View:
United States securities and exchange commission logo
June 29, 2020
Hongdi Brian Gu
Vice Chairman and President
XPENG INC.
No. 8 Songgang Road, Changxing Street
Cencun, Tianhe District, Guangzhou
Guangdong 510640
People s Republic of China
Re: XPENG INC.
Draft Registration
Statement on Form F-1
Submitted June 2,
2020
CIK No. 0001810997
Dear Mr. Gu:
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 June 2, 2020
Implications of Being a Foreign Private Issuer . . ., , page 6
1. Please reconcile your
disclosure here, page 61 and page 155 regarding whether you intend
to follow your home
country's corporate governance practice. If you do intend to follow
your home country's
practice, also revise your disclosure on page 61 to clarify on which of
the "three exemptions"
you intend to rely given that you list five exemptions.
Implications of Being an Emerging Growth Company, page 6
2. Please provide us with
supplemental copies of all written communications, as defined in
Hongdi Brian Gu
FirstName LastNameHongdi Brian Gu
XPENG INC.
Comapany
June NameXPENG INC.
29, 2020
June 29,
Page 2 2020 Page 2
FirstName LastName
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.
Risk Factors, page 14
3. We note the disclosure on page 6 that you will be a "controlled
company" upon
completion of this offering. Though you do not currently intend to
utilize the corporate
governance exemptions available to you, please revise to disclose
those exemptions and
the related risks to investors.
4. We note the different voting rights applicable to Class A and Class B
shares. Please
disclose the risk that your multi-class structure may render your
shares ineligible for
inclusion in certain stock market indices, and thus adversely affect
share price and
liquidity. Please also tell us how you will determine whether more
than 50 percent of its
outstanding voting securities are owned of record by U.S. residents
for purposes of
satisfying the foreign private issuer definition. See Securities Act
Rules Compliance and
Disclosure Interpretation Question 203.17.
The COVID-19 outbreak . . ., , page 19
5. Please quantify the magnitude of the reduction in sales during your
first quarter as a result
of the outbreak. Please also expand to clarify whether the your
suppliers are unable to
provide you materials and, if so, the availability of alternative
suppliers.
ADS holders may not be entitled to a jury trial . . ., , page 58
6. Please revise to discuss whether the limitations on liability
mentioned on page 169 and
jury trial waiver provision apply if an ADS holder withdraws the
ordinary shares from the
depository. Please also revise to clarify the jurisdictional provision
cited in this risk
factor. Further, disclose that investors cannot waive compliance with
the federal
securities laws.
Capitalization, page 66
7. It appears you have only considered your equity in the determination
of your
capitalization. Please note, your total capitalization table should
also include your short
and long term debt balances. Please modify your presentation
accordingly and refer to
Item 3.B of Form 20-F for guidance.
Dilution, page 67
8. Please revise to clarify how the numbers and percentages in the table
on page 68 would
change, assuming the exercise of the options and warrants and
acquisition of RSUs
mentioned in the last paragraph on that page.
Hongdi Brian Gu
FirstName LastNameHongdi Brian Gu
XPENG INC.
Comapany
June NameXPENG INC.
29, 2020
June 29,
Page 3 2020 Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Commitments, page 87
9. It appears you should expand your table of contractual obligations to
include purchase
commitments for good and services, obligations under you contract
manufacturing
arrangement and estimated interest expense on your debt obligations.
Please modify your
disclosure accordingly.
Principal Shareholders, page 147
10. Please identify each of the natural persons who have or share voting
and/or dispositive
powers or right to receive the economic benefit over the shares held
by the entities listed
in the table.
Registration Rights, page 163
11. Please clarify whether the registration rights agreement is part of
the shareholders
agreement referenced here, or a separate agreement. If its a separate
agreement, please
file it as an exhibit. Please also revise to describe the nature and
extent of the registration
rights granted pursuant to the agreement.
Taxation, page 174
12. If, as indicated by Exhibits 8.1, 8.2 and 8.3, the disclosure in this
section represents the
opinion of counsel, please revise to identify counsel, that the
disclosure represents their
opinion and clearly identify and articulate the opinion being
rendered.
Underwriting, page 181
13. Please tell us where in this section you describe the directed share
and directed ADS
program cross-referenced on pages 10 and 11.
Financial Statements
Summary of Significant Accounting Policies
Note (r) Revenue Recognition
Customer Upgrade Program, page F-28
14. We note your disclosure for the optional trade-in right offered in
your Customer Upgrade
Program. Please clarify for us and in your disclosure where
applicable, the following
items:
Your disclosure indicates you are essentially providing a discount
on a future
purchase of a vehicle, but also repurchasing the original model
vehicle. Please
provide additional details of the exact terms of your trade-in
program. It is unclear
how your program results in a sales discount.
Please clarify if your repurchase of the original G3 2019 model is
at a fixed pre-
determined price (guaranteed trade-in value) or if the vehicles
will be repurchased at
Hongdi Brian Gu
XPENG INC.
June 29, 2020
Page 4
fair market value.
Please tell us how you considered whether or not the contract
modification for your
trade-in program represented a conversion to a lease agreement for
those customers
who have elected the trade-in option.
Exhibits
15. Please file as an exhibit the lock-up agreement mentioned on page 172.
You may contact Kevin Stertzel at (202) 551-3723 or John Cash,
Accounting Branch
Chief, at (202) 551-3768 if you have questions regarding comments on the
financial statements
and related matters. Please contact Geoff Kruczek at (202) 551-3641 or Jay
Ingram, Legal
Branch Chief, at (202) 551-3397 with any other questions.
Sincerely,
FirstName LastNameHongdi Brian Gu
Division of
Corporation Finance
Comapany NameXPENG INC.
Office of
Manufacturing
June 29, 2020 Page 4
cc: Kevin P. Kennedy
FirstName LastName