SecProbe.io

United States securities and exchange commission logo
March 31, 2023
Qingfeng Feng
Chief Executive Officer
Lotus Technology Inc.
No. 800 Century Avenue
Pudong District, Shanghai
People's Republic of China
Re:Lotus Technology Inc.
Draft Registration Statement on Form F-4
Submitted March 6, 2023
CIK No. 0001962746
Dear Qingfeng Feng:
            We have reviewed your draft 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 providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR.  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 the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement on Form F-4 submitted March 6, 2023
General
1.With a view toward disclosure, please tell us whether your sponsor is, is controlled by, or
has substantial ties with a non-U.S. person. Please also tell us whether anyone or any
entity associated with or otherwise involved in the transaction, is, is controlled by, or has
substantial ties with a non-U.S. person. If so, also include risk factor disclosure that
addresses how this fact could impact your ability to complete your initial business
combination. For instance, discuss the risk to investors that you may not be able to
complete an initial business combination with a U.S. target company should the
transaction be subject to review by a U.S. government entity, such as the Committee on

 FirstName LastNameQingfeng Feng
 Comapany NameLotus Technology Inc.
 March 31, 2023 Page 2
 FirstName LastNameQingfeng Feng
Lotus Technology Inc.
March 31, 2023
Page 2
Foreign Investment in the United States (CFIUS), or ultimately prohibited. Further,
disclose that the time necessary for government review of the transaction or a decision to
prohibit the transaction could prevent you from completing an initial business
combination and require you to liquidate. Disclose the consequences of liquidation to
investors, such as the losses of the investment opportunity in a target company, any price
appreciation in the combined company, and the warrants, which would expire worthless.
2.We note the disclosure on pages 13-14 and elsewhere that there are significant factual and
legal uncertainties as to whether the business combination will qualify as a
reorganization. If tax counsel is unable to opine on the material tax consequences, please
state this fact clearly. Please revise the cover page to provide a prominent discussion of
the legal and factual uncertainties associated with the potential tax consequences and
highlight that the business combination may be a taxable event for U.S. holders.
3.Please expand your disclosure regarding the sponsor’s ownership interest in the target
company. Disclose the approximate dollar value of the interest based on the transaction
value and recent trading prices as compared to the price paid.
4.We note the disclosure on page 18 and elsewhere about the provisions in the articles
waiving the corporate opportunities doctrine.  Please address this potential conflict of
interest and whether it had an impact on your search for an acquisition target.
5.We note the disclosure on page 18 and elsewhere that certain shareholders have waived
their rights to liquidation dividends and conversion price adjustments.  Please describe any
considration provided in exchange for these agreements.
6.We note your disclosure on page 89 regarding Russia's invasion of Ukraine. Please revise
your filing, as applicable, to provide more specific disclosure related to the direct or
indirect impact that Russia's invasion of Ukraine and the international response have had
or may have on your business. For additional guidance, please see the Division of
Corporation Finance's Sample Letter to Companies Regarding Disclosures Pertaining to
Russia’s Invasion of Ukraine and Related Supply Chain Issues, issued by the Staff in May
2022.
7.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
warrants. Clearly explain the steps, if any, the company will take to notify all
shareholders, including beneficial owners, regarding when the warrants become eligible
for redemption.
Cover Page
8.Please expand the disclosure about "investors in LTC are not acquiring equity interest in
any operating company but instead are acquiring interest in a Cayman Islands holding
company" to, if applicable, explain whether the VIE structure is used to replicate foreign

 FirstName LastNameQingfeng Feng
 Comapany NameLotus Technology Inc.
 March 31, 2023 Page 3
 FirstName LastName
Qingfeng Feng
Lotus Technology Inc.
March 31, 2023
Page 3
investment in Chinese-based companies where Chinese law prohibits direct foreign
investment in the operating companies. Also, revise the references to the "value of the
securities of LTC to significantly decline" to also disclose the value could become
worthless.  In addition, expand your disclosure about authorities could "disallow this
structure" to acknowledge that authorities could disallow this structure, which would
likely result in a material change in your operations and/or value of your ordinary shares,
including that it could cause the value of such securities to significantly decline or become
worthless.
9.We note the disclosure that "Investors may never directly hold equity interests in the
VIE."  Please revise the disclosure to clarify that the investors will never directly hold
equity interests in the VIE.
10.Provide prominent disclosure about the legal and operational risks associated with being
based in or having the majority of the company’s operations in China. Your disclosure
should make clear whether these risks could result in a material change in your operations
and/or the value of your ordinary shares or could significantly limit or completely hinder
your ability to offer or continue to offer securities to investors and cause the value of such
securities to significantly decline or be worthless. Your disclosure should address how
recent statements and regulatory actions by China’s government, such as those related to
the use of variable interest entities and data security or anti-monopoly concerns, has or
may impact the company’s ability to conduct its business, accept foreign investments, or
list on an U.S. or other foreign exchange. Your prospectus summary should address, but
not necessarily be limited to, the risks highlighted on the prospectus cover page.
11.Clearly disclose how you will refer to the holding company, subsidiaries, and VIEs, if
applicable, when providing the disclosure throughout the document so that it is clear to
investors which entity the disclosure is referencing and which subsidiaries or entities are
conducting the business operations. Refrain from using terms such as “we” or “our” when
describing activities or functions of a VIE, if applicable.
12.Provide a description of how cash is transferred through your organization and disclose
your intentions to distribute earnings. 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. Also, disclose here and in the
prospectus summary whether you have cash management policies and procedures that
dictate how funds are transferred, and if so, describe these policies and procedures.
13.Please disclose on your cover page that following the business combination you will be a
"controlled company" within the meaning of NASDAQ rules and the controlling
shareholders' anticipated total voting power. Also disclose on the cover page that you will
be a "foreign private issuer" and the related exemptions on which you will be entitled to
rely.

