Correspondence 0001493152-23-025303 from Aimei Health Technology Co., Ltd. (AFJK)
Aimei Health Technology Co., Ltd.
Date: July 24, 2023 · CIK: 0001979005 · Accession: 0001493152-23-025303
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-272230
Referenced dates: June 21, 2023
Letter
Via EDGAR Division of Corporation Finance Office of Manufacturing Re: Aimei Health Technology Co., Ltd Registration Statement on Form S-1 Filed May 26, 2023 File No. 333-272230
Dear Mr. Alper and Ms. Long:
On behalf of Aimei Health Technology Co., Ltd (the “Company”‘), we are hereby responding to the letter dated June 21, 2023 (the “Comment Letter”) from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), regarding the Company’s Registration Statement on Form S-1, filed on May 26, 2023, File No. 333-272230 (the “Registration Statement”).
In response to the Comment Letter and to update certain information in the Registration Statement, the Company is filing Amendment No. 1 to the Registration Statement (the “Amended Registration Statement”) with the Commission today. Capitalized terms used herein but not defined herein have the meanings ascribed thereto in the Amended Registration Statement.
For ease of reference, the text of the Staff’s comment is included in bold-face type below, followed by the Company’s response.
Registration Statement on Form S-1 filed May 26, 2023
Cover Page
1. Provide prominent disclosure about the legal and operational risks associated with a majority of your directors and officers based in or having significant ties to China. Your disclosure should make clear whether these risks could result in a material change in your search for a target company and/or the value of the securities you are registering for sale. 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 antimonopoly concerns, have or may impact the company’s ability to conduct its business, accept foreign investments, or list on a U.S. or other foreign exchange. Please disclose the location of your auditor’s headquarters and whether and how the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023, and related regulations will affect your company. Your prospectus summary should address, but not necessarily be limited to, the risks highlighted on the prospectus cover page.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s comment on the cover page, in the “Summary” section on page 3, and in the “Risk Factors”, starting on page 36 of the Amended Registration Statement.
Prospectus Summary, page 1
2. In your summary of risk factors, disclose the risks that the majority of your directors and officers being based in or having significant ties to China poses to investors. In particular, describe the significant regulatory, liquidity, and enforcement risks with cross-references 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 search for a target company or completion of your initial business combination at any time, which could result in a material change in your operations and/or the value of the securities you are registering for sale.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s comment in the “Summary” section on page 3, and beginning on pages 22 and 36 of the Amended Registration Statement.
3. Disclose each permission or approval that you or your officers and directors are required to obtain from Chinese authorities to search for a target company. State whether your directors and officers are covered by permissions requirements from the China Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency, and state affirmatively whether you have received all requisite permissions or approvals and whether any permissions or approvals have been denied. Please also describe the consequences to you and your investors if your officers and directors (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions or approvals in the future.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s comment on the cover page, in the “Summary” section on page 3, and beginning on page 44 of the Amended Registration Statement.
Risk Factors, page 18
4. Given the Chinese government’s significant oversight and discretion over the conduct of your directors’ and officers’ search for a target company, please revise to highlight separately the risk that the Chinese government may intervene or influence your operations at any time, which could result in a material change in your search and/or the value of the securities you are registering.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s comment on the cover page, in the “Summary” section on page 3, and beginning on page 44 of the Amended Registration Statement.
5. In light of recent events indicating greater oversight by the Cyberspace Administration of China (CAC) over data security, please revise your disclosure to explain how this oversight impacts your officers and directors and to what extent you believe that you are compliant with the regulations or policies that have been issued by the CAC to date.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s comment on the cover page, in the “Summary” section on page 5, and beginning on pages 50, 83 and 88 of the Amended Registration Statement.
6. Please include a risk factor that describes the potential material effect on your shareholders of the stock buyback excise tax enacted as part of the Inflation Reduction Act in August 2022. If applicable, include in your disclosure that the excise tax could reduce the trust account funds available to pay redemptions or that are available to the combined company following a de-SPAC. Describe the risks of the excise tax applying to redemptions in connection with:
● liquidations that are not implemented to fall within the meaning of “complete liquidation” in Section 331 of the Internal Revenue Code,
● extensions, depending on the timing of the extension relative to when the SPAC completes a de-SPAC or liquidates, and
● de-SPACs, depending on the structure of the de-SPAC transaction.
