SecProbe.io

October 4, 2018
Xuezhu Wang
Chief Executive Officer
Happiness Biotech Group Ltd
No. 11, Dongjiao East Road
Shuangxi, Shunchang, Nanping City
Fujian Province, P.R.C.
Re:Happiness Biotech Group Ltd
Draft Registration Statement on Form F-1
Submitted September 4, 2018
CIK No. 0001751876
Dear Mr. Wang:
            We have reviewed your draft registration statement and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.
            Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
            After reviewing the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement on Form F-1
Cover Page
1.Please revise the description of the escrow arrangement to clarify whether you
will return funds promptly in the event the minimum offering amount is not sold.  Refer to
Exchange Act Rule 10b-9.
2.Based on certain of your disclosures, such as your statements in footnotes 1 and 4 to the
fee table and your capitalization tables, it appears that you intend to grant the underwriters
an over-allotment option. The use of an over-allotment option, however, is not appropriate

 FirstName LastNameXuezhu Wang
 Comapany NameHappiness Biotech Group Ltd
 October 4, 2018 Page 2
 FirstName LastNameXuezhu Wang
Happiness Biotech Group Ltd
October 4, 2018
Page 2
in an offering being conducted on a best efforts, minimum-maximum basis (i.e., it is
used/appropriate only in offerings done on a firm commitment basis, which is not the case
here).  Please revise accordingly.
3.Please identify your underwriters and provide the plan of distribution disclosures required
by Item 9.B of Form 20-F.
Prospectus Summary, page 1
4.Please explain "Reishi spore powder," "Cordyceps mycelia," and "Ejiao solution" in terms
a lay investor would understand.  Please also disclose the indications targeted by each of
these products.
5.In the "Overview" section here, please provide a brief description of the traditional
Chinese medicine industry in China and its key differences from the regulated
pharmaceutical industry.  Include in your "Regulations" subsection a more detailed
discussion of the differences in regulatory requirements, the type of regulatory approvals
your nutraceutical products have received, and whether your GMP certificate that you
received in 2005 needs to be renewed.
6.Please add a section here in the summary to discuss your material risks in as prominent in
detail and presentation as the discussion of your competitive advantages and growth
strategies.
Implications of Our Being an “Emerging Growth Company” and “Foreign Private Issuer”, page
3
7.Please supplementally provide us with copies of all written communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf,
present to potential investors in reliance on Section 5(d) of the Securities Act, whether or
not they retain copies of the communications.
8.Please revise your last paragraph, which states that your audit committee will only consist
of two independent directors, as your disclosures elsewhere, including on page 71,
indicate that your audit committee will consist of at least three independent directors
within the meaning of the NASDAQ Listing Rules.
Risks Related to the Offering and Our Ordinary Shares, page 10
9.Please add a risk factor discussing your potential status as a PFIC, and also add a
discussion on this issue in your summary risks section.
10.Please add a risk factor discussing the regulations that require an enterprise in China to set
aside at least 10% of its after-tax profit based on PRC accounting standards each year to
its general reserves until its cumulative total reserve funds reaches 50% of its registered
capital, and state the current percentage you have achieved.

 FirstName LastNameXuezhu Wang
 Comapany NameHappiness Biotech Group Ltd
 October 4, 2018 Page 3
 FirstName LastNameXuezhu Wang
Happiness Biotech Group Ltd
October 4, 2018
Page 3
Risk Factors
Our Chief Executive Officer owns a substantial amount of our Common Stock, page 15
11.Please expand this risk factor and its heading to disclose the family relationship between
the Chairman and the CEO.  Please also include a discussion of the significant insider
ownership and family relationship in your summary risks section.
Risks Related to Doing Business in China, page 15
12.Please add a risk factor discussing the difficulty investors may have in obtaining or
enforcing judgments against you or some of your executive officers and directors.
Use of Proceeds, page 25
13.Please revise to disclose the number of experience stores you expect to be able to open if
you achieve the minimum amount of proceeds and if you achieve the maximum amount.
14.We note that one of your proposed uses is to invest in research and development.  Please
clarify whether all such amounts would be used for the three products you reference in the
last three paragraphs on page 48, or whether this amount will also be used to develop
other products.
Dilution, page 28
15.Please provide the disclosure required by Item 9.E.1 of Form 20-F regarding amounts paid
by existing investors and new investors or tell us why you believe this disclosure is not
required.
Management's Discussion and Analysis
Operating Activities, page 35
16.Please address the following:
•expand the disclosure to explain the underlying reasons for the decrease in inventory
and the increase in accounts receivable.
•regarding inventory, days' sales in inventory decreased to 26 days at March 31, 2018
from 50 days at March 31, 2017.  In particular, per page F-17 finished goods inventory
at March 31, 2018 is $253,174.  Expand your discussion to address the effect the level
of inventory at March 31, 2018 will have on sales in fiscal 2019.
•regarding accounts receivable, explain in the disclosure why days' sales in accounts
receivable increased to 194 days at March 31, 2018 from 161 days at March 31, 2017.
•reconcile for us the change in accounts receivable and inventory shown on the cash
flow statement for fiscal 2018 to the change in reported amounts on the balance sheet.

