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United States securities and exchange commission logo
August 10, 2022
Jingbo Wang
Chief Financial Officer
Agora, Inc.
Floor 8, Building 12 , Phase III of ChuangZhiTianDi
333 Songhu Road
Yangpu District, Shanghai
People s Republic of China
Re: Agora, Inc.
Form 20-F for the
fiscal year ended December 31, 2021
Dear Mr. Wang:
We have limited our review of your filing to the financial
statements and related
disclosures 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for the fiscal year ended December 31, 2021
Part 1
D. Risk Factors, page 5
1. You disclose on page 5
that this structure allows you to exercise effective control over the
VIEs, and is designed
to replicate substantially the same economic benefits as would be
provided by equity
ownership. Your disclosures in the filing should not should not refer
to any type of equity
ownership when discussing VIEs. Please revise.
2. We note from your
disclosures on page 8 that the PCAOB is currently unable to inspect
your auditor in
relation to their audit work performed for your financial statements
included elsewhere in
this annual report. Please revise to disclose the HFCAA and
Accelerating HFCAA
timeframes in this section of the filing. You should also provide a
specific
cross-reference to the longer risk factor discussion of the impacts of the
HFCAA
and Accelerating HFCAA.
In addition, your disclosure should make clear whether these
Jingbo Wang
FirstName
Agora, Inc.LastNameJingbo Wang
Comapany
August 10, NameAgora,
2022 Inc.
August
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FirstName LastName
risks could cause the value of your ADSs to become worthless.
3. In this section of the filing provide a diagram of the company s
corporate structure,
identifying the person or entity that owns the equity in each depicted
entity. 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. Identify clearly entity(ies) in which the
company s operations are
conducted. Describe the relevant contractual agreements between the
entities and how this
type of corporate structure may affect investors and the value of
their investment,
including how and why the contractual arrangements may be less
effective than direct
ownership and that the company may incur substantial costs to enforce
the terms of the
arrangements. Your disclosures provided in Item 4 (A) "History and
Development of the
Company" should be moved to the forepart of this filing. Explain why
the diagram of the
company's corporate structure does not appear to include the
consolidated variable interest
entity within the Easemob group structure.
4. Please revise your disclosures in this section to clarify that the
Cayman Islands holding
company controls and receives the economic benefits of the VIE s
business operations
through contractual agreements between the VIE and your Wholly
Foreign-Owned
Enterprise (WFOE) and that those agreements are designed to provide
your WFOE with
the power, rights, and obligations equivalent in all material respects
to those it would
possess as the principal equity holder of the VIE. Additionally, your
disclosure should
clarify that you are the primary beneficiary of the VIE for accounting
purposes.
.
5. Please provide a specific cross-reference to the more detailed risk
factor for each summary
risk factor.
6. Disclose in this section each permission or approval that you, your
subsidiaries, or the
VIEs are required to obtain from Chinese authorities to operate your
business and to offer
the securities being registered to foreign investors. State whether
you, your subsidiaries, or
VIEs are covered by permissions requirements from the China Securities
Regulatory
Commission (CSRC), Cyberspace Administration of China (CAC) or any
other
governmental agency that is required to approve the VIE s
operations, and state
affirmatively whether you have received all requisite permissions or
approvals and
whether any permissions or approvals have been denied. Please also
describe the
consequences to you and your investors if you, your subsidiaries, or
the VIEs: (i) do not
receive or maintain such permissions or approvals, (ii) inadvertently
conclude that such
permissions or approvals are not required, or (iii) applicable laws,
regulations, or
interpretations change and you are required to obtain such permissions
or approvals in the
future.
7. In this section, provide a clear description of how cash is
transferred through your
organization. Disclose your intentions to distribute earnings or
settle amounts owed under
the VIE agreements. Provide us with a roll-forward of the Amount
due to intercompany
Jingbo Wang
FirstName
Agora, Inc.LastNameJingbo Wang
Comapany
August 10, NameAgora,
2022 Inc.
August
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FirstName LastName
for the VIEs as of December 31, 2021. Describe any restrictions and
limitations on your
ability to distribute earnings from the company, including your
subsidiaries and/or the
consolidated VIEs, to the parent company and U.S. investors as well as
the ability to settle
amounts owed under the VIE agreements. Quantify any cash flows and
transfers of other
assets by type that have occurred between the holding company, its
subsidiaries, and the
consolidated VIEs, and direction of transfer. Quantify any dividends
or distributions that a
subsidiary or consolidated VIE have made to the holding company and
which entity made
such transfer, and their tax consequences. Similarly quantify
dividends or distributions
made to U.S. investors, the source, and their tax consequences. Your
disclosure should
make clear if no transfers, dividends, or distributions have been made
to date. Describe
any restrictions on foreign exchange and your ability to transfer cash
between entities,
across borders, and to U.S. investors. Provide cross-references to the
condensed
consolidating schedule and the consolidated financial statements.
8. We note your tables beginning on page 61 that present the summary
financial
information. Please revise the schedule headings to refer to these
schedules as "selected
condensed consolidating data" instead of selected condensed
consolidated data . Please
revise to provide a roll-forward table for for Agora, Inc.'s Share
of income/(loss) from
VIE and VIE s Subsidiaries and "Investments in subsidiaries
and "Investments in
VIEs".
Risks Related to Our Corporate Structure
"If the PRC government deems that the contractual arrangements in relation to
the VIEs do not
comply with PRC regulatory restrictions...", page 33
9. Revise your risk factors to acknowledge that if the PRC government
determines that the
contractual arrangements constituting part of the VIE structure do not
comply with PRC
regulations, or if these regulations change or are interpreted
differently in the future,
your securities may decline in value or become worthless if the
determinations, changes,
or interpretations result in your inability to assert contractual
control over the assets of
your PRC subsidiaries or the VIEs that conduct all or substantially
all of your operations.
Risks Related to Doing Business in China
"Changes in the political and economic policies of the PRC government could
adversely affect
our business, operating results...", page 38
10. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your securities. Also,
given recent
statements by the Chinese government indicating an intent to exert
more oversight and
control over offerings that are conducted overseas and/or foreign
investment in China-
based issuers, acknowledge the risk that any such action could
significantly limit or
completely hinder your ability to offer or continue to offer
securities to investors and
Jingbo Wang
Agora, Inc.
August 10, 2022
Page 4
cause the value of such securities to significantly decline or be
worthless.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Morgan Youngwood, Senior Staff Accountant at
202-551-3479 or
Stephen Krikorian, Accounting Branch Chief at 202-551-3488 with any questions.
FirstName LastNameJingbo Wang Sincerely,
Comapany NameAgora, Inc.
Division of
Corporation Finance
August 10, 2022 Page 4 Office of
Technology
FirstName LastName