 FirstName LastNameQingfeng Feng
 Comapany NameLotus Technology Inc.
 March 31, 2023 Page 4
 FirstName LastName
Qingfeng Feng
Lotus Technology Inc.
March 31, 2023
Page 4
Industry and Market Data, page 3
14.We note your disclosure that information in the proxy statement/prospectus is based on
information obtained from industry publications, and reports and forecasts and that you
have not independently verified the accuracy or completeness of any such information.
This disclosure appears to imply a disclaimer of responsibility for this information in the
proxy statement/prospectus. Please either revise this section to remove such implication or
specifically state that you are liable for all information in the proxy statement/prospectus.
15.Please clarify whether you commissioned any of the third-party data presented in your
proxy statement/prospectus.  To the extent that you commissioned any such data, please
provide the consent of the third party in accordance with Rule 436.
Questions and Answers about the Business Combination, page 10
16.We note the disclosure on page 14 that "there are significant factual and legal
uncertainties as to whether the Business Combination will qualify as a reorganization
within the meaning of Section 368(a) of the Code."  Please revise the disclosure on page
14 to briefly describe the "significant factual and legal uncertainties."
What interests does the Sponsor have in the Business Combination?, page 17
17.Please revise the response to this question and elsewhere in the prospectus, as appropriate,
to clarify if the Sponsor and its affiliates can earn a positive rate of return on their
investment, even if other shareholders experience a negative rate of return in the post-
business combination company.
Corporate History and Structure of Lotus Tech, page 26
18.Please ensure that the diagram on page 27 is legible.
Cash and Asset Flows through Lotus Tech's Organization, page 30
19.Please revise this section to 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. 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. 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

 FirstName LastNameQingfeng Feng
 Comapany NameLotus Technology Inc.
 March 31, 2023 Page 5
 FirstName LastNameQingfeng Feng
Lotus Technology Inc.
March 31, 2023
Page 5
the VIE agreements.
Risks Relating to our Corporate Structure, page 44
20.We note your disclosure on page 44 about risks relating to your corporate structure and
risks relating to doing business in China.  In your summary of risk factors, disclose the
risks that your corporate structure and being based in or having the majority of the
company’s operations in China poses to investors. In particular, describe the significant
regulatory, liquidity, and enforcement risks with cross-references from each summary risk
factor to the more detailed discussion of these risks in the prospectus. For example,
specifically discuss risks arising from the legal system in China, including risks and
uncertainties regarding the enforcement of laws and that rules and regulations in China
can change quickly with little advance notice; and the risk that the Chinese government
may intervene or influence your operations at any time, or may exert more control over
offerings conducted overseas and/or foreign investment in China-based issuers, which
could result in a material change in your operations and/or the value of the securities.
Acknowledge any risks that any actions by the Chinese government to exert more
oversight and control over offerings that are conducted overseas and/or foreign investment
in China-based issuers could significantly limit or completely hinder your ability to offer
or continue to offer securities to investors and cause the value of such securities to
significantly decline or be worthless.
We are dependent on suppliers, many of whom are our single source suppliers, page 74
21.We note your disclosure that "many of the components used in our vehicles are purchased
from a single source, which exposes us to multiple potential sources of delivery failure or
component shortages."  Please update the risk factor to disclose, if applicable, that recent
supply chain disruptions have impacted your operations.
Covenants of LCAA, page 152
22.We note the disclosure in item (f) on page 153 about the extension until March 15, 2024.
Please expand the appropriate section to disclose the number and percentage of
shareholders who redeemed their shares in connection with the votes to approve the
extension.
Background of the Business Combination, page 163
23.Please revise your disclosure throughout this section to discuss in greater detail the
negotiations and discussions between the parties.  For example, discuss how the parties
determined an equity valuation of $5.5 billion as disclosed at the bottom of page 170.  As
another example, discuss in greater detail the "feedback from representatives of Geely and
Etika" mentioned on page 171.
24.We note that you state that the disclosure in this section is a brief description of LCAA’s
formation, LCAA’s previous engagements with business combination targets other than

 FirstName LastNameQingfeng Feng
 Comapany NameLotus Technology Inc.
 March 31, 2023 Page 6
 FirstName LastName
Qingfeng Feng
Lotus Technology Inc.
March 31, 2023
Page 6
LTC, and its negotiations with, and evaluation of, LTC. Please revise to clarify that you
have described all material contacts between the parties during the past two years.
25.Please expand the appropriate section to discuss the material terms of the put option
agreements mentioned on page 171.
Information about Lotus Tech, page 213
26.Please describe your "strategic relationship" with LVMH. Please discuss the material
terms of such relationship and file any agreements as exhibits to the proxy
statement/prospectus.
Eletre, page 217
27.We note that as of January 31, 2023, you have received over 5,000 orders for Eletre
globally. Please balance this statement with the disclosure in Risk Factors on page 70 that
orders may be cancelled despite their deposit payment and online confirmation.
Unaudited Pro Forma Condensed Combined Financial Information, page 283
28.We note your disclosure on page nine which states that LCAA must have net tangible
assets of at least $5,000,001 upon consummation of the business combination and LCAA
may not consummate the business combination if immediately prior to or upon
consummation, the net tangible assets are below the $5,000,001 threshold.   You further
state that unless LTC elects to waive the minimum available cash condition, the maximum
redemption scenario cannot occur.

As such, it appears you should m