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United States securities and exchange commission logo
August 5, 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.
Draft Registration
Statement on Form F-4
Submitted July 8,
2022
CIK No. 0001936804
Dear Mr. Liu:
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
Cover Page
1. We note your statement
that "Auto Services Group Limited is not an operating company
but a Cayman Islands
holding company with operations primarily conducted by its
subsidiaries in China."
Please revise to disclose this structure involves unique risks to
investors. Your
disclosure should acknowledge that Chinese regulatory authorities
could disallow this
structure, which would likely result in a material change in your
operations and/or a
material change in the value of the securities you are registering for
sale, including that it
could cause the value of such securities to significantly decline or
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
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become worthless. Please also revise this disclosure (and all related
China-based issuer
disclosure throughout the prospectus) to disclose your status as a
China-based Issuer as it
relates to PubCo post-combination.
2. Please revise the cover page to disclose the full amount of
consideration in connection
with the Business Combination, including the CEO's potential earnout
shares.
3. We note the defined terms in the "Use of Certain Terms" section.
Please revise to clearly
disclose how you will refer to the holding company and subsidiaries
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. For example, disclose, if true, that your subsidiaries
conduct operations in
China and that the holding company does not conduct operations. Please
revise to include
definitions for "PRC Subsidiaries" and if different, "PRC Operating
Entities." Disclose
clearly the entity (including the domicile) in which investors are
purchasing an interest.
4. 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. Provide
cross-references to the
condensed consolidating schedule and the consolidated financial
statements.
5. With respect to your transfers of cash, please disclose:
On the cover page and in the summary risk factors and risk
factors sections to 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.
Yongsheng Liu
SunCar Technology Group Inc.
August 5, 2022
Page 3
Questions and Answers about the Business Combination and the Extraordinary
General Meeting,
page 4
6. We note your redemption scenarios on page 151. Please add a question
and answer to
disclose the equity stakes of each group of shareholders in a chart or
another easily
understandable presentation in this section, that is as of a recent
date. Please disclose the
sponsor and its affiliates' total potential ownership interest in the
combined company,
assuming exercise and conversion of all securities, and the
shareholders of SunCar,
including the earn-out. The disclosure should also show the potential
impact of
redemptions on the per share value of the shares owned by
non-redeeming shareholders by
including a sensitivity analysis showing a range of redemption
scenarios, including
minimum, maximum, and interim redemption levels.
7. We note that SunCar and the initial shareholders of Goldenbridge will
enter into an insider
share purchase agreement. Please add a question and answer to discuss
in detail this
insider share purchase agreement to include why the parties will enter
into this
agreement, the number of shares to be purchased and their aggregate
purchase price.
Additionally, please revise the question and answer captioned "Do any
of Goldenbridge s
directors, officers or the Sponsor have interests that may conflict
with my interests with
respect to the Business Combination?" on page 5 and the Interests of
Certain Persons in
the Business Combination section on page 18 to disclose this interest.
Q: What is the consideration being paid to SunCar security holders?, page 5
8. 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: Will I experience dilution as a result of the Business Combination?, page 8
9. Please revise to disclose all possible sources and extent of dilution
that shareholders who
elect not to redeem their shares may experience in connection with the
Business
Combination. Provide disclosure of the impact of each significant
source of dilution,
including the amount of equity held by founders, convertible
securities, including
warrants retained by redeeming shareholders, at each of the redemption
levels detailed in
your sensitivity analysis, including any needed assumptions.
10. We note that based on your disclosure on page 141, underwriting fees
remain constant and
FirstName LastNameYongsheng Liu
are not adjusted based on redemptions. Please revise to disclose, in
this section, the
Comapany NameSunCar
effective Technology
underwriting fee on a Group Inc. basis for shares at each
redemption level
percentage
Augustpresented in your
5, 2022 Page 3 sensitivity analysis related to dilution.
