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November 17, 2021
Xiaofeng Gao
Co-Chief Executive Officer
Skillful Craftsman Education Technology Ltd
Floor 4, Building 1, No. 311, Yanxin Road
Huishan District, Wuxi
Jiangsu Province 214000
Re: Skillful Craftsman
Education Technology Ltd
Amendment No. 1 to
Registration Statement on Form F-3
Filed on October
25, 2021
File No. 333-259498
Dear Mr. Gao:
We have reviewed your amended 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 your
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 comments are to comments in our
September 30, 2021 letter.
Amendment No. 1 to Registration Statement on Form F-3 filed October 25,
2021
Prospectus Cover Page, page i
1. We note your response
and revised disclosure to comment 3 and reissue our comment.
Clearly disclose how
you will refer to the holding company, subsidiaries, and VIEs when
providing the
disclosure throughout the document so that it is clear to investors which
entity the disclosure
is referencing and which subsidiaries or entities are conducting the
business operations.
Refrain from using terms such as we or our when describing
activities or functions
of a VIE. Disclose clearly the entity (including the domicile) in
which investors are
purchasing their interest. For example, on your cover page you state
that "[w]e may offer
the securities described in this prospectus from time to time at prices
Xiaofeng Gao
Skillful Craftsman Education Technology Ltd
November 17, 2021
Page 2
and on terms to be determined at or prior to the time of the offering,
up to $95,000,000."
This disclosure appears to refer to Skillful Craftsman Education
Technology Limited, a
Cayman Islands company. However, on page 2 you state that "[w]e
currently provide
approximately 642 vocational training courses that cover a wide range
of subjects such as
mechanics, electronics, auto repair and construction," which appears
to refer to your VIE.
Please revise your disclosure so that an investor clearly understands
which entity you are
referring to in your disclosure.
2. Provide here a description of how cash is transferred through your
organization and
disclosure regarding your intentions to distribute earnings or settle
amounts owed under
the VIE agreements. State whether any transfers, dividends, or
distributions have been
made to date.
3. We note your disclosure on page 4 and throughout your filing that you
control and receive
economic benefits of Skillful Craftsman Education Technology Limited
s business
operations through VIE agreements and that those agreements are
designed to provide
your WFOE or PRC subsidiary with the power, rights, and obligations
equivalent in all
material respects to those it would possess as the principal equity
holder of the VIE. We
also note disclosure that you are the primary beneficiary of the VIE.
However, you or
your investors do not have an equity ownership in, direct foreign
investment in, or control
through such ownership/investment of the VIE. As such, when describing
the design of
the VIE agreements and related outcome, please refrain from implying
that the VIE
agreement is equivalent to an equity ownership in the business of the
VIE. Any
references to control or benefits that accrue to you because of the
VIE should be limited to
and clearly describe the conditions you met for consolidation of the
VIE under U.S.
GAAP and your disclosure should clarify that, for accounting purposes,
you will be the
primary beneficiary. In addition, your disclosure should note, if
true, that the agreements
have not been tested in a court of law.
4. We note your disclosure that the VIE structure is used to replicate
foreign investment in
FirstName LastNameXiaofeng Gao
China-based companies. We note, however, that the structure provides
contractual
Comapany NameSkillful
exposure to foreignCraftsman Education
investment Technology
in such companies Ltd than
replicating an investment.
rather
Please
November 17,revise here and
2021 Page 2 throughout your filing, accordingly.
FirstName LastName
Xiaofeng Gao
FirstName LastNameXiaofeng Gao
Skillful Craftsman Education Technology Ltd
Comapany 17,
November NameSkillful
2021 Craftsman Education Technology Ltd
November
Page 3 17, 2021 Page 3
FirstName LastName
5. We note your response to comment 2 and reissue the comment in part. In
this regard, we
note your disclosure that "[you] face risks associated with regulatory
approvals on
offshore offerings, the use of variable interest entities,
anti-monopoly regulatory actions,
and oversight on cybersecurity and data privacy, as well as the lack
of PCAOB inspection
on [y]our auditors, which may impact [y]our ability to conduct certain
businesses, accept
foreign investments, or list on a United States or other foreign
exchange." Please discuss
how these risks relate to China's recent statements and regulatory
actions, similar to your
discussion on page 3.
Prospectus summary, page 2
6. We note your response to comment 8 in Annex I to your response letter.
Please include in
the prospectus summary the disclosure you included in Annex I. In this
regard, we note
that the activity of the VIE is reflected in the line item titled
investments in subsidiaries
and VIE in the parent s financial statements. Please provide a
roll-forward of the
investment in subsidiaries and VIE line item.
Recent Regulatory Developments, page 3
7. We note your revised disclosure in response to comment 6. State
whether you, your
subsidiaries, or VIEs are covered by permissions requirements from the
CSRC, CAC or
any other entity that is required to approve of the VIE's operations,
and state affirmatively
whether you have received all requisite permissions and whether any
permissions have
been denied. In this regard, we only note disclosure referencing
inquiries, notices,
warnings or sanctions from the CSRC. Please disclose whether you are
required to obtain
any approvals to offer securities to foreign investors, whether you
have received such
approvals and the consequences to you and your investors if you do not
receive or
maintain the approvals, inadvertently conclude that such approvals are
not required, or
applicable laws, regulations, or interpretations change and you are
required to obtain
approval in the future.
Summary of Risk Factors, page 7
8. We note your response to comment 5 and reissue the comment in part.
Please discuss risks
arising from the legal system in China, including risks and
uncertainties regarding how
regulations in China can change quickly with little advance notice and
cross-reference to
the more detailed discussion of these risks in the prospectus.
Risk Factors, page 11
9. We note from the audit opinion that you have a U.S. based auditor that
is registered with
the PCAOB and currently subject to PCAOB inspection. Please disclose
any material
risks to the company and investors if it is later determined that the
PCAOB is unable to
inspect or investigate completely your auditor because of a position
taken by an authority
in a foreign jurisdiction. For example, disclose the risk that lack of
inspection could cause
Xiaofeng Gao
Skillful Craftsman Education Technology Ltd
November 17, 2021
Page 4
trading in your securities to be prohibited under the Holding Foreign
Companies
Accountable Act and as a result an exchange may determine, to delist
your securities.
10. Please expand your risk factor disclosure to discuss that the United
States Senate passed
the Accelerating Holding Foreign Companies Accountable Act, which, if
enacted, would
decrease the number of non-inspection years from three years to two,
thus reducing the
time period before your securities may be prohibited from trading or
delisted.
11. We note your response to comment 11 and your revised disclosure with
regards to how
the greater oversight by the Cyberspace Administration of China may
impact your
business. Please revise your disclosure to also explain how this
oversight impacts your
offering and to what extent you believe that you are compliant with
the regulations or
policies that have been issued by the CAC to date.
General
12. We note your response to comment 13. Please provide similar disclosure
in your filing
clarifying the applicability of the "Opinions on Further Alleviating
the Burden of
Homework and After School Tutoring for Students in Compulsory
Education" to you and
your business. Please also address if these guidelines may be expanded
in the future to
cover any of your business or operations, in light of the
uncertainties regarding the
interpretation of laws, rules and regulations in China and given that
these rules can change
quickly with little advance notice.
You may contact Scott Anderegg at 202-551-3342 or Jennifer L pez-Molina
at 202-551-
3792 with any questions.
FirstName LastNameXiaofeng Gao Sincerely,
Comapany NameSkillful Craftsman Education Technology Ltd
Division of Corporation
Finance
November 17, 2021 Page 4 Office of Trade & Services
FirstName LastName