SecProbe.io

July 5, 2024
Hiroshi Furukawa
Chief Executive Officer
PicoCELA Inc.
2-34-5 Ningyocho, SANOS Building, Nihonbashi
Chuo-ku, Tokyo 103-0013 Japan
Re:PicoCELA Inc.
Draft Registration Statement on Form F-1
Submitted June 13, 2024
CIK No. 0002018462
Dear Hiroshi Furukawa:
            We have reviewed your draft registration statement and have the following comment(s).
            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 a comment applies 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 this letter and your amended
draft registration statement or filed registration statement, we may have additional comments.
Draft Registration Statement on Form F-1
Prospectus Summary, page 4
1.Please revise your summary to provide a more balanced discussion of your company and
products. Balance the discussion of your strengths with an equally prominent discussion
of your weaknesses, including your history of operating losses, accumulated deficits, and
material risks such as your geographic concentration, reliance on IC-supply and licensed
intellectual property, and limited number of third-party manufacturers.

July 5, 2024
Page 2
2.Please revise the lead-in and table on page 6 to clearly disclose the actual percentages of
your outstanding shares prior to and following the offering ( i.e., not taking into account
the conversion or exercise of any convertible securities, unless and to the extent these will
automatically convert or be exercised in conjunction with the offering). Information
regarding a holder's percentage ownership on an as-converted basis should be provided by
footnote. Additionally revise or remove disclosure that, "Percentage of the voting interest
of our Preferred Shareholders are based on the Common Shares representing the Preferred
Shares they hold as of the date of this prospectus on an as-converted basis."
Risk Factors, page 9
3.Please revise or advise as to the applicability of apparently unrelated disclosures
throughout; for instance, and without limitation, on page 9 ("sales of our condominiums),"
page 12, ("travel and the other products we offer" and "maintain existing properties or
develop new properties"), and page 14 ("a decline in the number of home purchasers").
Please additionally confirm whether the reference on page 21 to the Form 20-F for the
fiscal year ending September 30, 2023, should be updated.
Our business could be materially and adversely disrupted by an epidemic or pandemic...., page 11
4.We note your disclosure regarding the material impacts of COVID-19 since it shut down
the facilities of your corporate customers, where your products would have been installed,
which disrupted your supply chain in overseas outsourced manufacturing
companies. Please revise to more fully explain how your supply chain was impacted by
COVID-19, including whether you were impacted by the global supply shortage of
electrical components, including semiconductor chips, and how this affected your ability
to meet customer orders.
Capitalization, page 31
5.Please address the following items related to your capitalization table:
•Revise to double-underline your cash and cash equivalent balance so it is clear that
cash and cash equivalent is not part of your total capitalization;
•Revise to remove operating lease liabilities from the capitalization table;
•Revise captions for Common Shares and Class A, B and C Preferred Shares to
include the number of authorized, issued and outstanding shares on “as adjusted”
basis; and
•Revise to replace the caption “Accumulated profit” with “Accumulated deficit”.
6.Your disclosures on pages 34 and F-22 indicate that, subsequent to September 30, 2023,
you have issued convertible bond and additional Class C Preferred Shares, as well as
obtained additional borrowing from a bank. Please ensure that these transactions are
reflected in the financial information on a pro forma basis here and in Dilution
disclosures.
We note from your disclosure on page 1 and elsewhere in the filing that your reporting
currency is Japanese Yen (“JPY”). However, in certain sections of your filing, such as
“Capitalization” and “Dilution”, you present amounts in terms of U.S. Dollars. Please
note that amounts throughout the filing should be presented in terms of the JPY.
Additionally, your disclosures in the “Management Discussion and Analysis of Financial 7.

July 5, 2024
Page 3
Condition and Results of Operations” and the “Business” sections include financial
information prior to fiscal 2023 in U.S. Dollars. Please note that convenience translation
is permitted, but only for the most recent fiscal year and interim period. Please revise your
disclosures accordingly. Refer to Rule 3-20(b)(1) of Regulation S-X.
Business
Our Growth Strategies, page 45
8.We note disclosure regarding your future business plans, including transitioning to a
subscription model (with a concurrent reduction in purchase prices), transforming
PicoManager into an online software store selling third-party software, manufacturing and
marketing the PBE module, and expanding into international markets and partnering with
local distributors. Please revise to more fully discuss the steps involved in these business
plans, including obstacles to overcome, and identify related risks and uncertainties.
Include risk factor disclosure as appropriate.
Manufacturing Suppliers, page 50
9.We note your disclosure that you rely on single or limited sources for certain of your
components. Please revise your table on page 51 to clarify what you mean by "Purchase
Amount," and revise to clarify which of your suppliers is a single source supplier. Please
also update your disclosure to disclose whether the contract with Compex has been
renewed. Additionally, please provide updated contracts as exhibits to your registration
statement. In this regard, we note your Exhibit 10.1 is dated as of June 17, 2022.
10.Please disclose what oversight, if any, you maintain on the manufacture of your products
through your third-party manufacturers. If you do not maintain any oversight, please
disclose as much. In this regard, we note your disclosure that your third-party
manufacturers provide sourcing of raw materials, and that they have no discretion in
sourcing replacement chips if Wi-Fi IC chips are short in demand.
Sales and Marketing, page 52
11.We note that you have identified transaction agreements with Customers A, B, C, D, and
E as material contracts. Please revise to identify Customers A, B, C, D, and E.
Intellectual Property, page 56
12.Please revise the disclosure in this section to clearly indicate which intellectual property is
owned by you, and which is licensed. If all the patents listed, issued and pending, are
owned by Kyushu University, clearly so state, and describe which of your products uses
these patents, making corresponding revisions to your risk factor on page 17. Describe the
key provisions of your material license agreement(s), including payment and termination
provisions. If your license agreement(s) are with a related party, include appropriate
disclosure and/or cross-references within your related party transactions section.
Description of Share Capital, page 68
13.Please add disclosure summarizing the differences between your common stock and
preferred stock, for instance with respect to dividends, creditors' rights, rights upon
liquidation or winding up, or other matters. Additionally disclosure whether common and
preferred shares vote together as a class upon matters requiring a shareholder vote.

