CORRESP 1 filename1.htm

 

SOS Limited

Building 6, East Seaview Park

298 Haijing Road, Yinzhu Street

West Coast New District, Qingdao City, Shandong Province

People’s Republic of China

 

February 3, 2023

 

VIA EDGAR

 

Michelle Miller

Sharon Blume

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Finance

100 F Street, N.E.

Mail Stop 4631

Washington, DC 20549

 

  Re: SOS Limited
    Form 20-F for the fiscal period ending December 31, 2020
   

Filed May 5, 2021

Form 20-F/A for the fiscal period ending December 31, 2020

Filed October 12, 2021

Form 20-F/A for the fiscal period ending December 31, 2020

Filed January 7, 2022

Form 20-F for the fiscal period ending December 31, 2021

Filed May 2, 2022

    File No. 001-38051

 

Dear Ms. Miller:

 

SOS Limited (the “Company”, “SOS,” “we”, “us” or “our”) hereby supplementally transmits its response to the letter received from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated December 21, 2022 regarding our annual report on Form 20-F previously submitted on May 2, 2022 (the “Form 20-F”). For ease of reference, we have repeated the Commission’s comments in this response and numbered them accordingly.

  

Form 20-F for the fiscal period ending December 31, 2021

 

Introduction, page iii

 

1.We note your response to prior comment 1 and your revised proposed disclosure that “China” or the “PRC” refers to the People’s Republic of China, excluding, for the purposes of your annual report only, Taiwan. As requested, and considering that China SOS Ltd, a Hong Kong LLC holds a substantial amount of the Company’s cash and cash equivalents as disclosed on page F-31, please enhance your disclosures to:

 

●Clarify that the same legal and operational risks associated with operations in China also apply to operation in Hong Kong;

 

●Provide risk factor disclosure to explain whether there are any commensurate laws or regulations in Hong Kong or Macau which result in oversight over data security and explain how this oversight impacts your business and to what extent you believe you are compliant with the regulations or policies that have been issued.

 

Provide us with your proposed disclosure.

 

 

 

 

Response: In response to the Staff’s comment, we propose to add the following risk factors to our Risk Factor section.

 

The Hong Kong legal system embodies uncertainties which could limit the availability of legal protections.

 

As one of the conditions for the handover of the sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong’s Basic Law. The Basic Law ensured Hong Kong will retain its own currency (Hong Kong Dollar), legal system, parliamentary system and people’s rights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom to function with a high degree of autonomy. The Special Administrative Region of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English common law system.

 

However, if the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our customers.

 

Our Hong Kong subsidiaries are subject to Hong Kong laws and regulations regarding data security, which could subject them to government enforcement actions and investigations, fines, penalties, and suspension or disruption of their operations.

 

Our Hong Kong subsidiaries, including China SOS Limited and Future Technology Global Ltd., operate in Hong Kong and are thus subject to laws and regulations in Hong Kong in respect of data privacy, data security, and data protection. The main legislation in Hong Kong concerning data security is the Personal Data (Privacy) Ordinance (Cap. 486 of the Laws of Hong Kong) (the “PDPO”), which regulates the collection, usage, storage, and transfer of personal data and imposes a statutory duty on data users to comply with the six data protection principles contained therein. Pursuant to section 33 of the PDPO, the PDPO is applicable to the collection and processing of personal data if such activities take place in Hong Kong, or if the personal data is collected by a data user whose principal place of business is in Hong Kong. As of the date of this annual report, we and our Hong Kong subsidiaries have complied with the laws and requirements in respect of data security in Hong Kong. Our directors confirm that: (i) each of our directors and our Hong Kong subsidiaries has not been involved in any litigation or regulatory action relating to breach of the PDPO; and (ii) they are not aware of any non-compliance incidents relating to breach of the PDPO since the date of incorporation of our Hong Kong subsidiaries. Since our PRC subsidiaries conduct substantially all of their business operations in the mainland China, we believe that the incumbent data security statutory requirements under Hong Kong laws do not materially affect their business. However, the laws on cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, may subject us or our Hong Kong subsidiaries to consequences including but not limited to government enforcement actions and investigations, fines, penalties, and suspension or disruption of our Hong Kong subsidiaries’ operations.

 

Item 3. Key Information, page 2

 

2.We note your response prior comment 4. As previously requested, please address the following:

 

●Currently your SOS Organization Chart diagram reflects solid lines between all entities. Revise to present dashed lines for your VIE contractual agreements to clearly differentiate from your equity interests.

 

●Define the legal entity of “the operating entity in China” as disclosed on page 4.

 

●Reflect with an arrow from and to, the ability to pay dividends and other distributions of equity as well as consulting and service fees.

 

●Disclose in Item 3., consolidating schedules of your financial position and operations, together with related cash flows consistent with your audited consolidating financial schedules on pages F-30 thru F-38.

 

●Disclose a rollforward of investments in subsidiaries outside China, in WFOE and in China SOS that reconciles beginning and or ending balance, plus or minus equity in earnings of VIEs, equity in earnings of subsidiaries, foreign currency translation and other in arriving at investments in subsidiaries outside China, in WFOE and in China SOS prior to consolidation/elimination adjustments as of December 31, for the periods presented.

 

Provide us with your proposed disclosure.

 

2

 

 

Response: In response to the Staff’s comment, please see the proposed disclosures below.

 

●

We propose to revise the SOS organization chart diagram on page 4 and page 54. Please see the following diagram.

 

 

 

We also propose to revise the following disclosures on F-7:

 

SOS Auto Service Co., Ltd.   A 99% subsidiary of Qingdao SOS Investment LLP (PRC)   Other Subsidiary
         
Qingdao SOS Industrial Holding Co., Ltd.   A VIE of Qingdao SOS Investment Management Co., Ltd.   VIE
         
Common Prosperity Technology Co., Ltd.   A 99% subsidiary of SOS International Trading Co., Ltd.   Other Subsidiary
         
SOS International Trading Co., Ltd.   A 50% subsidiary of Qingdao SOS Investment Management Co., Ltd. and another 50% owned by Qingdao SOS Investment LLP   Other Subsidiary
         
SOS Ronghe Digital Technology Co., Ltd. (PRC)   A 31.22% subsidiary of SOS Information Technology Co,. Ltd.   Other Subsidiary

 

●We propose to revise our disclosures on page 4 as follows (revisions in italic):

 

Our ability to pay dividends depends upon dividends paid by our operating entities. If the operating entities incur debt on their own behalf, the instruments governing their debt may restrict their ability to pay dividends to us.

