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United States securities and exchange commission logo
September 20, 2023
Wu Haimei
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
Registration
Statement on Form F-4
Filed August 21,
2023
File No. 333-274114
Dear Wu Haimei:
We have reviewed your 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form F-4 Filed August 21, 2023
Cover Page
1. We note your cover page
disclosure that PubCo will be a controlled company under the
listing rules of Nasdaq
and may be exempt from certain corporate governance
requirements other than
those exemptions available to foreign private issuers. Please
revise to disclose on
the cover page and in the prospectus summary whether you intend to
rely on any exemptions
as a controlled company and identify the controlling shareholder
and the shareholder's
total voting power. We refer to your disclosure on page 135.
2. Given that the Nasdaq
listing approval as a closing condition is waivable, please revise
your cover page to
prominently disclose that shareholders will not have certainty at the
time they vote
regarding whether the PubCo ordinary shares will be listed on a national
securities exchange
following the business combination. Please revise your risk factor on
Wu Haimei
Baird Medical Investment Holdings Limited
September 20, 2023
Page 2
page 122 accordingly.
3. We note your disclosure that "[b]ecause most of the operations of
PubCo will be
conducted in Mainland China through its wholly-owned subsidiary Tycoon
and its
subsidiaries, the business is subject to PRC laws and regulations and
supervision and
potential intervention by the Chinese government," and your cross
reference to your risk
factors. Please revise your disclosure to more clearly highlight that,
because the business
is subject to PRC laws and regulations, there are legal and
operational risks associated
with being based in or having the majority of the company's operations
in China. In
addition, we note your disclosure that "potential intervention by the
Chinese government .
. . could result in a material change in The Target Group's operations
and/or the value of
PubCo's Ordinary Shares after the Business Combination." Given that
you are also
registering PubCo warrants on this registration statement, please
revise this disclosure,
as appropriate, to include a reference to PubCo warrants.
4. On your cover page, state whether any transfers, dividends, or
distributions have been
made to date between the holding company and its subsidiaries, or to
investors, and
quantify the amounts where applicable. Provide cross-references to the
condensed
consolidating schedule and the consolidated financial statements. As a
related matter,
please amend the disclosure in your Summary of the Proxy
Statement/Prospectus to
include a clear description of how cash is transferred through your
organization. Quantify
any cash flows and transfers of other assets by type that have
occurred between the
holding company and its subsidiaries, and the direction of transfer.
Quantify any
dividends or distributions that a subsidiary has 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. Describe any
restrictions and
limitations on your ability to distribute earnings from the company,
including your
subsidiaries, to the parent company and U.S. investors.
Questions and Answers for Stockholders of ExcelFin, page 17
5. Please highlight the material risks to public warrant holders, including
those arising from
differences between private and public warrants. Clarify whether recent
common stock
trading prices exceed the threshold that would allow the company to
redeem public
FirstName LastNameWu Haimei
warrants. Clearly explain the steps, if any, the company will take to
notify all
Comapany NameBaird
shareholders, Medicalbeneficial
including Investment Holdings
owners, Limited
regarding when the warrants
become eligible
for redemption.
September 20, 2023 Page 2
FirstName LastName
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 3 20, 2023 Page 3
FirstName LastName
Q: Did Board obtain a fairness opinion in determining whether or not to proceed
with the
Business Combination?, page 20
6. We note your disclosure that you did not obtain a fairness opinion.
Here and as
appropriate throughout your filing, please provide additional detail
describing the
qualifications and "substantial experience" of your board that allowed
them
to determine that the business combination agreement and the
transactions thereby are
advisable and in the best interests of shareholders, and recommend
that stockholders
approve the business combination.
Q: What equity stake will current stockholders of ExelFin and Baird Medical
hold in PubCo after
the Closing?, page 21
7. We note your disclosure on page 24 relating to the potential impact of
redemptions on the
per share value of the shares owned by non-redeeming shareholders.
Please revise to
include a sensitivity analysis showing a range of redemption
scenarios, including at least
one interim redemption level.
Q: If I am a warrants holder, can I exercise redemption rights with respect to
my warrants?, page
30
8. Quantify the value of warrants, based on recent trading prices, that
may be retained by
redeeming stockholders assuming maximum redemptions and identify any
material
resulting risks.
Summary of the Proxy Statement/Prospectus, page 35
9. Please revise your description of Baird Medical to address the
following issues:
You disclose on page 73 that Baird Medical has obtained one
registration certificate
for microwave ablation therapeutic apparatus under Class III, one
registration
certificate for microwave ablation needles under Class III and
one registration
certificate for microwave ablation needles under Class II. Revise
to disclose the
specific products for which and when Baird Medical obtained Class
II and III
registration certificates here and elsewhere in the prospectus.
