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United States securities and exchange commission logo
June 2, 2022
Yongchen Lu
Chief Executive Officer
TH International Limited
2501 Central Plaza
227 Huangpi North Road
Shanghai, People s Republic of China, 200003
Re: TH International
Limited
Amendment No. 4 to
Registration Statement on Form F-4
Filed May 9, 2022
File No. 333-259743
Dear Mr. Lu:
We have reviewed your amended 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our April
27, 2022 letter.
Amendment No. 4 to Registration Statement on Form F-4 filed May 9, 2022
Cover Page
1. Clearly disclose how
you will refer to the holding company and its 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.
Your revisions should include definitions of "PRC subsidiaries,"
"Hong Kong subsidiary"
and "HK subsidiary."
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Limited
Comapany
June 2, 2022NameTH International Limited
June 2,
Page 2 2022 Page 2
FirstName LastName
Summary, page 1
2. We note your amended disclosure that provides the same-store sales
growth for the second
half of 2020 and 2021, as well as your disclosure that discusses
revenue of your stores on
a "year-over-year basis since 2020." To provide shareholders with a
complete and
balanced picture of your company, please provide same-store sales
growth data for all of
2020 and 2021 or tell us why you are excluding data from the first
half of 2020 and 2021.
3. We note your disclosure relating to "volatility in the supply and
price of raw materials,"
the impact of supply chain issues and inflationary pressures on the
economy, and the
availability and cost of imported coffee beans. We also note press
reports indicating that
Tim Hortons has increased its prices in China. Please update your
disclosure to expand
upon the actual and anticipated impact of inflation, supply chain
issues and your increased
prices on your business, results of operations, margins, outlook,
goals and customers, and
discuss the risks of such issues to your business and investors more
specifically (as
opposed to including boilerplate language). To the extent that you
have passed or
anticipate passing along costs to customers, please quantify such
amounts in your section
entitled "THIL's Management's Discussion and Analysis of Financial
Condition and
Results of Operations," and narratively discuss the impact on your
business if price
increases continue, including the impact on your working capital needs
if your margins
are compressed. Additionally, please revise to discuss known trends or
uncertainties
resulting from inflation, supply chain issues and your increased
prices, as well as from
current or anticipated mitigation efforts relating to the same, if
any, and explain whether
any mitigation efforts introduce new material risks, including those
related to quality,
reliability, or regulatory approval. Please refer to Item 303(b) of
Regulation S-K. Last, to
the extent that you are impacted by Russia's invasion of Ukraine
(which we note you
reference on page F-60 in your amended disclosure), please revise to
provide more
specific disclosures about the legal and operational risks, as well as
the impact on your
results of operations, as a result of such invasion. For additional
guidance, please see the
Division of Corporation Finance s Sample Letter to Companies
Regarding Disclosures
Pertaining to Russia s Invasion of Ukraine and Related Supply Chain
Issues issued by the
Staff in May 2022. Please revise your discussions of supply chain
issues to clarify that the
pandemic is no longer the sole source of such issues.
4. We note your response to comment 3, as well as your amended
disclosure. Please further
revise here, on the prospectus cover page and in the risk factors to
clarify, if true, that the
identified restrictions on your ability to transfer cash/assets are
based on relevant PRC law
and that you do not have any other cash management policies that
dictate how funds are
transferred between you and your subsidiaries, including those not in
the PRC. In
addition, here, on the prospectus cover page and in the risk factors,
revise your statement
regarding "potential interventions in or the imposition of these
restrictions and limitations
by the PRC" (emphasis included) to include new and other restrictions
and limitations, as
well. Also include a statement here, on the prospectus cover page and
in the risk factors
that, to the extent cash/assets are in Hong Kong or a Hong Kong
entity, the cash/assets
Yongchen Lu
TH International Limited
June 2, 2022
Page 3
may not be available to fund operations or for other use outside of
Hong Kong due to
interventions in or the imposition of restrictions and limitations on
the ability of you and
your Hong Kong subsidiary by the PRC government to transfer
cash/assets.
