F-1 1 ff12019_lohacoltd.htm REGISTRATION STATEMENTAs filed with the Securities and Exchange Commission on December 9, 2019Registration No. 333- UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM F-1REGISTRATION STATEMENT UNDERTHE SECURITIES ACT OF 1933 LOHA CO. LTD(Exact name of Registrant as specified in its charter)Not Applicable(Translation of Registrants Name into English)Cayman Islands 5140 Not Applicable(State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. EmployerIdentification No.) Room 818, Yisibo Software BuildingHaitian 2nd Road, Nanshan DistrictShenzhen, Guangdong Province 518000Peoples Republic of China+86 755-33093707(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)Cogency Global Inc.10 East 40th Street, 10th FloorNew York, N.Y. 10016(800)221-0102(Names, address, including zip code, and telephone number, including area code, of agent for service) Copies to:Louis A. Bevilacqua, Esq.Kevin (Qixiang) Sun, Esq.Bevilacqua PLLC1050 Connecticut Avenue, NW, Suite 500Washington, DC 20036(202) 869-0888Barry I. Grossman, Esq.Sarah E. Williams, Esq.Ellenoff Grossman however, we will not complete this offering unless we are so listed.Investing in our Class A ordinary shares involves a high degree of risk. See “Risk Factors” beginning on page 7 of this prospectus for a discussion of information thatshould be considered in connection with an investment in our Class A ordinary shares. We are an “emerging growth company” as defined in the Jumpstart Our Business Act of 2012, as amended, and, as such, are eligible for to reduced public company reportingrequirements.While we initially expect to be a “controlled company” under the rules of Nasdaq/NYSE immediately after consummation of this offering, we do not intend to avail ourselvesof the corporate governance exemptions afforded to a “controlled company” under the rules of Nasdaq/NYSE. Per Share Total Initial public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds to us, before expenses $ $ (1) Represents underwriting discount and commissions equal to 7.5% per Class A ordinary share, which is the underwriting discount we have agreed to pay on all investors inthis offering. Does not include expense allowance, payable to the underwriter, or the reimbursement of certain expenses of the underwriter. See “Underwriting” beginningon page 106 of this prospectus for additional information regarding total underwriter compensation.In addition to the underwriting discounts listed above and the expense allowance described in the footnote, we have agreed to issue to the underwriter upon the closing of thisoffering warrants to purchase 7.5% of the total number of Class A ordinary shares being sold in this offering. The exercise price of the compensation warrants is equal to 120%of the offering price of the shares offered hereby. Assuming the exercise of the over-allotment option in full and an exercise price of $ per Class A ordinary share, we wouldreceive, in the aggregate, $ upon exercise of the warrants, of which there can be no guarantee. The warrants are exercisable commencing six (6) months after the closing ofthis offering and will terminate five (5) years after the effective date of the registration statement for this offering of which this prospectus is a part. The registration statement ofwhich this prospectus is a part also covers the Class A ordinary shares issuable upon the exercise thereof. For additional information regarding our arrangement with theunderwriter, please see “Underwriting” beginning on page 106.We have granted the underwriter an option, exercisable for 45 days from the date of this prospectus, to purchase up to an additional shares on the same terms as the othershares being purchased by the underwriter from us. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectusis truthful or complete. Any representation to the contrary is a criminal offense.The underwriter expects to deliver the Class ordinary shares to purchasers in this offering on or about , 2019.Maxim Group LLCThe date of this prospectus is , 2019TABLE OF CONTENTSPageProspectus Summary 1Risk Factors 7Special Note Regarding Forward-Looking Statements 33Use of Proceeds 34Dividend Policy 35Capitalization 36Dilution 37Selected Consolidated Financial Data 38Managements Discussion and Analysis of Financial Condition and Results of Operations 39Corporate History and Structure 57Industry 60Business 63Management 85Principal Shareholders 90Related Party Transactions 91Description of Share Capital 93Shares Eligible For Future Sale 100Taxation 101Enforceability of Civil Liabilities 105Underwriting 106Expenses Related to this Offering 116Legal Matters 117Experts 118Where You Can Find More Information 119Index to Consolidated Financial Statements F-1You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you.Neither we, nor the underwriter has authorized anyone to provide you with different information. The information in this prospectus is accurate only as of the date ofthis prospectus, regardless of the time of delivery of this prospectus, or any free writing prospectus, as the case may be, or any sale of Class A ordinary shares.For investors outside the United States: Neither we, nor the underwriter has done anything that would permit this offering or possession or distribution of this prospectus inany jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus mustinform themselves about, and observe any restrictions relating to, the offering of the Class A ordinary shares and the distribution of this prospectus outside the United States.This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties.Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, althoughthey do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable,you are cautioned not to give undue weight to this information. iCOMMONLY USED DEFINED TERMSExcept as otherwise indicated by the context and for the purposes of this prospectus only, references in this prospectus to: “we,” “us,” “our” or “our company,” are to the combined business of Loha Co. Ltd, a Cayman Islands company, and its consolidated subsidiaries and variable interestentity; “Lohas BVI” are to our wholly-owned subsidiary Lohas World Co. Ltd, a British Virgin Islands company; “Lohas HK” are to Lohas BVIs wholly-owned subsidiary Lohas (Global) Group Co., Limited, a Hong Kong company; “Lohas WFOE” are to Lohas HKs wholly-owned subsidiary Lohas World (Shenzhen) Intelligent Technology Co., Ltd., a PRC company; “Lohas Agricultural” are to our variable interest entity Lohas Agricultural Information Technology Co., Ltd., a PRC company; “Lohas Supply Chain” are to Lohas Agriculturals wholly-owned subsidiary Shenzhen Lohas Supply Chain Management Co., Ltd., a PRC company; “Shenzhen Lohas” are to Shenzhen Lohas World Co., Ltd., which owns 99.333334% of Lohas Agricultural. “Hong Kong” are to the Hong Kong Special Administrative Region of the Peoples