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United States securities and exchange commission logo
November 9, 2022
Yongchen Lu
Chief Executive Officer and Director
TH International Ltd
2501 Central Plaza
227 Huangpi North Road
Shanghai, People s Republic of China, 200003
Re: TH International
Ltd
Registration
Statement on Form F-1
Filed October 13,
2022
File No. 333-267864
Dear Yongchen Lu:
We have limited our review of your registration statement to
those issues we have
addressed in our 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.
Registration Statement on Form F-1 filed October 13, 2022
Cover Page
1. We note your disclosure
that the ESA investors purchased their applicable portion of the
5,000,000 ordinary
shares to be registered for resale at a price of $10.00 per share. We
also note that you paid
such investors an option premium of $500,000, and that the
governing equity
support agreement with Shaolin Capital Management LLC provides that
you will pay the
applicable investors an amount that adjusts if the VWAP falls below
$10.40, $10.60 or
$10.90, based on the applicable reference period following the closing
date of the business
combination. In connection therewith:
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Ltd
Comapany 9,
November NameTH
2022 International Ltd
November
Page 2 9, 2022 Page 2
FirstName LastName
Please quantify the three applicable reference payments that
may be due based on
your recent trading prices, and also revise your disclosure to
provide an estimate of
the price paid per share after accounting for the option premium
payment as well as
the reference period payments (e.g., estimate the price paid per
share by using recent
trading prices as a proxy for the VWAP adjustments to illustrate
how much the
applicable investors paid after accounting for the anticipated
amount that you may
pay to each investor at the end of the applicable reference
periods).
We also note your disclosure that "the ESA Investors may
experience a potential
profit if the price of our Ordinary Shares exceeds $10.00 per
Ordinary Share." Please
revise to also explain the circumstances upon which such
investors may profit if the
price of the ordinary shares are below $10.00 per share.
Revise your summary to discuss the risks that this agreement
may pose to other
holders if you are required to pay such reference period amounts.
For example,
discuss how such payments would impact the cash you have
available for other
purposes and to execute your business strategy and how your stock
price/stock
volatility might be affected. In revising your discussion, also
disclose the related
risks of the convertible notes agreement, including the risk that
you may be required
to repurchase all of the applicable holders' notes. Last, please
include a standalone
risk factor discussing such risks.
2. We note your disclosure that you are registering for resale certain
shares that "were
acquired by Pangaea Two Acquisition Holdings XXIIA Limited and Pangaea
Two
Acquisition Holdings XXIII, Ltd. for nominal consideration." Please
revise to clarify that
Peter Yu is the controlling owner of these shares and disclose what
the "nominal"
consideration paid for such shares was, to provide investors with a
more complete picture
of the offering.
3. We note your disclosure that you are registering the shares issuable
upon exercise of the
sponsor warrants, and you state that the sponsor purchased such
warrants "for a total
consideration of $9,400,000 in a private placement concurrent with the
initial public
offering of Silver Crest." Please disclose the price paid per warrant,
and also reconcile
with your disclosure in the Form 8-K of Silver Crest Acquisition Corp.
filed January 20,
2021, which indicates that the total consideration in such private
placement was
$8,900,000. Additionally, where you discuss the 5,050,000 ordinary
shares issued to the
PIPE investors at $10.00 per share, revise to clarify that the sponsor
purchased and is
registering for resale 500,000 of such shares.
4. We note your disclosure that the notes investors purchased an
aggregate principal amount
of $50 million notes for a purchase price of 98% of the principal
amount thereof. Please
disclose the conversion price per underlying share, which appears to
be $11.50 according
to your disclosure on page 101 per underlying share, as well as the
purchase price per
underlying share.
Yongchen Lu
FirstName LastNameYongchen Lu
TH International Ltd
Comapany 9,
November NameTH
2022 International Ltd
November
Page 3 9, 2022 Page 3
FirstName LastName
5. We note that you propose registering the 4,450,000 and 1,200,000
ordinary shares
issuable upon the exercise of the sponsor warrants and the PIPE
warrants, respectively, in
both primary and resale offerings, thereby indicating that you intend
to sell certain
underlying shares pursuant to Section 5 of the Securities Act and/or
pursuant to an
exemption(s) from Section 5 of the Securities Act. Please tell us why
you are proposing
to offer the same securities pursuant to two separate types of
issuances/offerings and
provide us with your analysis as to how this complies with the
Securities Act and the rules
and regulations promulgated thereunder.
Recent Development, page 12
6. Please summarize the option agreement, dated August 19, 2022, as you
are registering the
resale of 200,000 shares in connection therewith.
Use of Proceeds, page 68
7. We note your disclosure on pages 20 and 21 that "[t]he likelihood that
warrant holders
will exercise the Warrants and any cash proceeds that we would receive
is dependent upon
the market price of our Ordinary Shares" and "[i]f the market price
for our Ordinary
Shares is less than $11.50 per share, we believe warrant holders will
be unlikely to
exercise their Warrants." Please revise to disclose this here when
discussing the
warrants. Additionally, in your section entitled "Liquidity and
Capital Resources"
beginning on page 101, to the extent that your warrants are
out-of-the-money, please
describe how this impacts your liquidity and update the discussion on
the ability of your
company to fund your operations on a prospective basis with your
current cash on hand.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources, page 101
8. We note that the projected total revenue from your company owned and
operated
stores for 2022 was $244.6 million, as set forth in the unaudited
prospective financial
information management prepared and provided to the board in
connection with the
evaluation of the business combination. To the extent material, please
update your
disclosure in Liquidity and Capital Resources, and elsewhere, to
provide updated
information about the company s financial position and further risks
to the business
operations and liquidity, including whether you will meet your 2022
revenue projections.
In this regard, it appears that your total 2022 revenue as of June 30,
2022 was $60.295
million, according to your disclosure on page 89.
Exhibit Index, page II-3
9. Please file the option agreement, dated August 19, 2022, as well as
the executed
convertible note purchase agreement(s) with Sona Credit Master Fund
Limited and
Sunrise Partners Limited Partnership, as we note that it appears you
have only submitted
the form of such agreement as exhibit 10.12.
Yongchen Lu
TH International Ltd
November 9, 2022
Page 4
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Brian Fetterolf at 202-551-6613 or Lilyanna Peyser at
202-551-3222 if
you have any questions.
Sincerely,
FirstName LastNameYongchen Lu
Division of
Corporation Finance
Comapany NameTH International Ltd
Office of Trade &
Services
November 9, 2022 Page 4
cc: Jesse Sheley
FirstName LastName