SecProbe.io

CORRESP
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filename1.htm

August 9, 2024

VIA EDGAR

Tracey Houser

Jeanne Baker

Conlon Danberg

Lauren Nguyen

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Industrial Applications and Services

100 F Street, N.E.

Washington, D.C. 20549

    Re:
    Baird Medical Investment
    Holdings Limited

    Amendment No. 5
    to Registration Statement on Form F-4

    Filed July 19,
    2024

    File No. 333-274114

Dear Mr. Newberry:

This letter is in response
to the comments of the staff of the United States Securities and Exchange Commission (the “Staff”) contained in your
letter dated August 1, 2024 (the “Comment Letter”), regarding Amendment No. 5 to Registration Statement
on Form F-4 (the “Registration Statement”), which was filed by Baird Medical Investment Holdings Limited (the
 “Company”) with the United States Securities and Exchange Commission (the “Commission”) on July 19,
2024.

The Company has filed today
Amendment No. 6 to the Registration Statement (“Amendment No. 6”) together with this letter via EDGAR correspondence.
For the convenience of the Staff, the numbering of the paragraphs below corresponds to the numbering of the comment in the Comment Letter,
the text of which the Company has incorporated into this response letter in italicized type, and which is followed by the Company’s
response. Unless otherwise indicated, all page references in the responses are to page numbers in Amendment No. 6. Capitalized
terms used herein but not defined shall have the meanings ascribed to them in Amendment No. 6.

Amendment No. 5 to Form F-4 filed
July 19, 2024

Enhanced Research and Development Capabilities
through Collaboration with Market Participants, page 271

 1. Comment:
                                            We note your revised disclosure on pages 271 and 291 that you hold two Class III
                                            registration certificates you hold for the microwave therapeutic instrument and accessories
                                            and disposable microwave ablation needle, the Class III certificate you recently obtained
                                            for MWA needles and one Class II registration certificate in relation to disposable
                                            sterile biopsy needles. Please revise to clarify, if true, that the two Class III registration
                                            certificates you currently hold for your microwave therapeutic instrument and disposable
                                            microwave ablation needles include the Class III certificate you recently obtained for
                                            MWA needles in July 2023. We refer to your CFDA 20183011581 and 20233010963 registration
                                            certificate numbers, respectively.

Response:
The Company acknowledges the Staff’s comment and has revised the disclosure on pages 41, 84, 274 to 275 and 282 to 285 of
Amendment No. 6 in response to the Staff’s comment. The Company holds two additional Class III registration certificates
with registration certificate numbers CFDA 20233011839 and 20243010517.

Customers, page 290

 2. Comment:
                                            We acknowledge your revised disclosure in response to prior comment 8. Please revise your
                                            disclosure to address the following issues:

 · Please
                                            disclose when you entered into this agreement with the Top Distributor and the term of the
                                            agreement. We refer to section 18 of the agreement, which states that the agreement expired
                                            on December 31, 2023. Please confirm whether you have entered into a supplementary agreement
                                            with the Top Distributor to renew the distribution agreement, and if so, please file any
                                            such agreement as an exhibit to the registration statement as required by Item 21 of Form F-4
                                            and Item 601(b)(10) of Regulation S-K and revise your disclosure accordingly; and

 · We
                                            note that certain portions of Exhibit 99.9 have been redacted. Please include a statement
                                            at the top of the first page of such redacted exhibit stating that certain information
                                            has been excluded because it is both not material and the type of information that the registrant
                                            treats as private or confidential and also ensure that such exhibit is in the proper text-searchable
                                            format. Refer to Item 601(b)(10)(iv) of Regulation S-K and Item 301 of Regulation S-T.

Response:
The Company acknowledges the Staff’s comment and has revised the disclosure on pages 292 to 293 of Amendment No. 6 to
clarify that the Company entered into the agreement with the Top Distributor on January 1, 2023, and the term of the agreement was
from January 1, 2023 to December 31, 2023. On January 1, 2024, the Company renewed the agreement by entering into a supplementary
agreement with the Top Distributor to extend the term of the distribution agreement to December 31, 2024. Such supplementary agreement
is filed as Exhibit 99.10 to Amendment No. 6.

The Company acknowledges the Staff’s
comment and has included a statement at the top of the first page of each of Exhibit 99.9 and Exhibit 99.10 stating: “The
name of the Top Distributor, the pricing of the medical devices to be sold, and the identity and location of the Top Distributor’s
hospital clients have been redacted because such information is both not material and the type of information that the Company treats
as private or confidential.”

PubCo's Management's Discussion and Analysis
of Financial Condition and Results of Operations, page 341

 3. Comment:
                                            We note your response to comment 10. Please address the following:

 · Pursuant
                                            to Item 5A of the Form 20-F, please disclose the specific significant factors that materially
                                            impacted revenues in a similar manner to your response with quantification regarding the
                                            extent to which revenues were impacted. You should specifically discuss the extent to which
                                            fluctuations in revenues were attributable to changes in prices, changes in the volume or
                                            amount of products being sold, or to the introduction of new products; and

 · In
                                            light of the limitations you note regarding your distributor inventory reports, please help
                                            us better understand your basis for stating that you are not aware of any material amount
                                            of unsold inventory held by your deliverers and its distributors, including how you determined
                                            what would be material.

Response:
With respect to impact on revenue, the Company acknowledges the Staff’s comment and has revised the disclosure on page 349
of Amendment No. 6 to disclose the specific significant factors that materially impacted revenues.

