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United States securities and exchange commission logo
November 23, 2022
David Hui Shao
Chief Executive Officer
YishengBio Co., Ltd
Building No. 2, 38 Yongda Road
Daxing Biomedical Industry Park
Daxing District, Beijing, PRC
Re: YishengBio Co., Ltd
Amendment No. 1 to
Draft Registration
Statement on Form F-4
Submitted November
14, 2022
CIK No. 0001946399
Dear David Hui Shao:
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
November 14, 2022
Frequently Used Terms, page 4
1. We note your response
to our previous comment 5 and reissue in part. Please revise your
definition of "China"
to further clarify that the legal and operational risks associated with
China also apply to
Hong Kong and Macau.
David Hui Shao
FirstName
YishengBioLastNameDavid Hui Shao
Co., Ltd
Comapany 23,
November NameYishengBio
2022 Co., Ltd
November
Page 2 23, 2022 Page 2
FirstName LastName
Questions and Answers About the Proposals
Q: What shall be the relative equity stakes of Summit Shareholders, YS
Biopharma shareholders
immediately after..., page 12
2. We note your response to our previous comment 8 and updated disclosure
on page 13 and
reissue. Please disclose the Sponsor and its affiliates total
potential ownership interest in
the combined company, assuming the exercise and conversion of all
securities. For
example only, we note your disclosure on page 360 discussing working
capital
loans between the Sponsor and Summit that may be convertible into
warrants at a price of
US$1.00 per warrant and we note the Sponsor appears to hold "6,000,000
Summit Private
Warrants" which do not appear to be reflected in your revised
disclosure on page 13.
Summary of the Proxy Statement/Prospectus
The Parties to the Business Combination
YS Group, page 28
3. We note your response to our previous comment 11, including your
reference to a
"concert party agreement" between All Brilliance Investments Limited,
Hopeful World
Company Limited, Apex Pride Global Limited and Acton Town
International Limited (the
Concert Parties ). Please clarify whether this agreement will
continue after the Business
Combination. If so, please file the agreement as an exhibit and
describe the material terms
of the agreement or otherwise advise.
Anticipated Accounting Treatment, page 42
4. We note your revisions in response to our previous comment 42. Your
discussion of the
anticipated accounting treatment for the transaction on pages 42 and
174, however,
continues to make references to IFRS. Please revise accordingly.
Proposal No. 1 - The Business Combination Proposal
Background of the Business Combination
Timeline of the Business Combination, page 162
5. We note your response to our previous comment 20, including your
revised disclosure on
page 162 and reissue. For example only, based on the disclosures in
the revised Timeline
of the Business Combination, it remains unclear where each party stood
with respect to
the valuation and commercial arrangements of the Business Combination
from initiation
of discussions in May 2022 until the letter of intent was signed July
1, 2022. Please revise
your disclosure to explain the reasons for the terms, each party's
position on the issues,
how and why they evolved over time from initiation of discussions
until September 29,
2022, and how you reached agreement on the final terms.
David Hui Shao
FirstName
YishengBioLastNameDavid Hui Shao
Co., Ltd
Comapany 23,
November NameYishengBio
2022 Co., Ltd
November
Page 3 23, 2022 Page 3
FirstName LastName
Reasons for Summit Board's Approval of the Business Combination, page 164
6. We note your response to our previous comment 22, including your
updated disclosure on
page 164 and reissue. Please identify each advisor that the Summit
Board consulted with.
In addition, we note Summit's press release dated September 29, 2022
states that Ogier
served as a legal advisor to Summit in connection with the Business
Combination;
however, Ogier does not appear to be mentioned in your draft
registration statement.
Summary of Valuation Analysis and Opinion of Financial Advisor to the Summit
Board
Overview, page 169
7. We note your response to our previous comment 23 and reissue. We note
that your Board
considered a fairness opinion prudent in light of the potential
conflicts of interest; that the
fairness opinion was provided to the Board prior to its vote on the
Business Combination;
and that the YS Biopharma financial projections were used by Summit
s financial advisor
to conduct its analyses. Therefore, we continue to believe that
disclosure of the YS
Biopharma financial projections are material to an assessment of the
value of the merger
consideration and the financial analyses performed by ValueScope. In
addition, please
disclose the material assumptions and underlying bases of the
financial projections
provided by YS Biopharma and discuss the "certain adjustments" made by
ValueScope, and any limitations of the projections. For example only,
please disclose if
such projections included assumptions regarding potential future
product candidate
approvals.
8. You state that ValueScope's analysis consisted of multiple factors
including a review of
data of comparable companies and industry transactions. Pursuant to
Item 1015(b)(6) of
Regulation M-A, please amend your disclosure to include the comparable
companies and
industry transactions reviewed, how they were selected, and the
respective valuations. In
this regard, for example, we note the comparable company valuation
benchmarking
analysis provided on slide 16 of the corporate presentation filed in
Exhibit 99.2 to
Summit's Form 8-K filed September 29, 2022.