We note your disclosure on page 73 that in addition to the
registration certificates,
companies engaging in manufacturing of Class II and Class III
medical devices are
required to obtain and maintain a Manufacture License for medical
devices. You also
disclose on page 246 that Baird Medical has obtained the
Manufacture License for
Class II and III medical devices for its existing microwave
ablation products in
China. Please revise to clarify when Baird Medical obtained such
Manufacture
Licenses and the expiration dates of such licenses.
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 4 20, 2023 Page 4
FirstName LastName
The Combined Company and Baird Medical's Structure before and after the
Business
Combination, page 36
10. Your diagram at the top of page 37 indicates that Auto King
International Limited will
own 59.94% of Betters Medical Investment Holdings Limited, which will
own 75% of
PubCo. Please revise your disclosure in this section to discuss, as
you do on page 312,
that Auto King is controlled by Wu Haimei, and discuss any related
conflicts of interest.
Sources and Uses of Funds for the Business Combination, page 45
11. We understand that UBS Securities and KeyBanc Capital Markets Inc.,
two of the
underwriters in your SPAC IPO, intend to waive the deferred
underwriting commissions
that would otherwise be due to them upon the closing of the business
combination. Please
disclose how these waivers were obtained and why the parties agreed to
these waivers.
Make conforming changes to your disclosure in the Background of the
Business
Combination.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION,
page 62
12. Please update the pro forma financial information provided to included
a pro forma
balance sheet as of June 30, 2023 as well as a pro forma statement of
operations for the six
months ended June 30, 2023.
13. We note your disclosures in notes F and J on page 68 indicating that
the Earnout shares
did not qualify for equity treatment as the provisions contained a
change of control
feature, which is not an assumption in the fixed-to-fixed model.
Please further expand
your disclosures to clarify the specific terms that resulted in your
determination that they
should treated as a liability classified instrument pursuant to your
consideration of ASC
815-40. Please also disclose and discuss the potential impact of the
shares on future
results and provide a sensitivity analysis that quantifies the
potential impact that changes
in the per share market price of the post combination common stock
could have on the pro
forma financial statements. Refer to Article 11-02(b)(10) of
Regulation S-X.
14. We note your discussion of agreements that will terminate upon the
business combination
as discussed on page 282. Please address what consideration was given
to reflecting these
agreements in your pro forma financial information.
15. Your disclosures on page 172 indicate that two of the underwriters in
the ExcelFin IPO,
informally notified ExcelFin that, in connection with the Business
Combination, they were
waiving their right to receive any deferred underwriting fees arising
out of the ExcelFin
IPO. Given your characterization of this as an informal notification,
please disclose your
basis for reflecting this waiver in the pro forma financial
information. Refer to Rule 11-
02 of Regulation S-X.
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 5 20, 2023 Page 5
FirstName LastName
Comparative Share Information, page 71
16. Please provide all of the disclosures required by Item 3(f) of Part
I.A of the Form F-4,
including equivalent pro forma per share data. Please clearly disclose
the exchange ratio
used to calculate these amounts.
Risk Factors Relating to Baird Medical's Business and Industry, page 72
17. We note your disclosure on page 82 that Baird Medical plans to expand
its presence in
foreign and emerging markets as part of its business strategy. Please
expand your
disclosure to specify the jurisdictions, the addressable market for
microwave ablation
medical devices in such jurisdictions and the expected timeline for
Baird Medical's
business strategy.
Baird Medical has engaged in transactions with related parties . . ., page 82
18. We note your disclosure that "[t]he other two Electing Preference
Shares Holders
repurchase requests remain outstanding," and your disclosure on page
94 that "[t]he
expenditure of cash that may be necessary to repurchase the remaining
Preference Shares
Holders, if redeemed by the Company, may adversely affect Baird
Medical s financial
position." Please provide an estimate of the amount of cash that would
be necessary to
repurchase the relevant preference shares, if estimable and material.
Recently enacted and future legislation . . ., page 86
19. We note your disclosure that "a number of legislative and regulatory
changes and
proposed changes regarding medical device industry may affect the
approval processes of
Baird Medical's pipeline products and the inclusion of certain
approved activities in the
regulatory supervision system." You also provide an example describing
regulatory pilot
programs initiated in 2021. Please briefly describe any of the other
relevant legislative and
regulatory changes and proposed changes, if material.
If Baird Medical fails to comply . . ., page 87
20. We note your disclosure that Baird Medical's subsidiaries were
previously determined to
have not maintained the management ledger of the industrial solid
waste of two
manufacturing sites within the PRC, and such non-compliance events may
result in these
subsidiaries being subject to certain penalties, being requested to
rectify the non-
compliance and return any gains resulting form the non-compliance.
Please provide an
estimate of the liability to which these subsidiaries could
potentially be subject, if material
and estimable.