 

The operating entities in mainland China will be permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with the Accounting Standards for Business Enterprise as promulgated by the Ministry of Finance of the PRC, or PRC GAAP. In accordance with PRC company laws, any consolidated VIEs in China must make appropriations from its after-tax profits to non-distributable reserve funds including (i) statutory surplus fund and (ii) discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the consolidated VIEs. Appropriation to discretionary surplus fund will be made at the discretion of the consolidated VIEs.

 

3

 

 

●

We propose to add the following disclosures in Item 3:

 

Consolidation Schedule

 

Condensed consolidated Statements of comprehensive of loss

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-21 
                                               Subsidiaries   Subsidiaries         
                   Subsidiaries   Subsidiaries   SOS Ltd.   China SOS Ltd   WFOE   VIE   Inter-company   Outside China   Inside China   Conso   SOS Ltd. 
   SOS Ltd   China SOS Ltd   WFOE   VIE   Outside China   Inside China   Adjustment(a)   Adjustment (a)   Adjustment   Adjustment   Elimination   Adjustment(b)   Adjustment   Working   Consolidated 
   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$ 
REVENUES -net        15,314              718    342,615                             (718)        357,930    357,930 
COST OF REVENUES        2,327              3,728    330,697                                       336,752    336,752 
GROSS PROFIT   -    12,987    -    -    (3,010)   11,918    -    -    -    -    -    (718)   -    21,178    21,178 
OPERATING EXPENSES:                                                                           
General and administrative   49,250    10,340    12    0    7,574    9,085    (12,033)   -                   (718)        63,511    62,448 
Share-based compensation                                                                           
Selling expense                  -3         677                                       674    674 
Profit (Loss) on evaluation                                                                           
Total operating expenses   49,250    10,340    12    (3)   7,574    9,762    (12,033)   -    -    -    -    (718)   -    63,511    62,448 
INCOME FROM OPERATIONS                                                          -    -    (42,333)   (41,270)
OTHER INCOME(EXPENSE):                                                                           
Loss on acquisition                                                                           
Other income(expense),net        -    -    -         (1,767)   -             -             -             -             -             -             -    (1,767)   (1,767)
Total other (expenses) income, net                                                          -    -    (1,767)   (1,767)
Income from investments                                                                           
INCOME(LOSS) BEFORE INCOME TAXES   (49,250)   2,647    (12)   3    (10,584)   389    12,033    -    -    -    -    -    -    (44,100)   (43,037)
INCOME TAXES                            (768)                                      (768)   (768)
NET INCOME(LOSS) - CONTINUING OPERATION                                                                           
Non-controlling interest                            (200)                                      (200)   (200)
DISCONTINUED OPERATIONS:                                                                           
Loss from discontinued operations                                                                           
Income from disposal of discontinued operations                                                                           
LOSS FROM DISCONTINUED OPERATIONS                                                                         - 
                                                                            
Equity earnings in subs outside China   (49,250)   2,647    (12)   3    (10,584)        12,033                                         
Equity earnings in subs and VIES inside China   -    -    -    -    -    1,157                                              
NET PROFIT(LOSS)   (49,250)   2,647    (12)   3    (10,584)   1,157    12,033    -    -    -    -    -    -    (44,006)   (44,006)
                                                                            
OTHER COMPREHENSIVE INCOME(LOSS)                                                                           
Foreign currency translation adjustment - net of tax                                                                           
COMPREHENSIVE INCOME(LOSS)                                                                           

 

4

 

 

Condensed Consolidated Balance Sheet

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-21 
                   Subsidiaries   Subsidiaries   SOS Ltd.   China SOS Ltd.   WOFE   VIE   Inter-company   Subsidiaries
Outside China		   Subsidiaries
Inside China		   SOS Ltd.
Consolidated		 
   SOS Ltd.   China SOS Ltd.   WOFE   VIE   Outside China   Inside China   Adjustment(a)   Adjustment(b)   Adjustment(c)   Adjustment(d)   Adjustment(e)   Adjustment(f)   Adjustment   Adjustment   Adjustment   elimination(g)   Adjustment   Adjustment  total 
   US$   US$   US$   US$   US$   US$   US$       US$               US$   US$   US$   US$       US$   US$ 
ASSETS                                                                            
Current assets:                                                                                               
Cash and cash equivalents   12,301    160,091    4,164    2    101,210    60,258                                                                338,026 
Accounts receivable, net                            26,167                                                                26,167 
Other receivables - net   67,962    16,902              345    903                                                 (79,391)             6,721 
Amount due from related parties        900              1,000    5,939                                                                7,839 
Inter-company receivable   19,791    (153,855)   311,415    (2)   (19,791)   (196,737)   39,179              3,578                                       (3,578)   -0 
Inventory                            96,071                                                                96,071 
Total current assets   100,054    24,038    315,579    -    82,764    (7,399)   39,179    -    -    3,578    -                      -                 -                 -    (79,391)                -    (3,578)   474,824 
Non-current assets:                                                                                               
Operating lease, right-of-use assets                            3,401                                                                3,401 
Property equipment and software, net        9,844              16,903    535                                                                27,282 
Goodwill                            72                                                                72 
Intangible assets   14,502                                                                                         14,502 
Long-term investments                                                                                             - 
Investment in subsidiaries outside China   374,463                                       (374,463)                                                - 
Investment in WFOE        310,205                             (310,205)                                                     - 
Investment in China SOS                       64,794                             -    (64,794)                                 - 
Prepaid expense                            1,038                                                                1,038 
Advance payments   6,400    97,116              300    62,698                                                                166,514 
Total non-current assets   395,365    417,165    -    -    81,997    67,744    -    -310,205    -374,463    -    -    -64,794    -    -    -    -    -    -    212,809 
Total assets   495,419    441,203    315,579    -    164,761    60,345    39,179    (310,205)   (374,463)   3,578    -    (64,794)   -    -    -    (79,391)   -    (3,578)   687,632 
LIABILITIES AND EQUITY                                                                                               
Current liabilities:                                                                                               
Liabilities:                                                                                               
Accounts payable        11,359              -    18,128                                                                29,487 
                                                                                                