YS Group's Marketed Product and Product Candidates
YSJA Rabies Vaccine - YS Group's marketed product
Better safety profile, page 223
9. We note your response to our previous comment 33 regarding the
head-to-head clinical
studies. You state that four head-to-head studies were conducted by
certain CDC centers
in China but we note only two studies appear to be discussed, one
conducted by Guangxi
CDC and the other by Guizhou CDC. To the extent the other two
head-to-head studies
were relied on, please amend to include the material details of such
studies, including a
discussion of the trial design, who conducted the study, number of
participants, and other
rabies vaccines studied or otherwise advise.
David Hui Shao
FirstName
YishengBioLastNameDavid Hui Shao
Co., Ltd
Comapany 23,
November NameYishengBio
2022 Co., Ltd
November
Page 4 23, 2022 Page 4
FirstName LastName
YS BioPharma's Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Contractual Obligations, page 304
10. We note your response to our previous comment 50 and revised
disclosure on page 305
and reissue in part. Please expand your disclosure to describe all
material terms of the
agreement including the royalty term or otherwise advise.
Unaudited Pro Forma Condensed Combined Balance Sheet, page 316
11. With respect to the 10,000,000 Public Warrants and 6,000,000 Private
Warrants issued by
Summit in connection with its IPO, please tell us whether you
anticipate any change in
classification between liabilities and equity upon consummation of the
business
combination. If so, please revise your pro forma financial statements
accordingly.
YishengBio Co., Ltd. Financial Statements
Note 3. Summary of Significant Accounting Policies
Revenue from Contracts with Customers, page F-53
12. We note your response to our previous comment 46 and the revisions
made to your
revenue recognition accounting policy disclosure. Your accounting
policy appears
boilerplate and is not specific to your business. Accordingly, please
address the following:
Specify the point in time that you determine control has
transferred to the customer
and the performance obligation has been satisfied. For example,
clarify whether this
occurs at the time of shipping, upon delivery to external service
providers, or
customer acceptance.
Clearly disclose that your revenue contracts with customers do not
involve variable
considerations, such as discounts and rebates, as you stated in
your response.
Provide us with a detailed description of your sales arrangements
with external
service providers and clearly explain the purpose of the guarantee
deposits. In this
regard, your disclosure on page F-64 that such deposits are
provided by service
providers "in case they fail to sell the vaccines according to the
contract
requirements" raises the question of whether the service providers
assume inventory
risk for the vaccines before they are transferred to the end
customer. Explain your
consideration of ASC 606-10-55-36 through 55-40 as it relates to
these arrangements.
Note 4. Accounts Receivable, Net, page F-59
13. We note your response to our previous comment 47 and the aging
analysis provided.
Please revise your filing as follows:
Disclose both the contractual and customary payment terms for your
accounts
receivable.
Disclose your accounting policy for writing-off accounts
receivable deemed to be
uncollectible.
Clarify whether any of your accounts receivable have been
written-off (i.e., charged
David Hui Shao
YishengBio Co., Ltd
November 23, 2022
Page 5
against the allowance) and if so, include the amount of such
write-offs in your
rollforward of the allowance for doubtful accounts.
Consider providing a rollforward of your accounts receivable
balance that shows the
impact of current year sales and customer payments.
Revise your MD&A to discuss the reasons for any changes in your
Days Sales
Outstanding for each period presented.
General
14. We note your response to our previous comment 55 and reissue. We note the
disclosure
on page 40 that the Sponsor, YS Biopharma, and/or Summit's or YS
Biopharma's
directors, officers, or respective affiliates may purchase Summit Public
Shares and
execute other agreements, including forward purchase agreements. In
addition, we note
that the Sponsor, YS Biopharma, and/or Summit s or YS Biopharma s
directors, officers,
or respective affiliates may enter into transactions with such
investors and others to
provide them with incentives to acquire Summit Public Shares or vote
their Summit
Public Shares in favor of the Business Combination Proposal or First
Merger Proposal."
Please provide you analysis on how such purchases and agreements comply
with Rule
14e-5.
You may contact Li Xiao at 202-551-4391 or Angela Connell at
202-551-3426 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Doris Stacey Gama at 202-551-3188 or Jason Drory at 202-551-8342 with
any other
questions.
Sincerely,
FirstName LastNameDavid Hui Shao
Division of
Corporation Finance
Comapany NameYishengBio Co., Ltd
Office of Life
Sciences
November 23, 2022 Page 5
cc: Dan Ouyang, Esq.
FirstName LastName