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Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
5, 2022
August
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Summary of the Proxy Statement/Prospectus, page 12
11. We note SunCar's corporate structure chart on page 19. Please disclose
the holders of the
other remaining interests in Beijing Beisheng United Insurance Agency
Co. Limited and
Shanghai Shengshi Dalian Automobile Service Co., Limited.
12. Disclose each permission or approval that you and your subsidiaries
are required to obtain
from Chinese authorities to operate your business and to offer the
securities being
registered to foreign investors. State whether you or your
subsidiaries are covered by
permissions or approvals 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 you or your subsidiaries:
(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. With
respect to each permission or approval, please revise to state whether
you relied on an
opinion of counsel in making such a determination. If so, please name
counsel and file the
consent of counsel as an exhibit. To the extent that you did not rely
on counsel, please
revise to state as much and state why such an opinion was not
obtained. In this regard, we
note certain references to Allbright Law Offices as PRC Counsel.
Please revise as
applicable and provide the required consent.
13. Provide a clear description of how cash is transferred through your
organization. Disclose
your intentions to distribute earnings. Quantify any cash flows and
transfers of other
assets by type that have occurred between the holding company, its
subsidiaries, and
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. Provide
cross-references to the condensed consolidating schedule and the
consolidated financial
statements. Additionally, please revise to include the disclosure
requested in comments 4
and 5 above.
14. Disclose that trading in your securities may be prohibited under the
Holding Foreign
Companies Accountable Act if the PCAOB determines that it cannot
inspect or investigate
completely your auditor, and that as a result an exchange may
determine to delist your
securities. Disclose whether your auditor is subject to the
determinations announced by
the PCAOB on December 16, 2021.
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FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
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Summary of Risk Factors
Risks Related to Doing Business in China, page 19
15. 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 you are registering for sale. 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.
Comparative Per Share Information, page 23
16. Please explain why GBRG has a positive book value per share as of
March 31, 2022 when
its balance sheet had negative shareholders' equity at this date.
Please advise or revise as
appropriate.
Risk Factors, page 25
17. We note your statements on pages 26 and 39 regarding the potential
impacts of inflation,
with respect to the increase in labor costs in China and more
generally, with respect to the
economic environment in recent years. Please expand to identify the
principal factors
contributing to the inflationary pressures that you have experienced
and clarify the
resulting impact to the company, specifically with respect to your
products and services.
Additionally, please disclose whether recent inflationary pressures
have materially
impacted your operations. In this regard, identify the types of
inflationary pressures you
are facing and how your business has been affected.
18. We note your statements on pages 26 and 39 that your supply chain may
be impacted by
"unexpected demand, problems in production or distribution, acts of
terrorism, financial or
other difficulties of suppliers, labor issues, inclement weather,
natural disasters such as
floods, drought and hurricanes, outbreak of armed conflicts or
disease, such as the war in
Ukraine or COVID-19, or other conditions." Please update your risks
characterized as
potential if recent supply chain disruptions have impacted your
operations.
19. We note your statements regarding the potential effects that the
military conflict between
Russia and Ukraine may have on supply chain, which may in turn
negatively impact your
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
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business. Please revise to disclose specifically how your business may
be impacted, for
example discuss whether you have or expect to experience labor
shortages that impact
your business and experience cybersecurity attacks in your supply
chain. Explain whether
and how you have undertaken efforts to mitigate the impact and where
possible quantify
the impact to your business.
20. We note your disclosure on page 52 about the Holding Foreign Companies
Accountable
Act. Please expand your risk factors to disclose that the United
States Senate has passed
the Accelerating Holding Foreign Companies Accountable Act, which, if
enacted, would
decrease the number of non-inspection years from three years to
two years, and thus,
would reduce the time before your securities may be prohibited from
trading or delisted.
Update 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.
