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United States securities and exchange commission logo
August 23, 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
Amendment No. 2 to
Registration Statement on Form F-1
Filed August 4,
2021
File No. 333-255891
Dear Mr. Weng:
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.
Amendment No. 2 to Registration Statement on Form F-1
Cove Page
1. Please refer to the
prospectus cover page. Please revise the fourth paragraph to explain
whether the VIE
structure is used to replicate foreign investment in Chinese-based
companies where Chinese
law prohibits direct foreign investment in the operating
companies, and disclose
that investors may never directly hold equity interests in the
Chinese operating
company. Your disclosure should acknowledge that Chinese regulatory
authorities could
disallow this structure, which would likely result in a material change in
your operations and/or
value of your Class A ordinary shares, including that it could cause
the value of such
securities to significantly decline or become worthless. Provide a cross-
reference to your
detailed discussion of risks facing the company and the offering as a
Xueyuan Weng
FirstName
Golden SunLastNameXueyuan Weng
Education Group Limited
Comapany
August 23, NameGolden
2021 Sun Education Group Limited
August
Page 2 23, 2021 Page 2
FirstName LastName
result of this structure, and state that this structure involves
unique risks to investors.
2. Please revise the prospectus cover page to provide prominent
disclosure about the legal
and operational risks associated with being based in or having the
majority of the
company s operations in China. Your disclosure should make clear
whether these risks
could result in a material change in your operations and/or the value
of your Class A
ordinary shares or could significantly limit or completely hinder your
ability to offer or
continue to offer securities to investors and cause the value of such
securities to
significantly decline or be worthless. Your disclosure should address
how recent
statements and regulatory actions by China s government, such as
those related to the use
of variable interest entities, data security, anti-monopoly concerns,
and the regulation of
tutoring institutions, has or may impact the company s ability to
conduct its business,
accept foreign investments, or list on an U.S. or other foreign
exchange. Your prospectus
summary should address, but not necessarily be limited to, the risks
highlighted on the
prospectus cover page.
3. Clearly disclose how you will refer to the holding company,
subsidiaries, and VIEs when
providing the disclosure throughout the document so that it is clear
to investors which
entity the disclosure is referencing and which subsidiaries or
entities are conducting the
business operations. Refrain from using terms such as we or
our when describing
activities or functions of a VIE. Disclose clearly the entity
(including the domicile) in
which investors are purchasing their interest.
Prospectus Summary , page 1
4. In this section, disclose clearly that the company uses a structure
that involves a VIE
based in China and what that entails and provide early in the summary
a diagram of the
company s corporate structure, including who the equity ownership
interests are of each
entity. Describe all contracts and arrangements through which you
purport to obtain
economic rights and exercise control that results in consolidation of
the VIE s operations
and financial results into your financial statements. Identify clearly
the entity in which
investors are purchasing their interest and the entity(ies) in which
the company s
operations are conducted. Describe the relevant contractual agreements
between the
entities and how this type of corporate structure may affect investors
and the value of their
investment, including how and why the contractual arrangements may be
less effective
than direct ownership and that the company may incur substantial costs
to enforce the
terms of the arrangements. Disclose the uncertainties regarding the
status of the rights of
the Cayman Islands holding company with respect to its contractual
arrangements with the
VIE, its founders and owners, and the challenges the company may face
enforcing these
contractual agreements due to uncertainties under Chinese law and
jurisdictional limits.
5. In this section, disclose each permission that you, your subsidiaries
or your VIEs are
required to obtain from Chinese authorities to operate and issue these
securities to foreign
investors. State whether you, your subsidiaries, or VIEs are covered
by permissions
requirements from the CSRC, CAC, PRC Ministry of Education or any
other entity that is
Xueyuan Weng
FirstName
Golden SunLastNameXueyuan Weng
Education Group Limited
Comapany
August 23, NameGolden
2021 Sun Education Group Limited
August
Page 3 23, 2021 Page 3
FirstName LastName
required to approve of the VIE s operations, and state affirmatively
whether you have
received all requisite permissions and whether any permissions have
been denied.