Also describe, if 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.
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that because the Company is incorporated as a Cayman Islands exempted company, there would be no effect on the Company’s shareholders of the stock buyback excise tax enacted as part of the Inflation Reduction Act in August 2022.
If we seek shareholder approval of our business combination., page 22
7. We note disclosure that your sponsor, directors, officers and their affiliates may purchase shares in the open market from public shareholders for the purpose of voting those shares in favor of a proposed business combination, thereby increasing the likelihood of the completion of the combination. Please explain how such purchases would comply with the requirements of Rule 14e-5 under the Exchange Act. Refer to Tender Offer Rules and Schedules Compliance and Disclosure Interpretation 166.01 for guidance.
Response: The Company has revised the disclosure in the Amended Registration Statement to address the Staff’s comment. Please see pages 18 and 29.
Capitalization, page 52
8. We note that you present the private warrants as equity in your capitalization table. Please provide us with your analysis under ASC 815-40 to support your accounting treatment for these warrants. As part of your analysis, please address whether there are any terms or provisions in the warrant agreement that provide for potential changes to the settlement amounts that are dependent upon the characteristics of the holder of the warrant, and if so, how you analyzed those provisions in accordance with the guidance in ASC 815-40. Your response should address, but not be limited to, your disclosure on page 86 that “If the private warrants are held by holders other than the initial shareholders or their permitted transferees, the private warrants will be redeemable by us for cash and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.”
Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has removed the language from page 86 of the Registration Statement referenced in the above Comment #8 and it has filed the form of Warrant Agreement as an exhibit to the Amended Registration Statement. The private placement warrants are identical to the warrants except that, so long as they are held by our sponsor or its permitted transferees, they will not be redeemable by the Company and will not be transferable, assignable or salable until 30 days after the completion of our initial business combination. Below is the Company’s analysis under ASC 815-40 to support the accounting treatment for these warrants:
Step 1: Is the warrant a freestanding instrument? Yes
Public Warrant - The Public Warrants will be issued with public units. Each unit consists of one ordinary share, one right and one warrant. Each warrant entitles the holder thereof to purchase three-fourths (3/4) of one ordinary share. Each right entitles the holder thereof to receive one-tenth (1/10) of one ordinary share upon the consummation of an initial business combination. The Public Warrants will be publicly traded under a separate ticker “AFJKW” from Company’s ordinary shares and therefore, are considered legally detachable and separable. Therefore, the Public Warrant is a freestanding instrument.
Private Placement Warrant - The Private Placement Warrants will be issued with the Private Placement Units in connection with the Initial Public Offering. The Warrants as noted in section 2.6 of the Warrant agreement are issued in the same form as the Public Warrants. Although the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, it will not affect the transferability nature of the Private Placement Warrant. Therefore, the Private Placement Warrant is a freestanding instrument.
Step 2: Is the warrant within the scope of ASC 480? No
● The warrants are not mandatorily redeemable (per section 6 of the Warrant Agreement).
● The warrants represent an obligation to issue ordinary share of the Company. They do not represent an obligation of the Company to purchase its own equity shares; and
● The warrants obligate the Company to issue a fixed number of ordinary shares at the exercise price. Per section 4 of the Warrant Agreement, the adjustment provisions for Split-Ups; Aggregation of Shares; Extraordinary Dividends, and the related Adjustments in Exercise Price may potentially result in a variable number of shares to be issued but as these adjustments are intended to maintain the economic value of the warrants after such significant events, the provisions do not result in the war
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CORRESP
1
filename1.htm
Loeb
& Loeb LLP
345
Park Avenue
New York, NY 10154
Main
Fax
212.407.4000
212.407.4990
July
21, 2023
Via
EDGAR
Division
of Corporation Finance
Office
of Manufacturing
U.S.
SECURITIES AND EXCHANGE COMMISSION
100
F Street, N.E.
Washington,
DC 2054
Attn: Ronald (Ron) E.
