View:
United States securities and exchange commission logo
January 18, 2024
Cong Shi
Director
Helport AI Limited
9 Temasek Boulevard #07-00, Suntec Tower Two
Singapore 038989
Re: Helport AI Limited
Draft Registration
Statement on Form F-4
Submitted December
22, 2023
CIK No. 0002001699
Dear Cong Shi:
We have reviewed your
draft registration statement and have the following comments.
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 a comment applies 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 this
letter and your amended
draft registration statement or filed registration statement, we may
have additional comments.
Draft Registration Statement on Form F-4
Defined Terms, page 11
1. Please revise to define
the terms of, and parties to, the Helport Reorganization as well as
the Reorganization
Documents, which you reference throughout the filing. Tell us what
role, if any, Helport
Limited has in the reorganization and why you provided financial
statements for this
entity and not the registrant, Helport AI Limited. In addition, clarify
whether the
Reorganization was completed by the December 31, 2023 deadline or revise
to discuss any
additional extensions.
Questions and Answers
What interests do Tristar's Sponsor, executive officers and directors
have in the business
combination, page 32
2. Please highlight the
risk that the sponsor will benefit from the completion of a business
combination and may be
incentivized to complete an acquisition of a less favorable target
Cong Shi
FirstName
Helport AI LastNameCong Shi
Limited
Comapany
January 18,NameHelport
2024 AI Limited
January
Page 2 18, 2024 Page 2
FirstName LastName
company or on terms less favorable to shareholders rather than
liquidate. Include
corresponding disclosure in your risk factors.
What vote is required to approve the proposals presented at the Meeting, page
34
3. We note that the Initial Shareholders and Current Insiders have agreed
to vote in favor of
the business combination and related proposals. Please revise your
discussion to highlight
the vote of the unaffiliated shareholders needed to approve the
business combination.
Summary of the Proxy Statement/Prospectus
Tristar Initial Shareholders and Current Insiders, page 47
4. We note that the holders of the Founder Shares have waived their
redemption rights.
Please describe any consideration provided in exchange for this
agreement.
Risk Factors
Risks Related to the Business Combination of Tristar
Since the Sponsor and Tristar s directors and officers..., page 61
5. Please clarify how the board considered the conflicts described in
this risk factor in
negotiating and recommending the business combination.
Tristar's shareholders will experience immediate dilution..., page 70
6. We note that the future issuance of securities by the combined company
may dilute the
economic and voting rights and reduce the market price of Pubco
ordinary shares. Please
expand this risk factor to highlight the impact that additional
redemptions may have on
your ability to fund the surviving company, including the likelihood
that you will be
unable to raise additional capital on favorable terms, if at all.
Discuss the downward
pressure potential sales of securities following the business
combination or any future
capital raising transactions may have on the trading price of the
combined entity.
Risks Related to Our Securities Following the Business Combination and Helport
Operating as a
Public Company
If Helport or Pubco fails to implement and maintain an effective system of
internal controls or
remediate the material weaknesses..., page 91
7. Please revise to disclose when you expect to fully remediate the
material weaknesses in
your internal controls over financial reporting and any material costs
you expect to incur
as part of your remediation plan.
The Business Combination Proposal
Earnout, page 104
8. We note your disclosure regarding the terms of the earnout as set
forth in the business
combination agreement. Please revise to clarify that the earnout and
related escrow were
Cong Shi
FirstName
Helport AI LastNameCong Shi
Limited
Comapany
January 18,NameHelport
2024 AI Limited
January
Page 3 18, 2024 Page 3
FirstName LastName
removed in connection with the First Amendment to the Business
Combination
Agreement consistent with your disclosure on page 108.
Background of the Business Combination, page 110
9. We note your statement that On September 30, 2023, Tristar received
the first version of
Valuescope s fairness opinion. Please tell us whether the board
considered multiple sets
of projections, and if so, disclose how the projections referred to in
the registration
statement were selected. If the board considered a draft of the
projections, disclose the
material differences between the draft projections and final
projections and why such
changes were necessary.
Recommendation of the Board and Reasons for the Business Combination, page 120
10. We note your statement that the board's decision to recommend the
transaction considered
a number of factors including, but not limited to, the following
material factors. Please
revise to include, without qualification, the full list of material
factors considered by the
board when determining whether to recommend the business combination.
