SecProbe.io

September 19, 2024
Jiulong You
Chief Executive and Interim Chief Financial Officer
Pinnacle Food Group Limited
600 837 West Hastings Street
Vancouver BC V6C 2X1 Canada
Re:Pinnacle Food Group Limited
Draft Registration Statement on Form F-1
Submitted August 23, 2024
CIK No. 0002032755
Dear Jiulong You:
            We have reviewed your draft registration statement and have the following comments.
            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 submitted August 23, 2024
Cover Page
1.We note that your issued and outstanding share capital consists of both Class A common
shares and Class B common shares, with each holder of your Class A common shares
entitled to one vote per share and each holder of your Class B common shares entitled to
five votes per share. Please revise your cover page to briefly discuss the risks to
investors stemming from holders of your Class B common shares being entitled to more
votes per share, including your Class B shareholders having control over corporate
matters requiring shareholder approval, such as election of directors, amendment of
constitutional documents including your memorandum and articles of association, and
significant corporate transactions. Please also include a cross reference to your risk factor
disclosure on page 28.
We note your disclosure on page 69 that Jin Yang Zhao currently controls approximately
60% of your voting power. We also note your disclosure that Li Xia Du controls 2.

September 19, 2024
Page 2
approximately 17% of your voting power. Please revise to discuss whether you expect to
be a controlled company under the listing standards of Nasdaq following the offering.
Please also briefly discuss the exemptions available to controlled companies, disclose
whether you intend to rely on any such exemptions, and include appropriate risk factor
disclosure that discusses the effect, risks and uncertainties of being designated a
controlled company, including but not limited to, that you may elect not to comply with
certain corporate governance requirements.
3.Please revise to disclose Ms. Zhao' s current share ownership and voting power
percentage in the company, and her expected share ownership and voting power
percentage following the offering. Please also disclose, both on the cover page and in your
principal shareholder disclosure on page 69, the relationship between Li Xia Du and Jin
Yang Zhao.
4.Please revise your cover page and prospectus summary to disclose, as you do on page 88,
that in connection with this offering, you have agreed to issue Representative's Warrants
to the Representative, and that you intend to register the warrants and underlying Class A
common shares on this registration statement. Your disclosure should briefly describe the
terms of the warrants.
Prospectus Summary, page 1
5.We note your disclosure that you currently sell hydroponic growing systems and technical
support services to individual households and community groups and are developing a
hydroponic growing system for urban farms. Please revise to discuss, both here and in
MD&A, where your products and services are currently sold and offered. Refer to Item
4.B.2. of Form 20-F. Please also briefly discuss the types of community groups and urban
farms that you are targeting as customers and your intended timing for the development of
your hydroponic growing system for urban farms. In this regard, we note your disclosure
that you intend to provide such equipment and services to urban farms in the "near future"
and to smart greenhouses and large-scale farming systems "at a later date."
6.We note your disclosure that your core technology is based on real-time, remote data
monitoring using sensors that you have selected. Please revise to clarify whether these
sensors are provided by a third party, and if so, please clarify whether these sensors are
custom-made for your products. We also note your disclosure on page 2 that you use "big
data structures and machine learning training models developed for [you] by third parties
to provide customers with data models to help them better manage vegetable planting."
Please revise your disclosures throughout to clarify that the data intelligence you provide
to users of your hydroponic growing systems is based on "big data structures" and
"machine learning training models" developed by a third party, and further explain how
you utilize these structures and models and to what degree you modify or customize these
structures and models when analyzing your customers' data and providing
recommendations regarding their vegetables through your mobile applications.
We note your disclosure on page 2 that the PFAI Model S hydroponic growing systems
and its operating parameters were designed by you and developed by a third party
commissioned by you, and that you own the molds made by such third party and have
engaged an OEM manufacturer to produce the equipment using the molds. Please revise
to clearly identify the party designing, developing, and manufacturing each of your 7.