"Our historical business growth and profitability may not be indicative of
future performance...",
page 25
21. Please revise to discuss SunCar's net losses for 2020 and 2021.
"Any breaches to our security measures, including unauthorized access to our
systems, computer
viruses and cyber attacks . . . ", page 27
22. Please disclose whether you are subject to material cybersecurity
risks in your supply
chain based on third-party products, software, or services used in
your products, services,
or business and how a cybersecurity incident in your supply chain
could impact your
business. Please discuss the measures you have taken to mitigate these
risks.
"The Chinese government exerts substantial influence over the manner in which
we must
conduct our business activities...", page 41
23. We note your disclosure in this risk factor related to permissions
requirements from the
China Securities Regulatory Commission (CSRC) and Cyberspace
Administration of
China (CAC) is overly 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.
"We may become subject to a variety of laws and regulations in the PRC ...",
page 45
24. We note your statement that "[o]ur PRC subsidiaries currently have
obtained all material
permissions and approvals required for our operations in compliance
with the relevant
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SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
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PRC laws and regulations in the PRC, including the business license.
In the event that the
applicable laws, regulations or interpretations change such that we
are subject to any
mandatory cybersecurity review and other specific actions required by
the CAC, we
cannot guarantee whether we can complete the registration process in a
timely manner, or
at all." The disclosure here should not be qualified by materiality.
Please make
appropriate revisions to your disclosure.
Risk Factors Relating to Goldenbridge's Business, page 57
25. Please highlight the material risks to public warrant holders,
including those arising from
differences between private and public warrants. Clarify whether
recent trading prices of
ordinary shares 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.
Capitalization, page 72
26. Please revise to include Suncar's historical non-controlling interests
as a component of its
total capitalization as of March 31, 2022. Also, the "as adjusted"
assuming no redemption
and assuming maximum redemption capitalization amounts should also be
revised to
include the non-controlling interests as a component of total
capitalization.
Redemption Rights, page 75
27. Please update this section to quantify the value of warrants, based on
recent trading prices,
that may be retained by redeeming shareholders assuming maximum
redemptions and
identify any material resulting risks.
Differences between PubCo's Memorandum and Articles of Association and GBRG's
Memorandum and Articles of Association, page 79
28. We note that following the business combination PubCo will have a
duel-class structure
with super voting Class B Ordinary shares. Please disclose this
material difference and
add a question and answer to address this change and the resulting
voting power the Class
B holders will possess after the business combination.
29. We note that following the business combination PubCo will have a new
Memorandum
and Articles of Association which will differ from Goldenbridge's
existing charter to
include certain changes which appear to substantively affect
Goldenbridge's
shareholder rights, i.e. the adoption of a duel-class structure with
super voting Class B
Ordinary shares. Please include a separate proposal which gives
Goldenbridge's
shareholders an opportunity to express their views on PubCo's new
Memorandum and
Articles of Association and any material provisions which will
establish their substantive
rights as shareholders in PubCo. Alternatively, tell us why you do not
believe you are
required to give Goldenbridge's shareholders the opportunity to vote
on these material
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SunCar Technology Group Inc. Liu
Comapany
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changes to the securities that they will be receiving in this
transaction.
Material U.S. Federal Income Tax Consequences, page 79
30. 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.
31. 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.
32. Please revise to address and express a conclusion for each material
federal tax
consequence. A description of the the law is not sufficient. Rather,
the tax opinion
must opine on the material tax issues. If there is a lack of authority
directly addressing the
tax consequences of the transaction, conflicting authority or
significant doubt about the
tax consequences of the transaction, counsel may issue a should
or more likely than
not opinion to make clear that the opinion is subject to a degree
of uncertainty. In such
cases, counsel should explain clearly why it cannot give a will
opinion. Refer
to Sections III.C.1, III.C.2 and III.C.4 of Staff Legal Bulletin No.
19. Additionally, please
revise the proxy statement/prospectus throughout to include the
applicable questions and
answers and risk factors.