Obtaining and maintaining Baird Medical's patent protection . . ., page 92
21. We note your disclosure that "Baird Medical has in the past lost
rights to one or more
patents for failure to comply with the various renewal requirements
and fees necessary to
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 6 20, 2023 Page 6
FirstName LastName
maintain those rights." Please affirmatively disclose whether Baird
Medical is compliant
with respect to its currently-held patents.
If Tycoon fails to implement and maintain . . ., page 94
22. We note your disclosure that "Tycoon has adopted and will adopt
further measures to
improve its internal control over financial reporting." Please briefly
describe the remedial
measures adopted by Tycoon and the measures Tycoon intends to adopt to
improve its
internal controls.
Risks Related to Doing Business in China, page 96
23. Given the significant oversight and discretion of the government of
the People s Republic
of China (PRC) over the operations of your business, please describe
any material impact
that intervention or control by the PRC government has or may have on
your business or
on the value of your securities. We refer to your disclosure on pages
101 and elsewhere in
the prospectus that the PRC government intervenes to optimize China
s economy, has
implemented various measures to encourage economic growth, and
may strengthen
oversight over your operations. We remind you that, pursuant to
federal securities rules,
the term control (including the terms controlling,
controlled by, and under
common control with ) means the possession, direct or indirect,
of the power to direct or
cause the direction of the management and policies of a person,
whether through the
ownership of voting securities, by contract, or otherwise.
24. Revise your risk factor disclosure, where appropriate, to discuss the
risk that rules and
regulations in China can change quickly with little advance notice.
The CSRC has recently released . . ., page 100
25. We note your disclosure that you believe the Business Combination will
be considered an
indirect offering and you will be subject to the filing requirements
under the Trial
Measures. Please revise your disclosure to clarify whether you have
begun the process of
filing with the CSRC and the current status of any relevant filings
with the CSRC.
Actions by the government of China to exert more supervision over offerings . .
.., page 104
26. We note your disclosure on page 104 that as confirmed by your PRC
counsel, the Chinese
Securities Regulatory Commission s (the CSRC ) approval under
the M&A Rules is not
required in connection with this business combination. You also
disclose on pages 104
and 113 that Baird Medical does not believe it is required to obtain
permissions or
approvals from CSRC, the CAC, or any other Chinese authorities. Please
identify outside
PRC counsel and file a consent as an exhibit to the prospectus.
Risks Relating to ExcelFin, PubCo and the Business Combination, page 116
27. We note your disclosure on pages 198, F-44 and F-58 that ExcelFin may
be subject to an
excise tax of 1% of the fair market value of stock redeemed by PubCo.
Please describe, if
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 7 20, 2023 Page 7
FirstName LastName
applicable, the risk that if existing SPAC investors elect to redeem
their shares such that
their redemptions would subject the SPAC to the stock buyback excise
tax, the remaining
shareholders that did not elect to redeem may economically bear the
impact of the excise
tax.
The process of taking a company public by means of a business combination . .
.., page 116
28. We note your disclosure on page 116 of the risks to unaffiliated
investors presented by
taking the company public through a merger rather than an underwritten
offering. Please
revise your risk factor disclosure to include the risks of the absence
of due diligence
conducted by an underwriter that would be subject to liability for any
material
misstatements or omissions in a registration statement.
The PubCo Ordinary Shares to be received by ExcelFin's stockholders . . ., page
130
29. We note your disclosure that "[t]here will be important differences
between your current
rights as an ExcelFin stockholder and your rights as a shareholder of
PubCo." Please
revise your risk factor to briefly discuss the material differences in
a stockholder's rights
as an ExcelFin stockholder and the rights of a stockholder of PubCo.
The Business Combination Proposal, page 152
30. We note that you have arranged to sell additional securities to raise
funds to satisfy the
minimum cash required to complete the business combination transaction
after returning
funds to redeeming stockholders. We also refer to your disclosure that
ExcelFin and Baird
Medical have agreed to cooperate with each other to consummate the
PIPE investment
concurrently with the closing. Please clarify the current status of
discussions and
negotiations regarding the contemplated PIPE investment. Revise the
disclosure to discuss
the key terms of any convertible securities and to disclose the
potential impact of those
securities on non-redeeming shareholders, as applicable. To the extent
that negotiation and
marketing processes for a PIPE are ongoing, please disclose material
details of those
processes, including who selected the potential PIPE investors, the
relationships the PIPE
investors have to ExcelFin, the Sponsor, Baird Medical and their
affiliates, and the
placement agent and how the terms of the PIPE transaction were
determined, as
applicable.
31. Please highlight material differences in the terms and price of
securities issued at the time
of the IPO as compared to private placements contemplated at the time
of the business
combination. Disclose if the SPAC s Sponsor, directors, officers or
their affiliates will
participate in the private placement.
