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United States securities and exchange commission logo
April 21, 2023
Jun Jiang
Chief Operating Officer
Jinxin Technology Holding Co
Floor 8, Building D, Shengyin Building
Shengxia Road 666
Pudong District, Shanghai 201203
People s Republic of China
Re: Jinxin Technology
Holding Co
Draft Registration
Statement on Form F-1
Submitted March 27,
2023
CIK No. 0001967631
Dear Jun Jiang:
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. We note your intention
to apply for the listing of your ADS's on either the NYSE or
Nasdaq Global Select
Market. Please revise your disclosure here to clearly state whether
your offering is
contingent upon the listing of your ADS's on the NYSE or Nasdaq Global
Select Market. If this
offering is not contingent upon such listing, please provide risk
factor disclosure that
explains the risk of purchasing securities for which there is no
market.
Jun Jiang
FirstName LastNameJun Jiang
Jinxin Technology Holding Co
Comapany
April NameJinxin Technology Holding Co
21, 2023
April 221, 2023 Page 2
Page
FirstName LastName
2. Please revise your disclosure on the cover page to address recent
statements and
regulatory actions by China's government relating to education and
after-school
tutoring have or may impact the company s ability to conduct its
business, accept foreign
investments, or list on a U.S. or other foreign exchange. In this
regard, we note that
the Alleviating Burden Opinion may have materially and adversely
affected and may
continue to affect your business, operations and financial condition.
3. Please refrain from using terms such as we or our when
describing activities or
functions of a VIE. In this regard, we note your disclosure that
"'we,' 'us,' 'our
company,' 'our' and 'our or 'Jinxin Technology'" also refers to the
consolidated VIE.
Additionally, we note your discussion on page 162 of the federal
income tax implications
of failure to own stock in "our VIEs."
4. We note your discussion of cumulative capital contributions and
representations that 1) no
other cash or asset was transferred within your organization and 2)
you have not
previously declared or paid any cash dividend or dividend in kind, and
have no plan to
declare or pay any dividends in the near future. Please revise your
disclosure here to
provide cross-references to the condensed consolidating schedule and
the consolidated
financial statements.
5. Please state on the cover page whether there are limitations on your
ability to transfer cash
between you, your subsidiaries, the consolidated VIE or investors.
Provide a cross-
reference to your discussion of this issue in your summary, summary
risk factors, and risk
factors sections, as well.
6. We note your disclosure on page 6 that you "do not have cash
management policies and
procedures in place that dictate how funds are transferred" through
the company. Please
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.
7. We note your disclosure that you "may be subject to the risk of
trading prohibitions under
the Holding Foreign Companies Accountable Act, or the HFCA Act."
Please revise your
disclosure to reflect that the Holding Foreign Companies Accountable
Act has
been amended by the Consolidated Appropriations Act as of 2023. Please
also make
conforming revisions in your Prospectus Summary and Risk Factors
sections.
Prospectus Summary
Our Business, page 1
8. We note your representation here and on pages 73, 94 and 98 that you
are the "largest
digital textbook platform" for K-9 students in China according to
Frost & Sullivan.
Please revise your disclosure to clarify by what metric you are the
largest digital textbook
platform for the stated demographic.
Jun Jiang
FirstName LastNameJun Jiang
Jinxin Technology Holding Co
Comapany
April NameJinxin Technology Holding Co
21, 2023
April 321, 2023 Page 3
Page
FirstName LastName
Summary of Risk Factors, page 3
9. Please revise your Summary of Risk Factors to ensure that each risk
factor has a cross-
reference to the relevant individual detailed risk factor.
Corporate History and Structure, page 5
10. Please revise the diagram of the company s corporate structure. The
diagram should use
dashed lines without arrows with respect to the relationship with the
VIE.
Transfer of Funds and Other Assets, page 6
11. Provide a clear description of how cash is transferred through your
organization. Disclose
your intentions to distribute earnings or settle amounts owed under
the VIE agreements.
Quantify any cash flows and transfers of other assets by type that
have occurred between
the holding company, its subsidiaries, and the consolidated VIEs, and
direction of
transfer. Describe any restrictions on foreign exchange and your
ability to transfer cash
between entities, across borders, and to U.S. investors. Describe any
restrictions and
limitations on your ability to distribute earnings from the company,
including your
subsidiaries and/or the consolidated VIEs, to the parent company and
U.S. investors.
Lastly, please provide cross-references to the condensed consolidating
schedule and the
consolidated financial statements.
Conventions Which Apply to This Prospectus, page 10
12. We note your definition of "China" and the "PRC" appears to exclude
the special
administrative regions of Hong Kong and Macau. Please clarify that the
legal and
operational risks associated with operating in China also apply to
operations in Hong
Kong and Macau. This disclosure may appear in the definition itself or
in an appropriate
discussion of legal and operational risks.
13. Please define "K-9" as you use the term in the prospectus.
14. We note your statements on page 11 that "[w]e have not independently
verified the
accuracy or completeness of the data contained in these industry
publications and reports.
The industry in which we operate is subject to a high degree of
uncertainty and risk due to
variety of factors . . . . [t]hese and other factors could cause
results to differ materially
from those expressed in these publications and reports." It is not
appropriate to imply that
you are not liable for information included in your registration
statement. Accordingly,
please delete the statements referenced above or state specifically
that you are liable for
the disclosure included in the registration statement that is based on
third-party sources.
