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United States securities and exchange commission logo
August 22, 2022
Yi Yang
Chief Financial Officer
Kaixin Auto Holdings
9/F, Tower A, Dongjin International Center
Huagong Road
Chaoyang District, Beijing 100015
People s Republic of China
Re: Kaixin Auto
Holdings
Form 20-F for the
Year Ended December 31, 2021
Filed April 29,
2022
File No. 001-38261
Dear Ms. Yang:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Annual Report on Form 20-F
Item 3. Key Information
Disaggregated Financial Information relating to the VIEs, page 8
1. Please revise your
condensed consolidating schedules to disaggregate the parent company,
the VIEs and their
consolidated subsidiaries, the WFOEs that are the primary
beneficiaries of the
VIEs, and an aggregation of other entities that are consolidated. The
objective of this
disclosure is to allow an investor to evaluate the nature of assets held by,
and the operations of,
entities apart from the VIE, as well as the nature and amounts
associated with
intercompany transactions.
Yi Yang
FirstName
Kaixin AutoLastNameYi
Holdings Yang
Comapany
August 22, NameKaixin
2022 Auto Holdings
August
Page 2 22, 2022 Page 2
FirstName LastName
Kaixin Auto Holdings
Consolidated Financial Statements for the Years Ended December 31, 2021 and
2020
Consolidated Balance Sheet at December 31, 2021, page F-3
2. Please explain if the 4,513,761 ordinary shares confirmed in August
2021 as part of the
Contingent Consideration as issuable to the Dealership Operators in
accordance with the
Equity Purchase Agreements subject to the operating performance of the
dealerships and
service centers before 2021 were issued as of December 31, 2021. You
disclose that on
November 30, 2021, that Renren transferred 13,422,613 ordinary shares
of the Company
it held, to an escrow company to fully settle the Contingent
Consideration shares
of 8,219,510. However, it is unclear whether these shares were issued
or transferred by
the escrow company to the Dealership Operators to settle the 4,513,761
ordinary shares
confirmed in August 2021. If these shares were issuable at December
31, 2021, explain
and disclose how these shares have been reflected in your financial
statements.
Notes to Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
(bb) Recent Accounting Standards, page F-23
3. Please tell us your consideration for not adopting and implementing
ASU 2016-13,
Financial Instruments - Credit Losses (ASC 326) until the fiscal year
beginning after
December 15, 2022. Your disclose ASC 326 was effective for the Group
(the
company) for fiscal years, and interim periods within those fiscal
years beginning after
December 15, 2019, but are still in the process of evaluating the
impact this guidance will
have on the company's consolidated financial statements.
Note 8. Dealership Settlement, page F-28
4. Please tell us and disclose how you determined the amount of the loss
on the Dealership
Settlement of $11.142 million for the year ended December 31, 2021.
Also, please
explain and disclose the specific terms for determining the
Compensation Shares to be
issued to the Dealership Operators as incentives for operating
performance in future
periods. In your response and disclosure, describe how you will
determine the value of
the ordinary shares to be issued as Compensation Shares and the
period(s) in which they
will be recognized as share-based compensation. If you do not believe
the Compensation
Shares represent share-based compensation, please explain why. Refer
to ASC 450-20-
25, and ASC 450-20-50 regarding the recognition and initial measure of
a loss
contingency, and ASC 718 for share-based compensation.
5. Please explain the business purpose and accounting treatment for the
company's former
parent Renren's transfer of 13,422,613 ordinary shares of the company
it held to an escrow
company to fully settle the Contingent Consideration shares of
8,219,510. You
recognized a loss on the Dealership Settlement of $11.142 million for
the year ended
December 31, 2021, but the company does not appear to have issued new
ordinary shares
Yi Yang
Kaixin Auto Holdings
August 22, 2022
Page 3
or shares from treasury to settle the dispute with the non-controlling
shareholders
(Dealership Operators).
General
6. Please revise, as applicable, to provide more specific and prominent
disclosures about the
legal and operational risks associated with China-based companies. For
additional
guidance, please see the Division of Corporation Finance s Sample
Letter to China-Based
Companies issued by the Staff in December 2021 (China-Based Company
Dear Issuer
Letter). Please also consider the comments issued in our letter dated
August 12, 2022 for
the F-3 filed on August 4, 2021.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Robert Shapiro at 202-551-3273 or Lyn Shenk at
202-551-3380 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Alyssa Wall at 202-551-8106 or Jennifer Lopez Molina at 202-551-3792
with any other
questions.
FirstName LastNameYi Yang Sincerely,
Comapany NameKaixin Auto Holdings
Division of
Corporation Finance
August 22, 2022 Page 3 Office of Trade
& Services
FirstName LastName