Interests of Certain Persons in the Business Combination, page 92
33. Please revise your disclosure, here and elsewhere, as appropriate to:
Quantify the aggregate dollar amount and describe the nature of
what the sponsor and
its affiliates have at risk that depends on completion of a
business combination.
Include the current value of securities held, loans extended,
fees due, and out-of-
pocket expenses for which the sponsor and its affiliates are
awaiting reimbursement.
Provide similar disclosure for the company s officers and
directors, if material. In this
regard, we note the Insider Share Purchase Agreement should be
discussed and
disclosed.
Highlight the risk that the sponsor will benefit from the
completion of a business
combination and may be incentivized to complete an acquisition of
a less favorable
target company or on terms less favorable to shareholders rather
than liquidate.
Clarify if the sponsor and its affiliates can earn a positive
rate of return on their
investment, even if other SPAC shareholders experience a negative
rate of return in
the post-business combination company.
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SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
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34. Please revise here, and elsewhere as appropriate, to:
Highlight all material interests in the transaction held by the
sponsor and the
company s officers and directors. This could include fiduciary
or contractual
obligations to other entities as well as any interest in, or
affiliation with, the target
company. In addition, please clarify how the board considered
those conflicts in
negotiating and recommending the business combination.
Please expand your disclosure regarding the sponsor s
resulting ownership interest in
SunCar. Disclose the approximate dollar value of the interest
based on the
transaction value and recent trading prices as compared to the
price paid.
Regulatory Approals, page 94
35. In each instance where you mention SunCar's PRC legal advisor, please
revise to name
such advisor and include their consent as an exhibit.
Background of the Business Combination, page 95
36. Please revise to summarize the material discussions and negotiations
surround the
determination of the consideration to be paid in connection with the
business
combination. Please state the reasons for the difference in valuation
between GBRG and
SunCar. Additionally, please disclose how the earn-out milestones were
determined and
how it was determined that only the Chief Executive Officer of SunCar
would receive
such earn-out shares.
37. Please describe, in detail, the reasons that GBRG determined that
SunCar offered the most
compelling business combination opportunity and any discussions and/or
negotiations
surrounding the material terms and the entry into the letter of intent
with SunCar on May
5, 2022.
38. We note the discussions and negotiations between GBRG and SunCar in
April and May of
2022. Please revise to provide a detailed description of such events,
including:
The competitive environment and growth opportunities discussed
on April 27, 2022.
How the form of letter of intent delivered by GBRG on April 29,
2022 came about
and disclose how such valuations were determined. In this light,
we note that the
conference call on April 29, 2022 specifically did not specify
any proposed terms for
the transaction. Please clarify how valuations in the form of
letter of intent were
determined.
The commercial and legal matters discussed on April 30, 2022
and how GBRG
determined to propose the pre-money enterprise value of SunCar
and SunCar's
reasoning for its proposed valuation. Please also disclose how
GBRG determined the
valuation and its terms (such as the performance targets) and the
reasons for the
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FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
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changed terms that were presented in the modified draft letter of
intent.
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.
39. We note that GBRG engaged Maxim to introduce suitable business
combination targets to
GBRG. Please disclose the date on which GBRG engaged Maxim and
disclose the
number of targets that Maxim introduced to GRBG. Additionally, please
quantify the
aggregate fees payable to Maxim upon completion of the business
combination, including
any fees in connection with introductions to target companies, outside
of the $2,012,500
payable upon consummation of the Business Combination. If applicable,
disclose the
potential conflict of interest of Maxim and any related risk factors
that have or may arise
from engaging Maxim in this capacity and as an underwriter in your
initial public
offering.
40. Please revise to more fully describe the role of SunCar's financial
advisors, Chain Stone
Capital Limited and Trans Asia Capital Management Ltd in the
transaction. Additionally,
please disclose the compensation that the SunCar financial advisors
received in
connection with their role in the business combination.
