View:
United States securities and exchange commission logo
February 6, 2024
Haimei Wu
Chief Executive Officer
Baird Medical Investment Holdings Limited
Room 202, 2/F, Baide Building, Building 11, No.15
Rongtong Street, Yuexiu District, Guangzhou, People's Republic of China
Re: Baird Medical
Investment Holdings Limited
Amendment No. 2 to
Registration Statement on Form F-4
Filed January 19,
2024
File No. 333-274114
Dear Haimei Wu:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our December 20,
2023 letter.
Amendment No. 2 to Registration Statement on Form F-4 filed January 19,
2024
Risk Factor Summary, page 14
1. We note your revised
disclosure in narrative form on page 14 in response to prior
comment 4, which we
reissue in part. Please reformat your revised disclosure relating to
the risks that having
the majority of the company s operations in China pose to investors,
including but not
limited to the risks arising from the legal and regulatory system in
China, into a bullet
point format that is consistent with this section. For such risk factors
describing the
significant regulatory, liquidity, and enforcement risks, please also include
cross-references to the
more detailed discussion of each of the relevant risks in the
prospectus.
Q: What equity stake will current stockholders of ExcelFin and Baird
Medical hold...?, page 22
2. We note your response
to prior comment 6, which we reissue in part. Please also expand
Haimei Wu
FirstName LastNameHaimei Wu Limited
Baird Medical Investment Holdings
Comapany6,NameBaird
February 2024 Medical Investment Holdings Limited
February
Page 2 6, 2024 Page 2
FirstName LastName
your disclosure to clarify whether it is possible that more public
shareholders may redeem
than assumed for the purposes of your maximum redemption scenario.
Manufacture License, page 39
3. We note your revised disclosure in response to prior comment 9 refers
to the updates and
revisions to the 2022 Supervisory and Administrative Measures for
Production. Please
expand your disclosure relating to such updates and revisions to the
2022 Supervisory and
Administrative Measures for Production and clarify, if true, that you
are subject to and in
compliance with such regulation. We refer to your disclosure on page
304.
Unaudited Pro Forma Condensed Combined Financial Information, page 67
4. Please address your accounting for each of the following transactions
as well as what
consideration was given as to how they should be reflected in your pro
forma financial
information:
In connection with the extension of the expiration date of
ExcelFin to October 25,
2023, the Sponsor agreed to transfer 1,250,000 founder shares
upon the closing of the
Business Combination to certain parties who agreed not to redeem
their ExcelFin
public shares in connection with that extension;
At Closing, the Sponsor will be issued 3,150,00 PubCo Ordinary
Shares and
1,350,000 Earnout Shares and the transferees will be issued
1,250,000 PubCo
Ordinary Shares;
On October 25, 2023, the Sponsor exercised its right to convert
all of the founder
shares into an equal number of shares of ExcelFin Class A Common
Stock; and
The Sponsor paid an aggregate of $11,700,000 for 11,700,000
private placement
warrants in connection with the IPO. In connection with the
Business Combination
Agreement, the Sponsor has agreed to surrender all of the private
placement warrants
for no additional consideration.
5. Regarding your response to prior comment 10, we note your conclusion
that since "the
change in control provision that accelerates the vesting is not based
on the stock price or
another fixed-to-fixed adjustment" then equity classification is
precluded. Please provide
further elaboration regarding the basis for this conclusion. Also,
please clarify for us
whether there are any circumstances under which the earnout obligation
would be settled
in cash or whether the number of shares issued because of a change in
control would be
variable.
Comparative Share Information, page 76
6. We note your response to comment 11. As previously requested, please
also provide the
equivalent pro forma per share data required by Item 3(f) of Part I.A
of the Form F-4, or
Haimei Wu
FirstName LastNameHaimei Wu Limited
Baird Medical Investment Holdings
Comapany6,NameBaird
February 2024 Medical Investment Holdings Limited
February
Page 3 6, 2024 Page 3
FirstName LastName
help us understand why it is not provided. Please refer to Instruction
1 to which states that
equivalent pro forma per share amounts shall be calculated by
multiplying the pro forma
income (loss) per share, pro forma book value per share, and the pro
forma dividends per
share of the registrant by the exchange ratio so that the per share
amounts are equated to
the respective values for one share of the company being acquired.
Certain Unaudited Baird Medical Prospective Financial Information, page 98
7. We note your revised disclosure in response to comment 15, including
on page 190 that,
"On April 10, 2023, ExcelFin received a financial package consisting
of Baird Medical
audit reports for the years 2019-2022 and a financial forecast for
2023-2025 from Baird
Medical s advisors." Please clarify whether the forecast received on
April 10, 2023 is the
same as the prospective financial information described in this
section. If not, please
disclose the relevant forecast and provide the assumptions underlying
the forecast. In
addition, please explain the difference in assumptions underlying two
different sets of
prospective financial information, if applicable.