Amount due to related parties   15         2         18    2,742                   -                                       -    2,777 
Operating lease liability-current                       -    894                                                                894 
Advance from customers                       -    19,815                                                                19,815 
Payroll payable                       1    2                                                                3 
Tax payable                       -    (7,955)                                                               (7,955)
Other payables   141    (24,879)   47         5,093    104,391                   (3,528)                            (79,391)        -    1,874 
Total current liabilities   156    (13,520)   49    -    5,112    138,017    -    -    -    (3,528)   -    -    -    -    -    (79,391)   -    -    46,895 
Operating lease liability-noncurrent                            1,918                                                                1,918 
Total non-current liability   -    -    -    -         1,918    -    -    -    -              -    -    -    -    -    -    1,918 
Total liabilities   156    (13,520)   49    -    5,112    139,935    -    -    -    (3,528)             -    -    -    (79,391)   -    -    48,813 
Non-controlling interest                            200                                                                200 
Shareholder’s equity                                                                                               
Paid up capital   427,258    452,078    315,547         104,391    (100,020)   14    (310,205)   (374,463)        (453,084)   (64,794)   -                        3,578    300 
Additional paid-in capital   119,113                        8    39,165                   514,066    -    -                             672,351 
Retained earnings   (51,120)   2,646    -16         60,359    15,076                        (65,113)   -    -    -                        (38,168)
Accumulated other comprehensive income (loss)                                                     4,131                                       4,131 
Total Shareholders’ equity   495,251    454,724    315,531    -    164,750    (84,936)   39,179    (310,205)   (374,463)   -    -    (64,794)   -    -    -    -    -    3,578    638,615 
Total Liabilities and shareholders’ equity   495,407    441,204    315,580    -    169,862    55,199    39,179    (310,205)   (374,463)   (3,528)   -    (64,794)   -    -    -    (79,391)   -    3,578    687,628 

 

5

 

 

Condensed consolidated statement of cash flow

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-21 
                   Subsidiaries   Subsidiaries   Consolidation   Consolidation   SOS Ltd.
Consolidated		 
   SOS Ltd.   China SOS Ltd.   WFOE   VIE   Outside China   inside China   Adjustments(a)   Adjustments(b)   total 
   US$   US$   US$   US$   US$   US$   US$   US$   US$ 
CASH FLOWS FROM OPERATING ACTIVITIES                                    
Net (loss)   (49,250)   2,647    (12)   3    (10,584)   1,157         12,033    (44,007)
Adjustments to reconcile net income net cash used in operating activities:                                           - 
Depreciation of property, plant and equipment        0                   61              61 
Share-based compensation   34,473                                       34,473 
Allowance for doubtful accounts - accounts receivable                            963              963.00 
Allowance for doubtful accounts - other receivable                            269              269.00 
Loss on acquisition                                           - 
Income from disposal of discontinued operations                                           - 
Inventory                            (96,071)             (96,071)
Changes in operating assets and liabilities                                             
Accounts receivable   -                        (15,933)             (15,933)
Other receivables   (9,522)   (99,516)             (595)   (16,228)             (125,862)
Inter-company account   (99,132)   128,855    (311,415)    (1)   84,650    197,044    0           
Amount due from related parties        (900)   (2)        (1,000)   (2,243)             (4,146)
Intangible assets        (14,502)                                 (14,502)
Accrued liabilities                       3    19,812              19,815 
Tax payables                            (8,618)             (8,618)
Accounts payable        11,359                   17050              28,409 
Other payables   141    121    47              (307)             3 
Amount due to related parties   15                   9    845              869 
Contract liabilities                            (415)             (415)
Lease liability                            (770)             (770)
Net cash (used in) generated from operating activities   (123,276)   28,064    (311,382)    2    72,482    96,615    0    12,033    (225,462)
                                              
CASH FLOWS FROM INVESTING ACTIVITIES:                                             
Purchase of property, equipment and equipment        (9,844)             (16,903)   (1,064)             (27,812)
Investment in equity   (374,463)   (310,205)             (64,794)   (657)   750,119         (0)
Proceed from disposals of discontinued operations   0                                         
Net cash (used in) generated from investing activities   (374,463)   (320,049)   -    -    (81,698)   (1,721)        -    (27,812)
                                              
CASH FLOWS FROM FINANCING ACTIVITIES                                             
Proceed from share issuance, net of issuance costs   510,043    452,076    315,547         110,523    (40,425)   (750,119)   (12,033)   585,611 
Proceed from private equity placement, net of issuance costs        -    -                             - 
Net cash generated from (used in) financing activities   510,043    452,076    315,547    0    110,523    (40,425)   (750,119)   (12,033)   585,611 
                                            - 
EFFECT OF EXCHANGE RATES ON CASH   0         (1)        (98)   2065              1,966 
                                              
Net increase/(decrease), effect of exchange rate changes on cash and cash equivalent   12,304    160,090    4,164    2    101,210    56,535    (750,119)   -    334,304 
CASH AND CASH EQUIVALENTS, beginning of year   1    0    0    0    0    3,721              3,722 
CASH AND CASH EQUIVALENTS, end of year   12,301    160,091    4,164    2    101,210    60,259    (750,119)   -    338,026 

 

6

 

 

Condensed consolidated Statements of comprehensive of loss

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-20 
               Subsidiaries   Subsidiaries   SOS Ltd   China SOS               Subsidiaries
Outside		   Subsidiaries
Inside		     
   SOS Ltd   China SOS Ltd   WFOE   VIE   Outside
China		   Inside
China		   Adjustment
(a)		   Adjustment
(b)		   Ltd
Adjustment		   WFOE
Adjustment		   VIE
Adjustment		   Inter-company
Elimination		  