September 19, 2024
Page 3
products and services, including the Model M, Model A and Model R, and FaaS Lite,
Plus, Pro, and Enterprise. Please also further discuss the role of distributors in the sale of
your products, and clearly explain which of your products and services are offered
directly to consumers and which of your products and services are offered only through
distributors. Consider presenting this information in tabular format.
8.We note your disclosure on page 4 that your "expansion strategy initially entails a
carefully phased expansion into various Canadian provinces. This approach is designed to
solidify [y]our domestic market presence before increasing [y]our presence in the
international arena. After the initial success in the domestic market, [y]ou started to sell
[y]our products to a distributor in New Zealand and plan to expand to Australia." Please
revise to discuss the timeframe for this expansion across Canada and into Australia and
describe the relevant phases in detail, including the intended timing for completion of
each phase.
Implications of Being a Foreign Private Issuer, page 9
9.Please revise your prospectus summary to clearly state whether you intend to rely
on certain home country practices in relation to corporate governance matters.
The Offering
Lock-up, page 12
10.Please revise to briefly describe the "certain exceptions" to your lock-up agreements.
Risk Factors, page 13
11.We note your disclosure on page 45 that in fiscal 2023, your three distributors accounted
for approximately 53%, 16% and 12% of your total revenue and that your principal
supplier accounted for 84% of your total purchases of materials and outsourcing
production costs. We also note that in fiscal 2022, one customer accounted for 89% of
your total revenue. Please revise to disclose whether any of your customers accounted for
more than 50% of your revenue in fiscal 2023 and whether you expect this customer
concentration to continue going forward. Please also amend your risk factor disclosure to
include a risk factor describing the risks to investors stemming from your supplier and
customer concentration. In this regard, your risk factor on page 13 describes the risks
related to your reliance on three distributors but does not discuss risks related to supplier
or customer concentration.
12.We note your disclosure on page 74 that you will enter into indemnification agreements
with your directors and executive officers that provide such persons with additional
indemnification beyond that provided in your post-offering memorandum and articles of
association. Please amend your disclosure to include a risk factor describing the
limitations on director and officer liability and indemnification, and related risks to
investors.
Technological failures and rapid advancements pose risks to our company., page 14
13.Please revise this risk factor to discuss the risks to investors stemming from your
outsourcing of the development of your big data structures and machine learning training
models to third parties.

September 19, 2024
Page 4
Increases in costs, disruption of supply or shortage of materials, in particular for our products and
consumables, could harm our business., page 21
14.Please revise to disclose the sources and availability of your raw materials. Refer to Item
4.B.4. of Form 20-F.
It may be difficult to enforce civil liabilities under U.S. securities laws in Canada and the Cayman
Islands., page 22
15.We note your disclosure that certain of your directors and executive officers reside or are
based principally in Canada and the majority of your assets and all or a substantial portion
of the assets of these persons is located outside the United States. Please revise to disclose
the residence of each of your executive officers and directors.
Risks related to Regulations and Litigation
Any inability to obtain requisite approvals, licenses, or permits..., page 27
16.We note your disclosure that "[d]ue to uncertainties in the regulatory environment of the
industries and/or jurisdictions in which we operate, there can be no assurance that we
have obtained or applied for all the approvals, permits and licenses required for
conducting our business in Canada or elsewhere, or would be able to maintain our
existing approvals, permits and licenses or obtain any new approvals, permits and licenses
if required by any future laws or regulations." Please revise your disclosure to clarify
whether you believe that you currently hold the requisite approvals, licenses, or permits to
operate in accordance with relevant government regulations.
Our dual-class voting structure will limit your ability to influence corporate matters requiring
shareholder approval..., page 28
17.We note your disclosure that "[a]s a result of the dual-class share structure and the
concentration of ownership, holders of Class B Common Shares will have considerable
influence over corporate matters requiring shareholder approval, such as election of
directors, amendment of constitutional documents including [y]our memorandum and
articles of association, and significant corporate transactions." We also note your
disclosure that "[t]his concentrated control will limit your ability to influence corporate
matters and could discourage others from pursuing any potential merger, takeover or other
change of control transactions that holders of Class A Common Shares may view as
beneficial." Please advise whether holders of your Class B common shares can approve
corporate matters without requiring the favorable vote of any Class A common shares. If
so, please revise this risk factor, and your disclosures throughout the registration
statement, to clarify that holders of Class B common shares will have control over
corporate matters requiring shareholder approval.
Use of Proceeds, page 37
We note your disclosure that portions of the proceeds will be used for several uses,
including to expand the functionality and capabilities of your hydroponic growing
systems; for development and expansion of your business, including international
expansion; and for general corporate purposes, including working capital, operating
expenses and capital expenditures. Please revise to provide additional detail for each 18.