 FirstName LastNameXuezhu Wang
 Comapany NameHappiness Biotech Group Ltd
 October 4, 2018 Page 4
 FirstName LastNameXuezhu Wang
Happiness Biotech Group Ltd
October 4, 2018
Page 4
Business, page 43
17.You state in the second paragraph and elsewhere in the prospectus that you believe you
are one of the leading companies specializing in research, development, manufacturing,
and sale of nutraceutical and dietary supplements made of Reishi spore powder,
Cordyceps mycelia, Ejiao, and other materials.  Please provide the basis for your belief
that you are one of the leading companies in this area.
18.We note that your description of many of the products in your table on page 44, and your
discussion of certain of the products generally on pages 41-42, claim that they produce
certain benefits, such as "effects of boosting the immune system and preventing
diseases."  For each such statement, please revise to explain the basis for determining that
the product is effective for such purpose, whether such benefits needed to be proven to
any regulatory authority, and state any serious adverse events the products may produce.
With respect to any product that you state has shown no side effects (such as your
statement in the penultimate paragraph on page 42), please clarify the basis for such
statements.
Manufacturing and Quality Control, page 45
19.To provide context for your statements in the first two paragraphs on page 46 regarding
the savings that resulted from your transition from labor-intensive manufacturing
processes to the use of automatic methods, please disclose which years you are using for
comparison purposes.
20.We refer to your statement in the third paragraph on page 47 that you provide professional
training to nutrition consultants so that they are able to provide physical examination
services to consumers.  Please revise to clarify these type of services, and whether they are
medical in nature, and if they are, please state whether any other regulatory approvals or
licenses will be needed.
Research and Development, page 48
21.You state in the last three paragraphs on page 48 that you are planning to introduce three
new products based on Reishi mushrooms, and that these products have the health benefit
of improving liver function or regulating blood lipid level.  Please explain whether these
benefits are still under testing and therefore remain unproven.  If the stated benefits are
still being tested, please explain whether a regulatory authority will determine that the
products have such stated benefits.  If the benefits have already been proven, please
disclose the basis for such statements.
22.Please expand your disclosure to further explain the nature of the research you are
conducting in connection with your three proposed new products, such as whether the
research is focused on developing or testing the effects of such products, or whether it is
focused on their manufacturing.

 FirstName LastNameXuezhu Wang
 Comapany NameHappiness Biotech Group Ltd
 October 4, 2018 Page 5
 FirstName LastNameXuezhu Wang
Happiness Biotech Group Ltd
October 4, 2018
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Suppliers, page 48
23.Please reconcile your disclosure here regarding your supply of Reishi spore powder with
your disclosure on page 45 where you state you purchase these raw materials at a discount
to market from suppliers to which you provide technical support for their cultivation.
Management, page 59
24.Please revise to provide the information required by Item 6.A. of the Form 20-F for your
directors.  In addition, please expand your discussion of Mr. Bian's experience to explain
the nature of his responsibilities when he was a manager for Viscardi AG, China Division,
and to describe his recent business experience since 2012.
Duties of Directors, page 60
25.You state here that a director may not vote at any meeting on any resolution concerning an
interested matter, and you have similar disclosure in the first paragraph on page 72, but
Section 23.3 of your Memorandum and Articles of Association states that the director
shall be at liberty to vote on interested transactions or contracts so long as the nature of the
interest is disclosed.  Please reconcile your disclosure, or if this is a provision that will be
in an amended and restated version of your articles of association, please ensure to file
this document as an exhibit to your registration statement.
Executive Compensation
Agreements with Named Executive Officers, page 62
26.Please revise the description of these agreements to be consistent with the terms of
Exhibits 10.3 and 10.4.  For instance, we note that the dates of execution, the
compensation arrangements and the terms of severance payments in the event of
termination without cause are inconsistent. Please also expand your disclosure to describe
the change in control provisions.
Related Party Transactions, page 64
27.You state that the loan from Mr. Wang was interest-free.  However, we note your
statements on pages 37 and F-19 which appear to indicate that interest expense recognized
from the related party loan was $345,562 for the year ended March 31, 2017.  Please
reconcile your disclosures.
Description of Share Capital
Calls on shares and forfeiture, page 67
28.Please expand to describe the circumstances under which the directors may make calls on
shareholders.