China
Adjustment

   China
Adjustment		    SOS Ltd.
Consolidated
total		 
   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$ 
REVENUES  -   -   -                50,289                                                                                    50,289 
COST OF REVENUES   -    -    -              (37,295)                                           (37,295)
GROSS PROFIT   -    -    -    -         12,994    -    -    -    -    -    -         -    12,994 
OPERATING EXPENSES:                                                                         - 
General and administrative   (897)   (2)   (3)             (1,047)        (452)   -                             (2,401)
Share-based compensation   (506)   -    -    -         -                                            (506)
Total operating expenses   (1,403)   (2)   (3)   -         (1,047)   -    (452)   -    -    -    -         -    (2,907)
INCOME FROM OPERATIONS   (1,403)   (2)   (3)   -         11,947    -    (452)   -    -    -    -         -    10,087 
OTHER INCOME(EXPENSE):                                                                         - 
Loss on acquisition                            -    (5,679)                                      (5,679)
Other income (expense), net   -                        625                                            625 
Total other (expenses) income, net   -    -    -    -         625    (5,679)   -    -    -    -    -         -    (5,054)
INCOME(LOSS) BEFORE INCOME TAXES   (1,403)   (2)   (3)   -         12,572    (5,679)   (452)   -    -    -    -         -    5,033 
INCOME TAXES   -    -                   (147)                                           (147)
NET INCOME(LOSS) - CONTINUING OPERATION   (1,403)   (2)   (3)   -         12,425    (5,679)   (452)   -    -    -    -         -    4,886 
                                                                          - 
DISCONTINUED OPERATIONS:                                                                           
Loss from discontinued operations                            -    (545)                                      (545)
Income from disposal of discontinued operations   -    -    -                   63                                       63 
LOSS FROM DISCONTINUED OPERATIONS   -    -    -    -         -    (482)   -    -    -    -    -         -    (482)
                                                                          - 
Equity in earnings in subs outside China   (1,403)   (2)   (3)   -         -    (6,161)   (452)                                   
Equity in earnings in subs and VIES inside China                            12,425                                              
NET PROFIT(LOSS)   (1,403)   (2)   (3)   -    -    12,425    (6,161)   (452)   -    -    -    -         -    4,404 
                                                                          - 
OTHER COMPREHENSIVE INCOME(LOSS)                                                                         - 
Foreign currency translation adjustment - net of tax   -    -    -    -         874                                            874 
COMPREHENSIVE INCOME(LOSS)   (1,403)   (2)   (3)   -         13,299    (6,161)   (452)   -                             5,278 

 

7

 

 

Condensed Consolidated Balance Sheet

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-20 
                           SOS Ltd.                            
   SOS Ltd.   China
SOS Ltd.		   WFOE   VIE   Subsidiaries
Outside China		   Subsidiaries
Inside
China		   Adjustment
(a)		   Adjustment
(b)		   China SOS
Ltd.
Adjustment		   WFOE
Adjustment (d)		   VIE
Adjustment		   Inter-company
elimination (c)		   Subsidiaries
Outside
China
Adjustment		   Subsidiaries
Inside
China
Adjustment (e)		   SOS Ltd.
Consolidated
total		 
   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$ 
ASSETS                                                                                                       
Current assets:                                                                           
Cash and cash equivlaents  1   268   3,304   2      148                         3,722 
Accounts receivable,net   -    -    -    -         10,235                                            10,235 
Other receivables - net   102    -    100              43,672         3,500                                  47,373 
Amount due from related parties   -                        3,693                                            3,693 
Inter-company receivable (c)                                 (38,429)                       38,429              - 
Total current assetes   103    268    3,404    2         57,748    (38,429)   3,500         -    -    38,429         -    65,023 
Non-current assets:                                                                         - 
Operating lease, right-of-use assets   -    -    -              4,158                                            4,158 
Property equipment and software,net   -                        509                                            509 
Investment in WFOE (d)   -    3,391    -                                  (3,391)                       - 
Investment in subsidiaries inside China (e)                            642                                       (642)   - 
Goodwill   -    -    -              -                                       72    72 
Total non-current assets   -    3,391    -    -         5,309    -    -         (3,391)   -    -         (570)   4,739 
Total assets   103    3,659    3,404    2         63,057    (38,429)   3,500         (3,391)   -    38,429         (570)   69,762 
LIABILITIES AND EQUITY                                                                         - 
Current liabilities:                                                                         - 
Liabilities:                                                                         - 
Accounts payble   -    -    -              1,078                                            1,078 
Amount due to related parties   -                        1,909                                            1,909 
Inter-company payable        -                                                                  
Operating lease liability-current   -    -    -              834                                            834 
Contract liability   -    -    -              610                                            610 
Tax payable   -    -    -              665                                            665 
Other payables   -    100    2    2         40,007                             (38,429)             1,681 
Total current liabilities   -    100    2    2         45,103    -    -         -    -    (38,429)        -    6,777 
Operating lease liabilty-noncurrent   -                        2,749                                            2,749 
Total non-current liability   -    -    -    -         2,749                                            2,749 
Total liabilities   -    100    2    2         47,852    -    -         -    -    (38,429)        -    9,526 
Shareholder's equity                                                                         - 
Paid up capital   (1)   3    -    -         -    46    12                             -    60 
Additional paid-in capital   1,960    3,558    3,406    -         590    38,383    9,649         (3,406)                  (540)   53,600 
Retained earnings   (1,855)   (2)   (3)             13,903         (6,161)        3                   (46)   5,838 
Accumulated other comprehensive income (loss)   -    -    0              712                   12                   14    738 
Total Shareholders' equity   103    3,559    3,402    -         15,205    38,429    3,500         (3,391)   -    -         (570)   60,236 
Total Liabilities and shareholders' equity   103    3,659    3,404    2         63,057    38,429    3,500    -    (3,391)   -    (38,429)        (570)   69,762 

 

8

 

 

Condensed consolidated statement of cash flow

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-20 
                   Subsidiaries   Subsidiaries   Consolidation   Consolidation   SOS Ltd. 
   SOS Ltd.   China SOS Ltd.   WFOE   VIE   Outside China   Inside China   Adjustment (a)   Adjustment (b)   Consolidated total 
   US$   US$   US$   US$   US$   US$   US$   US$   US$ 
CASH FLOWS FROM OPERATING ACTIVITIES                                    
Net (loss)   (1,403)   (2)   (3)   -                12,425    (452)   (6,161)   4,404 
Adjustments to reconcile net income net cash used in operating activities:                  0                          
Depreciation of property, plant and equipment   -    -    -    -         2              2 
Share-based compensation   506    -    -    -         -              506 
Allowance for doubtful accounts - accounts receivable   -    -    -    -         1              1 
Allowance for doubtful accounts - other receivable   0    0    0              158              158 
Loss on acquisition   -    -    -    -         -         5,679    5,679 
Income from disposal of discoutinued opeations   -    -    -    -         -         (63)   (63)
                                              
