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United States securities and exchange commission logo
July 12, 2022
Meng Dong (James) Tan
Chief Executive Officer
8i Acquisition 2 Corp.
Eu Tong Sen Street
#08-13 Singapore 059817
Re: 8i Acquisition 2
Corp.
Preliminary Proxy
Statement on Schedule 14A
Submitted June 15,
2022
CIK No. 0001847846
Dear Mr. Tan:
We have reviewed your filing 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.
Preliminary Proxy Statement on Schedule 14A submitted June 15, 2022
Questions and Answers about the Proposals, page 9
1. Please revise to
disclose with an appropriate Question and Answer and risk factor all
possible sources and
extent of dilution that shareholders who elect not to redeem their
shares may experience
in connection with the business combination. Provide disclosure of
the impact of each
significant source of dilution, including the amount of equity held by
founders, convertible
securities, including warrants retained by redeeming shareholders, at
each of the redemption
levels detailed in your sensitivity analysis, including any needed
assumptions.
Meng Dong (James) Tan
FirstName LastNameMeng Dong (James) Tan
8i Acquisition 2 Corp.
Comapany
July Name8i Acquisition 2 Corp.
12, 2022
July 12,
Page 2 2022 Page 2
FirstName LastName
Risks Related to 8i's Business and Business Combination
The Initial Shareholders who own Ordinary Shares and Private Units will not
participate in
liquidation distributions and, therefore, they ma, page 54
2. We note that certain shareholders agreed to waive their redemption
rights. Please describe
any consideration provided in exchange for this agreement.
Additionally, please describe
the negotiations where your Sponsor, Directors and Officers agreed to
waive their
redemption rights in the "Background to the Business Combination."
Unaudited Pro Forma Condensed Combined Financial Information, page 66
3. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
Notes to Unaudited Pro Forma Condensed Combined Financial Information, page 71
4. Revise your introductory narrative as well as your pro forma footnotes
to more clearly
address the earn out arrangements, including the fact that such earn
outs have been
excluded from your pro forma adjustments.
Note 3 - Adjustments to Unaudited Pro Forma Condensed Combined Financial
Information,
page 72
5. Please provide us your analysis under ASC 815-40-15 supporting your
determination that
the contingent obligation to issue Earn-Out shares is considered
indexed to the company's
own stock and therefore meets the requirement for equity
classification.
Background of the Business Combination, page 79
6. Please revise to provide additional detail regarding your discussions
with the other
potential targets, including when in the process you identified the
targets, who identified
them, when you contacted them and entered into non-disclosure
agreements, who
participated in the preliminary due diligence and discussions with the
targets, and when
you determined not to go forward with the transaction. We note, for
example, that 8i's
Board of Directors was still considering the four potential target
companies in its
discussions on April 3, 2022. To the extent that any preliminary
negotiations were entered
with the other potential targets, please disclose the subject and
nature of such negotiations.
Meng Dong (James) Tan
FirstName LastNameMeng Dong (James) Tan
8i Acquisition 2 Corp.
Comapany
July Name8i Acquisition 2 Corp.
12, 2022
July 12,
Page 3 2022 Page 3
FirstName LastName
7. We note the risk factor disclosures on page 33 that the loss of
certain key corporate clients
would have a materially adverse effect on EUDA's business, financial
condition, and
results of operations. We also note your risk factor disclosure that
EUDA's revenue will
be adversely affected if there is a decrease in the number of
individuals covered under
its platform, health plan and other clients, or if the application or
service subscription
numbers decrease. In light of this, please disclose any discussions
with EUDA about the
potential loss of clients in the near future or other events that may
materially affect the
target s prospects or its financial projections for future
performance of the business.
8. Please disclose the nature of the comments incorporated into the final
amendment of the
share purchase agreement that were provided by Shook Lin.