Republic of China; “PRC” and “China” are to the Peoples Republic of China, excluding, for the purpose of this prospectus, Taiwan and the special administrative regions of Hong Kongand Macau; “Renminbi” and “RMB” are to the legal currency of China; and “U.S. dollars,” “dollars,” “US$” and “$” are to the legal currency of the United States.iiPROSPECTUS SUMMARYThis summary highlights information that we present more fully in the rest of this prospectus. This summary does not contain all of the information you should considerbefore buying shares in this offering. This summary contains forward-looking statements that involve risks and uncertainties, such as statements about our plans, objectives,expectations, assumptions or future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could causeactual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. See “Special NoteRegarding Forward-Looking Statements.” You should read the entire prospectus carefully, including the “Risk Factors” section and the financial statements and the notes tothose statements. THE COMPANY Our Business We are a technology-driven, comprehensive distributor and smart retailer of fresh and healthy products in China with a focus on health and sustainability. Our name “Lohas”is an acronym for Lifestyles of Health and Sustainability, which is the core philosophy we deeply embrace. We have extensive experience in fresh produce supply chainmanagement and currently have 102 overseas and 5 domestic suppliers in 16 countries. We are committed to providing our customers with high-end quality products, whichmainly consist of imported fruits, wild-harvested seafood, green vegetables and eggs, as well as nutritious dry goods. Besides the stable and lucrative traditional wholesalebusiness, we are now actively pursuing the smart retail development of fresh products through our smart micro marts, which are intelligent vending machines that provideunique shopping experience. The smart micro marts are deployed in high traffic areas, such as residential communities and commute centers in large cities like Shenzhenand Guangzhou. Our smart micro marts work in combination with our online WeChat public account, self-developed WeChat mini-program- Lohas City, group purchaseprogram, and temperature-controlled vehicles to offer convenient shopping experience for our customers.Our business has grown rapidly in recent years as demonstrated by our growth in revenue from approximately $57.27 million for the fiscal year ended September 30, 2017to approximately $85.19 million for the fiscal year ended September 30, 2018, an increase of 48.75%, and growth in net income from approximately $5.14 million for thefiscal year ended September 30, 2017 to approximately $8.78 million for the fiscal year ended September 30, 2018, an increase of 70.70%. Our revenue increased by43.08% from approximately $31.40 million for the six months ended March 31, 2018 to approximately $44.92 million for the six months ended March 31, 2019 while ournet income decreased by 14.58% from approximately $3.10 million to approximately $2.65 million during the same period of time, mainly due to the rise of purchase priceof the majority of our imported fruits. Our Opportunity The growing Chinese economy is bringing more people into the middle class, many of which care for the health and well-being of their families and the planet, and arewilling to spend more on healthy foods. On one hand, the rising awareness of healthy lifestyle has given rise to stronger desire for fresh, green, and healthy products; on theother hand, the fast pace of life and work leaves people less time for traditional market-type shopping. Instead, people are searching for ready-to-eat and ready-to-go freshfood options. This gives us a large opportunity to expand our smart online and offline retail business. Accordingly, we believe, as a professional fresh produce supplier andtechnology-driven smart-retail leader, we will achieve significant growth in the near future. Our Competitive Strengths We believe that the following competitive strengths contribute to our success and differentiate us from our competitors: Unique “Lohas” philosophy emphasizing health and sustainability; Innovative smart retail strategy providing on-demand access to a wide selection of fresh and healthy products to consumers. Robust supply chain management system ensuring reliability and quality of products; Strong brand loyalty amplified by launching our own brand products; and Experienced management team. 1Our Growth StrategiesWe plan to grow and expand our business by pursuing the following growth strategies: Continually enhance our technology in order to retain and grow our customer base; Further penetrate our existing markets; Deploy smart micro marts to new cities and build new distribution centers; Expand our private label product line; Expand our group purchase program; Continue to build our brand and team; and Expand globally.Our Risks and ChallengesOur prospects should be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by similar companies. Our ability to realize ourbusiness objectives and execute our strategies is subject to risks and uncertainties, including, among others, the following: disruption of significant supplier relationships could negatively affect our business; conditions beyond our control can interrupt our supplies and increase our product costs; real or perceived concerns that products we sell could cause unexpected side effects, illness, injury or death could result in their discontinuance or expose us tolawsuits, either of which could result in unexpected costs and damage to our reputation; fluctuations in procurement costs and availability of products may impact profitability; our ability to open new smart micro marts is important for our future business development, and our failure to successfully open them could negatively impactour business; and risks associated with our control over Lohas Agricultural, our variable interest entity in China, which is based on contractual arrangements rather than equityownership; In addition, we face other risks and uncertainties that may materially affect our business prospects, financial condition, and results of operations. You should consider therisks discussed in “Risk Factors” and elsewhere in this prospectus before investing in our ordinary shares. Our Corporate History and Structure We were incorporated as an exempted company with limited liability under the laws of the Cayman Islands on January 10, 2019 to serve as a holding company for our PRCoperations.On February 8, 2019, we established Lohas BVI as a wholly-owned subsidiary in the British Virgin Islands. Lohas BVI is a holding company and holds all of the equityinterests of Lohas HK, which was established in Hong Kong on May 3, 2013. Lohas HK is a holding company and holds all of the equity interests of Lohas WFOE