United States securities and exchange commission logo
April 26, 2023
Lei Zhang
Director and Chief Executive Officer
Cheche Group Inc.
8/F, Desheng Hopson Fortune Plaza
13-1 Deshengmenwai Avenue
Xicheng District, Beijing 100088, China
Re: Cheche Group Inc.
Draft Registration
Statement on Form F-4
Submitted March 30,
2023
CIK No. 0001965473
Dear Lei Zhang:
We have reviewed your 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.
Draft Registration Statement on Form F-4
General
1. With a view toward
disclosure, please tell us whether your sponsor is, is controlled by, or
has substantial ties
with a non-U.S. person. Please also tell us whether anyone or any
entity associated with
or otherwise involved in the transaction, is, is controlled by, or has
substantial ties with a
non-U.S. person. If so, also include risk factor disclosure that
addresses how this fact
could impact your ability to complete your initial business
combination. For
instance, discuss the risk to investors that you may not be able to
complete an initial
business combination with a U.S. target company should the
transaction be subject
to review by a U.S. government entity, such as the Committee on
Lei Zhang
FirstName LastNameLei Zhang
Cheche Group Inc.
Comapany
April NameCheche Group Inc.
26, 2023
April 226, 2023 Page 2
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FirstName LastName
Foreign Investment in the United States (CFIUS), or ultimately
prohibited. Further,
disclose that the time necessary for government review of the
transaction or a decision to
prohibit the transaction could prevent you from completing an initial
business
combination and require you to liquidate. Disclose the consequences of
liquidation to
investors, such as the losses of the investment opportunity in a
target company, any price
appreciation in the combined company, and the warrants, which would
expire worthless.
Proxy/Prospectus Cover Page, page iv
2. Describe further how cash is transferred through your organization.
Disclose your
intentions to distribute earnings or settle amounts owed under the VIE
agreements. State
whether any transfers or other payments have been made to date from
the holding
company to its subsidiaries and consolidated VIEs, or from the holding
company's
subsidiaries to the consolidated VIEs, and quantify the amounts where
applicable. Provide
cross-references to the condensed consolidating schedule and the
consolidated financial
statements.
3. We note that the CSRC recently published Trial Measures that impose
certain filing
requirements for direct and indirect overseas listings and offerings.
Please disclose how, if
at all, the Trial Measures apply to this transaction, whether you and
relevant parties to this
transaction have complied with your obligations under the Trial
Measures, and the risks to
investors of non-compliance.
4. Please disclose the location of your auditor s headquarters and
whether and how the
Holding Foreign Companies Accountable Act, as amended by the
Consolidated
Appropriations Act, 2023, and related regulations will affect your
company.
Conventions That Apply to This Proxy Statement/Prospectus, page 7
5. Please revise your definition of "China" or "PRC" to include Hong Kong
and Macau and
to clarify that the legal and operational risks associated with
operating in China also
apply to your operations in Hong Kong. The definition may clarify that
the only time that
China or the PRC does not include Hong Kong or Macau is when you
are referencing
specific laws and regulations adopted by the PRC. If it does, please
revise your disclosure
to discuss any commensurate laws or regulations in Hong Kong, if
applicable, and any
risks and consequences to the company associated with those laws and
regulations.
Questions and Answers About The Business Combination and Extraordinary General
Meeting,
page 10
6. Please clearly disclose how you define "we" in this section.
Will Prime Impact obtain new financing in connection with the Business
Combination, page 13
7. Please highlight here or where appropriate the material differences in
the terms and price
of securities issued at the time of the IPO as compared to private
placements contemplated
Lei Zhang
FirstName LastNameLei Zhang
Cheche Group Inc.
Comapany
April NameCheche Group Inc.
26, 2023
April 326, 2023 Page 3
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at the time of the business combination. Disclose if the SPAC's
sponsors, directors,
officers or their affiliates will participate in the private
placement.
What is the expected per share value of the cash consideration to be received
by HoldCo in the
Business Combination, page 22
8. We note your disclosure on page 120 that your organizational documents
do not provide a
specified maximum redemption threshold, except that in no event will
Prime Impact
redeem Public Shares in an amount that would cause its net tangible
assets to be less than
$5,000,001 after giving effect to the transactions contemplated by the
Business
Combination Agreement and the PIPE Investment. Please discuss such
disclosure here.