Representations and Warranties, page 153
32. Please revise your list of representations and warranties on pages 153
to 155 to describe
the material terms of each item rather than providing a summary list.
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 8 20, 2023 Page 8
FirstName LastName
Background of the Business Combination, page 166
33. We note your disclosure that, "in connection with the ExcelFin
stockholder vote on April
13, 2023 to extend ExcelFin's business combination deadline . . .
certain ExcelFin
stockholders exercised their right to redeem their ExcelFin Class A
Common Stock."
Please disclose the percentage of ExcelFin's shareholders at the time
of the stockholder
vote that voted to redeem their shares. Make conforming changes
throughout your filing.
34. We note your disclosure on page 167 that ExcelFin initially identified
over seventy
potential targets during its search process. Please clarify whether
Baird was included in
this initial search for a potential target and expand your disclosure
to describe how Baird
Medical was identified as a potential target and by whom. We refer to
your disclosure on
page 168 that ExcelFin initiated negotiations with Baird Medical when
it was introduced
to Baird Medical by Mr. Jidong Duan on February 11, 2023.
35. We note your disclosure that "[f]ollowing these initial discussions,
ExcelFin's
management determined that Baird Medical and one of the Other
Potential Targets,
Company B, were worth evaluating further." Please amend your
disclosure to describe in
more detail the reasons underlying management's decision not to pursue
each of the Other
Potential Targets.
36. Please identify the individuals and/or parties who participated in the
meetings and
discussions described throughout this section. By way of example only,
please identify the
representatives of ExcelFin and Baird Medical and their financial
advisors. As a related
matter, where you disclose general topics, agreements, or "packages"
that were discussed
at each meeting, please provide additional detail regarding the
substance of those
discussions and material terms of the relevant agreements. For
example, where you
discuss various LOIs, business combination drafts, and financial
packages, discuss the
material terms of the same; and where you disclose the discussion of
"important structural
elements," "legal, financial, accounting, and operational matters,"
etc., please disclose the
substance of those discussions.
37. Please revise your background of the business combination section to
include a discussion
of negotiations relating to the material terms of the transaction,
including but not limited
to, the evolution of the transaction structure; merger consideration
and equity value of
Baird Medical; the downward revision of the minimum cash condition;
the terms of the
private placement, lock-up agreements and the earnout provisions; and
post-closing
governance terms. In your revised disclosure, please explain the
reasons for such terms,
each party's position on such issues, the proposals and
counter-proposals made during the
course of negotiations, and how you reached agreement on the final
terms.
38. Please revise your disclosure in this section to describe how the
ExcelFin Board arrived at
an initial pre-transaction enterprise value of $350 million for Baird
Medical for the LOI.
Please address in your revisions the methodology employed in reaching
the valuation,
including the underlying assumptions and conclusions of the ExcelFin
Board.
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 9 20, 2023 Page 9
FirstName LastName
Additionally, we note your disclosure on page 179 that the comparable
companies
analysis supported the ExcelFin Board s confirmation and validation
of the $370 million
enterprise value for Baird Medical reflected in the Business
Combination Agreement. We
refer to your disclosure that pursuant to the Business Combination
Agreement that
ExcelFin entered into on June 26, 2023, the consideration has an
aggregate value equal to
$300 million. Please reconcile the various enterprise values
disclosed, as appropriate, and
expand your disclosure to discuss the how the analysis and valuation
of Baird Medical
were amended downward from $350 million to $300 million, including how
each party s
position of the merger consideration evolved.
39. We note your disclosures on pages 168 and 170 that ExcelFin engaged
several financial
advisors with respect to the business combination, including Cohen,
EXOS, Grant
Thornton and S&A Consulting. Please expand your disclosure to discuss
the role of each
of your financial advisors in connection with the business
combination. We also refer to
your disclosure on page 171 that Grant Thornton and S&A Consulting
made presentations
regarding their financial and commercial due diligence findings and
that EXOS also
provided an update on their market analysis. Please briefly describe
the findings prepared
by your financial advisors and provide us with your analysis of
whether such findings
constitute a "report, opinion or appraisal materially relating to the
transaction," as
described by Item 4(b) of Form F-4. If Item 4(b) applies to such
findings, please provide
the information required by the item.
40. Please provide the following disclosure with respect to UBS and
KeyBanc:
Please describe the relationship, if any, between UBS and
KeyBanc and ExcelFin
after the close of the IPO, including any financial or
merger-related advisory services
conducted by UBS or KeyBanc. For example, clarify whether either
UBS or
KeyBanc had any role in the identification or evaluation of
business combination
targets.
