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United States securities and exchange commission logo
August 3, 2023
William Lim
Chief Executive Officer
Trident Digital Tech Holdings Ltd.
Suntec Tower 3
8 Temasek Boulevard Road, #24-03
Singapore, 038988
Re: Trident Digital
Tech Holdings Ltd.
Draft Registration
Statement on Form F-1
Submitted July 7,
2023
CIK No. 0001983550
Dear William Lim:
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 Nasdaq
Global Market or the
NYSE. Please revise your disclosure here and elsewhere as
appropriate to clearly
state whether your offering is contingent upon the listing of your
ADS's on the Nasdaq
Global Market or the NYSE.
2. We note your disclosure
on pages 4, 5 and 31 that you will be a controlled company
following the
completion of the offering. Please revise your prospectus cover page and
summary risk factors
section to disclose that you will be a controlled company.
William Lim
Trident Digital Tech Holdings Ltd.
August 3, 2023
Page 2
Additionally, where you discuss your status as a controlled company,
please 1) identify
and disclose the percentage of voting power to be held by Mr. Soon
Huat Lim following
the offering, 2) state if true, that Mr. Lim will have the ability to
determine all matters
requiring approval by stockholders and 3) clarify that in the event
that you were to lose
your controlled company status, you could still rely on the NYSE or
Nasdaq rules that
permit a foreign private issuer to follow its home country
requirements to some extent
concerning corporate governance issues, including whether a majority
of its board of
directors must be independent.
3. We note your discussion of a dual-class share structure on page 24.
Please revise the
prospectus cover page to disclose your dual-class voting structure.
Quantify the voting
power that your Class A ordinary shareholder will have after the
offering, and identify the
holder of such shares.
Prospectus Summary, page 1
4. We note your statement on pages 1, 45 and 61 regarding your
"successful track
record." Please provide support for these statements or characterize
them as
management's beliefs.
5. We note your statement on pages 1, 2, 45, 61, 62 and 63 that you are a
"leading digital
transformation enabler in Singapore." Please revise your disclosure to
consistently clarify
the specific market in which you are a leading digital transformation
enabler. In this
regard, we note you appear to be the fourth largest contributor of
services in the market
for Singapore-based companies who have been approved to participate in
the SMEs Go
Digital program, rather than in the broader market for digital
solutions in Singapore which
you also discuss throughout the prospectus.
6. In the last paragraph of the Overview subsection, on page 2, where you
discuss your
revenue, please also disclose your net income/loss for the noted
periods.
Risk Factors, page 14
7. We note instances of extreme stock price run-ups followed by rapid price
declines and
stock price volatility seemingly unrelated to company performance
following a number of
recent initial public offerings, particularly among companies with
relatively smaller public
floats. Please revise to include a separate risk factor addressing the
potential for rapid and
substantial price volatility and any known factors particular to your
offering that may add
to this risk and discuss the risks to investors when investing in stock
where the price is
changing rapidly. Clearly state that such volatility, including any
stock-run up, may be
FirstName LastNameWilliam Lim
unrelated to your actual or expected operating performance and financial
condition or
Comapany NameTrident
prospects, making Digital Tech
it difficult forHoldings Ltd.investors to assess the
rapidly changing value
prospective
Augustof3,your
2023stock.
Page 2
FirstName LastName
William Lim
FirstName LastNameWilliam
Trident Digital Tech HoldingsLim
Ltd.
Comapany
August NameTrident Digital Tech Holdings Ltd.
3, 2023
August
Page 3 3, 2023 Page 3
FirstName LastName
8. We note your disclosure on page 53 that you are "exposed to interest
rate risk while [you
have] bank loans." Please revise your summary risk factors and risk
factors sections to
specifically identify this risk. In your risk factor disclosure,
please discuss the impact of
any rate increases on your operations and how your business has been
affected. For
example, describe whether your borrowing costs have recently increased
or are expected
to increase and your ability to pass along your increased costs to
your customers.