Risks Related to Doing Business in China, page 107
8. We note your revised disclosure in response to prior comment 13, which
we reissue in
part. We are concerned that the noted disclosures below mitigate the
challenges you face
as you continue to state that the PRC government:
"has implemented measures emphasizing the utilization of market
forces for
economic reform and the establishment of improved corporate
governance in
business enterprises, the PRC government continues to play a
significant role in
regulating industry development by improving industrial policies,
intervenes to "optimize China s economy,"
has implemented various measures to "encourage economic growth,
and
strengthens" the supervision on overseas listings
Please remove or revise the disclosure noted above to clearly describe
the material impact
that intervention or control by the PRC government has or may have on
your business or
on the value of your securities. You should provide specific
disclosures regarding the
legal and operational risks associated with your operations,
consistent with the guidance in
our Sample Letter to China-Based Companies issued on December 20,
2021, and our
Sample Letter to Companies Regarding China-Specific Disclosures issued
on July 17,
2023. The Sample Letters to China-Based Companies seek specific
disclosure relating to
the risk that the PRC government may intervene in or influence your
operations at any
time, or may exert control over operations of your business, which
could result in a
material change in your operations and/or the value of the securities
you are registering
for sale. We do not believe the disclosures noted above sufficiently
convey this risk.
Haimei Wu
FirstName LastNameHaimei Wu Limited
Baird Medical Investment Holdings
Comapany6,NameBaird
February 2024 Medical Investment Holdings Limited
February
Page 4 6, 2024 Page 4
FirstName LastName
9. As a related matter, where you disclose throughout this section that
certain rules and
regulations that place restrictions on capital raising or other
activities by China
based companies could adversely affect your business and results of
operations, please
disclose that these regulations could materially affect your business
and results of
operations. Make conforming changes to your disclosures throughout
this section.
Background of the Business Combination, page 186
10. We refer to the third bullet point in your response to prior comment
17 that on June 22,
2023, ExcelFin agreed to a $20 million increase in valuation based on
the completion of
due diligence by ExcelFin s management on Baird Medical s business
and the results of
ExcelFin s comparable company analysis. Please revise your
disclosure on page 194 to
discuss in more detail the basis for the ExcelFin management s
decision to agree to a $20
million increase in valuation as a result of the due diligence and
comparable company
analysis.
11. We note your response to prior comment 18, including your response
that the due
diligence summaries were prepared by ExcelFin s advisors to assist
ExcelFin in its due
diligence of certain aspects of Baird Medical s business based on
each advisor s
respective expertise. Please revise to clarify whether each of your
advisors findings and
conclusions were those of ExcelFin or of each such advisor. If the
latter, please provide
additional analysis as to why none of these summaries is a report,
opinion, or appraisal
materially relating to the transaction pursuant to Item 4(b) of
Form F-4 and provide
additional analysis as to why a consent is not required from each such
professional
advisor. Refer to Rule 436 and Securities Act Section 7.
12. We note your revised disclosure in response to comment 16, including
your discussion of
the breakup fee and limited triggering events. Please disclose the
triggering events and
amount of the breakup fee, including how each of the same evolved
throughout
negotiations.
Research and Development, page 273
13. We note your revised disclosure on page 283 in response to prior
comment 25 that Baird
Medical sponsored the clinical trials and paid certain hospitals to
conduct such trials
pursuant to the collaboration agreements. You also disclose on page
278 that you entered
into collaboration agreements with three hospitals. Please clarify
whether the
collaboration agreements referenced are separate from the
collaboration agreements
entered into with Nanjing Huitong Medical Technology Co., Ltd. and
Zhuhai People s
Hospital, and if so, please discuss the material terms of
collaboration agreements and file
such agreements that are currently in effect as exhibits to the
registration statement. Refer
to Item 601(b)(10) of Regulation S-K.
14. We note your revised disclosure on page 289 in response to prior
comment 26 that the
relevant research findings report for your thyroid nodule clinical
trial was finalized on
July 20, 2020. You also disclose on page 260 that the research and
development and
Haimei Wu
FirstName LastNameHaimei Wu Limited
Baird Medical Investment Holdings
Comapany6,NameBaird
February 2024 Medical Investment Holdings Limited
February
Page 5 6, 2024 Page 5
FirstName LastName
clinical trials for breast lump and thyroid nodule products in the
E.U. is well-advanced,
but that additional studies and clinical evaluation research is needed
to meet EU MDR
requirements. Please revise your disclosure in this section and
elsewhere to clarify the
status of your clinical studies and research for each of your products
in different
jurisdictions. Please also revise to disclose, where appropriate, your
plans to appoint
additional hospitals with respect to your breast lump and pulmonary
nodules clinical trials,
as disclosed in your response.