Changes in operating assets and liabilities                                           - 
Accounts receivable   -    -    -    -         (2,065)             (2,065)
Other receivables   (102)   -    -    -         (35,917)             (36,019)
Amount due from related parties   -                        (2,871)             (2,871)
Tax payables   -    -    -    -         292              292 
Accounts payable                            (11,940)             (11,940)
Other payables   -    100    -    (2)        1,386              1,484 
Amount due to related parties   -    -    -              (3,666)             (3,666)
Contract liabilities   -                        546              546 
Net cash (used in) generated from operating activities   (999)   98    (3)   (2)        (41,649)   (452)   (545)   (43,552)
                                              
CASH FLOWS FROM INVESTING ACTIVITIES:                                             
Purchase of property, equipment and equipment   -    -    -    -         (501)             (501)
Investment in equity   -    (3,391)   3,391    -         0              - 
Proceed from disposals of discontiuned operations   -    -    -              3,500              3,500 
Net cash (used in) generated from investing activities   -    (3,391)   3,391    -         2,999         -    2,999 
                                              
CASH FLOWS FROM FINANCING ACTIVITIES                                             
Proceed from share issuance, net of issuance costs   -    3,578    -    -         -              3,578 
Proceed from private equity placement, net of issuance costs   1,000                        38,973              39,973 
Net cash generated from (used in) financing activities   1,000    3,578    -    -         38,973         -    43,551 
                                              
EFFECT OF EXCHANGE RATES ON CASH   (1)   (17)   (84)   -         785              683 
                                              
NET CASH CHANGES IN CASH AND CASH EQUIVALENTS   (0)   268    3,304    (2)        1,108    (452)   (545)   3,681 
CASH AND CASH EQUIVALENTTS, beginning of year   1    -    -    -         41         -    42 
CASH AND CASH EQUIVALENTTS, end of year   1    268    3,304    2         147    (452)   (545)   3,722 

 

9

 

 

Condensed consolidated Statements of comprehensive of loss

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-19 
                                       Subsidiaries     
                   Subsidiaries   China SOS Ltd   WFOE   VIE   Inter-company   Inside China   SOS Ltd. 
   SOS Ltd   China SOS Ltd   WFOE   VIE   Insde China   Adjustment   Adjustment   Adjustment   Elimination   Adjustment   Consolidated total 
   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$ 
REVENUES  -                              11,577                                                       11,577 
COST OF REVENUES   -                   (9,459)                            (9,459)
GROSS PROFIT   -                   2,118                             2,118 
OPERATING EXPENSES:                                                       
General and administrative   -                   (365)                            (365)
Share-based compensation   -                   -                             - 
Total operating expenses   -                   (365)                            (365)
INCOME FROM OPERATIONS   -                   1,753                             1,753 
OTHER INCOME (EXPENSE):                                                       
Loss on acquisition   -                   -                             - 
Other income (expense), net   -                   41                             41 
Total other (expenses) income, net   -                   41                             41 
INCOME (LOSS) BEFORE INCOME TAXES   -                   1,794                             1,794 
INCOME TAXES   -                   (324)                            (324)
NET INCOME (LOSS) - CONTINUING OPERATION   -                   1,470                             1,470 
                                                        
DISCONTINUED OPERATIONS:                                                       
Loss from discontinued operations   -                   -                             - 
Income from disposal of discontinued operations   -                                                 - 
LOSS FROM DISCONTINUED OPERATIONS   -                   -                             - 
                                                        
Equity earnings in subs outside China                                                       
Equity earnings in subs and VIES inside China                       1,470                               
NET PROFIT(LOSS)   -                   1,470                             1,470 
                                                        
OTHER COMPREHENSIVE INCOME(LOSS)                       -                               
Foreign currency translation adjustment - net of tax   -                   (16)                            (16)
COMPREHENSIVE INCOME(LOSS)   -                   1,454                             1,454 

 

10

 

 

Condensed Consolidated Balance Sheet

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-19 
                                               Subsidiaries    SOS Ltd 
                   Subsidiaries   Subsidiaries   SOS Ltd.   China SOS Ltd.   WFOE   VIE   Inter-company   Inside China   Consolidated 
   SOS Ltd.   China SOS Ltd.   WFOE   VIE   Outside China   Inside China   Adjustements   Adjustment   Adjustment   Adjustment   Elimination   Adjustment   total 
   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$   US$ 
ASSETS                                                    
Current assets:                                                    
Cash and cash equivlaents  -                                  41                                                                    41 
Accounts receivable, net   -                        8,171                                  8,171 
Other receivables - net   -                        11,512                                  11,512 
Amount due from related parties   -                        822                                  822 
Inter-company receivable (c)                                                                 
Total current assetes   -                        20,546                                  20,546 
Non-current assets:                                                                 
Operating lease, right-of-use assets   -                        -                                  - 
Property equipment and software,net   -                        6                                  6 
Investment in WFOE (d)                                                                 
Investment in Other subsidiarues (e)                                                                 
Goodwill   -                        -                                  - 
Total non-current assets   -                        6                                  6 
Total assets   -                        20,552                                  20,552 
LIABILITIES AND EQUITY                                                                 
Current liabilities:                                                                 
Liabilities:                                                                 
Accounts payble   -                        13,018                                  13,018 
Amount due to related parties   -                        5,575                                  5,575 
Inter-company payable                                                                 
Operating lease liability-current   -                        -                                  - 
Contract liability   -                        64                                  64 
Tax payable   -                        374                                  374 
Other payables   -                        197                                  197 
Total current liabilities   -                        19,228                                  19,228 
Operating lease liabilty-noncurrent   -                        -                                  - 
Total non-current liability   -                        -                                  - 
Total liabilities   -                        19,228                                  19,228 
Shareholder's equity                                                                 
Paid up capital   -                        6                                  6 
Additional paid-in capital   -                        (6)                                 (6)
Retained earnings   -                        1,340                                  1,340 
Accumulated other comprehensive income (loss)   -                        (16)                                 (16)
Total Shareholders' equity   -                        1,324                                  1,324 
Total Liabilities and shareholders' equity   -                        20,552                                  20,552 

