United States securities and exchange commission logo
September 1, 2021
Jie Weng
Chief Executive Officer
Aquaron Acquisition Corp.
515 Madison Ave. 8th Floor
New York, NY 10022
Re: Aquaron Acquisition
Corp.
Amendment to Draft
Registration Statement on Form S-1
Submitted July 28,
2021
CIK No. 0001861063
Dear Mr. Weng:
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. We note that a majority
of your executive officers and directors are located in or have
significant ties to
China and your disclosure that you intend to focus on the Asia TMT
sector, and initially
on companies with operations located primarily in Asia, including the
People s Republic of
China for an initial business combination. Please disclose
this prominently on the
prospectus cover page. Your disclosure also should describe the
legal and operational
risks associated with acquiring a company that does business in
China. Your disclosure
should make clear whether these risks could result in a material
change in your or the
target company s post-combination operations and/or the value of
your common stock or
could significantly limit or completely hinder your ability to offer
Jie Weng
FirstName LastNameJie Weng
Aquaron Acquisition Corp.
Comapany 1,
September NameAquaron
2021 Acquisition Corp.
September
Page 2 1, 2021 Page 2
FirstName LastName
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 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 a 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.
Prospectus Summary, page 1
2. Given that you may be seeking to acquire a company that uses or may
use a variable
interest entity structure to conduct China-based operations, please
describe what that
organizational structure would entail. Explain that the entity in
which investors may hold
their interest may not be the entity or entities through which the
company s operations
may be conducted in China after the business combination. Discuss 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 a
holding company with
respect to its contractual arrangements with a 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.
3. Disclose each permission that you are required to obtain from Chinese
authorities to
operate and issue these securities to foreign investors. State
affirmatively whether you
have received all requisite permissions and whether any permissions
have been denied.
4. Provide a clear description of how cash will be transferred through
the post-combination
organization if you acquire a company based in China. Describe any
restrictions on
foreign exchange and your ability to transfer cash between entities,
across borders, and to
U.S. investors that may apply after a business combination with a
company based in
China. 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.
5. 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 the auditor of a company you may target for an initial
business combination,
and that as a result an exchange may determine to delist your
securities.
Summary of Risk Factors, page 23
6. In your summary of risk factors, disclose the risks that acquiring a
company whose
corporate structure or whose operations are in China poses to
investors. 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
Jie Weng
FirstName LastNameJie Weng
Aquaron Acquisition Corp.
Comapany 1,
September NameAquaron
2021 Acquisition Corp.
September
Page 3 1, 2021 Page 3
FirstName LastName
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
common stock.
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.
Risk Factors, page 26
7. Please add risk factor disclosure that addresses limitations on the
ability of U.S.
regulators, such as the Department of Justice, the SEC, the PCAOB and
other authorities,
to conduct investigations and inspections within the PRC and Hong
Kong.
Risks associated with acquiring and operating a target business with its
primary operation in
China, page 53
8. To the extent that you may acquire a company that uses or may use a
variable interest
entity structure to conduct China-based operations, please revise your
risk factors to
acknowledge that if the PRC government determines that the 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 be worthless if you are unable to assert your contractual
control rights over the
assets of your PRC subsidiaries that may conduct all or substantially
all of your
operations.
9. Please expand your risk factor disclosure to address specifically any
PRC regulations
concerning mergers and acquisitions by foreign investors that your
initial business
combination transaction may be subject to, including PRC regulatory
reviews, which may
impact your ability to complete a business combination in the
prescribed time period.
10. Given the Chinese government s significant oversight and discretion
over the conduct of
the business of any China-based company that you may target for an
initial business
combination, 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 common stock. 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.
Jie Weng
Aquaron Acquisition Corp.
September 1, 2021
Page 4
11. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China over data security, particularly for companies seeking to list
on a foreign exchange,
please revise your disclosure to explain how this oversight could
impact the process of
searching for a target and completing an initial business combination,
and/or your
business on a post-combination basis.
Exhibit 4.5 (Form of Rights Agreement), page II-5
12. Please revise to address how the exclusive forum provision applies to
claims arising out of
the Securities Act and Exchange Act. In the alternative, tell us how
you will make future
investors aware of the applicability of the provision to the
Securities Act and Exchange
Act.
You may contact John Spitz at 202-551-3484 or Amit Pande at 202-551-3423
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Todd Schiffman at 202-551-3491 or Sandra Hunter Berkheimer at 202-551-3758 with
any other
questions.
FirstName LastNameJie Weng Sincerely,
Comapany NameAquaron Acquisition Corp.
Division of
Corporation Finance
September 1, 2021 Page 4 Office of Finance
FirstName LastName