United States securities and exchange commission logo
January 24, 2022
Shaosen Cheng
Chief Executive Officer
Golden Path Acquisition Corp
100 Park Avenue
New York, NY 10017
Re: Golden Path
Acquisition Corp.
Amendment No. 1 to
Registration Statement on Form S-4
Filed December 30,
2021
File No. 333-259896
Dear Mr. Cheng:
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.
Unless we note
otherwise, our references to prior comments are to comments in our
November 2, 2021 letter.
Amendment No. 1 to Registration Statement on Form S-4
Summary of the Proxy Statement/Prospectus, page 10
1. We note your response
to prior comment 7 regarding how cash is transferred from MC's
entities and how no PRC
or Hong Kong derived cash has been transferred to foreign
entities. 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 to the parent
company and U.S.
investors. Further, please explain how the SPAC's trust funds and
investment funds will
be used by your PRC-based operating subsidiaries and discuss any
restrictions or
limitations on the holding company s ability to transfer funds into the PRC.
Shaosen Cheng
FirstName
Golden PathLastNameShaosen
Acquisition CorpCheng
Comapany
January 24,NameGolden
2022 Path Acquisition Corp
January
Page 2 24, 2022 Page 2
FirstName LastName
2. We note your response to prior comment 1. Please expand your
disclosure accompanying
your pre- and post-reorganization diagrams on page 12 to make clear
that you do not
operate through any VIE structure because you are permitted under
current PRC law to
employ direct equity ownership of all your operating subsidiaries in
the PRC. If your
conclusion is not free from doubt (we note that you contemplated using
VIEs as part of
your merger agreement), please make this clear and include a new risk
factor highlighting
that your decision not to employ VIE structures for your PRC operating
subsidiaries could
be in error, and what the consequences would be to investors if your
direct equity
ownership is challenged by the PRC authorities.
3. We note your disclosure about the Holding Foreign Companies
Accountable Act and MC
Hologram s New York City-based audit firm, Friedman LLP, is subject
to PCAOB
inspections and not subject to the determinations announced by the
PCAOB on December
16, 2021. Please clarify whether the PCAOB has the right and access to
inspect the audit
workpapers of the MC Hologram s Chinese subsidiaries or any
Chinese-based subsidiary
post-business combination, and if not, what are the implications to
the company.
4. Please revise the introductory paragraphs to include a discussion of
MC's September 10,
2021 reorganization of entities under common control to add context to
the pre-
organization and post-organization charts.
MC Hologram, page 11
5. We note your response to prior comment 10 regarding your ADAS and how
it relates to
the autonomous driving industry. Please provide a more descriptive or
illustrative
example of how your ADAS technology is currently used within the
automotive industry
in standard vehicles, such as parking assistance or accident warning
systems. Further,
please clarify the meaning of your statement: "MC does not engage
directly in the
autonomous driving business ...."
If MC or New Golden Path fails to implement and maintain an effective system of
internal
controls..., page 59
6. We note your revised disclosures in response to prior comment 18 where
you indicate that
Golden Path concluded its disclosure controls and procedures were not
effective as of
September 30, 2021, and as a remedial measure revised their June 24,
2021 balance sheet
to reclassify public warrants. Please explain further how the
correction of this error
remediated the weaknesses or deficiencies in your controls and
procedures. Alternatively,
provide a separate discussion of any material weaknesses or
significant deficiencies in
Golden Path's controls that resulted in the restatement related to
accounting for public
warrants. Similarly, address any control deficiencies related to the
error in the
classification of redeemable stock outside of permanent equity.
Similarly, revise your
Controls and Procedures disclosures on page 169 and explain your
reference to the
"balance as of September 24, 2021."
Shaosen Cheng
FirstName
Golden PathLastNameShaosen
Acquisition CorpCheng
Comapany
January 24,NameGolden
2022 Path Acquisition Corp
January
Page 3 24, 2022 Page 3
FirstName LastName
Non-competition and Non-solicitation Agreements, page 77
7. We note your response to prior comment 19 regarding your
non-competition and non-
solicitation agreement with Best Road Holdings Limited. Please file
this agreement and
clarify whether the agreement applies solely to Best Road Holdings
Limited or if it applies
more broadly to its sole member, Ms. Wei Peng, and her affiliates.
Further, please
provide more detail of the scope of the business operations and
activities the agreement
encompasses.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of MC
Specific Factors Affecting MC's Results of Operations, page 131
8. We note your revised disclosures provided in response to prior comment
27 and have the
following additional comments:
Revise to disclose how you define a customer and specifically
address the fact that
your customer count is for the period ended rather than at each
balance sheet date.
Revise to present all metrics for each of the annual and interim
periods included in
the filing.
