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United States securities and exchange commission logo
July 14, 2022
Yusheng Han
Chief Executive Officer
Burning Rock Biotech Ltd
No. 5 Xingdao Ring Road North
International Bio Island
Guangzhou, 510005 The People's Republic of China
Re: Burning Rock
Biotech Ltd
Amendment No. 1 to
Registration Statement on Form F-3
Filed June 21, 2022
File No. 333-264577
Dear Mr. Han:
We have reviewed your amended 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our May
16, 2022 letter.
Amendment No. 1 to Form F-3 filed June 21, 2022
Cover page
1. Please revise to state
on the cover page that you conduct substantially all of your business
through the VIEs.
About this prospectus, page 1
2. We note your response
to prior comment 4 and your revised disclosure indicating that
"China" or the "PRC"
includes Taiwan. Please revise or advise. We also note your
disclosure indicating
that when used in the case of laws and regulations of China or the
PRC, China or
the PRC refers to the laws and regulations of the People s Republic
Yusheng Han
FirstName LastNameYusheng Han
Burning Rock Biotech Ltd
Comapany
July NameBurning Rock Biotech Ltd
14, 2022
July 14,
Page 2 2022 Page 2
FirstName LastName
of China, excluding that of Hong Kong, Macau and Taiwan. Please revise
to clarify that
the only instances in which China or the PRC do not
include Hong Kong or Macau
are where you reference the specific laws and regulations adopted by
the People's
Republic of China. Additionally, please ensure that you address
throughout your filing
legal and regulatory risks associated with your operations in Hong
Kong and having your
WFOE owned by your Hong Kong subsidiary. Please also revise the
graphic on page 8 to
state the jurisdiction of incorporation for each entity and to
identify the WFOE. As an
example only, expand your disclosure under the heading "Enforceability
of Civil
Liabilities" to address risks related to the enforceability of
judgments in Hong Kong.
Our Company , page 6
3. We note your response to prior comment 8 and your disclosure on page 6
that, As of the
date of this prospectus, none of [your] Company, [your] subsidiaries
or VIEs are required
to obtain any permissions requirements from the China Securities
Regulatory Commission
(the CSRC ), Cyberspace Administration of China (the CAC ).
Please revise to
explain how you determined that permissions from the CSRC or CAC are
not required. If
you relied on advice of counsel, please identify counsel and file
counsel s consent as an
exhibit to the registration statement. If you did not rely on advice
of counsel, please
explain why. We note your references to your PRC counsel, Tian Yuan
Law Firm. Please
ensure you file counsel s consent.
Holding Company Structure and Contractual Arrangements with the VIE, page 8
4. We note your reference to our VIE on page 8. Please revise here
and throughout your
filing to refer to the VIE. We note your responses to prior
comments 5 and 6. Your
disclosure continues to imply that you have control over the VIE, such
as your statement
on page 8 that your contractual arrangements enable you to have
effective control over
the VIE. We note also the heading on page 10 that references
"Agreements that Provide
Us with Effective Control over the VIE." Please refrain from implying
that the contractual
agreements are equivalent to equity ownership in the business of the
VIE. Any references
to control or benefits that accrue to you because of the VIE should be
limited to a clear
description of the conditions you have satisfied for consolidation of
the VIE under U.S.
GAAP.
Prospectus Summary, page 13
5. We note your response to prior comment 9. You state that the VIE has
not settled any
amounts owed to you under the VIE agreements and does not have the
intention to do so.
You also state that the WFOE received RMB42.2 million, RMB25.3 million
and
RMB88.7 million (US$13.9 million) of service fees from the VIEs in
2019, 2020 and
2021, respectively. Please revise to clarify this inconsistency or
advise. In this regard, we
also note your statement that the typical structure of cash
flows through your
organization involves the payment of service fees by the VIE to the
WFOE and the WFOE
transferring funds to BR Hong Kong Limited, which, in turn, would
transfer funds to you.
Yusheng Han
Burning Rock Biotech Ltd
July 14, 2022
Page 3
In your revisions please also provide the corresponding amounts in U.S.
dollars for 2019
and 2020. We reissue comment 9 in part. Please 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 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.
Risk Factors
Risks Relating to Doing Business in the PRC
Recent regulatory developments in China may subject us to additional regulatory
review and
disclosure requirements..., page 20
6. We note your response to prior comment 12 and your disclosure that,
Currently, the
cybersecurity laws and regulations have not directly affected [your]
business and
operations . We reissue comment 12 in part. Please revise to
explicitly address the
impact of cybersecurity laws and regulations on your proposed offering
and to what extent
you believe you are compliant with the regulations or policies that have
been issued by the
CAC to date.
Enforcement of Civil Liabilities, page 67
7. We note your disclosure that most of your directors and executive
officers are nationals or
residents of jurisdictions other than the U.S., and most of their assets
are located outside
the U.S. Please revise your disclosure to affirmatively state whether
any of your officers,
directors or other members of senior management are located in China. If
so, disclose that
their residence in China may make it even more difficult to enforce any
judgments
obtained from foreign courts against such persons compared to other
non-U.S.
jurisdictions. Additionally, if your officers, directors or other
members of management are
located in China, please include risk factor disclosure and a summary
risk factor
describing that it may be difficult to enforce any judgments obtained
from foreign courts
against you or your management in mainland China.
Please contact Christine Westbrook at 202-551-5019 or Celeste Murphy at
202-551-
3257 with any questions.
Sincerely,
FirstName LastNameYusheng Han
Division of
Corporation Finance
Comapany NameBurning Rock Biotech Ltd
Office of Life
Sciences
July 14, 2022 Page 3
cc: Shuang Zhao, Esq.
FirstName LastName