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United States securities and exchange commission logo
July 19, 2022
Xuezheng Chen
Chief Executive Officer
Golden Heaven Group Holdings Ltd.
No. 8 Banhouhaichuan Rd
Xiqin Town, Yanping District
Nanping City, Fujian Province, China 353001
Re: Golden Heaven Group
Holdings Ltd.
Draft Registration
Statement on Form F-1
Submitted June 22,
2022
CIK No. 0001928340
Dear Mr. Chen:
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
Cover Page
1. Please amend your
disclosure to clearly disclose how you will refer to the holding
company and
subsidiaries 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,
and refrain from using terms such as "we" or "our" when describing
activities, functions,
or employees of your subsidiaries. Please disclose clearly the entity
(including the
domicile) in which investors are purchasing an interest.
Xuezheng Chen
FirstName LastNameXuezheng
Golden Heaven Group HoldingsChen
Ltd.
Comapany
July NameGolden Heaven Group Holdings Ltd.
19, 2022
July 19,
Page 2 2022 Page 2
FirstName LastName
2. Please disclose prominently on the prospectus cover page that you are
not a Chinese
operating company but a Cayman Islands holding company with operations
conducted by
your subsidiaries based in China and that this structure involves
unique risks to investors.
Disclose that investors may never hold equity interests in the Chinese
operating entities.
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 a
material change in the value of your securities, including that it
could cause the value of
such securities to significantly decline or become worthless. Please
provide a cross-
reference to your detailed discussion of risks facing the company and
the offering as a
result of your operating structure.
3. Please disclose whether your auditor is subject to the determinations
announced by the
PCAOB on December 16, 2021 and whether and how the Holding Foreign
Companies
Accountable Act and related regulations will affect your company.
Please revise your
disclosure relating to the Holding Foreign Companies Accountable Act
to include a
discussion of the Accelerating Holding Foreign Companies Accountable
Act, as well as
the time frames under both Acts.
4. Please amend your disclosure here and in the summary risk factors and
risk factors
sections to state that, to the extent cash or assets in the business
is in the PRC or a
PRC entity, the funds or assets may not be available to fund
operations or for other use
outside of the PRC due to interventions in or the imposition of
restrictions and limitations
on the ability of you or your subsidiaries by the PRC government to
transfer cash or
assets. On the cover page, provide cross-references to these other
discussions.
5. Please discuss whether there are limitations on your ability to
transfer cash between you
and your subsidiaries or investors. Please provide a cross-reference
to your discussion of
this issue in your summary, summary risk factors, and risk factors
sections, as well.
6. To the extent you have cash management policies that dictate how funds
are transferred
between you, your subsidiaries, and investors, please summarize the
policies on your
cover page and in the prospectus summary, and disclose the source of
such policies (e.g.,
whether they are contractual in nature, pursuant to regulations,
etc.); alternatively, state
on the cover page and in the prospectus summary that you have no such
cash management
policies that dictate how funds are transferred. Provide a
cross-reference on the cover
page to the discussion of this issue in the prospectus summary.
Prospectus Summary, page 1
7. Please identify clearly the entity in which investors are purchasing
their interest and the
entities 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 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
Xuezheng Chen
Golden Heaven Group Holdings Ltd.
July 19, 2022
Page 3
its contractual arrangements and the challenges the company may face
enforcing these
contractual agreements due to legal uncertainties and jurisdictional
limits.
8. In your summary of risk factors, please disclose 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 securities.
Acknowledge any risks that any actions by the Chinese government to
exert more
oversight and control over offerings that are conducted overseas
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. Please provide cross-references
to the relevant
individual detailed risk factors.
9. Please provide a clear description of how cash is transferred through
your organization,
and disclose your intentions to distribute earnings. Quantify any cash
flows and transfers
of other assets by type that have occurred between the holding company
and its
subsidiaries and direction of transfer. Quantify any dividends or
distributions that a
subsidiary has 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. Your disclosure
should make clear if no
transfers, dividends, or distributions have been made to date.
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, to the parent
company and U.S.
investors.
10. Please 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
investigate completely your auditor, and that as a result an exchange
may determine to
delist your securities. Disclose whether your auditor is subject to
the determinations
announced by the PCAOB on December 16, 2021.
Risk Factors, page 12
11. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately 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 the securities you are
registering. 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
FirstName LastNameXuezheng Chen
in China-based issuers, acknowledge the risk that any such action could
significantly limit
Comapany NameGolden
or completely Heaven
hinder your Group
ability Holdings
to offer orLtd.
continue to offer
securities to investors and
cause the value
July 19, 2022 Page 3 of such securities to significantly decline or be
worthless.
FirstName LastName
Xuezheng Chen
FirstName LastNameXuezheng
Golden Heaven Group HoldingsChen
Ltd.
Comapany
July NameGolden Heaven Group Holdings Ltd.
19, 2022
July 19,
Page 4 2022 Page 4
FirstName LastName
Risks Related to Doing Business in the PRC
The enforcement of the PRC Labor Contract Law and other labor-related
regulations in the
PRC..., page 28
12. We note your disclosure that the operating companies failed to comply
with the PRC
Social Insurance Law and the Administrative Measures on Housing Fund
for the years
2019, 2020, and 2021. Please disclose the potential risk or
consequences to the company
caused by this noncompliance, including potential impact on the
securities offered. Please
also disclose whether you are currently in compliance with these
requirements, and
whether you have taken steps to remediate your prior failure to
comply.
