June 17, 2019
Erxin Zeng
Chief Executive Officer
Golden Bull Ltd
707 Zhang Yang Road
Sino Life Tower, F35
Pudong, Shanghai, China 200120
Re: Golden Bull Ltd
Form 20-F for Fiscal Year Ended December 31, 2018
Filed April 30, 2019
File No. 001-38421
Dear Mr. Zeng:
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.
Form 20-F for Fiscal Year Ended December 31, 2018
Item 5. Operating and Financial Review and Prospects, page 65
1. Please revise your future filings to provide a discussion of your
financial condition and
changes in financial condition as required by Item 303(a) of Regulation
S-K and Item 5 of
Form 20-F.
Key Operating Metrics, page 69
2. We note your disclosure of the reinvestment rate of existing lenders and
re-borrowing rate
for existing borrowers that you have identified as Key Operating Metrics.
Please provide
us with the calculations for the disclosed measures and explain why you
believe your
calculation is appropriate to explain the reinvestment rate of lenders
and the re-borrowing
rate. Please also revise your future filings to clearly disclose how
these measures are
calculated.
Erxin Zeng
FirstName LastNameErxin Zeng
Golden Bull Ltd
Comapany NameGolden Bull Ltd
June 17, 2019
June 17, 2019 Page 2
Page 2
FirstName LastName
Item 6. Directors, Senior Management and Employees, page 85
3. We note disclosure on page 86 that Ms. Jing Leng has been serving as
your Chief
Financial Officer since June 25, 2018. Additionally, we also note that
Ms. Leng also
serves as the financial manager of China Rapid Finance Limited (China
Rapid). Please
tell us and revise your future filings to address the following:
Disclose the amount of time Ms. Leng devotes to Golden Bull
Limited and any
associated risks related to her employment with China Rapid;
Disclose the extent to which you deem China Rapid to be a
competitor; and
Disclose any potential conflicts of interest and how you manage
them.
Item 15. Controls and Procedures, page 105
4. Please tell us and revise future filings to clearly identify each
material weakness and to
provide additional detail regarding how the deficiency in internal
control in each material
weakness impacted financial reporting.
5. Please tell us how you concluded that your disclosure controls and
procedures were
effective as of December 31, 2018, considering that your internal
control over financial
reporting was not effective as of this date due to the significant
deficiencies and material
weaknesses identified. Your explanation should be comprehensive and
address all of the
components of the definition of disclosure controls and procedures.
Please refer to
Sections II.D and E of SEC Release 33-8238. If appropriate, please
amend your Form 20-
F to revise your conclusion regarding your disclosure controls and
procedures.
Note 7 - Taxes, page F-19
6. We note that you have recognized a $810,863 deferred tax asset at
December 31, 2018
related to net operating losses which can be carried forward for five
years. We also note
cumulative losses since your inception in 2015 and disclosure that you
believe that a
valuation allowance is not necessary because there will be sufficient
operating income
generated in future years. In determining the need for a deferred tax
asset valuation
allowance and considering the guidance in paragraphs 21 23 of ASC
740-10-30,
forming a conclusion that a valuation allowance is not needed is
difficult when there is
negative evidence such as cumulative losses in recent years, which is
considered a
significant piece of negative evidence that is difficult to overcome.
The weight given to
the potential effect of negative and positive evidence should be
commensurate with the
extent to which it can be objectively verified.
Please provide us an accounting analysis that details the specific
positive and negative
evidence you considered in determining that your deferred tax assets
will more likely than
not be realized at December 31, 2018. Your analysis should include but
not be limited to:
Erxin Zeng
Golden Bull Ltd
June 17, 2019
Page 3
An analysis of your historical taxable or US GAAP income, projected
future tax or US
GAAP income by year and a schedule detailing the amounts and years
you expect to
realize the benefits from your deferred tax assets.
For your projections of future tax or US GAAP income, please:
o identify the most significant inputs and assumptions,
o provide a qualitative and quantitative discussion of the inputs
and assumptions to
allow us to fully understand your projections,
o provide specific evidence which supports the inputs and
assumptions, and
o provide a sensitivity analysis using reasonably likely
alternatives for key
assumptions.
An analysis comparing actual versus forecasted taxable income or US
GAAP income
for the interim period to date explaining the reasons for any
significant differences.
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 John Spitz, Staff Accountant, at (202) 551-3484 or
Michael Volley,
Staff Accountant, at (202) 551-3437 with any questions.
Sincerely,
FirstName LastNameErxin Zeng
Division of
Corporation Finance
Comapany NameGolden Bull Ltd
Office of Financial
Services
June 17, 2019 Page 3
cc: Jing Leng
FirstName LastName