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July 8, 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. 4 to Registration Statement on Form F-4
Filed June 20, 2024
File No. 333-274114
Dear Haimei Wu:
We have reviewed your amended registration statement and have the
following
comment(s).
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 April 2, 2024 letter.
Amendment No. 4 to Form F-4 Filed June 20, 2024
Unaudited Pro Forma Condensed Combined Financial Information, page 71
1. We note your response to comment 2. Adjustment (b)(b) states that it is
for the reversal of
non-recurring fees. Please specify what non-recurring fees are being
reversed in this
adjustment. We remind you of the updated guidance in Article 11-02(a)(6)
of Regulation
S-X and Section II.D of SEC Release 33-10786 which includes guidance
regarding the
inclusion of transaction accounting adjustments for nonrecurring items.
Please advise or
revise as necessary.
2. Prior to Closing, Baird Medical will transfer 1,947,058 PubCo Ordinary
Shares to Newco
and the Minority Holders will exchange their ownership interests in
Baird Medical for all
of the outstanding ownership interests in Newco; and after the special
meeting, Merger
Sub 2 will merge with and into Newco, with Newco continuing as the
surviving entity and
wholly-owned subsidiary of PubCo. This transaction is referred to as the
Second Merger
July 8, 2024
Page 2
in your filing. Please expand your disclosures to address the business
purpose of the
Second Merger and tell us what consideration was given to separately
reflecting
the Second Merger in the pro forma information provided, including
whether
noncontrolling interests need to be presented pursuant to ASC 810.
Comparative Share Information, page 82
3. We note your response to comment 6. Certain pro forma per share amounts
presented in
your comparative share information table do not appear to be the same as
the amounts as
presented in your pro forma financial information beginning on page 71.
Specifically the
pro forma net income (loss) per share basic and diluted amounts appear
to be
different. Please revise as necessary.
Background of the Business Combination, page 188
4. We note your revised disclosure in response to prior comment 9. With
respect to the
refined projections discussed in the third bullet point, please expand
your disclosure to
explain the impact of the revised projections on R&D and depreciation.
5. We note your revised disclosure relating to the multi-year trend
analysis of hospital usage
in response to prior comment 10, which we reissue in part. You disclose
that Baird
Medical management estimated the revised 2024 needles sales to be
increased to 60,142,
assuming a 13.7% year-over-year estimated hospital usage growth and
increased year-end
inventory from 1.6 months to 1.9 months at hospitals and distributors at
the end of 2024.
Please expand your disclosure to provide a reasonable basis for Baird
Medical
management s estimates for a 13.7% year-over-year hospital usage
growth and increased
year-end inventory in light of the preliminary 2023 results.
Opinion of Financial Advisor to the ExcelFin Board, page 213
6. We note your response to prior comment 13 and your revised disclosure
removing the
references to "projected US revenue for Baird Medical for the calendar
years ended 2024
through 2030" and "US Market Development Update for Baird Medical, dated
February
2024." Please advise whether the financial advisor will be providing an
updated and
revised fairness opinion.
Excelfin's Management's Discussion and Analysis, page 258
7. Please continue to provide the results of operations discussion for the
two years ended
December 31, 2023 in your filing. Refer to Item 5 of the Form 20-F.
Customers, page 287
8. We note your revised disclosure on page 287 that one distributor
accounted for 10.4% of
Baird Medical s total revenue for the year ended December 31, 2023.
Please identify this
top customer and provide a brief description of the material terms of
your agreement with
such customer, such as the termination provision and whether there are
any minimum
purchase requirements. If material, please also file the agreements as
exhibits to the
registration statement as required by Item 21 to Form F-4 and Item
601(b)(10) of
Regulation S-K, or explain to us why you believe you are not required to
do so.
July 8, 2024
Page 3
Research and Development - Clinical Trials, page 297
9. We note your revised disclosure in response to prior comment 14, which
we reissue in
part. We refer to your disclosure on page 303 that you plan to have the
clinical testing
plan program for your breast lump clinical trials and finalize the
applicable research
proposal for your pulmonary nodule clinical trials by the end of June
2024. Please revise
to update your disclosure in regard to these recent developments
accordingly.
