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United States securities and exchange commission logo
April 25, 2023
Tian Gao
Vice President
Pony AI Inc.
1301 Pearl Development Building
1 Mingzhu 1st Street, Hengli Town, Nansha District,
Guangzhou, People s Republic of China, 511458
Re: Pony AI Inc.
Draft Registration
Statement on Form F-1
Submitted March 27,
2023
CIK No. 0001969302
Dear Tian Gao:
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 Submitted March 27, 2023
Cover Page
1. Please explain whether
the VIE structure is used to provide investors with exposure to
foreign investment in
China-based companies where Chinese law prohibits direct foreign
investment in the
operating companies.
2. Disclose whether
listing on a national securities exchange is a condition to the offering.
Tian Gao
FirstName LastNameTian Gao
Pony AI Inc.
Comapany
April NamePony AI Inc.
25, 2023
April 225, 2023 Page 2
Page
FirstName LastName
Prospectus Summary, page 1
3. We note your disclosure that this prospectus contains certain
information from an industry
report commissioned by you and prepared by Frost & Sullivan, Inc.,
Shanghai Branch
Co., or Frost & Sullivan, a third-party industry research firm. Please
clarify the sources
from which the research firm obtained its industry statistics if it is
not based on its own
research. Furthermore, it is not clear whether all the industry
statistics disclosed are
derived from this report. Please specifically identify the source of
each industry
statistic disclosed.
4. We note that the consolidated VIEs constitute a material part of your
consolidated
financial statements. Please provide in tabular form a condensed
consolidating schedule
that disaggregates the operations and depicts the financial position,
cash flows, and results
of operations as of the same dates and for the same periods for which
audited consolidated
financial statements are required. The schedule should present major
line items, such as
revenue and cost of goods/services, and subtotals and disaggregated
intercompany
amounts, such as separate line items for intercompany receivables and
investment in
subsidiary. The schedule should also disaggregate the parent company,
the VIEs and its
consolidated subsidiaries, the WFOEs that are the primary beneficiary
of the VIEs, and an
aggregation of other entities that are consolidated. The objective of
this disclosure is to
allow an investor to evaluate the nature of assets held by, and the
operations of, entities
apart from the VIE, as well as the nature and amounts associated with
intercompany
transactions. Any intercompany amounts should be presented on a gross
basis and when
necessary, additional disclosure about such amounts should be included
in order to make
the information presented not misleading.
Summary of Risk Factors
Risks Related to Our Corporate Structure, page 2
5. For each of your summary risk factors related to your corporate
structure and the risks
related to doing business in China, please provide a specific
cross-reference to the more
detailed risk factor in the prospectus.
Contractual Arrangements, page 8
6. Please revise your disclosure to describe all contracts and
arrangements through which
you claim to have economic rights and exercise control that results in
consolidation of the
VIE s operations and financial results into your financial
statements.
Our Summary Consolidated Financial Data
Condensed consolidating statements of operations information, page 20
7. Please explain to us why you disclose elimination amounts in the Cost
from external
parties line-items or revise.
Tian Gao
FirstName LastNameTian Gao
Pony AI Inc.
Comapany
April NamePony AI Inc.
25, 2023
April 325, 2023 Page 3
Page
FirstName LastName
8. Explain to us why the sum of the total costs and total expenses
elimination amounts do not
equal the Revenues from intra-group entities elimination amounts.
Condensed consolidating balance sheets information, page 21
9. We note the current and non-current amounts due to group companies
from the VIEs and
their subsidiaries. Please disclose in a footnote the maturity dates
and repayment terms of
the underlying loans.
Condensed consolidating cash flows information, page 23
10. We note your statement on page 10 that the VIEs received debt
financing of US$9.5
million and US$23.7 million in 2021 and 2022 respectively. It is
unclear how the US$23.7
million debt financing is reported in the 2022 condensed consolidating
cash flows
information hereunder. Please explain in an explanatory footnote.
Risk Factors
We historically had a small number of customers due to the nascent stage of our
commercialization..., page 24
11. Please provide a more detailed description of your current customer
base and profiles such
as the number of customers from year to year and any concentration in
geographic
location, size, or industry and any material customer agreements.