Certain Prospective Operational and Financial Information, page 97
41. We note your statement that "SunCar has not warranted the accuracy,
reliability,
appropriateness or completeness of the SunCar Management Projections
to anyone,
including to GBRG." Please revise to remove this statement as it is
inappropriate to
disclaim responsibility for disclosure appearing in the proxy
statement/prospectus.
42. We note the SunCar Management Projections. Please disclose, in detail,
the material
underlying assumptions, estimates, and bases for the projections,
including specific
information and/or quantitative information relied upon in calculating
the projections for
SunCar as a whole and each of SunCar's business lines.
Goldenbridge's Board of Director's Reasons for Approving the Business
Combination
Engagement of Financial Advisor to Goldenbridge, page 97
43. Please disclose the reason that GBRG retained CHFT for a valuation
opinion.
Additionally, please disclose the scope of the opinion and the
information about the
opinion that is required by Item 1015(b) of Regulation M-A and include
the opinion as an
exhibit or annex to the proxy/registration statement. Refer to Item
21(c) of Form F-4. As
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SunCar Technology Group Inc. Liu
Comapany
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a related matter, in an appropriate place in your filing please
disclose the compensation
paid to CHFT in connection with this valuation opinion. Additionally,
please disclose
whether CHFT was retained to provide any additional services, the
related fees, and
whether those fees are conditioned upon the completion of the
transaction.
Valuation Analysis of CHFT as an Independent Professional Valuer to SunCar,
page 98
44. We note CHFT's Valuation Analysis. With respect to the Guideline
Public Company
Analyses, please disclose the comparable financial, operating, and
sector-specific
characteristics for each company and disclose why such information was
comparable to
SunCar. Additionally, please disclose the breakdown of the trading
multiples for each
selected peer group company. In this regard, for each peer group
company, disclose the
calculated multiple and the associated inputs, i.e. enterprise value
and 2023E sales.
Goldenbridge Board's reasons for the approval of the Business Combination, page
100
45. We note that the GBRG Board received an valuation opinion from CHFT.
Please revise to
discuss what consideration was given to this opinion.
46. We note the factors that the GBRG Board considered in supporting its
decision to enter
into the Merger Agreement and related agreements and transactions.
Please revise to
provide additional disclosure that provides insight into and context
for how each factor
supports the GBRG Board's recommendation. Additionally, we note that
the GBRG
Board considered a number of SunCar business-specific factors such as
quality and value
of the intellectual property, nation-wide supplier and sales partner
network, etc. Please
revise to discuss these considerations in greater detail to include
how each factor supports
the GBRG Board's recommendation.
47. In recommending the transaction, we note that the GBRG Board
considered the terms of
the Merger Agreement. Please revise to state whether the GBRG Board
considered the
consideration to be paid for the target company in recommending the
transaction and if
not, why not.
Industry Overview Of SunCar, page 106
48. We note that Forest & Sullivan prepared a report for SunCar that you
are relying on.
Please revise to file Forest & Sullivan's consent as an exhibit.
Additionally, please revise
your disclosure to note specifically when you are relying on the
Forest & Sullivan report
and provide sources for the statements that do not rely on information
from the Forest
& Sullivan report.
Business of SunCar , page 109
49. Please revise to cite sources of information for statements made in
this section, or
otherwise characterize such statements as management's beliefs. Where
you make
quantitative representations about your business, please revise to
provide such information
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for each of the same periods presented in your financial statements.
Where you make
quantitative statements about your position in the market, please
provide sufficient context
so that investors can fully understand your market share and reach.
Further, where you
provide information about your geographic location in China, please
revise to highlight
the specific locations, and if relevant, the number of customers in
each location. Some
examples of the foregoing include statements such as:
"The after-sales market is highly fragmented, complex and
localized, with non-
standard quality specifications."
"We had over 1,200 clients using our services by the end of
2021, generating over
700 customized service solutions running on over 1,100 client
applications. We have
developed a network of over 42,000 suppliers in over 2,500
districts and counties in
China, completing over 91 million service orders within the last
5 years."