Summary of Opinion of ValueScope, Inc. as Financial Advisor to Tristar, page
123
11. Please tell us whether ValueScope relied upon any projections or
forward-looking
financial information when rendering its fairness opinion.
Unaudited Pro Forma Condensed Combined Financial Statements
Basis of Pro Forma Presentation, page 153
12. You state that the historical financial statements have been adjusted
to give pro forma
effect to events that are directly attributable, factually supportable
and expected to have
a continuing impact on the result of the combined company. Please
revise your disclosure
to fully comply with the updated guidance in Article 11-02 of
Regulation S-X and remove
any references to the legacy pro forma guidance. In doing so, confirm
that your pro forma
financial statements include all necessary transaction accounting
adjustments, including
those that are not expected to have a continuing impact. Refer also to
SEC Release No.
33-10786.
Unaudited Pro Forma Combined Balance Sheet, page 154
13. Please explain your basis for presenting Helport Pte. Ltd. and Helport
Limited on a
combined basis in your pro forma financial statements.
14. Please revise to explain what the capitalized transaction fees
included in pro forma
adjustment (2) represent. Specifically quantify each component
included in this
adjustment and to which entity the fee relates. Also, clarify when
these fees were
"capitalized" and how they are reflected in the historical financial
statements, if at all. In
Cong Shi
FirstName
Helport AI LastNameCong Shi
Limited
Comapany
January 18,NameHelport
2024 AI Limited
January
Page 4 18, 2024 Page 4
FirstName LastName
addition, tell us how you determined that such costs should be
recorded as a reduction of
equity versus an expense in your pro forma statement of operations to
the extent they are
not already reflected in the historical financial statements. Refer to
SAB Topic 5.A.
15. You disclose on page 161 that the unsecured promissory notes issued in
July and
September 2023 are due and payable upon the closing of a business
combination. You
further disclose on page 50 that if a business combination is
completed, Tristar will repay
the notes with proceeds from the Trust Account. Please revise to
include pro
forma adjustments reflecting both the issuance and repayment of such
notes and related
income statement entries made subsequent to June 30, 2023.
Business of Helport, page 178
16. We note your partnership with Tianjin Youfei Digital Technology Group
Co., Ltd., which
provides relevant models, products, and R&D personnel. Please
tell us whether any of
these models or products rely upon third-party applications, such as
open-source software
or large historical data sets.
Competitive Strengths, page 179
17. We note your statement that you apply operations research theory
and AI technology to
create intelligent algorithms and tools underlying the intelligent
functions of AI Assist."
With a view toward disclosure, please describe with specificity how AI
is used in your
business model. Your revised disclosure should explain how you
developed and validated
your AI model, including the data quality and robustness of the
relationship predicted by
the model over time, the experience of the personnel that developed
the model, when the
model was developed, and how long the model has been used in a
clinical setting.
Helport's Management's Discussion and Analysis of Financial Condition and
Results of
Operations
Specific Factors Affecting Our Results of Operations, page 208
18. You state that banking, insurance and Internet are the main industries
that use AI Assist.
In addition, you indicate that the Helport team has developed
connections with
major financial institutions, insurance enterprises and Internet
corporations. Please tell us
whether your two main customers, Shenyang Pengbosheng Network
Technology and
Beijing Baojiang Science and Technology Co. are considered "major"
companies in the
banking, insurance or Internet industries and if so, explain the basis
for such
determination. Alternatively, revise to clarify these disclosures,
which appear to imply
your current customer base is comprised of major corporations.
Comparison of Years Ended June 30, 2023 and 2022, page 210
19. We note from your disclosures on page 216 that consideration for your
AI services is
based on the monthly average subscribed seats. In addition, you state
that the increase in
revenue for fiscal 2023 was due, in part, to the increase in the
number of subscription
Cong Shi
FirstName
Helport AI LastNameCong Shi
Limited
Comapany
January 18,NameHelport
2024 AI Limited
January
Page 5 18, 2024 Page 5
FirstName LastName
accounts per customer. Please tell us, and revise to disclose, the
number of average
monthly subscribed seats for each period presented. Refer to SEC
Release No. 33-10751.
