December 11, 2019
Zhenyu Wu
Chief Financial Officer
Elite Education Group International Ltd
1209 N. University Blvd.
Middletown, OH 45042
Re: Elite Education Group International Ltd
Draft Registration Statement on Form F-1
Submitted November 15, 2019
CIK 0001781397
Dear Mr. Wu:
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
Prospectus Summary
Corporate Structure and Information, page 5
1. We note your diagram at the top of page 6. Please also include a diagram
that illustrates
your corporate structure upon completion of the offering. In addition,
please clarify in the
diagram(s) that Mr. Zhang is the sole shareholder of Wonderland Holdings
International
Ltd., and include the amount of your common stock that he owns in his
individual
capacity, with a view toward informing investors of his total
shareholdings in the
company. Finally, here and in the first risk factor on page 17, provide
the ownership
amounts of Mr. Zhang and Mr. Wu after the offering.
Zhenyu Wu
FirstName LastNameZhenyu Wu Ltd
Elite Education Group International
Comapany11, 2019 Education Group International Ltd
December NameElite
Page 2
December 11, 2019 Page 2
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
31
2. It appears rental expenses are material to your results. In view of
this, please tell us your
consideration of disclosing "operating lease obligations" pursuant to
Item 5.F. of Form 20-
F "Tabular disclosures of contractual obligations."
3. We note from your Use of Proceeds that you have allocated $14 million
to expanding your
current facilities and entering the Canadian, Southeast Asian and UK
markets. As
appropriate, please provide further disclosure regarding any planned
capital expenditures
and the status of development of new products or services that have
been publicly
disclosed. Refer to Items 4.B.1 and 5.B.3 of Form 20-F.
Specific Factors Affecting Our Results of Operations
Partnered Education Institutions, page 32
4. We note you disclose that "[you] partner with Miami University of Ohio
.. . . to offer
[y]our services to Chinese students interested in studying in the US,"
and that you "rely
significantly on [y]our partnership with Miami University for the
provision of [y]our
English language programs." Please revise your disclosure to clarify
the nature of your
partnership with the University, and summarize the material terms of
any material
agreements with the University, including, but not limited to,
provisions regarding fees,
termination and indemnification. In addition, please tell us what
consideration you gave
to filing any material contracts you have with the Miami University of
Ohio as exhibits to
your registration statement. Refer to Item 4(a) of Form F-1 and Item
10(C) of Form 20-F.
Critical Accounting Policies, page 41
5. You disclose your revenue recognition is an area that requires
significant judgment and
estimate. In this regard, please revise to include here a discussion
that addresses the
material implications of uncertainties associated with the methods,
assumptions and
estimates underlying your revenue recognition, including those
associated with your
deferred revenue. Refer to Section V of "Interpretation: Commission's
Guidance
Regarding Management's Discussion and Analysis of Financial Condition
and Results of
Operations" in Release No. 33-8350.
As prepaid expenses associated with your prepayments to student
recruitment agents
appear to be material to your financial condition, operating cash
flows and results, please
disclose as appropriate critical accounting estimates associated with
their recognition and
subsequent amortization to expense.
Our Business
Government Regulation, page 48
6. Please revise to update the discussion of the Law for Promoting
Private Education, as it
Zhenyu Wu
Elite Education Group International Ltd
December 11, 2019
Page 3
appears the current disclosure is as of a date prior to the law's
effectiveness on September
1, 2017.
Signatures, page 84
7. If Mr. Wu is also signing the registration statement in his capacity
as principal financial
officer and principal accounting officer, please revise his signature
block to clarify that
this is the case. Refer to Instruction 1 to Signatures in Form F-1.
Costs of services, page F-9
8. Please disclose when tuition fees paid are recognized as cost of
service (i.e., as incurred or
some other pattern and the basis for the other pattern).
Notes to Consolidated Financial Statements
Note 2. Summary of significant accounting policies
Revenue recognition, page F-9
9. Please revise to disclose the basis for your recognition of deferred
revenue and how such
is recognized as revenue. Include the general payments terms
associated with your
sources of revenue, the timing of the receipt of those payments, the
amount of time over
which recognized into revenue and the pattern of recognition (straight
line or other
method) and the basis for the pattern applied. Also, disclose whether
or not your
arrangements include customer cancellation, termination or refund
provisions and how
such are factored into your revenue recognition. Refer to SAB Topic
13.B for guidance.
Note 3. Prepaid Expenses, page F-13
10. Please disclose the basis for the deferral of student recruitment fees
paid to agents and
how and when such are recognized as expenses. In particular, disclose
your treatment of
fees you mention are paid for promotion purposes.
You may contact Tony Watson at 202-551-3318 or Doug Jones at
202-551-3309 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jacqueline Kaufman at 202-551-3797 or Lilyanna Peyser at 202-551-3222
with any other
questions.
FirstName LastNameZhenyu Wu Sincerely,
Comapany NameElite Education Group International Ltd
Division of
Corporation Finance
December 11, 2019 Page 3 Office of Trade
& Services
FirstName LastName