Tell us whether UBS or KeyBanc was involved in the preparation
of any disclosure
that is included in the Form F-4 registration statement,
including any analysis
underlying disclosure in the registration statement. If so,
clarify their involvement,
whether they have retracted any work product associated with the
transaction, and the
risk of such withdrawal and reliance on their expertise. Further,
please clarify, if true,
that UBS and KeyBanc claim no role in the SPAC's business
combination transaction
and have affirmatively disclaimed any responsibility for any of
the disclosure in this
registration statement.
Please tell us whether you are aware of any disagreements with
UBS or KeyBanc
regarding the disclosure in your registration statement. Further,
please add risk factor
disclosure that clarifies that UBS and KeyBanc were to be
compensated, in part, on a
deferred basis for underwriting services in connection with the
SPAC IPO and such
services have already been rendered, yet UBS and KeyBanc are
waiving such fees
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 10 20, 2023 Page 10
FirstName LastName
and disclaiming responsibility for the Form F-4 registration
statement. Clarify the
unusual nature of such a fee waiver and the impact of the same on
the evaluation of
the business combination.
Disclose whether UBS and KeyBanc provided you with any reasons
for the fee
waivers. If there was no dialogue and you did not seek out the
reasons why UBS and
KeyBanc were waiving deferred fees despite already completing
their services, please
indicate so in your registration statement. Further, revise the
risk factor disclosure on
pages 126-127 to explicitly clarify that UBS and KeyBanc have
performed all their
obligations to obtain the fee and therefore are gratuitously
waiving the right to be
compensated.
Certain Unaudited Baird Medical Prospective Financial Information, page 175
41. We note the significant projected increase in revenue from 2023 to
2024. Please provide
additional detail regarding the assumptions underlying these projected
revenue amounts as
well as the basis for these assumptions to to help investors better
understand the
reasonableness of your assumptions. Please also address the inherent
limitations of these
projected amounts.
42. It appears your current discussion regarding projections primarily
addresses projected
revenues. Please also provide additional details regarding the
assumptions underlying
your projected Adjusted EBITDA amounts, especially given the
significant projected
increases in 2023 and 2024. Please also address the inherent
limitations of these projected
amounts.
Adjusted EBITDA Reconciliation, page 177
43. Please clarify the nature of listing expenses that are being adjusted
for in the
determination of Adjusted EBITDA.
Comparable Company Analysis, page 178
44. We note your disclosure on page 179 that "[i]n performing its
analysis, ExcelFin's
management team made assumptions with respect to, among other things,
industry
performance, general business and economic conditions and numerous
other matters."
Please amend your disclosure to provide a detailed description of each
of the relevant
assumptions.
45. We note your disclosure on page 46 that the Board considered the
valuation analysis
conducted by the ExcelFin's management team, Cohen and EXOS that was
based on
comparable companies. Please revise your disclosure to discuss in
greater detail how the
criteria for each of the comparable companies was chosen and whether
any companies
meeting the selection criteria were excluded from the analysis. Please
expand your
disclosure to discuss the valuations of the comparable companies and
the analyses
provided by ExcelFin, Cohen, and EXOS that were considered by the
ExcelFin Board and
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 11 20, 2023 Page 11
FirstName LastName
explain how the comparable companies analysis was applied to determine
the valuation
for Baird Medical. As a related matter, we note your disclosure on
page 46 that the Board
also considered "comparable transactions." Please provide the
disclosure requested above
with respect to these comparable transactions.
Material U.S. Federal Income Tax Considerations, page 195
46. We note your disclosure that "[t]he surrender by a U.S. holder of the
shares of Common
Stock in exchange for the PubCo Ordinary Shares pursuant to the
Merger, when taken
together with the Share Contribution and PIPE Investment, is expected
to qualify as a non-
recognition transaction pursuant to Section 351(a) of the Code."
Please note that a tax
opinion is required where the tax consequences are material to an
investor and a
representation as to tax consequences is set forth in the filing.
Refer to Item 601(b)(8) of
Regulation S-K. To support your conclusions about the tax consequences
of the business
combination, please revise to include a tax opinion covering the
material tax consequences
of the redemption and the merger, and state that the disclosure in
this section represents
the opinion of counsel. If there is uncertainty regarding the tax
treatment of the
transactions, counsel may (1) issue a "should" or "more likely than
not" opinion to make
clear that the opinion is subject to a degree of uncertainty and (2)
explain why it cannot
give a firm opinion. For guidance, see Staff Legal Bulletin No. 19.
Information about Baird Medical, page 226
47. We note your disclosure on page 226 and throughout your prospectus
that you are a
manufacturer of Class II and III medical devices in accordance with
China s National
Medical Products Administration regulations. Please expand your
disclosure to discuss,
where appropriate, whether the Class II and III medical devices that
you manufacture and
distribute are also defined as such in accordance with FDA
regulations. Please also
disclose the specific products for which Baird Medical has obtained
Class II and III
registration certificates.
