related to the
aforementioned individuals and entity is material to the company.
If HQT NETWORK fails to maintain the relationship with Google . . ., page 18
4. It appears you rely on Google's rebate and incentive structure to
generate all of your
digital marketing operations revenue as well as a substantial portion
of your total revenue.
Please expand your disclosure here and elsewhere in the prospectus as
appropriate to
discuss in greater detail your relationship, including the material
terms of any agreements
or arrangements with Google. In this regard, we note your reference to
an agency
agreement as well as a detailed discussion of the rebate and incentive
structure on page
88. Additionally, please file the agency agreement with Google as an
exhibit to the
registration statement or tell us why you believe you are not required
to do so. Refer to
Item 601(b)(10) of Regulation S-K.
The Operating Entities rely on third-party manufacturers to produce their
private label smart
products . . ., page 18
5. It appears you rely on partnerships with third parties to manufacture
the Operating
Entities' private label smart products. To the extent your business is
materially dependent
on such partnerships, please expand your disclosure here to identify
these third parties and
FirstName LastNameZhihua Wu
disclose the material terms of any agreements or arrangements with them.
Additionally,
Comapany NameLinkage
please file any suchGlobal Inc as exhibits to the registration
statement or tell us why you
agreements
June 5,believe you 2are not required to do so. See Item 601(b)(10) of
Regulation S-K.
2023 Page
FirstName LastName
Zhihua Wu
FirstName LastNameZhihua Wu
Linkage Global Inc
Comapany
June 5, 2023NameLinkage Global Inc
June 5,
Page 3 2023 Page 3
FirstName LastName
Since we are a "controlled company" within the meaning of the Nasdaq listing
rules . . ., page 27
6. Please identify and disclose the percentage of voting power to be held
by the controlling
shareholders following the offering. Additionally, please disclose, if
true, that the
controlling shareholders will have the ability to determine all
matters requiring approval
by stockholders in the event that you rely on the controlled company
exemptions under
the Nasdaq listing rules.
Recent greater oversight by the CAC over data security, particularly for
companies seeking to
list on a foreign exchange . . ., page 37
7. Please affirmatively state whether or not you believe that you are
compliant with the
regulations or policies that have been issued by the CAC to date.
Business
Further Strengthen our Supply Chain Integration, page 84
8. Please revise your disclosure here as well as the summary risk factors
and risk
factors sections to disclose whether you are subject to material
cybersecurity risks in your
supply chain based on third-party products, software, or services used
in your products,
services, or 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, page 112
9. We note your disclosure on page 16 that your business relies on the
availability of the
Operating Entities' marketplace and software and as a result, is
vulnerable to system
interruptions and performance failures in technology infrastructures.
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 data protection and supply
chain.
Where You Can Find Additional Information, page 152
10. Please update your disclosure to include your internet address. Refer
to Item 4(e) of Form
F-1.
1. Organization and Principal Activities
Reorganization, page F-7
11. We note that your reorganization involved acquisition of entities
under common control,
which you reflect as if the post-reorganization structure existed
throughout the periods
presented. Based on this information, your financial statements appear
to be more
appropriately described as combined, rather than as
consolidated. Please revise your
presentation or advise us why you believe you are not required to do
so. Refer to ASC
810-10-45-10.
Zhihua Wu
Linkage Global Inc
June 5, 2023
Page 4
2. Summary of Significant Accounting Policies
Revenue Recognition
Cross-Border Sales, page F-12
12. You state that you consider yourself the principal in the cross-border
sales transactions
because you are in control of establishing the transaction price,
arranging the whole
process of transactions and bearing inventory risk. You also state on
page 80 that certain
orders are shipped directly from the suppliers to the customers. For
those transactions that
are shipped directly by the suppliers to the customers, please clarify
your disclosure to
also state when and how you take control of the goods being sold and
bear inventory
risks. Refer to ASC 606-10-55-37A.
13. We note that the timing of the control transfer is different depending
on whether the sales
are made internationally or domestically. Please revise your
disclosure to explain how
this difference impacted your freight cost accounting. Refer to ASC
606-1025-18A and
25-18B.
Integrated E-Commerce Services, page F-12
14. Please revise your disclosure to clarify whether you recognize
revenues based on
estimated amount (e.g. of Advertiser spend) and how you determined
that it is probable
that a significant revenue reversal will not occur. Refer to ASC
606-10-32-11.
3. Segment Information, page F-16
15. Please disclose the disaggregation of long-lived assets other than
financial instruments by
geography as required under ASC 280-10-50-41(b).
Notes to the Consolidated Financial Statements
10. Long-term Debts, page F-19
16. Please tell us what the amounts in the column labeled "Principal"
represent and clarify in
your disclosure how to correlate with the amounts in the "long-term"
and "current portion"
columns.
19. Subsequent Events
Share Split, page F-27
FirstName LastNameZhihua Wu
17. Please tell us what consideration you gave to retroactively reflecting
the stock split that
Comapany NameLinkage
occured Global
after year-end but Inc
before issuance of the financial statements.
Refer to SAB
June 5,Topic 4.C. 4
2023 Page
FirstName LastName
Zhihua Wu
FirstName LastNameZhihua Wu
Linkage Global Inc
Comapany
June 5, 2023NameLinkage Global Inc
June 5,
Page 5 2023 Page 5
FirstName LastName
General
18. Please provide us with supplemental 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,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications. Please contact the staff member associated with the
review of this filing
to discuss how to submit the materials, if any, to us for our review.
19. Please define or include descriptions of what it means to be an
"authorized agent" as it
relates to your partnership with Google.
You may contact Keira Nakada at (202) 551-3659 or Lyn Shenk at (202)
551-3380 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Rucha Pandit at (202) 551-6022 or Dietrich King at (202) 551-8071 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Trade
& Services
cc: Ying Li