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United States securities and exchange commission logo
September 27, 2022
Yongsheng Liu
Chief Executive Officer
SunCar Technology Group Inc.
c/o Shanghai Feiyou Trading Co., Ltd.
Suite 209, No. 656 Lingshi Road
Jing an District, Shanghai, 200072
People s Republic of China
Re: SunCar Technology
Group Inc.
Amendment No. 1 to
Draft Registration Statement on Form F-4
Submitted August
29, 2022
CIK No. 0001936804
Dear Mr. Liu:
We have reviewed your amended 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.
Amendment No. 1 to Draft Registration Statement on Form F-4 Submitted
August 29, 2022
Cover Page
1. We note your amended
disclosure in response to comment 1 and we reissue it in
part. Please revise to
disclose that Auto Services Group Limited's structure involves
unique risks to
investors.
2. We note your amended
disclosure in response to comment 4 and we reissue it in part.
Please provide
cross-references to the condensed consolidating schedule and the
consolidated financial
statements.
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany 27,
September NameSunCar
2022 Technology Group Inc.
September
Page 2 27, 2022 Page 2
FirstName LastName
3. We note your response to comment 5 and we reissue it. With respect to
your transfers of
cash, please specifically disclose each of the following items:
On the cover page, in the summary risk factors, and in risk
factors sections state that,
to the extent cash in the business is in the PRC/Hong Kong or a
PRC/Hong Kong
entity, the funds may not be available to fund operations or for
other use outside of
the PRC/Hong Kong due to interventions in or the imposition of
restrictions and
limitations on the ability of you or your subsidiaries, by the
PRC government to
transfer cash. On the cover page, provide cross-references to
these other discussions.
Discuss whether there are limitations on your ability to
transfer cash between you,
your subsidiaries, or investors. Provide a cross-reference to
your discussion of this
issue in your summary, summary risk factors, and risk factors
sections, as well.
To the extent you have cash management policies that dictate
how funds are
transferred between you, your subsidiaries or investors,
summarize the policies on
your cover page and in the prospectus summary, and disclose the
source of such
policies (e.g., whether they are contractual in nature, pursuant
to regulations, etc.);
alternatively, state on the cover page and in the prospectus
summary that you have no
such cash management policies that dictate how funds are
transferred. Provide a
cross-reference on the cover page to the discussion of this issue
in the prospectus
summary.
Please note that the foregoing disclosure should not be qualified by
materiality.
Questions and Answers About the Business Combination and the Extraordinary
General
Meeting, page 4
4. We note your response to comment 8 and we reissue it because it does
not appear that you
have added a separate question and answer. We note your disclosure
that Mr. Zaichang
Ye may be entitled to receive up to 1,600,000 earn-out shares if
SunCar achieves certain
revenue requirements for each of the fiscal years 2022, 2023 and 2024.
Please revise to
add a separate question and answer to discuss the earn-out in greater
detail to include the
achievement thresholds, the total shares issuable, and the value of
such shares.
Q: What is the Insider Share Purchase Agreement?, page 5
5. We note your amended disclosure in response to comment 7 and we
reissue it in part. We
note that SunCar and the initial shareholders of Goldenbridge will
enter into an insider
share purchase agreement. Please revise the answer to discuss in
detail why the parties
will enter into this agreement.
Regulatory Approvals, page 18
6. We note your amended disclosure in response to comment 12. Please
revise to discuss the
permissions and approvals required to operate your business in
addition to the permissions
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany 27,
September NameSunCar
2022 Technology Group Inc.
September
Page 3 27, 2022 Page 3
FirstName LastName
and approvals that you have described to offer the securities being
registered to foreign
investors. In this regard, please affirmatively address whether you
have received all
requisite permissions or approvals to operate and whether counsel has
opined upon such
disclosure. Additionally, we note your statement CSRC permissions and
approvals that "if
Draft Rules Regarding Overseas Listing finally is promulgated, then we
may need to
obtain certain approvals from relative Chinese authorities." Please
revise to state whether
this is the opinion of your PRC counsel. Additionally, please include
a discussion of why
your business may be required to seek such approvals.
Summary of the Proxy Statement/Prospectus
Cash Transfer, page 18
7. We note your amended disclosure in response to comment 13 and we
reissue it in part.