"We are now working with 8 mainstream NEV and smart car panel
players,
embedding our after-sales service solutions into their online
applications and panels,
and providing various insurance products to NEV owners."
"Our one stop after-sales solution connects our clients with
full spectrum services
covering most places in China, while we provide quality standard
supervision, data
security and on-demand flexibility."
50. We note your statement that "[a]s of 2021, we rank first in China in
both the enterprise
automotive after-sales services market in terms of revenue, and in the
online auto
insurance intermediaries in terms of auto insurance premium
facilitated for NEVs ... ."
Please disclose how many competitors are in this space. With respect
to online auto
insurance premiums facilitated for NEVs, please clarify if this is a
reference to the number
of premiums facilitated or total amount of premiums facilitated.
51. We note that you have started making technologies for new business
lines, including
working on a SaaS model product offering and plan to gradually turn
suppliers into
technology customers. Please revise to disclose the steps taken
towards this new business
line and your estimated timeline for growing this business.
Direct synergies between our two major business segments, page 112
52. We note your disclosure on page 111 that by the end of 2021, you
engaged with 85
insurance companies and over 600 insurer branches. Please revise to
give an indication of
what percentage or market share of the insurance market that you
currently do business
with. Additionally, please revise to discuss the differences between
insurance companies
and insurer branches. We also note your disclosure on page 112, that
as of December 31,
2021, you had 190 of your engaged insurances companies and their
branches as after-sales
service clients. Please revise to distinguish how many of the 190 were
insurance
companies and how many were insurer branches. To the extent that the
type of
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
5, 2022
August
Page 135, 2022 Page 13
FirstName LastName
breakdown has an impact on your business or there are higher revenues
or fees that result
from insurance companies vs. insurer branches, please revise to state
as much.
Our Value Propositions, page 113
53. Please provide additional support for statements made in this section.
Either provide
quantitative results or state that you are relying on management's
beliefs or otherwise.
Our Automotive After-Sales Services Business Process, page 115
54. We note that in 2021, you terminated 52 of your after-sales service
providers. Please
disclose the impact, if any, that these terminations had on your
revenues.
Growth Strategy, page 119
55. We note your statement on page 119 regarding the after-sales market in
China, that
"[a]ccording to Frost & Sullivan, in 2021, the top 5 services
providers account for 40.3%
market share." We also note on page 124, you disclose that your market
share is 13.9%
among the automotive after-sales services market. Please disclose the
percentage of
market share held by the other top four services providers.
Competition, page 120
56. We note your statement that "[a]s competition in China s integrated
automotive after-sales
service market intensifies, we believe that we are well positioned to
take advantage of
opportunities in this growing industry." Please disclose the reason(s)
that you are well
positioned in this way.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
SunCar, page 124
57. Please disclose any known trends or uncertainties that have had or are
reasonably likely to
have a material impact on your cash flows, liquidity, capital
resources, cash requirements,
financial position, or results of operations arising from, related to,
or caused by inflation.
58. Please discuss whether supply chain disruptions materially affect your
outlook or business
goals. Specify whether these challenges have materially impacted your
results of
operations or capital resources and quantify, to the extent possible,
how your sales, profits,
and/or liquidity have been impacted.
Related Party Transactions, page 146
59. Please revise to provide all of the related party information required
by Item 18 of Form
F-4 and Item 7.B of Form 20-F with respect to the Working Capital
Loans and the
transactions described in the "Amounts due to related parties."
Unaudited Pro Forma Condensed Combined Statements of Operations, page 153
Yongsheng Liu
FirstName LastNameYongsheng
SunCar Technology Group Inc. Liu
Comapany
August NameSunCar Technology Group Inc.