Liquidity and Capital Resources, page 212
20. You disclose on page 188 that your customers can choose to settle
their bills on a
quarterly or annual basis. Please revise, both here and in Note 2(k),
to disclose the typical
payment terms of your arrangements. Also, disclose your days sales
outstanding for each
period presented along with a discussion of the underlying reasons for
any significant
changes therein. Lastly, tell us the age of the $8,116,654 accounts
receivables that were
collected subsequent to your fiscal 2023 year-end. Refer to Item
303(b)(1) of Regulation
S-K.
Helport Pte. Ltd. Financial Statements, page F-3
21. Revise to include the number of shares outstanding for each of Helport
Pte and Helport
Limited either on the face of the balance sheets or in the notes
thereto. Also, include a
footnote discussion of the subscription receivable as reflected in the
pro forma balance
sheet column for Helport and explain why such receivable in not
reflected in the audited
balance sheet for Helport Pte or Helport Limited. In addition, include
earnings per share
information. Refer to Item 18 of Form 20-F and Rule 5-02.29 and Rule
5-03.25 of
Regulation S-X.
Notes to Helport Pte. Ltd. Financial Statements
Note 4. Intangible Assets, net, page F-13
22. Please tell us the source of the intangible assets on your balance
sheet. To the extent this
asset relates to the development agreement with Youfei Shuke, tell us
the specific
accounting guidance you applied in capitalizing such costs. Also, tell
us how the
acquisition of this intangible is reflected in your cash flow
statement as you do not appear
have any investing cash flow activities. Refer to ASC 230-10-45-13(c).
Note 9. Subsequent Event, page F-16
23. Please revise to disclose the date through which you evaluated
subsequent events. Refer to
ASC 855-10-50-1(a).
Exhibits
24. We note that you rely on agreements with your developer partner,
Tianjin Youfei Shuke
Technology Group, for the development of your products. Please file
the material
agreements with Youfei Shuke summarized on page 189 as exhibits. Refer
to Item
601(b)(10)(ii)(B) of Regulation S-K.
General
25. We understand that Well Fargo Securities, the lead underwriter in your
SPAC IPO,
Cong Shi
Helport AI Limited
January 18, 2024
Page 6
waived the deferred underwriting commissions that were otherwise due to
it upon the
closing of the business combination. Please disclose how this waiver was
obtained, why
the waiver was agreed to, and clarify the SPAC s current relationship
with the firm.
26. Please describe what relationship existed between Wells Fargo Securities
and Tristar after
the close of the IPO, including any financial or merger-related advisory
services
conducted by the firm. For example, clarify whether the firm had any role
in the
identification or evaluation of business combination targets.
27. Please tell us whether you are aware of any disagreements with Wells
Fargo Securities
regarding the disclosure in your registration statement. Further, please
add risk factor
disclosure clarifying that the firm was to be compensated, in part, on a
deferred basis for
its underwriting services in connection with the SPAC IPO and such
services have already
been rendered, yet the firm is waiving such fees and whether it is
disclaiming
responsibility for the Form F-4 registration statement. Clarify the
unusual nature of such a
fee waiver and the impact of it on the evaluation of the business
combination.
28. Tell us whether Wells Fargo Securities was involved in the preparation of
any disclosure
that is included in the Form F-4 registration statement, including any
analysis underlying
disclosure in the registration statement. If so, clarify their
involvement, whether they have
retracted any work product associated with the transaction, and the risk
of such
withdrawal and reliance on their expertise. Further, please clarify
whether Wells Fargo
Securities claims no role in the SPAC s business combination
transaction and whether it
has affirmatively disclaimed any responsibility for any of the disclosure
in this registration
statement.
Please contact Dave Edgar at 202-551-3459 or Kathleen Collins at
202-551-3499 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Austin Pattan at 202-551-6756 or Jeff Kauten at 202-551-3447 with any
other questions.
Sincerely,
FirstName LastNameCong Shi
Division of
Corporation Finance
Comapany NameHelport AI Limited
Office of
Technology
January 18, 2024 Page 6
cc: Ying Li
FirstName LastName