Revise to discuss any significant fluctuations in your metrics.
For example, explain
the decrease in customers from 77 for the period ended December
31, 2019 to 43 for
the period ended September 30, 2020 and then the increase to 131
for the period
ended December 31, 2020. Similarly, explain the increase in the
retention rate from
21% for the year ended December 31, 2020 to 48% for the nine
months ended
September 30, 2021.
Provide a quantified discussion of any impact the Shenzhen Bowei
and Shenzhen
Tianyuemeng acquisitions had on your metrics.
Revise to disclose the percentage of total revenue attributed to
your high paying and
top 10 customers to add context to such measure.
Refer to SEC Release No. 33-10751.
COVID-19 Pandemic, page 133
9. We note your revised disclosures in response to prior comment 24.
Please revise to
quantify, if possible, how the shortage of chips products and the
increased prices have
impacted your historical operations. Also, to the extent you expect
these trends to
continue beyond fiscal 2020, include a discussion of any material
effects such trends may
have on your future results of operations.
Results of Operations
Nine Months Ended September 30, 2020, Compared to the Nine Months Ended
September 30,
2021, page 135
10. We note your revised disclosures in response to prior comment 28 where
you attribute the
increase in segment revenue to the Shenzhen Tianyeumeng and Shenzhen
Bowei
acquisitions. However, you also refer to the increase in revenue due
to the incorporation
Shaosen Cheng
FirstName
Golden PathLastNameShaosen
Acquisition CorpCheng
Comapany
January 24,NameGolden
2022 Path Acquisition Corp
January
Page 4 24, 2022 Page 4
FirstName LastName
of Horgos Bowei, Horgos Tianyuemeng and Horgos Youshi. Please tell us
the
relationship, if any, between these recently incorporated entities and
the businesses
acquired. Also, revise to clarify how the incorporation of an entity
impacted your
revenue. To the extent you launched new product or services as a
result of such
incorporation, revise to discuss the impact from such changes on your
revenue growth.
11. Please revise to clarify how the diversification of the Shenzhen
Mengyun and Shanghai
Mengyun s business lines and the commerce of operation of Mcloudvr
HK impacted your
revenue and profit margins.
Year Ended December 31, 2019 compared to Year Ended December 31, 2020, page 137
12. Please revise to provide a quantified discussion regarding the impact
of the Shenzhen
Bowei and Shenzhen Tianyuegmeng acquisitions on your revenue growth in
fiscal 2020
along with a quantified discussion of any other factors that impacted
such revenue growth.
Liquidity and Capital Resources, page 140
13. We note your revised disclosures in response to prior comment 25. As
previously
requested, please revise to also discuss any limitations on the
holding company's ability to
transfer any funds received in the merger into the PRC. Also, you
refer to a U.S.
dollar translation of $7.6 million, which does not agree to the $6.8
million disclosed in the
corresponding table. Please revise.
14. Your revised disclosures in response to prior comment 26 indicate that
accounts
receivable increased in the nine months ended September 30, 2021.
However, we note
from disclosure on page F-42 that accounts receivable decreased during
the period. Please
revise.
Unaudited Pro Forma Combined Financial Information, page 171
15. Please revise to include Golden Path's acquisition of both Shenzhen
Tianyuemeng
Technology Co., Ltd. and Shenzhen Bowei Vision Technology Co., Ltd. in
your
unaudited pro forma condensed statement of operations for the year
ended December 31,
2020. Refer to Rule 11-01(a) of Regulation S-X.
16. We note your revisions in response to comment 31. We further note that
adjustment (3) to
your pro forma balance sheet includes $0.9 million of estimated legal,
financial advisory
and other professional fees related to the business combination that
do not appear to be
reflected in the historical financial statements for either entity.
Please revise to reflect any
unrecorded transaction costs that will be expensed as part of the
merger in the pro forma
statement of operations assuming such adjustment was made as of the
beginning of the
fiscal year presented. To the extent these costs will not recur in the
income of the
combined entity beyond 12 months after the merger, revise to indicate
as such in the pro
forma notes. Refer to Article 11-02(b)(6)(B) and 11-02(b)(11)(i) of
Regulation S-X. Also,
explain why the $0.3 million of costs related to Golden Path were
adjusted through
Shaosen Cheng
FirstName
Golden PathLastNameShaosen
Acquisition CorpCheng
Comapany
January 24,NameGolden
2022 Path Acquisition Corp
January
Page 5 24, 2022 Page 5
FirstName LastName
additional paid-in-capital or revise as necessary.