9. We note that 8i agreed to enter into a binding agreement with EUDA
based on the terms
of the draft letter of intent on January 26. Please revise to clarify
how the material terms
of the transaction evolved during the negotiations, including any
proposals and
counterproposals made during the course of negotiations for the
material issues
discussed. The disclosure should provide shareholders with an
understanding of how,
when, and why the material terms of your proposed transaction evolved.
In your revised
disclosure, please ensure that you address the following:
negotiation of the transaction structure;
valuation of EUDA, including the enterprise value discussed
between January 3,
2022, and January 10, 2022, which party first presented a
valuation figure, each
counterproposal, and the basis or bases presented in support of
each valuation
proposed and the discussions that led to an decrease in the
valuation from $613.4
million to $172 million;
purchase consideration, especially the discussions leading to the
decrease from $550
million to $140 million; and
earn-out consideration, including the related negotiations and how
you determined
the value of the earnout milestones.
10. We note that certain financial projections were presented to Mr. Tan
and Mr. Yap between
January 3 and January 10, 2022 and to 8i's Board of Directors on April
1, 2022. Please
clarify whether these were the same set of financial projections
provided to 8i s Board of
Directors on February 25, 2022. To the extent that these were
different sets
of projections, please include such analyses in your filing and
explain the material
differences with the February 25 financial projections.
11. Please disclose who identified EUDA and how EUDA was identified.
Revised financial projections (as of May 30, 2022), page 82
12. Please disclose the material assumptions and underlying bases of the
May 31, 2022
financial projections, including the compounded annual growth rates,
revenue growth,
operating costs, gross margins, net income, etc. and the limitations
of the forecasts.
Provide investors with sufficient information to evaluate the
forecasted financial
Meng Dong (James) Tan
FirstName LastNameMeng Dong (James) Tan
8i Acquisition 2 Corp.
Comapany
July Name8i Acquisition 2 Corp.
12, 2022
July 12,
Page 4 2022 Page 4
FirstName LastName
information and its reasonableness. In addition, disclose whether your
projections are in
line with historic operating trends, including your growth rates and
revenue growth, and if
not, please explain why the change in trends is appropriate or
assumptions are reasonable.
For example, we note that your year-to-year growth rate between 2020
and 2021 was 25%
and that your projected compounded annual growth rates from 2022 to
2026 are projected
to be 98%, 148% and 235% for your base, middle, and best case
scenarios respectively. In
your revised disclosure, please discuss how your projections compare
to actual annualized
experience for the quarter ended March 31, 2021.
Interests of 8i's Directors, Officers and Certain Shareholders in the Business
Combination, page
89
13. Please quantify here and on page 23 the aggregate dollar amount and
describe the nature
of the January 12, 2022 and March 18, 2022 loans extended by Mr. Meng
Dong (James)
Tan, as well as any other loans extended, fees due, and out-of-pocket
expenses for which
the sponsor and its affiliates are awaiting reimbursement. Provide
similar disclosure for
the company s officers and directors, if material.
14. Please expand your disclosure regarding Mr. Mend Dong (James) Tan's
and 8i Holdings 2
Pte. Ltd. 's ownership interests in EUDA, including the approximate
dollar value of the
interest based on the transaction value and recent trading prices as
compared to the price
paid.
Information About EUDA
Overview, page 108
15. Please explain the meaning of "Omni-channel" and "win rate."
16. We note that paragraphs 3 to 6 on page 108 are duplicates of the
immediately preceding
disclosure. Please revise to remove the duplicated paragraphs.
17. Please identify the direct sales organization and direct sales force
referenced on page 108.
18. Please revise the description of your business at first mention of
EUDA and throughout
your registration statement so that the nature and extent of your
current operations are
clear and are distinguished from your proposed or aspirational
business plans. For
example only, we note your disclosure that one of your competitive
strengths is a business
model that "encompasses the full spectrum of healthcare & wellness
services" and that
"EUDA is an all-encompassing healthcare management platform
purpose-built to power
the entire ecosystem of value-based care." However, your disclosure
elsewhere appears to
indicate that your current operations are limited to providing medical
urgent care and
property management. We also note that you disclose that several
services that are listed
under your "Future Offerings" section are "include[d]" in your
wellness vertical or are
"currently offer[ed]" to your your clients. To the extent your "new
businesses" are
aspirational in nature, please revise to clearly disclose that fact
throughout this section.