July 5, 2024
Page 4
14.We note your disclosure that the preferred shares conversion price is subject to adjustment
in the event that you issue common stock for an amount lower than the relevant pre-
adjustment conversion price. Please revise to clarify whether the offering will result in an
adjustment if the initial public offering price is lower than the conversion price for any
series of preferred stock.
Balance Sheets, page F-3
15.Your disclosures on page F-18 state that in the event of distribution of residual assets
upon dissolution of the Company, the Company must pay to the preferred shareholders,
prior to common shareholders, amounts equal to their contributed amounts. As these
amounts appear to be considerably in excess of the par or stated value of these shares,
please revise to disclose in the equity section of the balance sheets the aggregate amount
of liquidation preference of these Preferred Shares. Refer to ASC 505-10-50-4.
Notes to the Financial Statements
Note 12. Equity,, page F-18
16.You disclose on page 68-71 that the conversion prices of Class A, Class B, and Class C
Preferred Shares will be adjusted upon the occurrence of certain events (e.g., issuance of
Common Shares at an amount lower than the conversion price). Please revise to disclose
the terms that change the conversion prices of preferred shares in the notes to the financial
statements, including those related to down-round features, as well as the actual changes
to conversion prices (if any) that have occurred during and subsequent to the reporting
period.
General
17.Please revise your disclosure to clarify whether any outstanding convertible securities
(including, without limitation, your preferred shares, convertible bonds, warrant issued to
Spirit Advisors, and stock options) will automatically convert or be exercised in
conjunction with your initial public offering. Include disclosure within the summary
section to clearly explain how such securities, in addition to the over-allotment shares and
representatives' warrant, are treated in disclosing outstanding shares throughout the
prospectus. Your disclosure should quantify the number of shares that will be outstanding
following the offering, and provide adequate information to additionally allow investors
to determine the number of shares on a fully-diluted basis.
18.We note disclosure on page 5 that indicates ownership will remain concentrated in the
hands of "[y]our management, who will continue to be able to exercise a direct or indirect
controlling influence." Please revise to identify the individual(s) who exercise this
controlling influence, including their ownership interests and management positions.
Additionally revise the generalized cross-reference to reference the specific risk factor
discussing this controlling influence and related risks, such as potential conflicts of
interest. If you will be a controlled company following the offering, disclose this on the
prospectus cover and in the summary, together with the percentage of voting power
controlled by your controlling shareholder(s) and whether you intend to take advantage of
the controlled company exemptions under the applicable listing rules.

July 5, 2024
Page 5
19.We note your disclosure regarding representatives' warrants on page 97. Please reference
these warrants in the table on the prospectus cover, include a description within the
summary section, and file the warrant agreement as an exhibit.
20.We note disclosure relating to your lock-up arrangements includes the qualification, "if
requested by the underwriters." Please revise to clearly state whether your shares will be
subject to lock-up restrictions following the offering, or whether this is subject to the
underwriters' prior request. If the latter is true, additionally disclose any conditions
relating to such request, including whether this is in the underwriters' sole discretion and
the timing thereof, and include appropriate risk factor disclosure. Ensure consistency with
lock-up disclosure appearing elsewhere, including, without limitation, on pages 86 and
98.
21.If holders of your shares or ADSs will be subject to exclusive forum provisions included
in your corporate documents or deposit agreement, then please revise your disclosure to
describe such provisions and include appropriate risk factor disclosure.
            Please contact Eiko Yaoita Pyles at 202-551-3587 or Kevin Stertzel at 202-551-3723 if
you have questions regarding comments on the financial statements and related matters. Please
contact Bradley Ecker at 202-551-4985 or Jennifer Angelini at 202-551-3047 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Manufacturing