5, 2022
August
Page 145, 2022 Page 14
FirstName LastName
60. Please revise to disclose the historical basic and diluted per share
amounts and weighted
average number of shares outstanding for SunCar. Refer to Rule 11-
02(a)(9) of
Regulation S-X.
61. Please revise your pro forma condensed combined statement of
operations to present the
Company's net income or loss only from continuing operations. Refer to
the guidance in
Rule 11-02(b)(1) of Regulation S-X.
62. The disclosure on page F-16 indicates that the monthly fee of $10,000
which became
payable to Golden Bridge Capital Limited on June 1, 2020 will
terminate upon completion
of a business combination. Please revise to include a pro forma
adjustment eliminating
these monthly fees from the pro forma condensed combined statement of
operations.
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined
Balance
Sheet, page 155
63. Refer to footnote 3.(5) - Please revise to explain how you calculated
or determined the
various pro forma adjustments reflected in adjustment (5).
4. Income per Share, page 156
64. The pro forma net income from continuing operations under each
scenario used to
calculate pro forma basic and diluted net income per share does not
agree to the amounts
reflected in the unaudited pro forma condensed combined statement of
operations on page
153. Please reconcile and revise these disclosures.
PubCo's Directors and Executive Officers After the Business Combination
Committees of PubCo's Board of Directors, page 166
65. Please describe the extent and nature of the role of the board of
directors in overseeing
cybersecurity risks, including in connection with SunCar's supply
chain/suppliers/service
providers.
Security Ownership of Certain Beneficial Owners and Management Prior to the
Business
Combination, page 169
66. Please disclose the the natural person(s) who have voting and/or
investment control over
the shares held by Golden Bridge Holding, LLC, Scienjoy Inc., Lucky
Link International
Limited, and Space Summit Capital LLC.
Security Ownership of the Combined Company After the Business Combination, page
170
67. Please disclose the the natural person(s) who have voting and/or
investment control over
the shares held by KMBP Holdings Limited, SSDL Holdings Limited, and
YSY Group
Limited.
Yongsheng Liu
SunCar Technology Group Inc.
August 5, 2022
Page 15
Auto Services Group Limited Financial Statements
Note 2. Summary of Significant Accounting Policies
(k) Revenue recognition, page F-53
68. Please provide us with your analysis of how you determined that you
only have one
performance obligation related to your various after-sale services
included in your
contracts with customers. Please clarify if the various services are
provided throughout
the contract term or the services are limited to a number of
occurrences specified in the
contracts. Also, please explain why the service coupons are not
recognized over time as
the services are provided. Refer to ASC 606-10-25-14 and 15 for
guidance.
69. We note your disclosure on page 124 that services are ultimately
provided to end-
customers of your enterprise clients by after-sales service providers
you engage through
your online platform. We also note you control the right to services
before the services
are provided to customers. Please clarify if your right to service
includes the ability to
direct that party to provide the service to the customer on your
behalf. Refer to ASC 606-
10-55-37A.
General
70. We note that GBGR is a British Virgin Islands company with principal
executive offices
in Hong Kong. Please revise your filing, as applicable, to provide
more specific and
prominent disclosures about the legal and operational risks associated
with China-based
companies, specifically with respect to any issues that may prevent
the company from
consummating the Business Combination.
71. In an appropriate place in the proxy statement/prospectus, for
example, in your risk factor
on page 70 where you discuss service of legal process, please name the
directors, officers,
or members of senior management located in the PRC/Hong Kong and
include a separate
"Enforceability" section that addresses whether or not investors may
being actions under
the civil liability provisions of the U.S. federal securities laws
against you, your officers or
directors who are residents of a foreign country, and whether
investors may enforce these
civil liability provisions when your assets, officers, and directors
are located outside of the
United States.
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.
FirstName LastNameYongsheng Liu Sincerely,
Comapany NameSunCar Technology Group Inc.
Division of
Corporation Finance
August 5, 2022 Page 15 Office of
Trade & Services
FirstName LastName