September 19, 2024
Page 5
stated use, including which products you intend to expand and the relevant functionalities
and capabilities, where you intend to expand your international activities and how, and the
specifics of any planned capital expenditures. If the anticipated proceeds will not be
sufficient to fund all of your proposed purposes, please provide the amount and sources of
other funds needed. Refer to Item 3.C. of Form 20-F.
Corporate History, page 44
19.We note your disclosure that on July 29, 2024, Ms. Du transferred all 2,999,000 issued
and outstanding Class B Preferred Shares in PFAI to PFAI in exchange for 2,999,000
Class E Preferred Shares of PFAI. Please clarify whether the Class E preferred shares are
convertible into Class A or Class B common shares.
Management's Discussion and Analysis of Financial Condition and Results of Operations, page
45
20.Please revise to provide a description of your research and development policies, and if
applicable, any material recent trends in production, sales and inventory, costs and selling
prices. Refer to Items 5.C. and 5.D. of Form 20-F. In your discussion of your research and
development policies, please clarify how you collect or intend to collect data from your
products and services. In this regard, we note your disclosure on page 53 that you believe
that the large amount of data you collect "will support [y]our research and development
and enable [you] to serve larger-scale plant factory projects in the future," and that
"[c]ommunity garden consumers produce a large quantity of data which enables [you] to
test the accuracy of data models [you] created based on data collected by [you] and helps
[you] provide better and more precise recommendations to [y]our customers." Clarify
whether you have access to this data through your mobile app or through other avenues.
21.Given that you exited the ginseng business in 2023, please provide us with your analysis
of the guidance concerning discontinued operations as outlined in ASC 205-20.
22.Please expand your disclosure to explain the material increases in your non-current assets.
Disclose how these assets were acquired and how you determined the carrying value of
these assets when acquired. Disclose whether any related parties were involved in these
transactions.
Results of Operations for the Year Ended December 31, 2023 and 2022
Revenue, page 46
23.Please quantify revenue from smart farming packages sold to distributors and smart
farming systems sold to individuals. Discuss and analyze differences in gross profit
generated by these two streams, as well as any trends or uncertainties expected to impact
future operations.
24.We note your disclosure that your revenues increased for the relevant period "due to the
launch of [y]our new smart farming business in 2023." Please revise your disclosure to
clarify how you generated revenue from this "launch," including whether and to what
extent the increase in revenue was attributable to sales of certain of your products or
services.

September 19, 2024
Page 6
Liquidity and Capital Resources, page 48
25.We note your disclosure that "[f]or the year ended December 31, 2023, [you] had cash
provided from financing activities of US$39 thousand, which was attributable to funds
borrowed from related parties" and that "[f]or the year ended December 31, 2022, [you]
had cash provided by financing activities of US$94 thousand, which was primarily
attributable to funds borrowed from related parties." Please revise to discuss the material
terms of the relevant transactions pursuant to which you borrowed from these parties
including the dates of the transactions, the identity of the parties, and interest rates.
Operating Activities, page 48
26.Please provide a discussion of your accounts receivable balance as of December 31, 2023,
which is over 90% of 2023 sales. Quantify the accounts receivable balance from
distributors and the balance from individuals.
27.Please provide a discussion of accounts payable as of December 31, 2023, which appears
to exceed all of your expenses reported for 2023, as well as the purchase of property, plant
and equipment. Discuss th