Please revise to provide a clear description of how cash is
transferred through your
organization. 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. Provide
cross-references to the
condensed consolidating schedule and the consolidated financial
statements.
Additionally, please revise to include the disclosure requested in
prior comment 5.
Summary of Risk Factors
Risks Related to Doing Business in China, page 22
8. We note your amended disclosure in response to comment 15. In your
second to last
bullet point in this section, please revise the last sentence to
disclose that such actions
could cause the value of such securities to significantly decline or
be worthless.
Additionally, please provide cross-references from each summary risk
factor to the more
detailed discussion of these risks in the prospectus/proxy statement.
Risk Factors
"Our historical business growth and profitability may not be indicative of
future performance...",
page 27
9. We note your amended disclosure in response to comment 21. Please
revise to quantify
your net losses in 2020 and 2021 and discuss the reasons for the
under-performance by
your financial leasing business line, including the reasons for
ultimately discontinuing
operations.
"The Chinese government exerts substantial influence over the manner in which
we must
conduct our business activities...", page 43
10. We note your response to comment 23, including your references to
other discussions
regarding the CAC and CSRC. However, we reissue this comment. Your
disclosure in
this risk factor related to permissions requirements from the CSRC and
CAC is overly
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany 27,
September NameSunCar
2022 Technology Group Inc.
September
Page 4 27, 2022 Page 4
FirstName LastName
vague and inconclusive. Please revise to explicitly state whether you
or your subsidiaries
are covered by permissions requirements from the CSRC, CAC or any
other governmental
agency that is required to approve your operations, and state
affirmatively whether you
have received all requisite permissions or approvals and whether any
permissions or
approvals have been denied. To the extent you conclude no permissions
or approvals are
required or are applicable, please discuss the basis for these
conclusions to include
whether an opinion of counsel was obtained.
"Our auditor is headquartered in Manhattan, New York, and is subject to
inspection by the
PCAOB ... ", page 54
11. We note your amended disclosure in response to comment 20. Please
revise your
disclosure to reflect that the Commission adopted rules to implement
the HFCAA and
that, pursuant to the HFCAA, the PCAOB has issued its report notifying
the Commission
of its determination that it is unable to inspect or investigate
completely accounting firms
headquartered in mainland China or Hong Kong.
"Goldenbridge may redeem your unexpired GBRG Public Warrants...", page 60
12. We note your response and amended disclosure in response to comment
25. Please revise
this risk factor to disclose, or include a cross-reference to your
disclosure describing:
whether recent trading prices of ordinary shares exceed the
threshold that would
allow the company to redeem public warrants; and
the steps the company will take to notify all shareholders,
including beneficial
owners, regarding when the warrants become eligible for
redemption.
Differences between PubCo's Memorandum and Articles of Association and GBRG's
Memorandum and Articles of Association, page 81
13. We note your amended disclosure in response to comment 28. Please
revise your
disclosure here to summarize the material differences between the
Class A and Class B
ordinary shares, including, for example, the number of votes per share
in each class.
U.S. Federal Income Tax Consequences of the Reincorporation Merger to U.S.
Holders, page 83
14. We note your amended disclosure in response to comment 30, draft tax
opinion filed as
Exhibit 8.1 and we reissue it. Please file a tax opinion that
addresses the material federal
income tax consequences to investors of the Reincorporation Merger and
the Acquisition
Merger, and revise the disclosure in this section to acknowledge and
reflect that the tax
consequences are the opinion of counsel. Refer to Item 601(b)(8) of
Regulation S-K and
Section III.A.2 of Staff Legal Bulletin No. 19. In this regard, we
note that the draft tax
opinion only addresses the Reincorporation Merger and not the
Acquisition Merger.
Please revise accordingly.
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany 27,
September NameSunCar
2022 Technology Group Inc.
September
Page 5 27, 2022 Page 5
FirstName LastName
15. We note your amended disclosure in response to comment 31 and we
reissue
it. Please revise to remove all language stating that the information
in this section is a
"general discussion" and "summary" or that "it should not be construed
as tax advice."
Investors are entitled to rely on the opinion expressed. Refer to
Section III.D.1 of Staff
Legal Bulletin No. 19. In this regard, we note that counsel will be
providing a legal
opinion on the Reincorporation Merger and Acquisition Merger.
