SEC Comment Letter for Farmmi, Inc. (FAMI) (CIK 0001701261) (FAMI) — Nov 28, 2017
Farmmi, Inc. (FAMI) (CIK 0001701261)
Date: Nov. 28, 2017 · CIK: 0001701261 · Accession: 0000000000-17-041646
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-221569
Letter
Mail Stop 4628 November 27, 201 7 Yefang Zhang Chief Executive Officer Farmmi, Inc. No. 307, Tianning Industrial Area Lishui, Zhejiang Province People’s Republic of China 323000
Re: Farmmi, Inc. Registration Statement on Form F-1 Filed November 15 , 201 7 File No. 333-221569
Dear M s. Zhang:
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 you r response.
After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comment s are to comments in our October 6 , 2017 letter.
Company Overview, page 1
We have considered your response to comment 1. Please provide enhanced 1. disclosure to better explain what you mean by stating that you conduct your business through a “traditional ownership structure.” In your revised disclosure, please differentiate between revenues generated through your “online store ,” your “online mall, ” and those derived from direct retail . Please a lso explain how the status of your subsidiaries as wholly foreign -owned entities permits the company to conduct busines s operation s through a “traditional ownership structure .”
We note your revisions in response to comment 2. We further note that the related 2. Exclusive Call Option Agreement filed as Exhibit 10.3 assumes that the transfer granted to Suyua n Agriculture , a PRC entity wholly -held indirectly b y a foreign
Yefang Zhang Farmmi, Inc. November 27, 2017 Page 2
entity , will be “within legal restriction of People’s Republic of China.” Please tell us in your response whether counsel has advised that the exclusive purchase option granted to Suyua n Agriculture comports with PRC law.
Corporate Structure, page 62
Khorgos Farmmi Enterprise Serv ice Co., Ltd. , page 62
We note your updated disclosure in this section regar ding the newly -created wholly 3. owned subs idiary of Suyuan Agriculture. Please expand your disclosure in this section or elsewhere to explain the “beneficial tax treatment” due to the Khorgos Farmmi Enterprise Service - Suyuan Agriculture structure which you bri efly disc losed here.
We also note that the tax-related disclosures in the Business section here are excepted 4. from PRC counsel’s tax opinion. Please supplement your disclosure here to attribute your discussion of the tax treatment for this entity to counsel or advise.
You may contact Lily Dang , Staff Accountant, at (202 ) 551 -3867 or Karl Hiller , Accounting Branch Chief, at (202) 551 -3686 if you have questions regarding comments on the financial statements and related matters. Please contact Jerard Gibson, Staff Attorney, at (202) 551 -3473 or, in his absence , me at (202) 551 -3642 with any other questions.
Sincerely,
/s/ Loan Lauren P. Nguyen
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Mail Stop 4628 November 27, 201 7 Yefang Zhang Chief Executive Officer Farmmi, Inc. No. 307, Tianning Industrial Area Lishui, Zhejiang Province People’s Republic of China 323000 Re: Farmmi, Inc. Registration Statement on Form F-1 Filed November 15 , 201 7 File No. 333-221569 Dear M s. Zhang: 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 you r response. After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comment s are to comments in our October 6 , 2017 letter. Company Overview, page 1 We have considered your response to comment 1. Please provide enhanced 1. disclosure to better explain what you mean by stating that you conduct your business through a “traditional ownership structure.” In your revised disclosure, please differentiate between revenues generated through your “online store ,” your “online mall, ” and those derived from direct retail . Please a lso explain how the status of your subsidiaries as wholly foreign -owned entities permits the company to conduct busines s operation s through a “traditional ownership structure .” We note your revisions in response to comment 2. We further note that the related 2. Exclusive Call Option Agreement filed as Exhibit 10.3 assumes that the transfer granted to Suyua n Agriculture , a PRC entity wholly -held indirectly b y a foreign Yefang Zhang Farmmi, Inc. November 27, 2017 Page 2 entity , will be “within legal restriction of People’s Republic of China.” Please tell us in your response whether counsel has advised that the exclusive purchase option granted to Suyua n Agriculture comports with PRC law. Corporate Structure, page 62 Khorgos Farmmi Enterprise Serv ice Co., Ltd. , page 62 We note your updated disclosure in this section regar ding the newly -created wholly 3. owned subs idiary of Suyuan Agriculture. Please expand your disclosure in this section or elsewhere to explain the “beneficial tax treatment” due to the Khorgos Farmmi Enterprise Service - Suyuan Agriculture structure which you bri efly disc losed here. We also note that the tax-related disclosures in the Business section here are excepted 4. from PRC counsel’s tax opinion. Please supplement your disclosure here to attribute your discussion of the tax treatment for this entity to counsel or advise. You may contact Lily Dang , Staff Accountant, at (202 ) 551 -3867 or Karl Hiller , Accounting Branch Chief, at (202) 551 -3686 if you have questions regarding comments on the financial statements and related matters. Please contact Jerard Gibson, Staff Attorney, at (202) 551 -3473 or, in his absence , me at (202) 551 -3642 with any other questions. Sincerely, /s/ Loan Lauren P. Nguyen Loan Lauren P. Nguyen Legal Branch Chief Office of Natural Resources cc: Anthony W. Basch, Esq. Xiaoqin Li, Esq. Kaufman & Canoles, P.C.