SecProbe.io

CORRESP
1
filename1.htm

Re:   Wins Finance Holdings Inc.

Form 20-F for Fiscal Year Ended June 30, 2021
(the “20-F”) Filed October 29, 2021

File No. 333-204074

Dear Mr. John Spitz and Mr. Ben Phippen:

Wins Finance Holdings Inc. (the “Company”) received your
comments letter on May 2, 2022. Please find the original comments and responses below:

Form 20-F for Fiscal Year Ended June 30, 2021

General

 1. We note your response to comment 1. Please provide us with the proposed disclosures to be included
in your Form 20-F for the fiscal year ended June 30, 2022, specifically addressing each of the legal and operational risks associated
with China-based companies as provided in the Division of Corporation Finance's Sample Letter to China-Based Companies issued by the Staff
in December 2021.

Response: Below are the questions included in the December
2021 letter and the response of Wins to such items.

 1. Please disclose prominently on the prospectus cover page that you are not a Chinese operating company
but a Cayman Islands holding company with operations conducted by your subsidiaries and through contractual arrangements with a variable
interest entity (VIE) based in China and that this structure involves unique risks to investors. If true, disclose that these contracts
have not been tested in court. Explain whether the VIE structure is used to provide investors with exposure to foreign investment in China-based
companies where Chinese law prohibits direct foreign investment in the operating companies, and disclose that investors may never hold
equity interests in the Chinese operating company. Your disclosure should acknowledge that Chinese regulatory authorities could disallow
this structure, which would likely result in a material change in your operations and/or a material change in the value of the securities
you are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.
Provide a cross-reference to your detailed discussion of risks facing the company and the offering as a result of this structure.

Response: The Company does not
operate using VIEs, and therefore this comment is not applicable to the Company.

 2. Provide prominent disclosure about the legal and operational risks associated with being based in or
having the majority of the company’s operations in China. Your disclosure should make clear whether these risks could result in
a material change in your operations and/or the value of the securities you are registering for sale or could significantly limit or completely
hinder your ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline
or be worthless. Your disclosure should address how recent statements and regulatory actions by China’s government, such as those
related to the use of variable interest entities and data security or anti-monopoly concerns, have or may impact the company’s ability
to conduct its business, accept foreign investments, or list on a U.S. or other foreign exchange. Please disclose whether your auditor
is subject to the determinations announced by the PCAOB on December 16, 2021 and whether and how the Holding Foreign Companies Accountable
Act and related regulations will affect your company. Your prospectus summary should address, but not necessarily be limited to, the risks
highlighted on the prospectus cover page.

Response: The Company included
risk factors on pages 20 to 21 of the 20-F in response this comment.

 3. Clearly disclose how you will refer to the holding company, subsidiaries, and VIEs when providing the
disclosure throughout the document so that it is clear to investors which entity the disclosure is referencing and which subsidiaries
or entities are conducting the business operations. Refrain from using terms such as “we” or “our” when describing
activities or functions of a VIE. For example, disclose, if true, that your subsidiaries and/or the VIE conduct operations in China, that
the VIE is consolidated for accounting purposes but is not an entity in which you own equity, and that the holding company does not conduct
operations. Disclose clearly the entity (including the domicile) in which investors are purchasing an interest.

Response: The Company does not
operate using VIEs, and therefore this comment is not applicable to the Company.

 4. Provide a description of how cash is transferred through your organization and disclose your intentions
to distribute earnings or settle amounts owed under the VIE agreements. State whether any transfers, dividends, or distributions have
been made to date between the holding company, its subsidiaries, and consolidated VIEs, or to investors, and quantify the amounts where
applicable. Provide cross-references to the condensed consolidating schedule and the consolidated financial statements.

Response: The Company does not
operate using VIEs, and therefore this comment is not applicable to the Company.

      2

 5. Disclose clearly that the company uses a structure that involves a VIE based in China and what that
entails, and provide early in the summary a diagram of the company’s corporate structure, identifying the person or entity that
owns the equity in each depicted entity. Describe all contracts and arrangements through which you claim to have economic rights and exercise
control that results in consolidation of the VIE’s operations and financial results into your financial statements. Identify clearly
the entity in which investors are purchasing their interest and the entity(ies) in which the company’s operations are conducted.
Describe the relevant contractual agreements between the entities and how this type of corporate structure may affect investors and the
value of their investment, including how and why the contractual arrangements may be less effective than direct ownership and that the
company may incur substantial costs to enforce the terms of the arrangements. Disclose the uncertainties regarding the status of the rights
of the Cayman Islands holding company with respect to its contractual arrangements with the VIE, its founders and owners, and the challenges
the company may face enforcing these contractual agreements due to legal uncertainties and jurisdictional limits.

Response: The Company does not
operate using VIEs, and therefore this comment is not applicable to the Company.

 6. We note your disclosure that the Cayman Islands holding company controls and receives the economic
benefits of the VIE’s business operations through contractual agreements between the VIE and your Wholly Foreign-Owned Enterprise
(WFOE) and that those agreements are designed to provide your WFOE with the power, rights, and obligations equivalent in all material
respects to those it would possess as the principal equity holder of the VIE. We also note your disclosure that the Cayman Islands holding
company is the primary beneficiary of the VIE. However, neither the investors in the holding company nor the holding company itself have
an equity ownership in, direct foreign investment in, or control of, through such ownership or investment, the VIE. Accordingly, please
refrain from implying that the contractual agreements are equivalent to equity ownership in the business of the VIE. Any references to
control or benefits that accrue to you because of the VIE should be limited to a clear description of the conditions you have satisfied
for consolidation of the VIE under U.S. GAAP. Additionally, your disclosure should clarify that you are the primary beneficiary of the
VIE for accounting purposes. Please also disclose, if true, that the VIE agreements have not been tested in a court of law.