Please also discuss why the columns assuming 75% redemption and
maximum
redemption have the values "N/A." Additionally, please include a
legend defining all
symbols, such as the asterisk next to "Estimated Transaction Expenses"
in your table.
Proxy Statement/Prospectus Summary
CCT's Business, page 29
9. We note your disclosure that CCT has no substantive operations and
carries out its
business in China through its wholly-owned PRC subsidiary and its VIE
contractual
arrangements. Please highlight in the beginning of your discussion of
CCT's Business
your structural arrangements and that CCT has no substantive
operations.
Ownership Structure, page 33
10. We note your diagrams depicting CCT and Prime Impact's ownership
structure before and
after the Business Combination. Please revise to provide a chart with
a more legible font.
Charts should also illustrate the states or countries of incorporation
of various legal
entities and various affiliations that exist.
Agreements Entered into in Connection with the Business Combination, page 36
11. We note that the Sponsor and certain officers, directors and advisors
of Prime Impact
agreed to waive their redemption rights. Please describe any
consideration provided in
exchange for this agreement.
Cash and Asset Flows through Organization, page 45
12. 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 the
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. Your disclosure
should make clear if no
transfers, dividends, or distributions have been made to date.
Describe any restrictions on
Lei Zhang
FirstName LastNameLei Zhang
Cheche Group Inc.
Comapany
April NameCheche Group Inc.
26, 2023
April 426, 2023 Page 4
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FirstName LastName
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 the company, including your subsidiaries and/or the
consolidated VIEs, to
the parent company and U.S. investors as well as the ability to settle
amounts owed under
the VIE agreements.
The Holding Foreign Companies Accountable Act, page 46
13. Please reflect that the HFCAA was amended by the Consolidated
Appropriations Act,
2023.
Risks Related to CCT's Corporate Structure, page 50
14. 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.
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 the
securities you are registering for sale. 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
Recent greater oversight by the CAC over data security, particularly for
companies seeking to
list on a foreign exchange, page 96
15. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China (CAC) over data security, particularly for companies seeking to
list on a foreign
exchange, please revise your disclosure to explain how this oversight
impacts your
business and your 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.
Trading in HoldCo's securities on any U.S. stock exchange or the U.S.
over-the-counter market
may be prohibited under the HFCAA, page 107
16. We note your disclosure about the Holding Foreign Companies
Accountable Act. Please
expand your risk factors to disclose that the Holding Foreign
Companies Accountable Act,
as amended by the Consolidated Appropriations Act, 2023, decreases the
number of
Lei Zhang
Cheche Group Inc.
April 26, 2023
Page 5
consecutive non-inspection years from three years to two years,
and thus, reduces the
time before your securities may be prohibited from trading or
delisted. Also update your
disclosure to describe the potential consequences to you if the PRC
adopts positions at any
time in the future that would prevent the PCAOB from continuing to
inspect or investigate
completely accounting firms headquartered in mainland China or Hong
Kong.
Prime Impact's directors and officers have agreed to vote in favor of the
Business Combination,
page 110
17. Please highlight the risk that the sponsor and Prime Impact's
directors and officers will
benefit from the completion of a business combination and may be
incentivized to
complete an acquisition of a less favorable target company or on terms
less favorable to
shareholders rather than liquidate.
The Sponsor or Prime Impact's directors, officers, advisors or any of their
respective affiliates
may elect to purchase, page 118
18. We note the disclosure here that the Sponsor, Prime Impact s
directors, officers, advisors
or any of their respective affiliates may purchase Public Shares in
privately negotiated
transactions or in the open market either prior to or following the
completion of the
Business Combination. Please provide your analysis on how such
potential purchases
would comply with Rule 14e-5.
Outstanding Prime Impact Warrants will be assumed by HoldCo and converted into
corresponding warrants, page 127
19. Please disclose that the exclusive forum provision in the A&R warrant
agreement can
result in increased costs to investors to bring a claim.
Opinion of Financial Advisor to the Prime Impact Board, page 179
20. Please provide a clear explanation as to the reason the fairness
opinion was obtained.
Interests of the Sponsor and Prime Impact Directors and Officers in the
Business Combination,
page 191
21. Please clarify if the sponsor and its affiliates or Prime Impact's
directors and officers can
earn a positive rate of return on their investment, even if other SPAC
shareholders
experience a negative rate of return in the post-business combination
company.