Use of Proceeds, page 41
13. Please provide information on the status of any acquisitions of
businesses engaged in
amusement park development. Refer to Item 3(C)(3) of Form 20-F.
Enforceability of Civil Liabilities, page 45
14. Please amend your disclosure in this section to include a description
of the difficulties in
bringing legal claims against your Hong Kong- and BVI-based
subsidiaries.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Components of Results of Operations
Comparison of the Year ended September 30, 2020 and 2021, page 51
15. Your disclosure in the Business section starting on page 70 includes
information on the
number of park guests, number of attractions, and pricing of rides and
attractions by
category. Please tell us if management uses any metrics or key
performance indicators to
assess performance. If so, please refer to SEC Release No. 33-10751
for guidance on
disclosures to provide.
16. Sales of in-park recreation increased by $14.9 million, or 44%, for
the year ended
September 30, 2021. Please expand your discussion to provide a robust
and quantified
analysis of the significant drivers that you identified for the
material changes in
revenues. Also, describe the underlying reasons and any known trends
or uncertainties
that have had or that are reasonably likely to have a material impact
on revenues. Refer to
Item 5 of Form 20-F.
Liquidity and Capital Resources, page 56
17. Please revise to include an analysis of the components of the
statements of cash flows
(i.e., operating, investing, and financing activities) that explains
and quantifies the
significant drivers underlying material year-to-year variations. Refer
to Item 5 of Form
20-F and Section IV.B.1 of SEC Release No. 33-8350.
Xuezheng Chen
FirstName LastNameXuezheng
Golden Heaven Group HoldingsChen
Ltd.
Comapany
July NameGolden Heaven Group Holdings Ltd.
19, 2022
July 19,
Page 5 2022 Page 5
FirstName LastName
Commitments and Contingencies
Commitments, page 56
18. Please amend your disclosure to describe what additional lease
commitments the company
is anticipating and when they are anticipated to commence.
Business, page 70
19. We note your disclosure that "the local governments have agreed in
four out of six current
agreements with our operating entities to disallow the development of
similar amusement
parks in the vicinity of the park localities." Please amend your
disclosure to describe the
terms of these agreements more fully, including the term of
exclusivity.
20. We note your disclosure on page 76 that "[w]e do not consider theme
park operators, such
as the Walt Disney Company and Fantawild Holdings Inc., as our
operating entities' direct
competitors." Please revise or amend your disclosure regarding cost
effectiveness of your
operating entities, which currently compares the cost of access to
your rides and
attractions with direct comparisons to costs of admission to
facilities operated by the Walt
Disney Company and Fantawild Holdings Inc., or explain why you believe
such
comparison is useful for investors.
Management, page 94
21. We note your disclosure that you will enter into employment agreements
with your
executive officers. Please file any such contracts as exhibits to the
registration statement.
Consolidated Financial Statements
Consolidated Statements of Operations and Comprehensive Income, page F-3
22. Please revise to provide earnings per share data consistent with Rule
5-03.25 of
Regulation S-X.
2. Summary of Significant Accounting Policies, page F-7
23. Please disclose in an accounting policy footnote the specific types of
amounts included in
cost of revenue, general and administrative expenses and selling
expenses.
Revenue Recogntion, page F-9
24. Please expand your policy for in-park recreation to discuss how you
measure obligations
for returns or refunds. See ASC 606-10-50-20.
25. On page 54, you say there was a $3.7 million increase in selling
expenses, which was
primarily attributable to an increase of $3.2 million in rebates that
you offered to guests
for loading their prepaid cards. Please disclose your accounting
policy for the incentives
you offer to your customers (e.g., rebates, discounts, etc.) and tell
us the authoritative
guidance you used to support your accounting treatment. Also, please
discuss how you
Xuezheng Chen
Golden Heaven Group Holdings Ltd.
July 19, 2022
Page 6
considered the guidance in ASC 606-10-32-6.
3. Other Current Assets, page F-11
26. You have recorded $15.3 million as prepayment of projects. Please
disclose the nature
and terms of these prepayments and discuss the related projects.
8. Advances From Customers, page F-13
27. Please disclose the nature and terms associated with your advances from
customers. Also,
disclose whether you assume any breakage on advances from customers and,
if so, your
accounting policy for assuming breakage. Refer to ASC 606-10-55-46
through 55-49.
13. Segment reporting, page F-16
28. Please tell us and disclose why two of your three segments have no
expenses or assets
allocated to them. Also, disclose the information required by ASC
280-10-50-29.
General
29. Please revise to name PRC counsel where you state that your position is
based on the
advice of your PRC counsel.
30. 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.
You may contact Nasreen Mohammed at 202-551-3773 or Rufus Decker at
202-551-
3769 if you have questions regarding comments on the financial statements and
related
matters. Please contact Alyssa Wall at 202-551-8106 or Donald Field at
202-551-3680 with any
other questions.
Sincerely,
FirstName LastNameXuezheng Chen
Division of
Corporation Finance
Comapany NameGolden Heaven Group Holdings Ltd.
Office of Trade &
Services
July 19, 2022 Page 6
cc: Ying Li
FirstName LastName