48. We note your disclosure on pages 226 and 228 that microwave ablation
treatments are
"safe, minimally invasive and easy to operate with a rapid recovery
and low complication
rate for patients" as compared to traditional treatment methods. You
also disclose that
microwave ablation has more advantages over ablation treatment options
such as
radiofrequency ablation, cryoablation and laser ablation. Please
clarify the meaning of
"traditional" treatment methods and expand your disclosure relating to
the alternative
ablation treatments and whether such treatments can also prevent
cancer progression by
curbing benign tumors from developing into malignant tumors. Finally,
please provide
support for your statements about the advantages of your ablation
treatments compared to
other methods, or characterize the same as management's opinions or
beliefs
49. We note your disclosure on page 227 that "[o]ur microwave ablation
devices primarily
target specialty areas with significant efficacy, including both
benign tumors with a focus
on thyroid nodules and breast lumps, and malignant tumors with a focus
on liver cancer
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 12 20, 2023 Page 12
FirstName LastName
and lung cancer." However, you disclose on page 228 that "[w]e have
completed the
prototype manufacturing and product registration testing of microwave
ablation devices
specifically approved for the treatment of breast lumps, and we expect
to complete the
clinical trials in 2024," and "[w]e expect to complete the NMPA
registration procedures
after the clinical trials and obtain applicable registration
certificates by the end of 2024."
Please revise your statement as to the efficacy of your ablation
devices with respect to
breast lumps, as efficacy determinations are solely within the
authority of the FDA or
similar regulatory body, and it appears that you have not yet
registered or completed
clinical trials with respect to your microwave ablation devices
specifically approved for
the treatment of breast lumps.
50. You disclose on page 229 that "[i]n 2022, we initiated our plan for
the application of FDA
registration in the U.S. and CE Marking in the EU for our proprietary
microwave ablation
medical devices specifically approved for the treatment of liver
cancer and thyroid
nodules, and the applications are expected to be approved in 2024."
Please revise your
disclosure to clarify that there is no guarantee that your FDA
registration and CE Marking
will be approved. In addition, please describe your plan for these
applications in additional
detail, including the current status of your plan, the steps you have
taken to date, and the
additional steps you will need to take for approval of your FDA and EU
applications.
Business Model, page 230
51. We note your disclosure on pages 230 and 233 that while Baird Medical
s business
primarily focuses on the manufacture and sale of microwave ablation
medical devices, it
also distributes and sells other medical devices sourced from
third-party suppliers that
include catheters, ventilators, operation tables, medical globes,
syringes, and large medical
machines and systems, and which represented 10.9% of its total revenue
for the fiscal year
ended December 31, 2022. Please expand your disclosure of these
medical devices to
discuss, including but not limited to, the classification of such
other medical devices
(Class I, II or III) and whether Baird Medical relies on certain
single-source suppliers for
such medical devices.
52. We refer to your disclosure on page 232 relating to the five models of
proprietary
microwave ablation therapeutics apparatus that Baird Medical produces.
Please revise
your table to specify the classification and useful life span for each
of the five models
listed. Please also revise your table relating to Baird Medical s
microwave ablation
needles on page 232 to clarify the meaning of the Class II and/or
Class III classification.
Suppliers, page 234
53. We note your disclosure on page 234 that Baird Medical is not
dependent upon any of its
current suppliers. However, you also disclose that Baird Medical
relied on two major
suppliers, one of which represented 34.1% and 21% of its total cost of
revenues for the
fiscal years ended December 31, 2021 and December 31, 2022,
respectively. Please revise
your disclosure to identify Baird Medical s key suppliers and the
material terms of its
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 13 20, 2023 Page 13
FirstName LastName
agreements with such parties, or tell us why you believe you are not
required to do so.
Revise your risk factor disclosure to discuss the risks related to
this supplier
concentration.
Customers, page 236
54. We note your disclosure on page 237 that one customer accounted for
10.3% of Baird
Medical s total revenue for the year ended December 31, 2022, and
two customers
accounted for 13.7% and 12% of the company s total revenue for the
year ended
December 31, 2021. Please identify your top customers and provide a
brief description of
the material terms of your agreements with such customers, 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
601(b)(10) of Regulation S-K, or explain to us why you believe you are
not required to do
so. In addition, amend your risk factor disclosure to discuss the
risks related to this
customer concentration.
Research and Development, page 237
55. We refer to your disclosure relating to Baird Medical s Class III
medical device
registration certificate for its microwave ablation therapeutic
apparatus and two Class II
medical device registration certificates for its microwave ablation
needles with expiration
dates of March 25, 2023 and January 13, 2025, respectively. Please
specify which models
of ablation therapeutic apparatuses and ablation needles such
registration certificates
relate to and clarify the expiration date for the registration
certificate for the Class III
microwave ablation therapeutic apparatus as it appears that expired
registration certificate
relates to the company s microwave ablation needles.