22. We note that Prime Impact's Amended and Restated Memorandum and Articles
of
Association, incorporated herein by reference, waives the corporate
opportunity doctrine.
FirstName LastNameLei Zhang
Please address this potential conflict of interest and whether it
impacted your search for an
Comapany NameCheche
acquisition target. Group Inc.
April 26, 2023 Page 5
FirstName LastName
Lei Zhang
FirstName LastNameLei Zhang
Cheche Group Inc.
Comapany
April NameCheche Group Inc.
26, 2023
April 626, 2023 Page 6
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23. Please quantify the aggregate dollar amount or describe any additional
consideration
provided, if any, by Prime Impact's independent directors and advisors
for the Prime
Impact Founder Shares transferred from the Sponsor.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
CCT, page 240
24. Please revise the Management s Discussion and Analysis ( MD&A )
section of your
filing to include a discussion of changes in financial position for
each of the periods
presented in your financial statements.
Results of Operations, page 247
25. Please revise your discussion of net revenues on page 248 to provide
quantification,
discussion and analysis of the key metrics and any other significant
factors driving the
fluctuation in insurance transaction services income (e.g., number of
policies written
through the platform, gross premiums written through platform
referrals, gross premiums
written through third-party platform partners, changes in insurance
premiums charged by
insurance carriers, changes in transaction service fee rates,
quantification of the expansion
in the number of referral partners, etc.) accompanied by a discussion
of any known trends
likely to impact future earnings.
26. Please revise your discussion of net revenues on page 248 to provide
an enhanced analysis
of changes in SaaS income, including quantification of the number of
subscription
services provided for each period presented and any changes in service
fees for using Sky
Frontier and Digital Surge, respectively. Please also include a
discussion of any known
trends likely to impact future earnings.
27. Please revise your discussion of cost of revenues on page 248 to
provide an analysis of
changes in the cost of referral partners, including quantification,
discussion and analysis
of the key metrics and any other significant factors driving the
fluctuation (e.g., number of
referral partners, changes in percentage rate paid by CCT to referral
partners, etc.),
accompanied by a discussion of any known trends likely to impact
future earnings.
Unaudited Pro Forma Condensed Combined Financial Information, page 296
28. We note your reference here, and in other sections of your filing,
that HoldCo may enter
into one or more subscription agreements (each, a PIPE Subscription
Agreement ) with
PIPE investors. Please revise your disclosure on page 297, and
elsewhere throughout
relevant sections of the document, to clarify whether you have any
committed PIPE
investment amounts and whether the amount of the PIPE investment is
dependent upon
public shareholder redemptions. Additionally, to the extent you enter
into any PIPE
Subscription Agreements, please include these as adjustments to your
unaudited pro forma
condensed combined financial statements.
Lei Zhang
FirstName LastNameLei Zhang
Cheche Group Inc.
Comapany
April NameCheche Group Inc.
26, 2023
April 726, 2023 Page 7
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Beneficial Ownership of Securities, page 325
29. Please disclose the sponsor and its affiliates' total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
Cheche Technology Inc. Financial Statements
h) Expected credit loss of receivables, page F-20
30. Please revise your disclosure to include both the contractual and
customary payment terms
of your accounts receivable as well as your accounting policy for
writing-off accounts
receivable deemed to be uncollectible. Additionally, please clarify
whether any of your
accounts receivable have been written-off (i.e., charged-off against
the allowance) and if
so, include the amount of such write-offs in your roll-forward of the
allowance for current
expected credit losses on page F-30.
31. As a related matter, please revise the MD&A of CCT beginning on page
240 to include an
aging analysis of your outstanding receivable balances accompanied by
a discussion of the
reasons for any significant changes in the balance of accounts
receivable and the
allowance for current expected credit losses at each period end.
Exhibits
32. We note that it is intended that each of the Initial Merger and the
Acquisition Merger will
qualify as a reorganization within the meaning of Section 368(a)
of the Code. Please
file a tax opinion pursuant to Item 601(b)(8) regarding this material
tax consequence.
You may contact Ben Phippen at 202-551-3697 or John Spitz at
202-551-3484 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Madeleine Mateo at 202-551-3465 or John Dana Brown at 202-551-3859 with
any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Finance
cc: Dan Espinoza