Our post-offering memorandum and articles of association and the deposit
agreement provide
that the United States District Court . . ., page 26
9. We note your disclosure that your "post-offering memorandum and
articles of association
provide that the United States District Court for the Southern
District of New York . . . is
the exclusive forum within the United States for the resolution of any
complaint asserting
a cause of action arising out of or relating in any way to the federal
securities laws of the
United States." We also note your representation that the deposit
agreement provides that
"the United States District Court for the Southern District of New
York . . . shall have
exclusive jurisdiction to hear and determine any suit, action or
proceeding and to settle
any dispute between us and the depositary that may arise out of or
relate in any way to the
deposit agreement including without limitation claims under the
Securities Act." Please
revise here and elsewhere as appropriate to clearly state whether the
exclusive forum
provision in the deposit agreement will also apply to claims arising
under the Exchange
Act. Additionally, with respect to Securities Act claims, please state
that investors cannot
waive compliance with the federal securities laws and the rules and
regulations
thereunder. In that regard, we note that Section 22 of the Securities
Act creates concurrent
jurisdiction for federal and state courts over all suits brought to
enforce any duty or
liability created by the Securities Act or the rules and regulations
thereunder.
ADS holders may not be entitled to a jury trial . . ., page 29
10. Please disclose whether the jury trial waiver provision would apply if
an ADS holder were
to withdraw the ordinary shares and whether the provision applies to
purchasers in
secondary transactions.
We have identified material weaknesses in our internal control over financial
reporting . . ., page
32
11. Please revise your risk factor to disclose whether you have a timeline
for remediation and
if there are any associated material costs.
William Lim
FirstName LastNameWilliam
Trident Digital Tech HoldingsLim
Ltd.
Comapany
August NameTrident Digital Tech Holdings Ltd.
3, 2023
August
Page 4 3, 2023 Page 4
FirstName LastName
Use of Proceeds, page 36
12. We note your representation on page 64 that you "plan to pursue
strategic
acquisitions." Please revise here and elsewhere as appropriate to
provide a brief
description of your acquisition plans, including the types of
opportunities you intend to
explore. Alternatively, clarify that management has not yet determined
the types of
businesses that the company will target.
Capitalization, page 38
13. Please address the following:
Revise the table to incorporate indebtedness, including long-term
debt and related
parties payables, as part of your capitalization. Refer to Item
4(a) of Form F-1 and
Item 3.B of Form 20-F.
Refer to the pro forma as adjusted basis column. It appears you
disclosed the
capitalization information on a historical actual basis as of
December 31, 2021 rather
than a pro forma as adjusted basis as of December 31, 2022. Please
revise.
14. Please format your table to clarify which column represents the actual
basis and which
column represents the pro forma as adjusted basis. Consider further
revising your table to
provide two pro forma as adjusted basis columns to illustrate
capitalization metrics for if
the over-allotment option is not exercised and for if the
over-allotment option is exercised
in full.
Enforceability of Civil Liabilities, page 40
15. Clarify here that while your memorandum and articles of association do
not require
arbitration, your deposit agreement will grant the depositary the
"right to require a claim
to be submitted to arbitration," according to your disclosure on page
26.
William Lim
FirstName LastNameWilliam
Trident Digital Tech HoldingsLim
Ltd.
Comapany
August NameTrident Digital Tech Holdings Ltd.
3, 2023
August
Page 5 3, 2023 Page 5
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Revenues, page 47
16. While you discuss certain factors to which changes are attributable,
you do not quantify
these factors nor describe the underlying reasons in enough detail.
For example, you state
business consulting revenues increased due to offering more
comprehensive brand
consulting services with those contract prices being higher, and
attribute the increase in IT
customization revenues in part to more projects being completed,
delivered and accepted
by customers. However, you do not quantify any of these factors nor
expand on what
those additional services and projects are. Please expand your results
of operations
discussion to ensure all material factors are quantified and properly
analyzed including the
effects of changes in price, and amount of products or services being
sold or to the
introduction of new products or services. In addition, please provide
information
regarding the impact of foreign currency fluctuations on the results
of the company as
appropriate. Refer to Item 4(a) of Form F-1 and Item 5 of Form 20-F.