 

11

 

 

Condensed consolidated statement of cash flow

(US$ thousands, except share data and per share data, or otherwise noted)

 

   31-Dec-19 
                               SOS Ltd. 
   SOS Ltd.   China SOS Ltd.   WFOE   VIE   Subsidiaries
Outside China		   Subsidiaries
Inside China		   Consolidation
Adjustments		   Consolidated
total		 
   US$   US$   US$   US$       US$   US$   US$ 
CASH FLOWS FROM OPERATING ACTIVITIES                                
Net (loss)   -                        1,470         1,470 
Adjustments to reconcile net income net cash used in operating activities:                                        
Depreciation of property, plant and equipment   -                        2         2 
Share-based compensation   -                        -         - 
Allowance for doubtful accounts - accounts receivable   -                        5         5 
Allowance for doubtful accounts - other receivable   0                        146         146 
Loss on acquisition   -                        -         - 
Income from disposal of discoutinued opeations   -                        -         - 
                                         
Changes in operating assets and liabilities                                        
Accounts receivable   -                        (5,455)        (5,455)
Other receivables   -                        (1,498)        (1,498)
Amount due from related parties   -                        3,278         3,278 
Tax payables   -                        364         364 
Accounts payable                            3,851         3,851 
Other payables   -                        (217)        (217)
Amount due to related parties   -                        (1,934)        (1,934)
Contract liabilities   -                        32         32 
Net cash (used in) generated from operating activities   -                        44         44 
                                         
CASH FLOWS FROM INVESTING ACTIVITIES:                                        
Purchase of property, equipment and equipment   -                        -         - 
Investment in equity   -                        -         - 
Proceed from disposals of discontiuned operations   -                        -         - 
Net cash (used in) generated from investing activities   -                        -         - 
                                         
CASH FLOWS FROM FINANCING ACTIVITIES                                        
Proceed from share issuance, net of issuance costs   -                        -         - 
Proceed from private equity placement, net of issuance costs   -                        -         - 
Net cash generated from (used in) financing activities   -                        -         - 
                                         
EFFECT OF EXCHANGE RATES ON CASH   -                        (16)        (16)
                                         
NET CASH CHANGES IN CASH AND CASH EQUIVALENTS   -                        28         28 
CASH AND CASH EQUIVALENTTS, beginning of year   -                        13         13 
CASH AND CASH EQUIVALENTTS, end of year   -                        41         41 

  

●

We propose to add the following disclosures in Item 3 after the consolidation Schedule:

 

The table breaks Equity earnings into equity earnings in the WOFE, the VIE and VIE’s subsidiaries including all subsidiaries inside China except the WOFE and the VIE

 

Roll-forward of “investments in the VIE and its Subsidiaries”

 

   US$“000” 
Balance at January 1, 2019
     
Equity earnings of WOFE    
Equity in earnings of VIE   1,470 
Equity in earnings of VIE’s subsidiaries   - 
Dividend distributed to shareholders   - 
Share-based compensation   - 
Foreign currency translation   (16)
Balance at December 31, 2019   1,326 
Equity earnings of WOFE   (3)
Equity in earnings of VIE   12,425 
Equity in earnings of VIE’s subsidiaries   (8,121)
Dividend distributed to shareholders   - 
Acquisition of China Rapid Finance   10,661 
Issuance of Class A Ordinary Shares and warrant   42,022 
Share-based compensation   951 
Foreign currency translation   874 
Balance at December 31, 2020   60,135 
Issuance of Class A Ordinary Shares and warrant   585,849 
Equity in earnings of WOFE   (12)
Equity in earnings of VIE   1,157 
Equity in earnings of VIE’s subsidiaries   (165,860)
Dividend distributed to shareholders   - 
Share-based compensation   33,153 
Foreign currency translation   3,392 
Balance at December 31, 2021   517,814 

 

Prior to December 31, 2019, the Company only had one legal entity operating inside China, which is later referred to as the VIE.

 

12

 

 

3.We note your response to prior comment 4. As requested, please conform your reference and identification of VIE(s) throughout your disclosures.

 

●For example, we note on page 6 that you disclose “Subsidiaries inside China” refers to the VIE’s subsidiaries, including:

 

oSOS Information Technology Co.,Ltd (“SOSIT”),

 

oInner Mongolia SOS Insurance Agency Co., Ltd (“IMSOS”);

 

oDirectly owned subsidiaries including SOS International Trading Co., Ltd (“SOSINT”),

 

oQingdao SOS Investment LLP (“SOSIL”),

 

oQingdao SOS Digital Technologies Ltd. (“SOSDT”),

 

oCommon Prosperity Technology Co., Ltd. (“SOSCP”),

 

oSOS Ronghe Digital Technology Co., Ltd. (“SOSRD”),

 

oWeigou International Trading Co., Ltd (“SOSWI”),

 

oShuyun International Trading Co., Ltd (“SOSSI”),

 

oSOS Auto Service Co., Ltd. (“SOSAS”), and

 

oChexiaoer Technology Co., Ltd (“SOSCX”).

 

●Whereas on page iii you disclose your definition of variable interest entity(ies) include:

 

oQingdao SOS Industrial Holding Co., Ltd.,

 

oQingdao SOS Digital Technologies Inc.,

 

oSOS Information Technology Co., Ltd.,

 

oInner Mongolia SOS Insurance Agency Co., Ltd.,

 

oSOS Ronghe Digital Technology Co., Ltd. and

 

oSOS International Trading Co., Ltd.