Please make conforming revisions to the similar declamatory language
on page 85.
Jun Jiang
FirstName LastNameJun Jiang
Jinxin Technology Holding Co
Comapany
April NameJinxin Technology Holding Co
21, 2023
April 421, 2023 Page 4
Page
FirstName LastName
Risk Factors
If we are not able to continue to attract and retain users . . . , page 21
15. It appears you generate revenue from partnerships with "major telecom
and broadcast
operators and hardware manufacturers in China." To the extent your
business is
materially dependent on such partnerships, please include a separate
risk factor identifying
these third-parties and disclose the material terms of any agreements
you have with
them. Also, please file any such agreements as exhibits to the
registration statement or tell
us why you believe you are not required to do so. See Item 601(b)(10)
of Regulation S-K.
A severe and prolonged global economic recession and the slowdown in the
Chinese economy . .
.. , page 23
16. Please provide any material updates to your COVID-19 related
disclosure to account for
any changes to your business as a result of the lifting of COVID-19
restrictions in China
in December 2022, as we note from your representation on page 77 that
your business
appears to have benefitted from the increase in the use of online
study throughout 2022.
We are subject to the oversight of the CAC and it is unclear how such oversight
may impact us . .
.., page 43
17. Please state to what extent you believe that you are compliant with
the regulations or
policies that have been issued by the CAC to date.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Year ended December 31, 2022 compared to year ended December 31, 2021
Net Revenues, Revenue from individual users, page 77
18. You disclose the company "ceased offering online tutoring services at
the end of 2021 in
order to be compliant with relevant PRC regulations, which restrict
the provision
of tutoring services on academic subjects by after-school tutoring
institutions to students
in compulsory education." Please disclose the amount of revenue
derived from this
service offering to individual users in 2021, and discuss the extent
that income was
impacted by lost revenues from online tutoring services in 2022. As
applicable, discuss
whether the effect of these PRC regulations represents a known trend,
uncertainty or event
that is reasonably expected to have a material impact on your net
sales, income from
operations, profitability, or liquidity, or that would cause reported
financial results to not
be indicative of future operating results or financial condition.
Refer to Items 5A and 5D
of Form 20-F as referenced from Item 4a of Form F-1.
19. Please discuss in greater detail the increase of individual paying
users who switched to
online study at home during the COVID-19 pandemic on your net revenues
and income
from operations during the year ended December 31, 2022. As
applicable, explain whether the increased number of K-9 students
opting for online
Jun Jiang
Jinxin Technology Holding Co
April 21, 2023
Page 5
learning from home during the pandemic represents a material trend
that is expected to
continue to impact your future operating results and financial
condition. Refer to Items
5A and 5D of Form 20-F as referenced from Item 4a of Form F-1.
20. Please describe the extent to which the increase in paying subscribers
is attributable to
changes in prices and/or changes in the volume of subscriptions,
and/or to the expansion
of the scope of your product offerings in 2022. Refer to Item 5A.1 of
Form 20-F as
referenced from Item 4a of Form F-1.
Operating Expenses, page 78
21. Please discuss in greater detail how your business restructuring plans
related to staff
optimization and cost reduction efforts impacted your results of
operations and financial
condition for the year ended December 31, 2022. Refer to Item 5A of
Form 20-F as
referenced from Item 4a of Form F-1.
22. Please expand your discussion of the significant decrease in sales and
marketing expenses
in response to changes in the PRC regulatory environment. In this
regard, please explain
how your sales and marketing efforts have been adapted to the bans in
private tutoring
services for K-9 students implemented in 2021. Refer to Item 5D of
Form 20-F as
referenced from Item 4a of Form F-1.
MD&A
Interest Rate Risk, page 81
23. We note your disclosure that you are "exposed to interest rate risk on
[y]our interest-
bearing assets and liabilities." Please revise your Summary of Risk
Factors and Risk
Factors sections to reflect this risk.
Business
Our Users for Namibox, page 100
24. Please disclose the basis for your statement here that you have formed
a large and loyal
fan community or state that it is management s belief.
Where YouLastNameJun
FirstName Can Find Additional
Jiang Information, page 177
Comapany
25. NameJinxin
Please Technology
update your disclosureHolding Coyour internet address. Refer to
Item 4(e) of Form
to include
F-1.
April 21, 2023 Page 5
FirstName LastName
Jun Jiang
FirstName LastNameJun Jiang
Jinxin Technology Holding Co
Comapany
April NameJinxin Technology Holding Co
21, 2023
April 621, 2023 Page 6
Page
FirstName LastName
General
26. We note your footnote on page 138 stating that the business address of
your directors and
executives is in the PRC. If you have one or more directors, officers
or members of senior
management located in the PRC or Hong Kong, please (i) state that this
is the case and
identify the relevant individuals and (ii) include a separate
Enforceability section,
consistent with Item 101(g) of Regulation S-K, and a risk factor
addressing the challenges
of bringing actions and enforcing judgments or liabilities against
such individuals.
27. Please define or include descriptions of what it means to be a
"registered user" as it relates
to your business. In this regard we note your discussion of
"registered users" throughout
the prospectus.
You may contact Robert Shapiro at (202) 551-3273 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: Steve Lin