 FirstName LastNameXuezhu Wang
 Comapany NameHappiness Biotech Group Ltd
 October 4, 2018 Page 6
 FirstName LastNameXuezhu Wang
Happiness Biotech Group Ltd
October 4, 2018
Page 6
Taxation, page 81
29.We note your reference in the exhibit index that your Exhibit 8.1 tax opinion from the
Tian Yuan Law Firm has been filed with the registration statement, but we did not see a
short-form version of the opinion on file and we note that the disclosure in this section
states that the PRC opinion is from King & Wood Mallesons.  Please reconcile your
statements and file the opinion in a future amendment.  Please also revise this section to
clearly state which disclosure is the opinion of Hunter Taubman.  With respect to any
disclosure serving as the opinion of tax counsel, revise to remove language stating that
"generally" certain tax consequences will apply and express a firm opinion for each
material tax consequence or explain why such an opinion cannot be given.  Additionally,
please clarify your statements regarding why a firm opinion on tax consequences cannot
be given if you are considered to be a PRC tax resident enterprise (for example, is there a
tax treaty with the Cayman Islands and the treatment of such tax treaty is uncertain).
Financial Statements
Statements of Cash Flows, page F-7
30.Dividends of $8.3 million are reported as paid in fiscal 2018. The balance sheet reports a
dividend payable of $8.0 million at March 31, 2017.  The statement of changes in
shareholders' equity does not reflect any dividends.  Please provide disclosure regarding
the dividends such as when the dividend was declared, why the dividend was paid for
more than the amount of the payable, and where the $0.3 million difference was recorded.
Also, if the dividend was declared prior to April 1, 2016, explain why payment was
delayed until fiscal 2018.
Note 1 - Organization and Nature of Operations, page F-8
31.You state "Since the Company is effectively controlled by the same Controlling
Shareholder before and after the reorganization, it is considered under common control."
You further state "Prior to the reorganization, Mr. Wang Xuezhu owns 47.7% ownership
of Fujian Happiness."  Please provide us your analysis of the ownership prior to the
reorganization that resulted in the Controlling Shareholder controlling as 47.7% does not
appear to result in control.  Revise the disclosure as necessary.
Signatures, page II-4
32.On page II-5, please revise the capacity in which Jiong Bian is signing to refer to his
additional role as principal accounting officer. Please also include the signatures of at least
a majority of the board (we note that your board will consist of five directors at closing).
Refer to Instruction 1 of Signatures in the Form F-1.

 FirstName LastNameXuezhu Wang
 Comapany NameHappiness Biotech Group Ltd
 October 4, 2018 Page 7
 FirstName LastName
Xuezhu Wang
Happiness Biotech Group Ltd
October 4, 2018
Page 7
General
33.Please provide us proofs of all graphics, visual, or photographic information you will
provide in the printed prospectus prior to its use, for example in a preliminary prospectus.
Please note that we may have comments regarding this material.

            You may contact Bonnie Baynes at 202-551-4924 or Lisa Vanjoske at 202-551-3614 if
you have questions regarding comments on the financial statements and related matters.  Please
contact Dorrie Yale at 202-551-8776 or Mary Beth Breslin at 202-551-3625 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Healthcare & Insurance
cc:       Joan Wu