 

oOn page F-7 you identify SOS Industrial Holdings Co., Ltd as the only VIE;

 

●On page F-17 you disclose that Qingdao SOS Digital Technologies Inc. (PRC) and SOS Information Technology Co, Ltd are 100% subsidiaries of Qingdao Enterprise Co. Ltd which is not identified in the SOS Organizational Chart or elsewhere in your disclosures;

 

●In your SOS Organizational Chart you disclose that SOSRD is a 31.22% subsidiary of SOSIT but on page F-7 you disclose SOSRD is a 69% subsidiary of SOSIT; and

 

●On page 4 you disclose that as of December 31, 2021 and 2020, the VIE accounted for an aggregate of 99% and 100%, respectively, of your consolidated total assets, 99% and 100% respectively, of your consolidated total liabilities, and 100% and 100% respectively, of your consolidated total net revenues. However, the activity presented on pages F-28 through F-38 reflects the substantial majority of consolidated total assets and liabilities are held by China SOS Ltd, Subsidiaries outside China and Subsidiaries inside China and the substantial majority of total net revenues are attributable to Subsidiaries inside China. This is inconsistent with your disclosures on page 55 that “as of December 31, 2021, the VIE and its subsidiaries accounted for an aggregate of 50.4% and 76.0% of your total assets and total liabilities, respectively. As of December 31, 2019, the VIE and its subsidiaries accounted for an aggregate of 100% and 100% of our total assets and total liabilities, respectively. “

 

Provide us with your proposed disclosure.

 

13

 

 

Response: In response to the Staff’s comment, please see the proposed disclosure below.

 

●

We propose to revise the disclosures on page 6 as follows:

 

Subsidiaries inside China refers to our directly owned subsidiaries and the VIE’s subsidiaries.

 

Our directly owned subsidiaries include Qingdao SOS Investment LLP (“SOSIL”), Qingdao SOS Investment LLP (“SOSIL”), SOS International Trading Co., Ltd (“SOSINT”), Common Prosperity Technology Co., Ltd. (“SOSCP”), SOS Ronghe Digital Technology Co., Ltd. (“SOSRD”), Weigou International Trading Co., Ltd (“SOSWI”), Shuyun International Trading Co., Ltd (“SOSSI”), SOS Auto Service Co., Ltd. (“SOSAS”), and Chexiaoer Technology Co., Ltd (“SOSCX”).

 

The VIE’s subsidiaries include SOS Information Technology Co., Ltd (“SOSIT”), Inner Mongolia SOS Insurance Agency Co., Ltd (“IMSOS”), and Qingdao SOS Digital Technology Inc. (“SOSDT”).

 

●

We propose to revise the definition on page iii as follows:

 

“variable interest entity” or the “VIE” refers to our consolidated variable interest entity, Qingdao SOS Industrial Holding Co., Ltd.

 

●

We propose to revise the Qingdao Enterprise Co., Ltd. to Qingdao SOS Industrial Holding Co., Ltd.

 

●

We propose to revise the disclosure on F-7, which is SOSRD is a 31.22% subsidiary of SOS Information Technology Co., Ltd.

 

● We propose to revise the disclosures on page 4 and page 55 as follows:

 

As of December 31, 2021 and 2020, the VIE and Subsidiaries inside China accounted for an aggregate of 99% and 100%, respectively, of consolidated total assets, 99% and 100% respectively, of consolidated total liabilities, and 100% and 100%, respectively, of consolidated total net revenues.

 

There was only one legal entity operating in mainland China prior to December 31, 2019, which is later referred to as the VIE. As of December 31, 2019, the VIE accounted for an aggregate of 100% and 100% of our total assets and total liabilities, respectively. and 100% and 100% respectively, of consolidated total net revenues.

 

4.We note your response to prior comment 5. Please address the following:

 

●Disclose PRC GAAP for the periods presented; and

 

●Enhance your proposed disclosure to clarify why you have not accrued any money to the reserve fund since you recognized profits, albeit under US GAAP, in prior periods.   Provide us with your proposed disclosure.

 

Response: In response to the Staff’s comment, we propose to add the following disclosures on page 4.

 

Pursuant to the law applicable to China’s foreign investment enterprises, an operating entity that is a foreign investment enterprise in the PRC has to make appropriation from its after-tax profit, as determined under PRC GAAP, to reserve funds including (i) general reserve fund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the total capital contribution to be paid-in by shareholders (the “Registered Capital”) of the operating company. Appropriation to the other two reserve funds is at the discretion of the operating company in China. General reserve fund and statutory surplus fund are restricted for set off against losses, expansion of production and operation or increase in Registered Capital of the respective companies. These reserves are not transferable to the Company in the form of cash dividends, loans or advances. These reserves are therefore not available for distribution except in liquidation.

 

No statutory reverse fund was provided in VIE’s subsidiary inside China called SOSIT for the fiscal years 2019, 2020, and 2021, respectively, even though they are making profit after tax because SOSIT has no registered paid-up capital yet and SOSIT has no plan to distribute dividend for the fiscal years 2019, 2020 and 2021, respectively.

 

14

 

 

5.We note your response to prior comment 8 and your proposed disclosure. Please enhance your proposed disclosure to specifically disclose, at the onset of Item 3, the ability and or the impact to relocate or reproduce operating activities elsewhere should operating in the PRC become prohibitive.   Provide us with your proposed disclosure.

 

Response: In response to the Staff’s comment, we propose to add disclosures at the onset of Item 3 and to the Risk Factor section.

 

We propose to add the following disclosure at the onset of Item 3 (at the end of page 6):

 

Our corporate structure is subject to risks relating to our contractual arrangements with Qingdao SOS Industrial Holding Co., Ltd. (the “VIE”) and its shareholders. These contractual arrangements have not been tested in a court of law. If the PRC government finds these contractual arrangements non-compliant with the restrictions on direct foreign investment in the relevant industries, or if the relevant PRC laws, regulations, and rules or the interpretation thereof change in the future, we could be subject to severe penalties or be forced to relinquish our beneficial interest in the consolidated VIE or forfeit our rights under the contractual arrangements. SOS and investors in the ADSs face uncertainty about potential future actions by the PRC government, which could affect the enforceability of our contractual arrangements with the VIE and, consequently, significantly affect the financial condition and results of operations of SOS. If we are unable to claim our right to control the assets of the consolidated VIE, the ADSs may decline in value or become worthless. In addition, changes in China’s economic, political or social conditions, or government policies may cause our and the consolidated VIE’s underlying operations in China to become prohibitive, which may subject us to sanctions imposed by PRC laws relating to, among others, data security and our remaining business operations in China may also become negatively affected. We could also be subject to severe penalties or be forced to relinquish our interests in those operations, which would result in a material adverse change to our business operations, and materially and adversely affect our financial condition and results of operations and cause our ADSs to significantly decline in value or become worthless.