Alper
Pam
Long
Re: Aimei Health Technology
Co., Ltd
Registration Statement on Form S-1
Filed May 26, 2023
File
No. 333-272230
Dear
Mr. Alper and Ms. Long:
On
behalf of Aimei Health Technology Co., Ltd (the “Company”‘), we are hereby responding to the letter dated
June 21, 2023 (the “Comment Letter”) from the staff (the “Staff”) of the Securities
and Exchange Commission (the “Commission”), regarding the Company’s Registration Statement on Form S-1,
filed on May 26, 2023, File No. 333-272230 (the “Registration Statement”).
In
response to the Comment Letter and to update certain information in the Registration Statement, the Company is filing Amendment No. 1
to the Registration Statement (the “Amended Registration Statement”) with the Commission today. Capitalized
terms used herein but not defined herein have the meanings ascribed thereto in the Amended Registration Statement.
For
ease of reference, the text of the Staff’s comment is included in bold-face type below, followed by the Company’s response.
Registration
Statement on Form S-1 filed May 26, 2023
Cover Page
1. Provide
prominent disclosure about the legal and operational risks associated with a majority of
your directors and officers based in or having significant ties to China. Your disclosure
should make clear whether these risks could result in a material change in your search for
a target company and/or the value of the securities you are registering for sale. 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 antimonopoly
concerns, have or may impact the company’s ability to conduct its business, accept
foreign investments, or list on a U.S. or other foreign exchange. Please disclose the location
of your auditor’s headquarters and whether and how the Holding Foreign Companies Accountable
Act, as amended by the Consolidated Appropriations Act, 2023, and related regulations will
affect your company. Your prospectus summary should address, but not necessarily be limited
to, the risks highlighted on the prospectus cover page.
Response:
The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s
comment on the cover page, in the “Summary” section on page 3, and in the “Risk Factors”, starting
on page 36 of the Amended Registration Statement.
Prospectus
Summary, page 1
2. In
your summary of risk factors, disclose the risks that the majority of your directors and
officers being based in or having significant ties to China poses to investors. In particular,
describe the significant regulatory, liquidity, and enforcement risks with cross-references
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
search for a target company or completion of your initial business combination at any time,
which could result in a material change in your operations and/or the value of the securities
you are registering for sale.
Response:
The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s
comment in the “Summary” section on page 3, and beginning on pages 22 and 36 of the Amended Registration Statement.
3. Disclose
each permission or approval that you or your officers and directors are required to obtain
from Chinese authorities to search for a target company. State whether your directors and
officers are covered by permissions requirements from the China Securities Regulatory Commission
(CSRC), Cyberspace Administration of China (CAC) or any other governmental agency, and state
affirmatively whether you have received all requisite permissions or approvals and whether
any permissions or approvals have been denied. Please also describe the consequences to you
and your investors if your officers and directors (i) do not receive or maintain such permissions
or approvals, (ii) inadvertently conclude that such permissions or approvals are not required,
or (iii) applicable laws, regulations, or interpretations change and you are required to
obtain such permissions or approvals in the future.
Response:
The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s
comment on the cover page, in the “Summary” section on page 3, and beginning on page 44 of the Amended Registration Statement.
Risk
Factors, page 18
4. Given
the Chinese government’s significant oversight and discretion over the conduct of your
directors’ and officers’ search for a target company, please revise to highlight
separately the risk that the Chinese government may intervene or influence your operations
at any time, which could result in a material change in your search and/or the value of the
securities you are registering.
Response:
The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s
comment on the cover page, in the “Summary” section on page 3, and beginning on page 44 of the Amended Registration Statement.
5. In
light of recent events indicating greater oversight by the Cyberspace Administration of China
(CAC) over data security, please revise your disclosure to explain how this oversight impacts
your officers and directors and to what extent you believe that you are compliant with the
regulations or policies that have been issued by the CAC to date.
Response:
The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has added disclosure addressing the Staff’s
comment on the cover page, in the “Summary” section on page 5, and beginning on pages 50, 83 and 88 of the Amended Registration
Statement.
6. Please
include a risk factor that describes the potential material effect on your shareholders of
the stock buyback excise tax enacted as part of the Inflation Reduction Act in August 2022.
