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United States securities and exchange commission logo
January 12, 2021
Xueyuan Weng
Chief Executive Officer
Golden Sun Education Group Limited
Profit Huiyin Square North Building
Huashan 2088, Unit 1001
Xuhui District, Shanghai, China
Re: Golden Sun
Education Group Limited
Draft Registration
Statement on Form F-1
Submitted December
18, 2020
CIK No. 0001826376
Dear Mr. Weng:
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-1
General
1. Please provide us with
supplemental copies of all written communications, as defined in
Rule 405 under the
Securities Act, that you, or anyone authorized to do so on your behalf,
have presented or
expect to present to potential investors in reliance on Section 5(d) of the
Securities Act, whether
or not you retained, or intend to retain, copies of those
communications. Please
contact the staff member associated with the review of this filing
to discuss how to
submit the materials, if any, to us for our review.
Xueyuan Weng
FirstName
Golden SunLastNameXueyuan Weng
Education Group Limited
Comapany
January 12,NameGolden
2021 Sun Education Group Limited
January
Page 2 12, 2021 Page 2
FirstName LastName
2. We note that in a number of places the prospectus summarizes the legal
opinions of Zhong
Lun Law Firm. Please revise the exhibit index to annotate that you
will file a consent
from your PRC counsel related to such legal opinions. Refer to Rule
436 of the Securities
Act of 1933.
Our Company , page 1
3. We note your disclosure on page 10 that certain of your schools are
designated as for-
profit and others as not-for-profit. Please revise the summary to
clarify the schools which
are designated as not-for-profit and discuss how such designation
could effect your future
business, operations and revenues. Please also revise the chart on
page 89 accordingly.
The Offering, page 8
4. Please revise the disclosure under Voting Rights to clarify that the
"holder of our Class B
Ordinary Shares" who will control all matters submitted to
shareholders for approval is
Mr. Xueyuan Weng, your Chairman and CEO. In addition, please tell us
what
consideration you have given to making such disclosure on the outside
prospectus cover
page, as well.
Our business and results of operations mainly depend on the level of tuition
fees, page 10
5. We note your disclosure that certain of your schools are designated as
not-for-profit.
Please revise to quantify the percentage of revenue derived from your
not-for-profit
schools which could be affected by future PRC regulations.
Risk Factors, page 10
6. We note your disclosure on page 126 that you owe Mr. Xueyuan Weng
approximately $2
million which is due on demand. Please revise to include a risk factor
discussing this
related party liability and any associated risks such as its on demand
nature.
We cannot assure you that we will make any profits from our operations of
Chongwen Middle
School, page 13
7. We note your disclosure that you are obligated to pay a fixed amount
of return on an
annual basis to the sponsors of Chongwen Middle School. Please revise
to quantify the
fixed amount of return. Please also revise the Chongwen Middle School
section on page
56 accordingly.
Factors Affecting Our Results of Operations, page 57
8. We note your disclosure that your education service fees for primary
and secondary
schools is mainly affected by tuition policy set by local governments.
Please revise to
expand your discussion of the factors that affect the tuition policy
set by local
governments and namely whether your school designations as for-profit
or not-for-profit
factor into such policies.
Xueyuan Weng
FirstName
Golden SunLastNameXueyuan Weng
Education Group Limited
Comapany
January 12,NameGolden
2021 Sun Education Group Limited
January
Page 3 12, 2021 Page 3
FirstName LastName
Management's Discussion and Analysis
Off-balance Sheet Commitments and Arrangements, page 68
9. Please disclose the information required by Item 5.E of Form 20-F
related to the capital
injection obligation. Also, provide the required GAAP disclosures for
this obligation in
your financial statement footnotes.
Critical Accounting Policies
Revenue recognition, page 69
10. We note your disclosure under the headers for both Primary and
secondary schools
revenue and Tutorial service revenue that you record your refund
liability utilizing the
most likely amount method. However, we noted under the Refund
Liability header that
you utilize the expected value method. Please clarify and revise here
and elsewhere in the
notes to your financials which method you currently use in estimating
your refund
liability.
Not-for-Profit/For-profit status, page 93
11. We note your disclosure that PRC laws and regulations place
limitations on not-for-profit
schools related to the receipt of proceeds and the use of cash
surplus. We also note that a
large number of your schools are designated as not-for-profit and that
these schools
currently contribute to a substantial portion of your revenues. Please
revise to discuss in
greater detail how your VIE arrangements discussed on page 53
reconcile with these PRC
laws and regulations which appear to place limitations on the use of
school proceeds and
require you to reinvest cash surplus back into the schools.
12. We note that you are obligated to pay a fixed amount of return on an
annual basis to the
sponsors of Chongwen Middle School. We also note your disclosure that
Chongwen
Middle School is a not-for-profit school. Please reconcile your
disclosure that sponsors of
a non-profit privately-run school are not allowed to receive proceeds
from school
operations with this required annual payment.
Management
Compensation of Directors and Executive Officers, page 120
13. Please update your disclosure regarding the compensation of directors
and executive
officers as of your most recently completed fiscal year. Refer to Item
6.B of Form 20-F.
VIE Arrangements, page 126
14. We note that under the Entrustment Agreement you are required to pay
the sponsors,
which include related parties, a fixed amount of return on an annual
basis. Please revise
this section to quantify the amounts paid to the sponsors for the time
periods required by
Item 7.B of Form 20-F.
Xueyuan Weng
Golden Sun Education Group Limited
January 12, 2021
Page 4
You may contact Abe Friedman at 202-551-8298 or Rufus Decker at
202-551-3769 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Donald Field at 202-551-3680 or Lilyanna Peyser at 202-551-3222 with
any other
questions.
FirstName LastNameXueyuan Weng Sincerely,
Comapany NameGolden Sun Education Group Limited
Division of
Corporation Finance
January 12, 2021 Page 4 Office of Trade &
Services
FirstName LastName