 

In addition, we propose to add the following to our Risk Factor section:

 

The PRC government has significant authority to exert influence on the China operations of an offshore holding company, such as us. Therefore, investors in the ADSs and our and the consolidated VIE’s business face potential uncertainty from the PRC government’s policy. Changes in China’s economic, political or social conditions, or government policies may cause our and the consolidated VIE’s underlying operations in China to become prohibitive, which could materially and adversely affect our and the consolidated VIE’s business, financial condition, and results of operations.

 

Substantially all of our and the consolidated VIE’s operations are located in China and as a result, the continuation of the underlying operations in China is vital to our and the consolidated VIE’s success. The PRC government has significant authority to exert influence on the China operations of an offshore holding company, such as us. Despite economic reforms and measures implemented by the PRC government, the PRC government continues to play a significant role in regulating industrial development, allocation of natural and other resources, production, pricing and management of currency, and there can be no assurance that the PRC government will continue to pursue a policy of economic reform or that the direction of reform will continue to be market friendly.

 

Our and the consolidated VIE’s ability to successfully conduct business operations in the PRC depends on a number of factors, including macro-economic and other market conditions. Our and the consolidated VIE’s business, financial condition and results of operations may be materially and adversely affected by the following factors:

 

opolitical instability or changes in social conditions of the PRC;
   
ochanges in laws, regulations, and administrative directives or the interpretation thereof;
   
omeasures which may be introduced to control inflation or deflation; and
   
ochanges in the rate or method of taxation.

 

These factors are affected by a number of variables which are beyond our and the consolidated VIE’s control. In the event that our or the consolidated VIE’s underlying operations in China become prohibitive, we and the consolidated VIE may not be able to relocate and/or reproduce operating activities elsewhere, which could cause significant business disruptions and materially and adversely affect our and the consolidated VIE’s business, financial condition, and results of operations.

 

15

 

 

Item 5. Operating and Financial Review and Prospects, page 55

 

6.We note your response to prior comment 9 that the $197 million the VIE and its Subsidiaries in China received as presented on page F-32 was from the Company’s wholly owned subsidiaries Qingdao SOS Investment Management Co., Ltd. and China SOS Ltd and your disclosure on page 55 that the Company has not provided any financial support to the VIE and the VIE’s subsidiaries for the years ended December 31, 2021 and 2020. We also note your disclosure on page iii, that SOS,” “we,” “us,” “our company” and “our” refer to SOS Limited, an exempted company registered in the Cayman Islands with limited liability, and its subsidiaries and its consolidated variable interest entities, and, in the context of describing our operations and combined and consolidated financial information, also include its affiliated entity and its subsidiaries. Please address the following:

 

●Revise your disclosures on page 55 to disclose any financial support provided between SOS Ltd, China SOS Ltd, WFOE, VIE, Subsidiaries outside China and Subsidiaries inside China for the periods presented. For example disclose that $197 million was provided to the VIE and its Subsidiaries in China by Qingdao SOS Investment Management Co., Ltd. (WOFE) and China SOS Ltd in 2021;

 

●Revise your disclosure on page 55 to remove reference to “the Company’s VIE” with “the VIE” to reflect the contractual nature of your VIE relationship; and

 

●Tell us and revise your disclosures on page F-32, to explain how proceeds from share issuance, net of issuance costs resulted negative cash flows of $40.4 million for Subsidiaries in China for the year ended December 31, 2021.

 

Provide us with your proposed disclosure.

 

Response: In response to the Staff’s comment, we propose to revise the disclosures as follows.

 

●We propose to revise the disclosures on page 55 as follows:

 

During the year of 2020, there were no inter-company cash activities. See F-35. SOS Limited (the “Company”) completed its first round of financing through a registered offering on Form F-3 on December 24, 2020 for net proceeds of US$3.6 million, which were deposited into the Company’s wholly owned subsidiary’s bank account at HSBC in Hong Kong. The Company did not have any means to finance the VIE and its subsidiaries before December 24, 2020.

 

The Company did several rounds of registered offerings which led to the inflow of funds for the year ended December 31, 2021. The Company instructed its investors to transfer the funds to the bank accounts of its wholly owned subsidiaries, China SOS Ltd., incorporated in Hong Kong and SOS Information Technology New York Inc., incorporated in New York. The VIE and its subsidiaries in China received an aggregate of US$197 million (See F-32) from its wholly owned subsidiaries Qingdao SOS Investment Management Co., Ltd. (WOFE) and China SOS Ltd. All these funds were provided by the Company raised through registered direct offerings.

 

16

 

 

●

We propose to revise the disclosures on page 55 as follows (revisions in italic):

 

Total assets and liabilities presented on the Company’s consolidated balance sheets and revenue, expense, net income presented on consolidated statement of operations and comprehensive income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows are substantially the financial position, operation and cash flow of the VIE and the VIE’s subsidiaries.

 

●On page F-32, the Condensed consolidated statement of cash flow as at December 31, 2021, $40.4 million of $585.6 million proceeds from share issuance -net of issuance costs was transferred and allocated to subsidiaries inside China.

 

Form 6-K filed November 8, 2022

 

Disposition Agreement, page 1

 

7.We note the Disposition Agreement of November 2, 2022, between SOS Limited (the “Company”), S International Group Limited (“S International”), a British Virgin Islands company and the Company’s wholly owned subsidiary, and S International Holdings Limited, a Cayman Islands exempt company (the “Purchaser”). Please tell us why S International is not reflected in the SOS Organization Chart disclosed in the SOS Ltd. 2021 20-F or your correspondence of December 13, 2022.

 

Response: In response to the Staff’s comment, we respectfully advise that S International was incorporated in September 2022 after issuing 2021 20-F to facilitate the disposition, which will reflect in 20-F for the year ended December 31, 2022.

 

We thank the Staff for its review of the foregoing. If you have further comments, we ask that you forward them by electronic mail to our counsel, Joan Wu at jwu@htflawyers.com or by telephone at 212-530-2208.

 

[Signature page follows]

 

17

 

 

  Very truly yours,
   
  /s/ Yandai Wang
 

Yandai Wang

Chief Executive Officer

 

cc:Hunter Taubman Fischer & Li LLC

 

 

18