Cost of Revenues, page 48
17. Please tell us your consideration of providing cost of revenues
discussion similar to your
discussion for revenue, separately by other subdivision (e.g. types of
service/product -
business consulting, IT consulting, and management software) in
addition to your current
breakout. Refer to Item 4(a) of Form F-1 and Item 5 of Form 20-F.
Quantitative and Qualitative Disclosures About Market Risks, page 53
18. Please revise your foreign currency translation and transaction risk
discussion to comply
with one of the suggested formats outlined in Item 11(a)(1) of Form
20-F.
Management, page 73
19. We note your disclosure on page 20 that you are "subject to
cybersecurity risks [such as]
outages and breaches of operational systems." Please describe the
extent and nature of the
role of the board of directors in overseeing cybersecurity risks,
including in connection
with the company's data protection.
Related Party Transactions, page 80
20. We note your disclosure regarding financing from related parties.
Please revise to
quantify the approximate dollar amount involved in each related party
transaction. Refer
to Item 404(a)(3) of Regulation S-K.
Description of Share Capital, page 90
21. Please revise here and in your Description of American Depositary
Shares section to
reflect the exclusive forum provisions discussed in the risk factor
disclosure on page 26.
William Lim
Trident Digital Tech Holdings Ltd.
August 3, 2023
Page 6
Consolidated Statements of Operations and Comprehensive (Loss)/Income, page F-4
22. Given its materiality to Net (Loss)/Income, please provide a break out
of the
components of Other Expenses, net by their nature in a note to the
financial statements. In
addition, revise the line item description, Other Expenses, net, on
the income statement as
it is a credit balance. Make corresponding changes throughout the
filing.
23. We note that you have presented earnings per share for the periods
presented using
four decimal places. Please revise throughout the filing to present
earnings per share
rounded to the nearest two decimal places so as not to indicate a
higher degree of accuracy
than actually exists.
Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies
(i) Revenue Recognition
Contract Balances, page F-11
24. Please revise to disclose the opening balance of your contract assets
and liabilities for the
earliest period presented (i.e. as of January 1, 2021). Refer to ASC
606-10-50-8(a).
(p) Loss/Income Per Share, page F-14
25. Please revise to disclose securities that could potentially dilute
basic EPS in the future that
were not included in the computation of diluted EPS because to do so
would have been
antidilutive for the periods presented. Refer to ASC 260-10-50-1(c).
(q) Segment Reporting, page F-14
26. Please revise to disclose revenues from external customers attributed
to your country of
domicile and attributed to all foreign countries in total. If revenues
from external
customers attributed to an individual foreign country are material,
disclose separately.
Refer to ASC 280-10-50-41.
8. Leases, page F-16
27. Please revise to disclose the weighted average remaining lease term
and the weighted
average discount rate for the 2021 fiscal year. Refer to ASC
842-20-50-4(g).
10. Borrowings, page F-19
FirstName LastNameWilliam Lim
28. Please revise to disclose the combined aggregate amount of maturities
for all long-term
Comapany NameTrident
borrowings Digital
for each of theTech
five Holdings Ltd. the date of the latest
balance sheet
years following
Augustpresented. Refer
3, 2023 Page 6 to ASC 470-10-50-1.
FirstName LastName
William Lim
FirstName LastNameWilliam
Trident Digital Tech HoldingsLim
Ltd.
Comapany
August NameTrident Digital Tech Holdings Ltd.
3, 2023
August
Page 7 3, 2023 Page 7
FirstName LastName
Item 7. Recent Sales of Unregistered Securities, page II-1
29. Please clarify if the consideration amounts for your recent sales of
unregistered securities
are presented at the par value or the offering prices or amounts of
consideration
received. If these sales are presented at par value, please revise to
disclose the aggregate
offering price for shares sold for cash, and/or aggregate amount of
consideration received
for shares sold otherwise than for cash, as required by Item 701(c) of
Regulation S-K.
General
30. Please provide us with supplemental 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,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications. Please contact the staff member associated with the
review of this filing
to discuss how to submit the materials, if any, to us for our review.
You may contact Stephen Kim at (202) 551-3291 or Angela Lumley at (202)
551-3398 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: Stephanie Tang