Response: The Company does not
operate using VIEs, and therefore this comment is not applicable to the Company.

      3

 7. In your summary of risk factors, disclose the risks that your corporate structure and being based in
or having the majority of the company’s operations in China poses to investors. In particular, describe the significant regulatory,
liquidity, and enforcement risks with cross-references to the more detailed discussion of these risks in the prospectus. For example,
specifically discuss risks arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws
and that rules and regulations in China can change quickly with little advance notice; and the risk that the Chinese government may intervene
or influence your operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based
issuers, which could result in a material change in your operations and/or the value of the securities you are registering for sale. Acknowledge
any risks that any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or
foreign investment in China-based issuers could significantly limit or completely hinder your ability to offer or continue to offer securities
to investors and cause the value of such securities to significantly decline or be worthless.

Response: The Company included
a risk factor summary on pages 3 to 4 of the 20-F and risk factors relating to operating in China on pages 13 to 21 of the 20-F in response
this comment.

 8. Disclose each permission or approval that you, your subsidiaries, or the VIEs are required to obtain
from Chinese authorities to operate your business and to offer the securities being registered to foreign investors. State whether you,
your subsidiaries, or VIEs are covered by permissions requirements from the China Securities Regulatory Commission (CSRC), Cyberspace
Administration of China (CAC) or any other governmental agency that is required to approve the VIE’s operations, and state affirmatively
whether you have received all requisite permissions or approvals and whether any permissions or approvals have been denied. Please also
describe the consequences to you and your investors if you, your subsidiaries, or the VIEs: (i) do not receive or maintain such permissions
or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations,
or interpretations change and you are required to obtain such permissions or approvals in the future.

Response: The Company revised the
disclosure on page 41 of the 20-F in response this comment.

      4

 9. Provide a clear description of how cash is transferred through your organization. Disclose your intentions
to distribute earnings or settle amounts owed under the VIE agreements. Quantify any cash flows and transfers of other assets by type
that have occurred between the holding company, its subsidiaries, and the consolidated VIEs, and direction of transfer. Quantify any dividends
or distributions that a subsidiary or consolidated VIE have made to the holding company and which entity made such transfer, and their
tax consequences. Similarly quantify dividends or distributions made to U.S. investors, the source, and their tax consequences. Your disclosure
should make clear if no transfers, dividends, or distributions have been made to date. 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 the company, including your subsidiaries and/or the consolidated VIEs, to the parent company and U.S.
investors as well as the ability to settle amounts owed under the VIE agreements.

Response:
The Company revised the disclosure on page 41 of the 20-F in response this comment.

 10. We note that the consolidated VIEs constitute a material part of your consolidated financial statements.
Please provide in tabular form a condensed consolidating schedule that disaggregates the operations and depicts the financial position,
cash flows, and results of operations as of the same dates and for the same periods for which audited consolidated financial statements
are required. The schedule should present major line items, such as revenue and cost of goods/services, and subtotals and disaggregated
intercompany amounts, such as separate line items for intercompany receivables and investment in subsidiary. The schedule should also
disaggregate the parent company, the VIEs and its consolidated subsidiaries, the WFOEs that are the primary beneficiary 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. Any intercompany amounts should be presented on a gross basis and when necessary, additional disclosure about such amounts
should be included in order to make the information presented not misleading.

Response:
The Company does not operate using VIEs, and therefore this comment is not applicable to the Company.

 11. Disclose that trading in your securities may be prohibited under the Holding Foreign Companies Accountable
Act if the PCAOB determines that it cannot inspect or investigate completely your auditor, and that as a result an exchange may determine
to delist your securities. Disclose whether your auditor is subject to the determinations announced by the PCAOB on December 16, 2021.

Response: The Company revised the
disclosure on pages 19 to 20 and on page 41 of the 20-F in response this comment.

      5

 12. Revise your risk factors to acknowledge that if the PRC government determines that the contractual
arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted
differently in the future, the securities you are registering may decline in value or become worthless if the determinations, changes,
or interpretations result in your inability to assert contractual control over the assets of your PRC subsidiaries or the VIEs that conduct
all or substantially all of your operations.

Response: The Company does not
operate using VIEs, and therefore this comment is not applicable to the Company.

 13. We note your disclosure about the Holding Foreign Companies Accountable Act. Please expand your risk
factors to disclose that the United States Senate has passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted,
would decrease the number of “non-inspection years” from three years to two years, and thus, would reduce the time before
your securities may be prohibited from trading or delisted. Update your disclosure to reflect that the Commission adopted rules to implement
the HFCAA and that, pursuant to the HFCAA, the PCAOB has issued its report notifying the Commission of its determination that it is unable
to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong.

Response: The Company revised
the disclosure on page 19 in response this comment.

 14. Given the Chinese government’s significant oversight and discretion over the conduct of your
business, please revise to highlight separately the risk that the Chinese government may intervene or influence your operations at any
time, which could result in a material change in your operations and/or the value of the securities you are registering. Also, given recent
statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas
and/or foreign investment in China-based issuers, acknowledge the risk that any such action could significantly limit or completely hinder
your ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or
be worthless.

Response: The Comp