15. We note your revised disclosure relating to your collaboration
agreement with Nanjing
Forestry University. You disclose on page 282 that pursuant to a
commercial agreement
with Nanjing Forestry University, you own all rights to the utility
patent relating to a
device for reducing magnetron power fluctuations that was registered
on August 24, 2021.
Please expand your disclosure to provide a brief description of the
material terms of such
commercial agreement and file such agreement as an exhibit to the
registration statement
or explain to us why you believe you are not required to do so. Refer
to Item 601(b)(10) of
Regulation S-K.
Baird Medical's Management's Discussion and Analysis of Financial Condition and
Results of
Operations, page 323
16. We note your revised disclosure on page 324 in response to prior
comment 32 that you
expect to apply for certification for breast lump and thyroid nodule
products in the E.U. in
the near future, and will seek to launch such product lines
thereafter. Please revise to
clarify the expected timeline for your breast lump and thyroid nodule
products. We refer
to your disclosure on pages 91 and 260.
Operating Activities, page 331
17. We note your response to prior comment 33, which we reissue. Please
revise your
disclosure to include your response in the registration statement
accordingly.
Executive Compensation of Baird Medical, page 334
18. Please update your compensation disclosure to reflect the fiscal year
ended December 31,
2023.
Financial Statements, page F-1
19. We note your response to comment 36. As previously requested, please
also provide
financial statements of the registrant, Baird Medical Investment
Holdings Limited
pursuant to Item 14(h) of the Form F-4. Please also include the
registrant in a separate
column in the pro forma financial information provided.
Note 21. Subsequent Events, page F-36
20. We note your response to comment 38. In a similar manner to your
response, please
clarify in your disclosures which entity these preferred shares are
related to and any
Haimei Wu
Baird Medical Investment Holdings Limited
February 6, 2024
Page 6
impact the settlement had on Baird Medical Holdings Limited.
Note 3 - Accounts Receivable, Net, page F-55
21. We note your response to comment 39. Please address the following:
Please provide a table in MD&A that disaggregates the aging of
your June 30, 2023
accounts receivable based on the number of days between the dates
the receivables
were initially recognized and the Balance Sheet date. In this
regard, it does not appear
that your standard repayment policy terms are being consistently
applied; and
We note that all accounts receivable are expected to be
recovered within one year. Of
the $25 million in accounts receivable at December 31, 2022, you
have collected
$18.3 million in one year. This results in a remaining balance of
approximately $7
million compared to an allowance for credit losses of only $1
million. Please help us
better understand how you determined that your allowance was
adequate given that it
appears approximately 28% of your accounts receivable balance is
not recovered for
more than a year. We also note that there are only $205k of
accounts receivable
which were over a year in the aging analysis provided as of June
30, 2023; this
indicates that there has been a recent significant decline in the
aging of your accounts
receivable. Please advise.
Note 19 - Subsequent Events, page F-65
22. We note your response to comment 40. Please address the following:
As previously requested, please disclose how you are accounting
for the $1.6 million
reassignment of Ms. Lu s loan; and
It appears that adjustment (L) to the pro forma balance sheet
includes multiple
components, including the repayment of this loan. Please
separately identify each
component in your disclosures.
General
23. We acknowledge your response to prior comment 42, which we reissue in
part. We note
that your investor presentation discloses 34 pending patent applications
on slide 29.
FirstName LastNameHaimei Wu
However, we also note your disclosure on pages 257 and 292 that you
currently have 33
Comapany NameBaird
pending Medical Investment
patent applications. Holdings
Please advise Limited
or revise your disclosure to
address this
inconsistency
February accordingly.
6, 2024 Page 6
FirstName LastName
Haimei Wu
FirstName LastNameHaimei Wu Limited
Baird Medical Investment Holdings
Comapany6,NameBaird
February 2024 Medical Investment Holdings Limited
February
Page 7 6, 2024 Page 7
FirstName LastName
Please contact Nudrat Salik at 202-551-3692 or Al Pavot at 202-551-3738
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Jane Park at 202-551-7439 or Katherine Bagley at 202-551-2545 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Industrial
Applications and
Services
cc: Stephen Leitzell, Esq.