Investors are entitled to
rely upon counsel's opinion on these two material tax consequences of
the transaction.
Please revise accordingly.
Background of the Business Combination, page 97
16. We note your amended disclosure in response to comment 36. Please
revise to summarize
how the value of the earn-out payment was determined. Please describe
all material
discussions and negotiations.
17. We note your amended disclosure in response to comment 37, including
that "GBRG
researched U.S. public companies comparable with SunCar and GBRG
concluded that
SunCar was the most compelling business combination opportunity
available to GBRG."
Please elaborate, with specificity, on the reasons that SunCar offered
the most compelling
business combination, especially in light of the other U.S. public
companies that GBRG
researched.
18. We note your amended disclosure in response to comment 38 and we
reissue it in
part. Please revise to provide a detailed description of:
The estimate of the total transaction costs of the Business
Combination and to the
extent that estimate has differed materially from the current
estimated transaction
costs, please revise to disclose the reasons why.
The discussions and negotiations that lead to the terms and
signing the May 5, 2022
letter of intent.
A summary of the material terms of all items discussed between
May 6 and May 23,
2022.
Certain Prospective Operational and Financial Information, page 99
19. We note your amended disclosure in response to comment 42. Where
possible, please
revise to quantify and provide specifics on all assumptions,
estimates, and bases
considered in the SunCar Management Projections.
Engagement of Financial Advisor to Goldenbridge, page 99
20. We note your amended disclosure in response to comment 43. Please
revise to disclose:
whether GBRG or CHFT determined the amount of consideration to
be paid or
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany 27,
September NameSunCar
2022 Technology Group Inc.
September
Page 6 27, 2022 Page 6
FirstName LastName
whether the outside party recommended the amount of consideration
to be paid;
any instructions received from GBRG and any limitation imposed
by GBRG on the
scope of CHFT's investigation, if applicable; and
the fee received by CHFT for delivering its opinion.
Industry Overview of SunCar, page 109
21. We note your amended disclosure in response to comment 48. Please file
Forest
& Sullivan s consent as an exhibit. Additionally, we note references
throughout your
disclosure to the "Forest & Sullivan Report" and separately to the
"Frost & Sullivan
Report." To the extent that you have relied on more than one report,
please revise to state
as much and include the relevant disclosure and consent as an exhibit.
Otherwise, please
revise for consistency.
Our Value Propositions, page 116
22. We note your amended disclosure in response to comment 53. Please
revise to clarify
whether the statements in each bullet of the list provided are
management's beliefs as
well. If not, please provide the relevant support for each statement.
Related Party Transactions
Amounts due to related parties, page 149
23. We note your response and amended disclosure in response to comment
59. To the extent
not already provided, please disclose the largest amount outstanding
during the period
covered and the amount outstanding as of the latest practicable date.
In this light, we note
that you have provided information as of June 30, 2021 and 2020 and as
of March 31,
2022. Please refer to Item 7.B.2 of Form 20-F.
General
24. We note your amended disclosure on the cover page in response to
comment 70 and we
reissue it. Please revise your filing, as applicable, to provide more
specific and prominent
disclosures about the legal and operational risks associated with GBRG
being based in
Hong Kong and the possibility that the PRC government may prevent GBRG
from
consummating the Business Combination.
25. When discussing the Holding Foreign Companies Accountable Act, please
update your
factual disclosure throughout your filing to discuss the fact that on
August 26, 2022, the
Public Company Accounting Oversight Board (PCAOB) signed a Statement
of Protocol
with the China Securities Regulatory Commission and the Ministry of
Finance of the
People's Republic of China, taking the first step toward opening
access for the PCAOB to
inspect and investigate registered public accounting firms
headquartered in mainland
China and Hong Kong.
Yongsheng Liu
SunCar Technology Group Inc.
September 27, 2022
Page 7
You may contact Tony Watson at (202) 551-3318 or Linda Cvrkel at (202)
551-3813 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Cara Wirth at (202) 551-7127 or Donald Field at (202) 551-3680 with any
other
questions.
Sincerely,
FirstName LastNameYongsheng Liu
Division of
Corporation Finance
Comapany NameSunCar Technology Group Inc.
Office of Trade &
Services
September 27, 2022 Page 7
cc: Giovanni Caruso, Esq.
FirstName LastName