Regulatory Matters, page 22
5. We note your response to comment 9, as well as your deletion of "other
PRC regulatory
authorities" on pages 22, 23 and 124. Please revise to expand these
discussions of
consequences, so that they apply to all permissions or approvals that
you are required to
obtain from the PRC and Hong Kong to offer your securities and conduct
your
operations. We further note your statement that, based on the opinion
of counsel, you do
not believe you are "subject to cybersecurity review or reporting
requirements under the
applicable PRC cybersecurity laws and regulations"; please revise each
instance of such
language to also say that you are not covered by permissions or
requirements of the CAC,
if true. Also, revise your disclosure that "[s]ubstantially all of
THIL s company owned
and operated stores and franchise stores" have obtained the approvals,
licenses and
permits that you are required to maintain in order to operate your
business, to disclose
whether you and your subsidiaries have received from the PRC and Hong
Kong the
approvals, licenses and permits that you are required to maintain in
order to operate your
business and offer your securities; also revise to discuss the nature
and number of such
approvals, licenses and permits that you and your subsidiaries have
not received, if and
when you anticipate receiving them, and the consequences during the
time that you are
operating without receiving them. Make conforming changes to your risk
factors.
Summary Financial Information of Silver Crest, page 30
6. We note that you include summary financial information for the nine
months ended
September 30, 2021. Please update to include the most recent financial
statement period
required in the filing.
Risk Factors
"The projections and forecasts presented in this proxy statement/prospectus are
not indicative of
the actual results . . . ", page 75
7. Here and on page 118, please state that THIL did not meet the 2021E
projections and
whether the difference between the projected and actual results is
material, and provide a
cross-reference to the discussion of your 2021 results of operations.
Given the material
lapse in time and change in circumstance since the projections were
prepared in April
2021, disclose whether the projections continue to reflect management's
views on future
FirstName LastNameYongchen Lu
performance and what consideration the board gave to obtaining updated
projections or a
Comapany
lack NameTH
of relianceInternational Limited In this regard, we note that the
board took into
upon the projections.
June 2,account such3 projections in its recommendation to stockholders
regarding the transaction.
2022 Page
FirstName LastName
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Limited
Comapany
June 2, 2022NameTH International Limited
June 2,
Page 4 2022 Page 4
FirstName LastName
Background of the Business Combination, page 103
8. We note your amended disclosure that "Mr. Yu, representing THIL, and
BofA Securities
mutually agreed to terminate their engagements." Please discuss the
potential impact on
the transaction related to the resignation of BofA Securities and its
affiliates. For
example, if BofA Securities or any of its affiliates would have played
a role in the closing,
please revise to identify the party who will be filling such role.
9. We note your amended disclosure that "BofA has waived its fees under
the engagement
letter." Please disclose any fees paid or due to BofA Securities and
its affiliates in
connection with their role as a financial advisor to THIL. If any of
these fees will be
forfeited by their May 8, 2022 resignation, please revise to disclose
this information. As
an example only, we note your disclosure on page 103 indicating that
BofA Securities and
its affiliates would have been "paid a fee equal to 2.0% of the
aggregate gross proceeds
received by THIL in any PIPE transaction."
10. We note your response to comment 11, as well as your amended
disclosure. In addition to
providing the individual fees payable to UBS, please provide the
aggregate fees payable to
UBS.
THIL's Management's Discussion and Analysis of Financial Condition and Results
of Operations
Contractual Obligations and Commitments, page 179
11. We note that the table includes only operating lease commitments
followed
by disclosure that you do not have any significant long-term
obligations. Please revise to
include bank borrowings and convertible notes.
Unaudited Pro Forma Condensed Combined Financial Information
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information,
page 197
12. Reference is made to transaction adjustment (9). Please explain why
the amount disclosed
in adjustment (9) does not agree to the adjustment to cash and cash
equivalents on page
192.
Silver Crest Acquisition Corporation Audited Financial Statements
Note 9. Fair Value Measurements, page F-58
13. Reference is made to the last sentence on page F-59. Please revise to
disclose the key
inputs into the binomial lattice model for the warrants.
