F-1: Golden Sun Health Technology Group Files for Resale of 9.5 Million Class A Ordinary Shares

Golden Sun Health Technology Group is registering the resale of up to 9.5 million Class A ordinary shares by selling shareholders following a recent convertible note and warrant issuance.

Summary

• Golden Sun Health Technology Group, a Cayman Islands holding company with operations in China, has filed a registration statement for the resale of up to 9,535,186 Class A ordinary shares.
• These shares are issuable to selling shareholders upon conversion of $5 million in senior secured convertible notes and exercise of warrants, both from a private placement that closed in connection with a Securities Purchase Agreement dated October 28, 2024.
• The company will not receive any proceeds from the sale of these shares by the selling shareholders.
• However, Golden Sun will receive proceeds from the exercise of the warrants if they are exercised for cash, which will be used for working capital and general corporate purposes.
• The company's Class A ordinary shares currently trade on The Nasdaq Global Market under the symbol GSUN, with the last reported closing price on March 14, 2025, at $3.0.
• Golden Sun is considered a controlled company under Nasdaq rules due to its largest shareholder, Mr. Xueyuan Weng, owning a majority of the voting power.
• The company conducts a substantial majority of its operations through operating entities in the PRC, making it subject to risks associated with doing business in China.
• The company believes it will not be subject to cybersecurity review with the Cyberspace Administration of China (CAC) and has obtained all requisite licenses, permits, and approvals from relevant authorities in the PRC that are material to its operations.
• Cash may be transferred among the Company and its subsidiaries in the form of capital contribution or shareholder loans, dividends or other distributions, and inter-company lending.
• The company's ordinary shares and warrants may be prohibited from trading on a national exchange or may be delisted from Nasdaq if the Public Company Accounting Oversight Board (PCAOB) determines it is unable to inspect or fully investigate our auditor.
• The company is an emerging growth company and a foreign private issuer, which allows it to take advantage of certain reduced reporting requirements.
• Investing in the company's ordinary shares involves a high degree of risk, as detailed in the Risk Factors section of the prospectus.

Sentiment

Score: 5

Explanation: The document is primarily factual and descriptive, outlining the terms of the share resale and associated risks. The sentiment is neutral, reflecting the objective nature of a prospectus.

Positives

• The company believes it is not subject to CAC cybersecurity review.
• The company has obtained all requisite licenses, permits, and approvals from relevant authorities in the PRC that are material to its operations.
• The company is an emerging growth company and foreign private issuer, benefiting from reduced reporting requirements.

Negatives

• The company will not receive any proceeds from the sale of these shares by the selling shareholders.
• The company's ordinary shares and warrants may be prohibited from trading on a national exchange or may be delisted from Nasdaq if the Public Company Accounting Oversight Board (PCAOB) determines it is unable to inspect or fully investigate our auditor.
• Investing in the company's ordinary shares involves a high degree of risk, as detailed in the Risk Factors section of the prospectus.

Risks

• Chinese regulatory authorities could disallow the company's corporate structure, which would likely result in a material change in operations and/or a material change in the value of Class A Ordinary Shares.
• The company's Ordinary Shares and Warrants may be prohibited from trading on a national exchange or over-the-counter markets under the Holding Foreign Companies Accountable Act (the HFCAA) or may be delisted from Nasdaq if the Public Company Accounting Oversight Board (PCAOB) determines it is unable to inspect or fully investigate our auditor.
• The SEC, PCAOB, Nasdaq, and the Holding Foreign Companies Accountable Act (HFCAA) requirements could affect our auditors qualifications, and add uncertainty to our compliance.
• PRC regulations on offshore investments may limit cash flow from our PRC subsidiaries and expose us or our PRC resident shareholders to liabilities or penalties.
• The company may rely on dividends and distributions from our PRC subsidiaries, but government imposed restrictions could limit our ability to fund operations.
• Currency controls and PRC regulations could delay or prevent using financing proceeds to invest in our PRC subsidiaries.
• The company's business is conducted in RMB, but our share price is in U.S. dollars, creating currency exchange risks.
• The PRC Enterprise Income Tax (EIT) Law may classify us as a resident enterprise, which could result in unfavorable tax consequences to us and our non-PRC shareholders.
• Taxation uncertainties could impact dividend payments and indirect equity transfers of PRC entities.
• Our PRC subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct our business.
• Negative publicity involving U.S.-listed Chinese companies could harm our business operations, stock price, and reputation.
• Our SEC disclosures are not reviewed by PRC regulators.
• PRC M&A Rules create complex procedures for foreign acquisitions of Chinese companies, limiting expansion opportunities.
• Future sales of our Class A ordinary shares or the anticipation of future sales, could reduce share price.
• We do not expect to pay dividends in the foreseeable future, so returns depend on share price appreciation.
• Share price volatility may lead to losses for our investors.
• If we cease to qualify as a foreign private issuer, compliance costs will increase.
• As a foreign private issuer, we follow Nasdaq exemptions, reducing shareholder protections.
• Anti-takeover provisions in our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control.
• During the course of the audit of our consolidated financial statements, we identified material weaknesses in our internal control over financial reporting.
• As an emerging growth company, we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Class A ordinary shares.
• Our dual-class share structure and controlled company status may adversely affect voting rights and shareholder influence.

Future Outlook

The company intends to use proceeds from the exercise of warrants for working capital and general corporate purposes. The company is also implementing a strategic transition to expand into the e-commerce and health related industry and others in China.

Industry Context

The document highlights the risks associated with operating in the PRC, including regulatory changes and economic conditions. It also mentions the competitive landscape of the PRC education sector.

Stakeholder Impact

• Shareholders may experience dilution if the convertible notes are converted and warrants are exercised.
• Shareholders are exposed to risks associated with the company's operations in China and potential regulatory changes.
• Shareholders' returns are dependent on share price appreciation as the company does not expect to pay dividends in the foreseeable future.

Next Steps

• The selling shareholders may offer all or part of the Resale Shares for resale from time to time through public or private transactions, at either prevailing market prices or at privately negotiated prices.

Key Dates