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United States securities and exchange commission logo
August 13, 2021
Peng Xue
Chief Executive Officer
BingEx Limited
Building 6
Zhongguancun Dongsheng International Science Park
No.1 Yongtaizhuang North Road
Haidian District, Beijing 100192
People s Republic of China
Re: BingEx Limited
Amendment No. 1 to
Draft Registration Statement on Form F-1
Submitted July 16,
2021
CIK No. 0001858724
Dear Mr. Xue:
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
Cover page
1. Please disclose
prominently on the prospectus cover page that you are not a Chinese
operating company but a
Cayman Islands holding company with operations conducted by
your subsidiaries and
through contractual arrangements with a variable interest entity
(VIE) based in China
and that this structure involves unique risks to investors. Explain
whether the VIE
structure is used to replicate foreign investment in Chinese-based
companies where Chinese
law prohibits direct foreign investment in the operating
Peng Xue
FirstName LastNamePeng Xue
BingEx Limited
Comapany
August 13, NameBingEx
2021 Limited
August
Page 2 13, 2021 Page 2
FirstName LastName
companies, and disclose that investors may never directly hold equity
interests in the
Chinese operating company. 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 value of your ADSs, including that it could
cause the value of such
securities to significantly decline or become worthless. Provide a
cross-reference to your
detailed discussion of risks facing the company and the offering as a
result of this
structure.
2. Please provide prominent disclosure about the legal and operational
risks associated with
being based in or having the majority of the company s operations in
China. Your
disclosure should make clear whether these risks could result in a
material change in your
operations and/or the value of your ADSs or 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. Your disclosure
should address how
recent statements and regulatory actions by China s government, such
as those related to
the use of variable interest entities and data security or
anti-monopoly concerns, has or
may impact the company s ability to conduct its business, accept
foreign investments, or
list on an U.S. or other foreign exchange. Your prospectus summary
should address, but
not necessarily be limited to, the risks highlighted on the prospectus
cover page.
3. Clearly disclose how you will refer to the holding company,
subsidiaries, and VIEs 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. Refrain from using terms such as we or
our when describing
activities or functions of a VIE. Disclose clearly the entity
(including the domicile) in
which investors are purchasing their interest.
Prospectus Summary, page 1
4. Disclose clearly that the company uses a structure that involves a VIE
based in China and
what that entails. Describe all contracts and arrangements through
which you purport to
obtain economic rights and exercise control that results in
consolidation of the VIE s
operations and financial results into your financial statements.
Identify clearly the entity
in which investors are purchasing their interest and the entity(ies)
in which the company s
operations are conducted. Describe the relevant contractual agreements
between the
entities and how this type of corporate structure may affect investors
and the value of their
investment, including how and why the contractual arrangements may be
less effective
than direct ownership and that the company may incur substantial costs
to enforce the
terms of the arrangements. Disclose the uncertainties regarding the
status of the rights of
the Cayman Islands holding company with respect to its contractual
arrangements with the
VIE, its founders and owners, and the challenges the company may face
enforcing these
contractual agreements due to uncertainties under Chinese law and
jurisdictional limits.
5. 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.
Peng Xue
FirstName LastNamePeng Xue
BingEx Limited
Comapany
August 13, NameBingEx
2021 Limited
August
Page 3 13, 2021 Page 3
FirstName LastName
In particular, describe the significant regulatory, liquidity, and
enforcement risks with
cross-references 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
your ADSs. 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.
6. Disclose each permission that you, your subsidiaries or your VIEs are
required to obtain
from Chinese authorities to operate and issue these securities to
foreign investors. State
whether you, your subsidiaries, or VIEs are covered by permissions
requirements from the
CSRC, CAC or any other entity that is required to approve of the VIE
s operations, and
state affirmatively whether you have received all requisite
permissions and whether any
permissions have been denied.
7. Provide a clear description of how cash is transferred through your
organization. Disclose
your intentions to distribute earnings or settle amounts owed under
the VIE agreements.