Meng Dong (James) Tan
FirstName LastNameMeng Dong (James) Tan
8i Acquisition 2 Corp.
Comapany
July Name8i Acquisition 2 Corp.
12, 2022
July 12,
Page 5 2022 Page 5
FirstName LastName
19. We note your disclosure on page 109 that increased AI-driven
advancement includes "a
strong potential for interactive virtual assistants . . ." Please
clarify whether you have
plans to develop interactive virtual assistants, or otherwise, please
explain how this is
relevant to your business.
Competitive Strengths, page 112
20. We note your disclosures about EUDA's competitive strengths and about
its future service
offerings. Your proxy statement should present a balanced discussion
of your business.
Please revise your disclosure here and throughout your proxy
statement/prospectus
to balance your prominent discussion of EUDA's competitive strengths
and growth
strategy with a discussion of the challenges you face in advancing
your platform s
capabilities and securing customer growth. For example, address in
your revisions the risk
that you may fail to meet customer specifications, that your customer
base may not
increase as planned, you may be unsuccessful in securing new business
from established
customers, and any limitations or risks you may face in developing
your future service
offerings.
Future Service Offerings, page 120
21. Please expand your discussion of each future service offering to
disclose the regulatory
and development steps necessary to implement these offerings,
including the steps that
EUDA has completed, and the steps that remain. Please also disclose
the estimated
timelines of when EUDA will implement these offerings. If you are
unable to provide
either of these estimates, please explain why you are unable to at
this time
22. We note your disclosure within the "Background to the Transaction"
section that EUDA
intends to expand its operations into Indonesia. Please expand your
disclosure here to
describe these plans.
Medical Urgent Care, page 123
23. Please explain what you mean by a "transactional-based model."
24. We note that you will use EUDA's AI and data analytics to perform a
variety of medical
services, including recognizing, analyzing, and determining the type
of treatment required.
Please expand your disclosure to explain how EUDA developed and
validated its artificial
intelligence ("AI") model. In the explanation, please include the data
quality and
robustness of the diagnoses and prescribed treatments, when the model
was developed,
and how long the model has been commercialized.
Meng Dong (James) Tan
FirstName LastNameMeng Dong (James) Tan
8i Acquisition 2 Corp.
Comapany
July Name8i Acquisition 2 Corp.
12, 2022
July 12,
Page 6 2022 Page 6
FirstName LastName
Management's Discussion and Analysis
Overview, page 135
25. Please address the following regarding your property management
services:
You disclose in the third paragraph that you have implemented
relevant solutions to a
wide variety of healthcare and homecare services that you
currently provide.
However your disclosure on page 119 states that "EUDA currently
provides 2
services namely Medical Urgent Care and Property Management
Services" and that
Property Management Services will not be categorized under Home
Care Service line
until 2023. Please revise to clarify the nature, extent, and
timing of management's
intended changes to these business lines.
In addition, you disclose on page 82 that the base case scenario
under your
revised projections are prepared based on the existing services
already offered by
EUDA. Therefore, please revise to explain why there is a line item
for Home Care
Services for 2022 and beyond on page 83 but no line item for
property management.
Please clarify in MD&A whether your property management service
fees are
contractually recurring, and revise your results of operations to
clearly reflect the
extent to which you expect your property management fee revenue to
continue at
comparable levels or be phased out in your transition to home care
services.
Revise to clarify the extent to which your property management
service business line
provides any services to your affiliated medical clinics.
Revise to provide a table presenting the percent of management
revenue from each
property type for each period presented.
Results of Operations, page 136
26. Please revise to address the following regarding your revenue from
medical services:
Revise to disclose the number of total employees covered by your
client contracts for
each period presented.