Revenues, page 342
10. Please disclose why revenues from Direct customers decreased whereas
revenue from
Distributors increased (page F-34). Disclose also whether you are aware
of a material
amount of unsold inventory held by your Distributors. In this regard, we
note the
Distributor inventory reports referenced on page 102. Tell us the dollar
amount of
inventory held by Distributors at December 31, 2023.
Selling and marketing expenses, page 344
11. We note your disclosure that selling and marketing expenses decreased by
$1 million in
the fiscal year 2023 and accordingly, your selling expenses as a
percentage of sales were
8.1% compared to 10.2% in 2022. You also disclose on page 344 that you
expect these
expenses to remain relatively steady as a percentage of your net
revenues to support
business growth. However, we note your revised disclosure on page 195
that in June
2023, ExcelFin and Baird Medical refined its 2023 and 2024 projections
of its overall
sales and marketing expenses to increase from 9% to 10% of sales revenue
with overall
sales expenses as a percentage of revenue expected to rise slightly. We
also refer to your
disclosure on page 306 that the number of members in your in-house sales
and marketing
department decreased from 79 members to 32 members as of December 31,
2023. Please
expand your disclosure to explain the differing expectations relating to
your sales
expenses as a percentage of revenue in light of your reported selling
expenses and
decrease in the size of your in-house sales and marketing department for
the fiscal year
2023.
Note 4. Accounts Receivable, Net, page F-23
12. We note that you mortgaged $4.4 million of your receivables for bank
loans. Please
provide all of the disclosures required by ASC 860-30-50, including
qualitative
information about the relationship between the assets and associated
liabilities, including
a description of the nature of restrictions placed on the assets.
13. Please explain the reasonable basis supporting your disclosures that
"The Company
generally grants trade debtors a credit period of 30 to 90 days." In
this regard, we note that
your December 31, 2023 net receivables balance approximates 100% of your
reported
revenues for the year. Consequently it is not clear whether any of your
2023 revenues
were actually collected during the year. Please disclose whether you
have historically
charged and collected any substantial late payment fees from your
customers. If your
actual practice in the periods presented has been to grant trade
creditors up to 365 days or
more to pay then that fact should also be clearly disclosed as well as
the reasons therefor.
For example, if Distributors generally do not pay you for product
purchases until after
they have sold those products to their customers then that factor should
be addressed in
July 8, 2024
Page 4
your explanation of your accounts receivable variances.
14. We note that your receivables increased by approximately 28% whereas
your revenue
decreased by 10%. In order for us to better understand the reasons for
this disparity,
please provide us with separate December 31, 2023 aging tables that show
(1) the aging of
receivables due from Distributors and (2) the aging of receivables due
from Direct
Customers (Note 19). Further, clarify for us the statement in your
response to prior
comment 15 that "the payments from these two publicly listed companies
are still
respectively in the process of being approved internally". If they
purchased the products in
2022 it is unclear why the payments have not been approved internally.
General
15. We note that ExcelFin Acquisition Corp. is seeking to extend the
termination date to
complete an initial business combination to December 25, 2024, which is
a date that is 38
months from ExcelFin Acquisition Corp.'s initial public offering. Since
Section IM-5101-
2 of the Nasdaq listing rules requires that a special purpose
acquisition company complete
a business combination within 36 months of the effectiveness of the
initial public offering
registration statement, please disclose that the proposal to extend the
termination date
beyond 36 months does not comply with this rule and describe the risks
of the non-
compliance, including that securities may be subject to suspension and
delisting from
Nasdaq.
16. We note revised disclosures indicating ExcelFin Acquisition Corp.'s
removal of the
requirement to maintain $5,000,001 in net tangible assets. Please revise
your risk factor
disclosure to discuss the risk that ExcelFin Acquisition Corp. shares
may not be approved
for initial listing on the Nasdaq, in light of your dependence upon this
status to avoid a
"penny stock" determination, and discuss the consequences of such
outcome.
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 Lauren Nguyen at 202-551-3642 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Industrial Applications and
Services
cc: Stephen Leitzell, Esq.