<SEC-DOCUMENT>0001213900-20-044405.txt : 20210513
<SEC-HEADER>0001213900-20-044405.hdr.sgml : 20210513
<ACCEPTANCE-DATETIME>20201223172026
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001213900-20-044405
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20201223

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Lianluo Smart Ltd
		CENTRAL INDEX KEY:			0001474627
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-RETAIL STORES, NEC [5990]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			D8

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		RM 2108, 21ST FL, NO. 20 SHIJINGSHAN RD
		STREET 2:		CHINA RAILWAY CONSTRUCTION BUILDING
		CITY:			SHIJINGSHAN DISTRICT, BEIJING
		STATE:			F4
		ZIP:			100040
		BUSINESS PHONE:		(8610)8860-9850

	MAIL ADDRESS:	
		STREET 1:		RM 2108, 21ST FL, NO. 20 SHIJINGSHAN RD
		STREET 2:		CHINA RAILWAY CONSTRUCTION BUILDING
		CITY:			SHIJINGSHAN DISTRICT, BEIJING
		STATE:			F4
		ZIP:			100040

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Dehaier Medical Systems Ltd
		DATE OF NAME CHANGE:	20091015
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Lianluo Smart Limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Room 611, 6th Floor, Beikong Technology Building</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">No. 10 Baifuquan Road, Changping District</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Beijing 102200, People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">December 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">U.S. Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, DC. 20549<BR>
Attn: Donald Field and Dietrich King</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<TD STYLE="width: 40pt; text-align: right">Re:</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Lianluo Smart Limited</TD>
</TR>                                   <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">Amendment No. 1 to Registration
Statement on Form F-4</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">Filed on December 9, 2020</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">File No. 333-249660</TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0.05pt 1.8pt 0 1in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt">Ladies and Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">We hereby submit the responses of Lianluo
Smart Limited (the &ldquo;<B>Company</B>&rdquo; or &ldquo;<B>LLIT</B>&rdquo;) to the comments of the staff (the &ldquo;<B>Staff</B>&rdquo;)
of the U.S. Securities and Exchange Commission (the &ldquo;<B>Commission</B>&rdquo;) set forth in the Staff&rsquo;s letter, dated
December 16, 2020, providing the Staff&rsquo;s comments with respect to the Company&rsquo;s Amendment No. 1 to Registration Statement
on Form F-4 filed on December 9, 2020 (the &ldquo;<B>Amendment No. 1</B>&rdquo;). Concurrently with the submission of this letter,
the Company is submitting its amendment No. 2 to the Registration Statement (&ldquo;<B>Amendment No. 2</B>&rdquo;) via EDGAR with
the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">For the convenience of the Staff, each
of the Staff&rsquo;s comments is included and is followed by the corresponding response of the Company.&nbsp;&nbsp;Unless the context
indicates otherwise, references in this letter to &ldquo;we,&rdquo; &ldquo;us&rdquo; and &ldquo;our&rdquo; refer to the Company
on a consolidated basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Amendment No. 1 to Registration Statement
on Form F-4</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><U>Unaudited Pro Forma Condensed Combined
Balance Sheet as of June 30, 2020, page 18</U></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>1.</B></TD><TD STYLE="text-align: justify"><B>We read your response to comment 8. Please revise your pro forma adjustment to remove the full
amount of the company&rsquo;s accumulated deficit.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in; text-align: justify; text-indent: 0in"><B><U>Response</U></B>:
We have revised pro forma adjustment and removed the full amount of the Company&rsquo;s accumulated deficit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><U>Material U.S. Federal Income Tax
Consequences of the Merger, page 80</U></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>2.</B></TD><TD STYLE="text-align: justify"><B>We note your discussion of U.S. federal income tax consequences of the merger in this section.
Item 601(b)(8) of Regulation S-K requires you to file a tax opinion where the tax consequences are material to an investor and
a representation as to the tax consequences is set forth in the filing. It appears that a tax opinion would be required since the
discussion includes tax consequences that would be material to investors. Please revise this section accordingly and the exhibit
index to indicate that a tax opinion and consent of counsel will be filed. For guidance, please refer to Section III of Staff Legal
Bulletin No. 19 dated October 14, 2011.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in; text-align: justify; text-indent: 0in"><B><U>Response</U></B>:
We have revised the section of U.S. federal income tax consequences of the merger accordingly and included the tax opinion and
consent of counsel in Exhibit 8.1 in the Amendment No. 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">U.S. Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">December 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Page 2</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Management&rsquo;s Discussion and Analysis
of Financial Condition and Results of Operations for</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Newegg</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Critical Accounting Policies</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Common Stock Valuations, page 176</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>3.</B></TD><TD STYLE="text-align: justify"><B>We read your response to comment 19. Please tell us whether and how you considered the number
of shares you expect to receive in the merger and the market price of Lianluo&rsquo;s common stock in retrospectively verifying
the reasonableness of your estimated enterprise value. </B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><B><U>Response</U></B>: In response
to the Staff&rsquo;s comment, Newegg has considered the number of shares expected to be issued to Newegg stockholders&nbsp;in the
merger and the market price of LLIT&rsquo;s common stock.&nbsp; However, Newegg does not believe the retrospective application
of this information should be used to verify the reasonableness of Newegg&rsquo;s estimated enterprise value in the context of
stock options granted during the six months ended June 30, 2020.&nbsp; In accordance with ASC 718, Newegg determined the exercise
price of those stock options based on the fair value at the time of grant and the information available to it at that time.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">At that time, and throughout the
six months ended June 30, 2020, the occurrence and terms of the merger were uncertain.&nbsp; While a merger was being considered
