January 22, 2020
Law Jia Ming
Chief Executive Officer
Synergy Empire Ltd
No.19 Jalan 12/118B, Desa Tun Razak
Kuala Lumpur, Malaysia, 56100
Re: Synergy Empire Ltd
Registration Statement on Form S-1
Filed December 26, 2019
File No. 333-235700
Dear Mr. Ming:
We have reviewed your 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 amending your registration statement
and providing the
requested information. 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 any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Form S-1 Filed December 26, 2019
Risks Relating to Our Company and Our Industry, page 5
1. Please add a risk factor regarding the fact that your auditor has
expressed substantial
doubt about your ability to continue as a going concern, and the risks
related to the same.
Risk Factors
Currently, our director, Mr. Leong Will Liam owns 100% of our common stock, he
has a
substantial voting power..., page 8
2. Please revise your risk factor to clarify that Mr. Leong Will Liam will
continue to have
substantial control and voting power after this offering, if true. In
this regard, we note that
Mr. Leong Will Liam is expected to hold approximately 66.67% shares of
common stock
after this offering.
Law Jia Ming
FirstName LastNameLaw Jia Ming
Synergy Empire Ltd
Comapany NameSynergy Empire Ltd
January 22, 2020
Page 2
January 22, 2020 Page 2
FirstName LastName
Management's Discussion and Analysis, page 15
3. Please further discuss and quantify, if material, the percentage of
sales derived from your
relationship with online food delivery companies. As a related matter,
please tell us what
consideration you have given to filing any material agreements with
the online food
delivery companies Foodpanda and Grabfood, referenced on page 18. In
this regard, we
note your disclosure on page 15 that the "Company is experiencing a
significant decline in
gross profit margin as food delivery intermediaries tend to charge on
average 30% on the
food bill."
Management's Discussion and Analysis
Results of Operations, page 15
4. Please expand your disclosure to provide the business reasons for
material changes in your
operating results between reporting periods. In circumstances where
more than one
business reason exists for a change between periods, please also
quantify the incremental
impact of each individual business reason. Refer to Item 303(a)(3) of
Regulation S-K.
Description of Business, page 17
5. Please revise this section to clarify and better describe the status
of your current
operations and your proposed business operations in accordance with
Item 101(h)(4) of
Regulation S-K. For example, revise to provide a more detailed
description of the
competitive environment in the industries or markets that you operate
in, your position in
that environment, and the methods of competition. Please also discuss
the sources and
availability of raw materials and provide the names of your principal
suppliers. Further,
please disclose the material terms of any material contracts with your
principal suppliers
or manufacturers and tell us what consideration you have given to
filing any such
agreements as exhibits. Please refer to Items 101(h)(4)(v) and
601(b)(10) of Regulation
S-K.
6. We note your reference to the Food Act 1983, the Food Regulations 1985
and Hygiene
Regulations 2009 and your related risk factor on page 6 that lists a
broad range of
regulations you must comply with including, labor and employment laws.
In the risk
factor you also discuss the risk related to the failure to obtain or
retain licenses and
permits. Please describe in your discussion here the significant
governmental regulations,
restrictions or approvals that have and will affect your business.
Please refer to Item
101(h)(4)(ix) Regulation S-K.
Future Plans, page 18
7. To the extent that you discuss future business plans here, the
discussion should be
balanced with a brief discussion on the steps involved, the associated
costs, and any
obstacles involved before you can commence such future plans. In this
regard, disclose
here the amount of funds needed to develop your future plans and the
anticipated
Law Jia Ming
Synergy Empire Ltd
January 22, 2020
Page 3
sources of funds. If you have not determined the sources of funds,
revise to state as much.
Plant and Equipment, page F-8
8. It appears that you depreciate the capitalized renovation costs at an
annual depreciation
rate of 10%. Please tell us whether your accounting policy is
consistent with the guidance
in ASC 840-10-35-6, or ASC 842-20-35-12 after your adoption of ASC 842
on April 1,
2019. In your response, please provide us with the amount of
depreciation expense for
each period presented if the renovation costs are depreciated over the
shorter of the useful
life of the assets or the remaining lease term.
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.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Suying Li, Staff Accountant at 202-551-3335 or Theresa
Brillant, Staff
Accountant at 202-551-3307 if you have questions regarding comments on the
financial
statements and related matters. Please contact Scott Anderegg, Staff Attorney
at 202-551-3342
or Jennifer L pez, Staff Attorney at 202-551-3792 with any other questions.
FirstName LastNameLaw Jia Ming Sincerely,
Comapany NameSynergy Empire Ltd
Division of
Corporation Finance
January 22, 2020 Page 3 Office of Trade
& Services
FirstName LastName