56. We note your disclosure on pages 75 and 106 that Baird Medical is
required under PRC
laws and regulations to conduct clinical trials of its medical devices
to obtain registration
certificates for Class III medical devices and that Baird Medical s
clinical trials are
conducted by third-party medical institutions. You also disclose on
page 237 that Baird
Medical engaged three Grade IIIA hospitals and collected clinical data
from 132 cases for
the clinical trials for its microwave ablation medical device for the
treatment of thyroid
nodules. You also disclose on page 228 that Baird Medical expects to
complete clinical
trials for its microwave ablation device for the treatment of breast
lumps in 2024. Please
expand your disclosure relating to such devices to clarify whether
Baird Medical
sponsored the clinical trial and who conducted the clinical trial;
discuss the scope, size and
design of the trial; specify the primary endpoint; the criteria used
for the enrollment of
participants; whether the trial was powered to show statistical
significance, and if so, the
p-value; any serious adverse events and the number of patients who
experienced
them. Please also disclose any ongoing clinical trials and how many
clinical trials Baird
Medical has conducted and/or sponsored, and revise to expand your
disclosure of such
clinical trials accordingly.
Wu Haimei
Baird Medical Investment Holdings Limited
September 20, 2023
Page 14
57. We refer to your disclosure on page 238 that it typically takes 24 to
36 months to
complete the research and development process for Class II medical
devices. Please
clarify whether clinical trials are required to apply for registration
certificates for Class II
medical devices pursuant to PRC laws and regulations. If so, please
expand your
disclosure of the clinical trials conducted for your Class II medical
devices.
58. We refer to your disclosure on pages and 90 and 238 that Baird Medical
collaborates with
various research and development partners, such as Nanjing Huitong
Medical Technology
Co., Ltd., Xiamen Institute of Rare Earth Minerals and FIIG (Beijing)
Meditec Regulatory
Consultancy, Nanjing Forestry University and Zhuhai People s
Hospital and has entered
into certain R&D related agreements with such partners. Please provide
a brief description
of the material terms of each collaboration and cooperation agreement
that Baird Medical
has entered into and file such agreements as exhibits 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.
Product Pipeline, page 238
59. We refer to the table on page 238 listing your major pipeline
products. We also note the
disclosure of your product portfolio on page 228, which specifies the
testing of various
microwave ablation devices for the treatment of various target
indications, such as breast
lumps, pulmonary nodules, varicose veins and bone tumors and uterine
fibroids. Please
revise your product pipeline table to specify the target indications
for each medical device
candidate.
Properties and Facilities, page 239
60. We note your disclosure on page 239 relating to Baird Medical s
leases for its principal
executive offices and its manufacturing plants. Please briefly
describe the material terms
of such leases and also file the lease agreements as exhibits or
provide us with an analysis
supporting a determination that you are not required to file them as
exhibits. Refer to Item
601(b)(10)(ii)(D) of Regulation S-K.
Competition, page 240
61. We note your disclosure that the top four microwave ablation
manufacturers account for
88.4% of the sales in 2022 and that Baird Medical was ranked as the
third largest
microwave ablation manufacturer in the PRC in 2022. Please revise to
identify your top
competitors and disclose whether any of your competitors have also
registered Class III
medical devices for microwave ablation devices, as well as various other
ablation
FirstName LastNameWu Haimei
apparatuses (radio frequency, cryoablation or laser ablation) for the
treatment of liver
Comapany NameBaird
cancer, Medicalbreast
thyroid nodules, Investment
lumps,Holdings Limited
lung cancer, varicose vein, bone
tumors and uterine
fibroids.
September 20, 2023 Page 14
FirstName LastName
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 15 20, 2023 Page 15
FirstName LastName
Intellectual Property, page 240
62. We refer to your disclosure that Baird Medical owns or co-owns 42
patents in China and
has pending applications for 39 patents in China. Please expand your
disclosure to identify
for each material patent and patent application, as applicable, the
scope and technology of
each such patent or patent application, the type of patent protection
and expiration dates.
For each patent that Baird Medical co-owns with a third party, please
identify the co-
owner of each such patent. Consider adding tabular disclosure in
addition to the narrative
for ease of use.
Baird Medical's Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Business Overview, page 264
63. We note your disclosure that "[w]e have experienced significant growth
in our business
and results of operations in the fiscal years ended December 31, 2021
and 2022." Please
disclose whether you expect this trend to continue in future financial
periods.
For the Years Ended December 31, 2022 and 2021
Revenues, page 268
64. We note your disclosure that for the year ended December 31, 2022,
revenue generated
from the sales of your proprietary MWA therapeutic apparatus
decreased, due to a
decrease in the selling price per unit because of your sales strategy
to offer a discounted
price on your therapeutic apparatus to attract new customers. Please
amend your
disclosure to clarify whether you intend to continue this sales
strategy in future financial
periods, and if so, the potential impact on your business and results
of operations.