Our History and Corporate Structure, page 97
12. We note that the dashed line indicating which entities are "offshore"
versus "onshore" is
positioned so that entities organized in Hong Kong are deemed
"offshore." Please move
the line so that "onshore" includes Hong Hong-based entities. Revise
the graphic on page
97 accordingly.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
100
13. We note your disclosure that the Company has accumulated over 18
million kilometers of
autonomous driving mileages, including over 800,000 kilometers of
driverless mileages.
Please clarify how many of those mileages are associated with a
passenger who
summoned a ride on the PonyPilot+ mobile app and how many are
attributable to your
testing on public roads. On a related note, we note your disclosure
that your peak daily
orders received per robotaxi exceeded 16, setting a key milestone
towards large-scale
commercialization of Level 4 robotaxis. Please clarify whether this
occurred when your
Company was offering promotions and discounts, and how many times you
reached this
milestone.
Tian Gao
FirstName LastNameTian Gao
Pony AI Inc.
Comapany
April NamePony AI Inc.
25, 2023
April 425, 2023 Page 4
Page
FirstName LastName
14. Please tell us whether your management uses any key metrics to monitor
or evaluate
the key factors that affect the company's performance or manage its
business, such as
customer growth or penetration. If they do use any key metrics, please
tell us your
consideration of disclosing these measures for each of the periods
presented. Refer to SEC
Release No. 33-10751.
Business
Our Company, page 125
15. Please discuss the nature and size of your operations in the United
States. Also, if
material, disclose the amount of revenue you generated in the United
States for each of the
periods covered in your financial statements.
Customers and Suppliers, page 147
16. We note your disclosure that your top three customers in the aggregate
accounted for
99.6% and 58.7% of your revenues in 2021 and 2022, respectively.
Please include a
separate section that discusses the material terms of your agreements
with those
customers, including the term and termination provisions.
Additionally, discuss the
services utilized, and whether there are any existing relationships
between any of the
members of management and the customer. File any such contract or
group of inter-
related contracts upon which you are substantially dependent.
Similarly, file as exhibits to
your registration statement any agreements with suppliers upon which
your business is
substantially dependent. Refer to Items 4.a and 8.a of Form F-1, Item
4.B.6 of Form 20-F
and Item 601(b)(10) of Regulation S-K.
Facilities, page 151
17. Please file your material lease agreements as exhibits to your
registration statement. Refer
to Item 8.a of Form F-1 and Item 601(b)(10)(ii)(D) of Regulation S-K.
Notes to the Consolidated Financial Statements
1. Operations and Principal Activities
(b) Consolidated VIEs in the PRC
iii. Risks in relation to the VIE structure, page F-11
18. Please clarify if any of your VIEs may be engaged in sectors that are
on the PRC's
negative list. If so, please identify those sectors and further
discuss the likely
consequences if the VIEs were deemed to be a form of foreign
investment in those
sectors.
Tian Gao
FirstName LastNameTian Gao
Pony AI Inc.
Comapany
April NamePony AI Inc.
25, 2023
April 525, 2023 Page 5
Page
FirstName LastName
2. Summary of Significant Accounting Policies
(k) Revenue Recognition, page F-18
19. We note that revenues from engineering solution services include
software licensing and
development services among others. To the extent material, please
separately disclose
revenues from software licensing apart from other engineering solution
revenues.
19. Subsequent Events, page F-56
20. Please disclose the fair value of the stock underlying the 690,000
RSUs that were granted
to your employees in March 2023 and the related unrecognized
compensation
expense. Reconcile for us any differences in your estimated fair value
per ordinary share
to the anticipated offering price per share.
21. Regarding the share purchase agreement with IWAY LLC, please clarify
if the repurchase
is in accordance with the terms of the Series A Preferred Stock and
tell us how you will
account for it.
General
22. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Kathryn Jacobson, Senior Staff Accountant at
202-551-3365 or Robert
Littlepage, Accounting Branch Chief at 202-551-3361 if you have questions
regarding comments
on the financial statements and related matters. Please contact Mariam
Mansaray, Staff Attorney
at 202-551-6356 or Matthew Crispino, Staff Attorney at 202-551-3456 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Hi Le