and a non-binding term sheet had been agreed upon on May 11, 2020, the term sheet was subject to due diligence and was terminable
at any time at will and without penalty by either Newegg or LLIT.&nbsp; In particular, the exchange ratio in the merger (and the
resulting number of shares to be issued to Newegg) was unknown at that time. &nbsp;The term sheet was scheduled to expire on its
own terms on July 10, 2020, a mere 10 days after June 30, 2020, making the occurrence of the merger highly speculative.&nbsp; While
the market price of LLIT&rsquo;s common stock was publicly known, it was not considered by Newegg at that time because it had no
relation to Newegg&rsquo;s enterprise value, absent an exchange ratio to link the value of LLIT to Newegg.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Also, Newegg believes a retrospective
application of this information is inappropriate because of significant changes in Newegg&rsquo;s expected and actual financial
performance that have occurred since the stock options were granted.&nbsp; At that time, the long-term effect of the COVID-19 pandemic
was not known to Newegg.&nbsp; Since June 30, 2020, Newegg&rsquo;s expected and actual financial performance has improved, driven
by a shift in consumer buying preferences from in-store to online distribution channels and by the increase in work-from-home arrangements,
necessitating greater consumer investments in the type of computers and electronics sold by Newegg.&nbsp; The strength and long-term
duration of these consumer trends were uncertain, and to some degree, unexpected by Newegg at the time of option grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Finally, Newegg believes that the
use of LLIT&rsquo;s common stock market price to verify the reasonableness of Newegg&rsquo;s standalone enterprise value is inappropriate
because the market price of LLIT&rsquo;s common stock (since October 26, 2020, the first trading day after the merger agreement
and related disclosures on Form F-4 were publicly announced) reflects the attributes of LLIT and Newegg on a combined basis, and
the changes to both companies that are expected to be made at and following consummation of the merger.&nbsp; These attributes
and changes result in a different combined entity than Newegg as it existed on a standalone basis at the time of the option grants.&nbsp;
For example, Newegg intends to bring on a new, independent board member prior to completion of the merger.&nbsp; In addition, the
terms of Newegg&rsquo;s current preferred stock allow its holder to cast 10 votes for every one common share that it is convertible
into.&nbsp; This contrasts with the capital structure of the combined entity, which will only have one class of stock with one
vote per share.&nbsp; The combined entity will also be incorporated in the British Virgin Islands, whereas Newegg is incorporated
in Delaware, which contains different corporate laws which may impact value. &nbsp;Newegg&rsquo;s management may also have different
perceptions of the value of its stock options as a result of the single class of stock and public listing of that stock, which
could impact the value of LLIT&rsquo;s common stock market price. &nbsp;LLIT&rsquo;s market price also reflects the residual assets,
liabilities and operations of LLIT that will remain with the combined company after completion of the merger, as well as the risk
that the merger could be terminated or completed.&nbsp; All of these changes, risks and factors are disclosed in the Form F-4 and
could impact the market price of LLIT&rsquo;s common stock.&nbsp; These considerations cause the basis of LLIT&rsquo;s common stock
market price to be fundamentally dissimilar to Newegg&rsquo;s standalone enterprise value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">For the reasons above, Newegg does
not believe that the number of shares expected to be issued to Newegg stockholders&nbsp;in the merger or the market price of LLIT&rsquo;s
common stock should be used to verify the reasonableness of Newegg&rsquo;s estimated enterprise value in the context of stock options
granted during the six months ended June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt 0.5in; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Newegg, Inc.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Consolidated Financial Statements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>(19) Segment Information, page F-119</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>4.</B></TD><TD STYLE="text-align: justify"><B>We read your response to comment 27. Page 133 shows Newegg&rsquo;s product categories. Please
disclose revenues from external customers by product category in your segment footnote. Please also disclose revenues from external
customers by geographical area in your segment footnote. In providing this geographical information, your U.S. and foreign revenues
should be separately presented, along with the revenues for any material individual foreign country. Refer to paragraphs 50-40
and 50-41 of ASC Section 280-10-50.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B><U>Response</U></B>: In response
to the Staff&rsquo;s comment, we have revised the segment footnote disclosure to add the breakdown of revenues from external customers
by geographical location.&nbsp; Our product categories as well as the aggregation of our product SKUs (Stock Keeping Units) into
product categories regularly change.&nbsp; In accordance with ASC 280-10-50-40, we find it impractical to disclose the revenues
from external customers for each group of similar products and services, as it is not readily available and the cost to develop
it would be excessive. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">U.S. Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">December 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Page 3</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-left: 0; text-align: justify">If you would like to discuss any of
the responses to the Staff&rsquo;s comments or if you would like to discuss any other matters, please contact the undersigned
at +86 10-89788107 or Kevin Sun of Bevilacqua PLLC at (202) 869-0888 (ext. 101).&nbsp;</P>

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<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">Sincerely,</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">Lianluo Smart Limited</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 60%">&nbsp;</TD>
    <TD STYLE="width: 4%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 36%">/s/ Bin Lin</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Bin Lin<BR>Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;&nbsp;</P>

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<TD STYLE="width: 15pt; text-align: left">cc:</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Kevin Sun, Esq., Bevilacqua PLLC</TD>
</TR>     <TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">Joan Wu, Esq., Hunter Taubman Fischer
&amp; Li LLC</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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