6. In this section, provide a clear description of how cash is
transferred through your
organization. Disclose your intentions to distribute earnings or
settle amounts owed under
the VIE agreements. Quantify any cash flows and transfers of other
assets by type that
have occurred between the holding company, its subsidiaries, and
consolidated VIEs, and
direction of transfer. Quantify any dividends or distributions that a
subsidiary or
consolidated VIE have made to the holding company and which entity
made such transfer,
and their tax consequences. Similarly quantify dividends or
distributions made to U.S.
investors, the source, and their tax consequences. 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 your businesses, including subsidiaries and/or consolidated VIEs,
to the parent
company and U.S. investors as well as the ability to settle amounts
owed under the VIE
agreements.
7. We note that the consolidated VIEs constitute a material part of your
consolidated
financial statements. Please provide in tabular form condensed
consolidating schedule -
depicting the financial position, cash flows and results of operations
for the parent, the
consolidated variable interest entities, and any eliminating
adjustments separately - as of
the same dates and for the same periods for which audited consolidated
financial
statements are required. Highlight the financial statement information
related to the
variable interest entity and parent, so an investor may evaluate the
nature of assets held
by, and the operations of, entities apart from the variable interest
entity, which includes
the cash held and transferred among entities.
8. Disclose that trading in your securities may be prohibited under the
Holding Foreign
Companies Accountable Act if the PCAOB determines that it cannot
inspect or fully
investigate your auditor, and that as a result an exchange may
determine to delist your
securities. If the PCAOB has been or is currently unable to inspect
your auditor, revise
your disclosure to so state.
9. In your summary of risk factors, disclose the risks that your
corporate structure and being
based in or having the majority of the company s operations in China
poses to investors.
In particular, describe the significant regulatory, liquidity, and
enforcement risks with
cross-references to the more detailed discussion of these risks in the
prospectus. For
example, specifically discuss risks arising from the legal system in
China, including risks
and uncertainties regarding the enforcement of laws and that rules and
regulations in
China can change quickly with little advance notice; and the risk that
the Chinese
government may intervene or influence your operations at any time, or
may exert more
control over offerings conducted overseas and/or foreign investment in
China-based
issuers, which could result in a material change in your operations
and/or the value of
your Class A ordinary shares. Acknowledge any risks that any actions
by the Chinese
government to exert more oversight and control over offerings that are
conducted overseas
Xueyuan Weng
Golden Sun Education Group Limited
August 23, 2021
Page 4
and/or foreign investment in China-based issuers could significantly
limit or completely
hinder your ability to offer or continue to offer securities to
investors and cause the value
of such securities to significantly decline or be worthless.
Risk Factors, page 10
10. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to separately highlight the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your Class A ordinary
shares. Also, given
recent statements by the Chinese government indicating an intent to
exert more oversight
and control over offerings that are conducted overseas and/or foreign
investment in China-
based issuers, acknowledge the risk that any such action could
significantly limit or
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless.
11. We note the recent issuance of the "Guideline to Significantly Reduce
The Excessive
Burden of Homework and After-school Tutoring for Students in Primary
and Middle
Schools." The guidelines appears to contain various requirements and
restrictions related
to after school tutoring services, including registration as
non-profit, prohibition on
foreign ownership, prohibition for listed companies on raising capital
to invest in
businesses that teach academic subjects in compulsory education,
limitations as to when
tutoring services on academic subjects may be provided and new fee
standards. Disclose
the applicability of these guidelines to you and your business and how
and when you
expect to comply. Please also address if these guidelines may be
expanded in the future to
cover any of your other business or operations.
12. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China over data security, particularly for companies seeking to list
on a foreign exchange,
please revise your disclosure to explain whether and how this
oversight impacts your
business and your offering and to what extent you believe that you are
compliant with the
regulations or policies that have been issued by the CAC to date if
applicable.
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
August 23, 2021 Page 4 Office of Trade
& Services
FirstName LastName