The
Company’s revenue from distributors increased from approximately $13.5 million during the fiscal year ended December 31, 2022
to approximately $15.0 million during the fiscal year ended December 31, 2023, resulting in a net increase of approximately $1.5
million. Changes in sales prices caused the revenue to increase by approximately $4.7 million, while changes in the volume of products
sold caused the revenue to decrease by approximately $3.2 million. With respect to the sales of MWA needles, revenue decreased due to
a decrease in the quantity of sales. This occurred because the quantity of needles sold during the fiscal year ended December 31,
2022 had increased as a result of the Class II to Class III certificate upgrade which occurred during that year, and such increase
was not sustained during the fiscal year ended December 31, 2023. Please refer to management’s analysis of multi-year sales
and inventory trends of the volume of needles sold in the section titled “Amendment to Business Combination Agreement” on
page 213 of Amendment No. 6. With respect to the sales of microwave therapeutic apparatuses, revenue increased due to increases
in both the quantity of sales and the selling price. The increase in revenue from sales of microwave therapeutic apparatuses outweighed
the decrease in revenue from sales of MWA needles, resulting in an overall increase in revenue.

The Company’s revenue from direct
customers decreased from approximately $21.6 million during the fiscal year ended December 31, 2022 to approximately $16.5 million
for the fiscal year ended December 31, 2023, resulting in a net decrease of approximately $5.1 million. Changes in sales prices
caused the revenue to decrease by approximately $1.1 million, while changes in the volume of products sold caused the revenue to decrease
by approximately $4.0 million. With respect to the sales of MWA needles and other medical devices, revenue decreased due to a decrease
in overall sales volume in each case. With respect to the sales of microwave therapeutic apparatuses, revenue increased due to increases
in both the quantity of sales and the selling price. The decrease in revenue from the sales of MWA needles and other medical devices
outweighed the increase in revenue from the sales of microwave therapeutic apparatuses, resulting in an overall decrease in revenue.

With respect to inventory reports,
the Company acknowledges the Staff’s comment and respectfully notes that the Company mainly relies on its own monthly reports which
are based on its own due diligence, communication with deliverers and distributors, and industry know-how. The Company’s due diligence
consists of conducting internal market research on the products and informally interviewing representatives of our distributors. The
communication with deliverers and distributors generally occurs on a monthly basis by means of phone calls and in-person conversations.
The Company combines this information with its industry know-how to track the estimated inventory levels of its microwave ablation medical
devices held by its deliverers and distributors and predict the sales trends of such devices. Based on such procedures, the Company estimates
that the average amount of unsold inventory currently held by its distributors is approximately 20% of their purchased amount of inventory.

The Company concluded that 20% is not
a material amount of unsold inventory held by its distributors based on its internal due diligence and industry know-how for the following
reasons. First, since distributors pay for the Company’s products when they are received and such products cannot be returned and
may only be exchanged if there are quality issues, such distributors’ payment to the Company is not dependent on whether such distributors
have sold those products to their respective customers. As a result, a distributor’s unsold inventory of the Company’s products
has no material impact on the Company’s revenue recognition. Second, distributors need to maintain a certain amount of unsold inventory
in case there is an unexpected increase in demand from their customers. Based on the Company’s understanding, it is typical across
the industry to retain 20% of inventory in case of a sudden additional increase in orders, or to hedge against the risk that the Company
may be unable to timely deliver subsequent products to such distributors in order to allow such distributors to meet their respective
delivery timelines.

The Aging of Accounts Receivable, page 349

 4. Comment:
                                            We note your responses to comments 13 and 14 and the corresponding expanded disclosures.
                                            Specifically you refer to customers being contractually entitled to a credit period of 30
                                            to 90 days, but in practice, you may, on a case-by-case basis, approve an extended credit
                                            period upon request. Given that the approval of an extended credit period appears to not
                                            be as infrequent as your disclosures indicate, we continue to believe that additional quantitative
                                            disclosures should be provided regarding your actual collection period for your receivables.
                                            For example, an analysis of days sales outstanding or other quantitative analysis could be
                                            helpful along with clear disclosure of how these calculations are determined. Include the
                                            information in your response to comment 14 in the disclosure on page 350. We also note
                                            your continued reference to the impact of the COVID-19 outbreak. Please further clarify in
                                            your disclosures why and how you are continuing to be impacted by this outbreak in recent
                                            periods. Also, please expand your disclosure to explain why you have any outstanding receivables
                                            from distributors given the provision in Section 6.2 of the Distribution Agreement in
                                            Exhibit 99.9 that products are not shipped to the distributor until after you have received
                                            payment.

Response:
The Company acknowledges the Staff’s comment and has revised the disclosure on pages 291 and 353 of Amendment No. 6 to
clarify that the Company grants extended credit terms to a majority of its customers. The discrepancy between the contractual credit
term contained in the Distribution Agreement and the credit terms the Company actually enforces occurs because each executed distribution
agreement is merely a framework agreement and is on a standard form for all distributors for purposes of consistency and ease of management.
However, based on Section 6.1 of the Distribution Agreement, in practice and on an as-needed basis, the Company may enter into subsequent
supplemental agreements on a case-by-case basis with applicable distributors, which may contain prepayment terms or credit terms of 30
to 90 days, subject to the applicable conditions therein. The Company has filed the form of subsequent supplemental agreement as Exhibit 99.11
to Amendment No. 6. The length of the credit term considers factors such as the distributor’s purchase volume, the duration
of the distributor relationship, and the distributor's credit and financial performance. For payments exceeding the credit term, the
Company, in order to maintain customer relationships, does not directly pursue litigation or penalties for collection but reserves contractual
rights and relies on the Company's sales personnel to regularly follow up on collections. There have been no disputes or lawsuits with
our distributors regarding payment issues. In each case, the Company believes such supplemental agreements are entered into in the ordinary
course of business and do not affect the validity of the original distribution agreements. The Company has disclosed on page 353
of Amendment No. 6 that as of December 31, 2022, the turnover days of accounts receivable was 187 days, while the tur