Security Ownership of Certain Beneficial Owners and Management Prior to the
Business
Combination, page 190
17. Please provide natural person(s) disclosure of the individual(s) that
hold voting and/or
investment power over the shares beneficially owned by Innovation
Spark Technology
Limited, Lucky Monkey Holding Limited, Sensegain Prosperity Holding
Limited, Super
Plus Holding Limited, Tiger Initiative Investment Ltd., and Wu Yue
Investment Ltd.
Regulations Applicable to MC, page 194
18. Please incorporate your response to prior comment 37 in your
registration statement to
clarify that your subsidiaries Horgos Tianyuemeng and Shenzhen
Tinanyeumeng do not
offer advertising services, only software and technology solutions to
the advertising
industry, and explain why such activities do not implicate regulation
under laws for
VATS.
MC Hologram, Inc. and Subsidiaries
Note 1. Nature of Business and Organization, page F-80
19. We note your response to prior comment 41. Please tell us whether
Beijing Xihui Cloud
Technology is part of your current organization structure, and if so,
how it is reflected in
your organization chart. If not, describe for us Beijing Xihui
operations and explain how
you determined that such operations, if any, are no longer relevant to
your business.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-87
20. Please describe the types of product that you sell as distributor and
whether they are
integrated with any of MC s products or services. Also, revise the
Business of MC
disclosure to include a discussion of these product sales and the
related vendor
arrangements.
21. We note your response to prior comment 46. Please explain how you have
the ability to
direct the use of, and obtain substantially all of the remaining
benefits from, the
inventory. For example, tell us whether you have the ability to
prevent the vendor from
transferring the product to the customer or to redirect the product to
a different customer.
Refer to ASC 606-10-25-25.
22. Please also address the following with regard to your response to
comment 46:
Tell us whether inventory is ordered only after you have a signed
order from your
customer or explain at what point in the contract process
inventory is ordered from
the vendor.
Clarify how and when you inspect the products considering
inventory is drop shipped
from the vendor.
Shaosen Cheng
Golden Path Acquisition Corp
January 24, 2022
Page 6
Tell us for what period of time you own the product. To
the extent you take title
before shipment begins, tell us the typical number of days
between these events.
Explain further your responsibility for the acceptability
of the products meeting
your customer s specifications, what this entails, and how it
supports that you are
primarily responsible for fulling the promising to provide the
product.
Tell us whether the terms of your vendor arrangements place any
restrictions on your
ability to accept returns or resell the products to another
customer.
Note 13. Loan payable-non current, page F-101
23. We note your response to prior comment 48. Please clarify whether the
lender, MIDI
CAPITAL MARKETS, LLC, is a related party to MC or Golden Path or any
of their
officers, directors or significant shareholders. Tell us how intend to
repay this loan and
the impact, if any, of the pending merger on such repayment. Also,
revise your liquidity
disclosures to include a discussion of your intent to repay this debt
in the short term.
Lastly, explain further how your intent to repay the loan prior to its
stated maturity date
precludes you from applying the guidance in ASC 835-30-25.
Shenzhen Tianyuemeng Technology Co., Ltd.
Balance Sheets, page F-112
24. Please address the following as it relates to the financial statements
of Shenzhen
Tianyuemeng Technology Co and Shenzhen Bowei Vision Technology Co.,
Ltd.:
Revise the statements of changes in stockholders' equity, in both
the annual and
interim financial statements, to present amounts in RMB consistent
with the other
financial statements provided.
Explain why the merger dates, as disclosed in the subsequent
events footnotes for
each of these entities, differs from the dates disclosed in MC
Hologram's financial
statements.
Revise to label the interim financial statements and the notes
thereto as unaudited.
Item 21. Exhibits and Financial Statement Schedules, page II-1
25. Please revise to include Exhibit 21 with your next amendment. Refer to
Item
601(b)(21) of Regulation S-K.
FirstName LastNameShaosen Cheng
26. Please revise to provide the consents of Shandong Haoxin Certified
Public Accountants
Comapany
Co., NameGolden Pathof
Ltd. for inclusion Acquisition
their auditCorp
reports on the financial
statements of Shenzhen
JanuaryTianyuemeng
24, 2022 PageTechnology
6 Co., Ltd. and Shenzhen Bowei Vision
Technology Co., Ltd.
FirstName LastName
Shaosen Cheng
FirstName
Golden PathLastNameShaosen
Acquisition CorpCheng
Comapany
January 24,NameGolden
2022 Path Acquisition Corp
January
Page 7 24, 2022 Page 7
FirstName LastName
You may contact Dave Edgar, Senior Staff Accountant, at (202) 551-3459
or Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 if you have questions
regarding comments
on the financial statements and related matters. Please contact Edwin, Kim,
Staff Attorney, at
(202) 551-3297 or Larry Spirgel, Office Chief at (202) 551-3815 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Brian C. Daughney, Esq.