If applicable, include in your disclosure that the excise tax could reduce the trust account
funds available to pay redemptions or that are available to the combined company following
a de-SPAC. Describe the risks of the excise tax applying to redemptions in connection with:
● liquidations
that are not implemented to fall within the meaning of “complete liquidation”
in Section 331 of the Internal Revenue Code,
● extensions,
depending on the timing of the extension relative to when the SPAC completes a de-SPAC or
liquidates, and
● de-SPACs,
depending on the structure of the de-SPAC transaction.
Also
describe, if 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.
Response:
The Company respectfully acknowledges the Staff’s comment and advises the Staff that because the Company is incorporated as a Cayman
Islands exempted company, there would be no effect on the Company’s shareholders of the stock buyback excise tax enacted as part
of the Inflation Reduction Act in August 2022.
If
we seek shareholder approval of our business combination., page 22
7. We
note disclosure that your sponsor, directors, officers and their affiliates may purchase
shares in the open market from public shareholders for the purpose of voting those shares
in favor of a proposed business combination, thereby increasing the likelihood of the completion
of the combination. Please explain how such purchases would comply with the requirements
of Rule 14e-5 under the Exchange Act. Refer to Tender Offer Rules and Schedules Compliance
and Disclosure Interpretation 166.01 for guidance.
Response:
The Company has revised the disclosure in the Amended Registration Statement to address the Staff’s comment. Please see pages 18
and 29.
Capitalization,
page 52
8. We
note that you present the private warrants as equity in your capitalization table. Please
provide us with your analysis under ASC 815-40 to support your accounting treatment for these
warrants. As part of your analysis, please address whether there are any terms or provisions
in the warrant agreement that provide for potential changes to the settlement amounts that
are dependent upon the characteristics of the holder of the warrant, and if so, how you analyzed
those provisions in accordance with the guidance in ASC 815-40. Your response should address,
but not be limited to, your disclosure on page 86 that “If the private warrants are
held by holders other than the initial shareholders or their permitted transferees, the private
warrants will be redeemable by us for cash and exercisable by the holders on the same basis
as the warrants included in the units being sold in this offering.”
Response:
The Company respectfully acknowledges the Staff’s comment and advises the Staff that it has removed the language from page 86
of the Registration Statement referenced in the above Comment #8 and it has filed the form of Warrant Agreement as an exhibit to
the Amended Registration Statement. The private placement warrants are identical to the warrants except that, so long as they
are held by our sponsor or its permitted transferees, they will not be redeemable by the Company and will not be transferable, assignable
or salable until 30 days after the completion of our initial business combination. Below is the Company’s analysis under ASC 815-40
to support the accounting treatment for these warrants:
Step
1: Is the warrant a freestanding instrument? Yes
Public
Warrant - The Public Warrants will be issued with public units. Each unit consists of one ordinary share, one right and one warrant.
Each warrant entitles the holder thereof to purchase three-fourths (3/4) of one ordinary share. Each right entitles the holder thereof
to receive one-tenth (1/10) of one ordinary share upon the consummation of an initial business combination. The Public Warrants will
be publicly traded under a separate ticker “AFJKW” from Company’s ordinary shares and therefore, are considered legally
detachable and separable. Therefore, the Public Warrant is a freestanding instrument.
Private
Placement Warrant - The Private Placement Warrants will be issued with the Private Placement Units in connection with the Initial
Public Offering. The Warrants as noted in section 2.6 of the Warrant agreement are issued in the same form as the Public Warrants. Although
the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination,
subject to certain limited exceptions, it will not affect the transferability nature of the Private Placement Warrant. Therefore, the
Private Placement Warrant is a freestanding instrument.
Step
2: Is the warrant within the scope of ASC 480? No
● The
warrants are not mandatorily redeemable (per section 6 of the Warrant Agreement).
● The
warrants represent an obligation to issue ordinary share of the Company. They do not represent
an obligation of the Company to purchase its own equity shares; and
● The
warrants obligate the Company to issue a fixed number of ordinary shares at the exercise
price. Per section 4 of the Warrant Agreement, the adjustment provisions for Split-Ups; Aggregation
of Shares; Extraordinary Dividends, and the related Adjustments in Exercise Price may potentially
result in a variable number of shares to be issued but as these adjustments are intended
to maintain the economic value of the warrants after such significant events, the provisions
do not result in the war