United States securities and exchange commission logo
January 18, 2023
Junling Liu
Chief Executive Officer
111, Inc.
3-5/F, No. 295 ZuChongZhiRoad
Pudong New Area
Shanghai, 201203
The People s Republic of China
Re: 111, Inc.
Annual Report on
Form 20-F
Response Dated
September 27, 2022
File No. 001-38639
Dear Junling Liu:
We have reviewed your September 27, 2022 response to our comment
letter 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
September 8, 2022 letter.
Annual Report on Form 20-F for Fiscal Year Ended December 31, 2021
Introduction, page 1
1. We note your response
to comment 1. Please further revise your disclosure to discuss any
Hong Kong laws and
regulations that apply to you as well as the related risks and
consequences. We also
note your disclosure on page 46 that a majority of your directors
and executive officers
reside within China. Identify the officers and directors located in
the PRC or Hong Kong
and revise to include a separate Enforceability section
disclosing the
difficulty of bringing actions and enforcing judgments against these
individuals.
Junling Liu
111, Inc.
January 18, 2023
Page 2
2. We note in response to comment 1 you propose to modify the definition
of "China" or
"PRC" to state that it excludes Hong Kong, Macau and Taiwan, but "only
in the context of
describing PRC laws, regulations and other legal or tax matters in
this annual report." As
currently drafted, the scope of the carve-out is unclear. To the
extent that you wish to
continue to exclude Hong Kong from this definition, please clarify
that it is excluded only
when the annual report refers to specific laws and regulations adopted
by the PRC.
Item 3, Key Information, page 3
3. We note your response to comment 2 and your statement that the risks
relating to the VIE
structure, including the risk that the Chinese regulatory authorities
could disallow such
structure, no longer apply to the Company. However, we believe that
such risk continues
to exist as Chinese regulatory authorities could disallow your current
structure by
changing the rules relating to foreign investment in China-based
issuers. Please revise
to specifically say that Chinese regulatory authorities could disallow
your current
structure. Additionally, provide a cross-reference to your detailed
discussion of the risks
facing the company if China were to change the rules and regulations
regarding foreign
ownership in the industry in which the company operates.
4. We note your response to comment 6. Please further revise the
disclosure to discuss
whether there are limitations on your ability to transfer cash between
you, your PRC or
Hong Kong subsidiaries, the consolidated VIEs, or investors. In this
regard, we note that
your discussion of the limitations on cash transfers appears to
discuss solely those in the
PRC. Revise to also discuss limitations applicable to Hong Kong, given
your Hong Kong
subsidiary. Please make consistent revisions throughout the document.
5. We note your response to comment 8. Please revise to identify the
various investors of the
14% interest in 1 Pharmacy Technology.
6. We note your proposed revisions in response to comment 9. Please
further revise to
include the title of each individual risk factor in the
cross-reference, as opposed to listing
only the page number.
7. We note your proposed disclosure in response to comment 11. Please
further revise to
name the PRC legal counsel you relied upon to determine that you are
not required to
obtain any prior approval or permission from the CSRC or CAC for your
historical
offshore offerings to foreign investors.
D. Risk Factors,
FirstName page 7
LastNameJunling Liu
Comapany
8. Name111,
In your Inc. revise your risk factors to add disclosure
associated with the
future filings,
Januarytermination of the
18, 2023 Page 2 VIE structure in February 2022.
FirstName LastName
Junling Liu
FirstName
111, Inc. LastNameJunling Liu
Comapany
January 18,Name111,
2023 Inc.
January
Page 3 18, 2023 Page 3
FirstName LastName
The approval, filing or other requirements of the China Securities Regulatory
Commission...,
page 29
9. We note your response to comment 14 and that you are uncertain and
cannot predict the
impact of the oversight by the Cyberspace Administration of China over
data security on
your business and any future offering. Please revise to explain to
what extent you believe
that you are compliant with the regulations or policies that have been
issued by the CAC
to date.
You may contact Jennie Beysolow at 202-551-8108 or Erin Jaskot at
202-551-3442 with
any questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Kevin Zhang, Esq.