Discuss the trend in the average revenue per patient for each
period presented.
27. Revise your discussion of Other income to more clearly identify and
discuss the various
components of this subtotal for your interim and annual periods.
Consider providing a tabular breakdown.
Clearly identify the extent to which the various components are
recurring versus one-
time items.
Given the significance of these one-time items, consider revising
your paragraphs
addressing the fluctuations in your net income (loss) to more
clearly address the
extent of the effects of one-time events or items.
Meng Dong (James) Tan
FirstName LastNameMeng Dong (James) Tan
8i Acquisition 2 Corp.
Comapany
July Name8i Acquisition 2 Corp.
12, 2022
July 12,
Page 7 2022 Page 7
FirstName LastName
Unaudited Historical Comparative and Pro Forma Combined Per Share Data of 8i
and EUDA,
page 152
28. Please revise your disclosure to show the potential impact of
redemptions on the per share
value of the shares owned by non-redeeming shareholders by including a
sensitivity
analysis that also includes interim redemption levels.
Beneficial Ownership of Securities - Pre & Post Business Combination, page 171
29. Please disclose the sponsor and its affiliates' total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities,
including the
Warrants within the Private and Public Units.
EUDA Holdings, Inc. Consolidated Financial Statements
Notes to Consolidated Financial Statements
Note 1 - Nature of business and organization, page F-35
30. We note that there are various entities that are included in the
consolidate financial
statements. One of these entities is Kent Ridge Healthcare Singapore
which is described
as a multi-care specialty group offering a range of specialty care
services to patients.
Another is The Good Clinic Private Limited which is described as a
medical facility
general practice clinic that provides holistic care for various
illnesses. However, you
disclose on page 38 that EUDA is dependent on third-party entities,
which they do not
own or control, to provide healthcare services to consumers. Please
clarify in your
disclosure whether the services your provide are from your
wholly-owned subsidiaries.
Further, revise your footnotes and MD&A to clearly describe the
difference and interplay
between your related party and third party revenues and related party
and third party cost
of revenues.
Note 3 - Summary of significant accounting policies
Revenue Recognition, page F-43
31. You disclose in Note 1 that you are engaged in the healthcare
specialty group (other than
general practice) business offering range of specialty care services
to patients and engaged
in the medical facility general practice clinic that provides holistic
care for various
illnesses. You disclose that the revenue for both the specialty
medical visits and the
general practice clinic is generated on a per healthcare visit basis.
You disclose on page
143 that the decrease of the medical services gross profit percentage
for the year ended
December 31, 2021 was mainly attributable to the increase of clinic
(including COVID-
testing) operations during the year ended December 31, 2021, as it
generally has lower
gross profit margin than their specialty care services. Please tell us
your consideration of
disaggregating revenue and cost of revenue between the specialty group
and general
practice (clinic) in your footnotes as well as in your MD&A.
Meng Dong (James) Tan
8i Acquisition 2 Corp.
July 12, 2022
Page 8
Note 10 - Goodwill, page F-53
32. We note that a significant portion of your goodwill is allocated to
Tri-Global which you
disclose is your operating subsidiary which is involved in the provision
of security
services at public events in Singapore. Please tell us the amount of
revenues from security
services for each period presented as well as your consideration of
disaggregating revenues related to security services.
General
33. Please quantify the value of warrants, based on recent trading prices,
that may be retained
by redeeming stockholders assuming maximum redemptions and identify any
material
resulting risks.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Vanessa Robertson at 202-551-3649 or Kevin Vaughn at
202-551-3494
if you have questions regarding comments on the financial statements and
related
matters. Please contact Jordan Nimitz at 202-551-5831 or Celeste Murphy at
202-551-3257 with
any other questions.
Sincerely,
FirstName LastNameMeng Dong (James) Tan
Division of
Corporation Finance
Comapany Name8i Acquisition 2 Corp.
Office of Life
Sciences
July 12, 2022 Page 8
cc: Jane Tam, Esq.
FirstName LastName