Operating Activities, page 270
65. We note that your accounts receivable balance, net increased by $13.2
million from $11.2
million at December 31, 2021 to $24.4 million at December 31, 2022, or
approximately
118% whereas your revenue increased by approximately 27% from $27.7
million in 2021
to $35.1 million in 2022. This increase in accounts receivables also
appears to be a
significant factor as to why your net cash generated from operations
decreased from the
year ended December 31, 2021 to the year ended December 31, 2022. In
this regard,
please expand your disclosures to address the reasons for this
significant increase in
accounts receivable as well as how you determined your allowance for
doubtful accounts
was appropriate. Refer to Item 5 of of the Form 20-F.
Management of PubCo after the Business Combination, page 274
66. Please revise to disclose the specific experience, skills,
qualifications and attribute of each
director that led you to the conclusion that each such director should
serve as one of the
directors of the combined company.
Wu Haimei
FirstName LastNameWu
Baird Medical InvestmentHaimei
Holdings Limited
Comapany 20,
September NameBaird
2023 Medical Investment Holdings Limited
September
Page 16 20, 2023 Page 16
FirstName LastName
Security Ownership of Certain Beneficial Owners and Management, page 309
67. We note your disclosure in footnote 2 to the table on page 310 that
"[e]ach manager of the
CFCHK Board disclaims beneficial ownership of the shares held by GFC."
Please
disclose the natural persons with voting and dispositive control of
the shares Class B
common stock reported in the table, or provide us with a detailed
legal analysis as to why
you believe you are not required to do so. This comment also applies
to the shares held by
Grand Fortune Capital reported in the table on page 312 and the
disclosure in footnote 2 to
the table on page 313.
Security Ownership of Certain Beneficial Owners and Management of PubCo, page
312
68. We note your disclosure on page 313 that at any time prior to the
special meeting,
ExcelFin Initial Stockholders, officers and directors as well as Baird
Medical or its
shareholders and/or their respective affiliates may purchase shares
from institutional and
other investors who vote, or indicate an intention to vote, against
the business combination
proposal, or execute agreements to purchase shares from such investors
in the future, or
they may enter into transactions with such investors and others to
provide them with
incentives to acquire shares of ExcelFin Class A common stock. You
further state that the
purpose of the share purchases could be to vote in favor of the
business combination.
Please provide your analysis on how such purchases comply with Rule
14e-5.
Enforceability of Civil Liabilities, page 315
69. To the extent that one or more of your officers and/or directors are
located in China or
Hong Kong, please create a separate Enforceability of Civil
Liabilities section for the
discussion of the enforcement risks related to civil liabilities due
to your officers and
directors being located in China or Hong Kong. Please identify each
officer and/or
director located in China or Hong Kong and disclose that it will be
more difficult to
enforce liabilities and enforce judgments on those individuals. For
example, revise to
discuss more specifically the limitations on investors being able to
effect service of
process and enforce civil liabilities in China, lack of reciprocity
and treaties, and cost and
time constraints. Also, please make conforming revisions to your risk
factor disclosure on
page 115, which should contain disclosures consistent with the
separate section.
Revenue Recognition, page F-14
70. In regards to revenues from sales to distributors, you disclose that
you act as a principal in
the sales of medical devices to distributors as you control the
medical devices before they
are transferred to distributors. After acceptance of goods, the
distributors bear all
inventory risks. You also disclose you recognize revenue at a point in
time when you
satisfy your performance obligation by transferring promised product
to end-customers
upon acceptance. Please better clarify when control is transferred and
correspondingly
revenue recognized pursuant to ASC 606-10-25-23 and 25-30, including
if it is when you
transfer good to the distributor or when goods are sold to the
end-user. We also remind
Wu Haimei
Baird Medical Investment Holdings Limited
September 20, 2023
Page 17
you that ASC 606-10-50-19 requires you to disclose the significant
judgments made in
evaluating when a customer obtains control of promised goods or services.
Note 20. Subsequent Events, page F-30
71. We note the disclosures regarding the Settlement of Preferred Shares of
Baird Medical
including that certain holders of these shares sent a repurchase notice
to the company.
Please address the following:
Please tell us how these preferred shares are accounted for and
reflected on the
historical financial statements; and
Please address what consideration was given to reflecting these
transactions in the
pro forma financial information.
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.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may 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,
FirstName LastNameWu Haimei Division of Corporation
Finance
Office of Industrial
Applications and
Comapany NameBaird Medical Investment Holdings Limited
Services
September 20, 2023 Page 17
cc: Stephen Leitzell, Esq.
FirstName LastName