Quantify any cash flows and transfers of other assets by type that
have occurred between
the holding company, its subsidiaries, and consolidated VIEs, and
direction of transfer.
Quantify any dividends or distributions that a subsidiary or
consolidated VIE have 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. 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 your businesses,
including subsidiaries and/or consolidated VIEs, to the parent company
and U.S. investors
as well as the ability to settle amounts owed under the VIE
agreements.
8. We note your response to comment 2. Considering your disclosure that
you are the largest
independent on-demand dedicated courier service provider in China,
please revise your
summary to disclose the difference between on-demand dedicated courier
service
providers and captive dedicated courier service providers in China.
9. Revise your disclosure in this summary section to 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 fully investigate your auditor,
and that as a result an
exchange may determine to delist your securities. If the PCAOB has
been or is currently
unable to inspect your auditor, revise your disclosure to so state. We
note your disclosure
on page 44.
Peng Xue
FirstName LastNamePeng Xue
BingEx Limited
Comapany
August 13, NameBingEx
2021 Limited
August
Page 4 13, 2021 Page 4
FirstName LastName
Summary Consolidated Financial Data, page 10
10. We note that the consolidated VIEs constitute a material part of your
consolidated
financial statements. Please provide in tabular form a condensed
consolidating schedule
depicting the financial position, cash flows and results of operations
for the parent, the
consolidated variable interest entities, and any eliminating
adjustments separately, as of
the same dates and for the same periods for which audited consolidated
financial
statements are required. Highlight the financial statement information
related to the
variable interest entity and parent, so an investor may evaluate the
nature of assets held
by, and the operations of, entities apart from the variable interest
entity, which includes
the cash held and transferred among entities.
Risk Factors, page 12
11. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to separately highlight the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your ADSs. Also, given
recent statements
by the Chinese government indicating an intent to exert more oversight
and control over
offerings that are conducted overseas and/or foreign investment in
China-based issuers,
acknowledge the risk that any such action 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.
Risks Related to Our Business and Industry
We collect, process and use data, some of which contains personal information.
Any privacy or
data security breach could damage..., page 18
12. We note your response to comment 4. Please also revise to explain how
CAC oversight is
impacting this offering and to what extent you believe that you are
compliant with the
regulations or policies that have been issued by the CAC to date.
If our expansion into new geographical areas is not successful, our business
and prospects may
be materially and adversely affected, page 20
13. In response to comment 5, you disclose that you have registered branch
offices in all first-
tier cities where you have operations. Please disclose what you
consider first-tier cities as
compared to what you disclose as lower-tier cities in which you are
expanding
you geographical reach.
Risks Relating to Our Corporate Structure
If the PRC government finds that the agreements that establish the structure
for operating our
business do not comply..., page 34
14. Revise this risk factor to acknowledge that if the PRC government
determines that the
Peng Xue
BingEx Limited
August 13, 2021
Page 5
contractual arrangements constituting part of your VIE structure do not
comply with PRC
regulations, or if these regulations change or are interpreted
differently in the future, your
shares may decline in value or become worthless if you are unable to
assert your
contractual control rights over the assets of your PRC subsidiaries that
conduct all or
substantially all of your operations.
Use of Proceeds, page 61
15. We note your revised disclosure in response to prior comment 7. Once
known, please
further revise your disclosure to quantify the dollar amount of net
proceeds to be allocated
for each principal intended use.
You may contact Diane Fritz, Staff Accountant, at (202) 551-3331 or
Kimberly Calder,
Assistant Chief Accountant, at (202) 551-3701 if you have questions regarding
comments on the
financial statements and related matters. Please contact Karina Dorin, Staff
Attorney, at (202)
551-3763 or Kevin Dougherty, Staff Attorney, at (202) 551-3271 with any other
questions.
Sincerely,
FirstName LastNamePeng Xue
Division of
Corporation Finance
Comapany NameBingEx Limited
Office of Energy &
Transportation
August 13, 2021 Page 5
cc: Julie Gao
FirstName LastName