Exhibit 5.2
14. Please revise to consent to all of the references to your firm in the
prospectus.
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Limited
Comapany
June 2, 2022NameTH International Limited
June 2,
Page 5 2022 Page 5
FirstName LastName
General
15. We note your response to comment 19. Please remove the reference to
"certain" in all
references to the sections "Certain Material U.S. Federal Income Tax
Considerations" and
"Certain Material PRC Tax Considerations" on pages xi, xii, 16, 66, 88
of the prospectus
and in your tax opinion filed as Exhibit 8.1. Refer to Section III.C.1
of Staff Legal
Bulletin No. 19.
16. Please tell us whether BofA Securities or any of its affiliates was
involved in the
preparation of any disclosure that is included in the registration
statement, or material
underlying disclosure in the registration statement, including but not
limited to the
disclosure beginning on page 114 regarding the "relative valuation
analysis" reviewed by
Silver Crest s board of directors or the prospective financial
information of THIL
beginning on page 116. If BofA Securities or any of its affiliates was
involved in
preparing this disclosure, please also include a risk factor
describing their role in
connection with the preparation of the registration statement and the
valuation of THIL,
including the reduction in THIL's valuation pursuant to the amended
merger agreement,
and that they disclaim any liability in connection with such
disclosure included in the
registration statement.
17. Please disclose whether BofA Securities or any of its affiliates
assisted in the preparation
or review of any materials reviewed by the Silver Crest board of
directors or management
as part of their services to THIL and whether BofA Securities or any
of its affiliates has
withdrawn its association with those materials and notified Silver
Crest of such
disassociation. With respect to any notifications to PIPE investors
regarding the
transaction, the "potential PIPE investor presentation" as disclosed
on page 101, as well as
any other materials reviewed by PIPE investors, please also disclose
the role played by
BofA Securities and its affiliates and discuss whether BofA Securities
or any of its
affiliates has withdrawn its association with those materials and
notified Silver Crest of
such disassociation.
18. Please disclose what consideration the board gave to the information
and discussions with
BofA Securities and its affiliates in light of its subsequent
resignation and refusal to be
associated with the transaction.
19. Please provide us with any correspondence between BofA Securities or
any of its
affiliates and THIL relating to BofA Securities and its affiliates'
resignation, as well as
any correspondence relating to the PIPE investments between THIL,
potential PIPE
investors and/or BofA Securities or any of its affiliates. Please
contact the staff member
associated with the review of this filing to discuss how to submit the
materials to us for
our review.
20. Please provide us with the engagement letter between THIL and BofA
Securities and its
affiliates, as well as any other documentation associated with this
transaction. Please
disclose any ongoing obligations of the company pursuant to the
engagement letter and
Yongchen Lu
TH International Limited
June 2, 2022
Page 6
any other document that will survive the termination of the engagement,
such as
indemnification provisions, and discuss the impacts of those obligations
on the company
in the registration statement.
21. Please provide us with a letter from BofA Securities and its affiliates
stating whether they
agree with the statements made in your proxy statement/prospectus related
to their
resignation and, if not, stating the respects in which they do not agree.
Please revise your
disclosure accordingly to reflect that you have discussed the disclosure
with BofA
Securities and its affiliates and they either agree or do not agree with
the conclusions and
the risks associated with such outcome. If BofA Securities and its
affiliates do not
respond, please revise your disclosure to indicate you have asked and not
received a
response and include disclosure about such fact and the risks to
investors, including that
there cannot be any inference drawn that BofA Securities and its
affiliates does not
disagree. Please revise the disclosure included accordingly.
You may contact Tatanisha Meadows at 202-551-3322 or Adam Phippen at
202-551-
3336 if you have questions regarding comments on the financial statements and
related
matters. Please contact Brian Fetterolf at 202-551-6613 or Lilyanna Peyser at
202-551-3222
with any other questions.
Sincerely,
FirstName LastNameYongchen Lu
Division of
Corporation Finance
Comapany NameTH International Limited
Office of Trade &
Services
June 2, 2022 Page 6
cc: John Owen
FirstName LastName