United States securities and exchange commission logo
September 30, 2021
Sze Hon, Johnson Chen
Chief Executive Officer
Magic Empire Global Limited
3/F, 8 Wyndham Street
Central, Hong Kong
Re: Magic Empire Global
Limited
Draft Registration
Statement on Form F-1
Submitted September
3, 2021
CIK No. 0001881472
Dear Mr. Chen:
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 provide
prominent disclosure about the legal and operational risks associated with
being based in or
having the company s operations in Hong Kong. Your disclosure
should make clear
whether these risks could result in a material change in your operations
or the value of your
Ordinary Shares 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 data
security or anti-monopoly concerns, has or may impact the company s
ability to conduct its
business, accept foreign investments, or list on an U.S. or other
Sze Hon, Johnson Chen
FirstName LastNameSze Hon, Johnson Chen
Magic Empire Global Limited
Comapany 30,
September NameMagic
2021 Empire Global Limited
September
Page 2 30, 2021 Page 2
FirstName LastName
foreign exchange. Your prospectus summary should address, but not
necessarily be
limited to, the risks highlighted on the prospectus cover page.
2. Please clearly disclose how you will refer to the holding company and
subsidiaries 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 of subsidiaries. Specify the entity (including the
domicile) in which investors
are purchasing their interest.
Prospectus Summary, page 1
3. In your summary of risk factors, please disclose the risks that your
corporate structure and
being based in or having the company s operations in China pose 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 or foreign investment in China-based
issuers, which could
result in a material change in your operations or the value of your
Ordinary Shares.
Acknowledge any risks that any actions by the Chinese government to
exert more
oversight and control over offerings that are conducted overseas 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.
4. Please disclose each permission that you or your subsidiaries are
required to obtain from
Chinese authorities to operate and issue these securities to foreign
investors. State
whether you or your subsidiaries are covered by permissions
requirements from the
CSRC, CAC or any other entity, and state affirmatively whether you
have received all
requisite permissions and whether any permissions have been denied.
5. Please provide a clear description of how cash is transferred through
your organization.
Disclose your intentions to distribute earnings. Quantify any cash
flows and transfers of
other assets by type that have occurred between the holding company
and its subsidiaries,
and direction of transfer. Quantify any dividends or distributions
that a subsidiary has
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. 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 your
businesses, including subsidiaries, to the parent company and U.S.
investors as well as the
ability to settle amounts owed.
Sze Hon, Johnson Chen
Magic Empire Global Limited
September 30, 2021
Page 3
Risk Factors, page 9
6. Given the Chinese government s potential oversight and discretion
over the conduct of
your business, please revise to separately highlight 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 or the value of your Ordinary Shares. 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.
7. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China over data security, particularly for companies seeking to list
on a foreign exchange,
please revise your disclosure to explain how this oversight impacts
your business and your
offering and to what extent you believe that you are compliant with
the regulations or
policies that have been issued by the CAC to date.
Our lack of effective internal controls over financial reporting may affect our
ability to
accurately report..., page 13
8. Please clarify in your next amendment when you intend to implement the
remediation
measures identified at the end of the first paragraph of this risk
factor and, to the extent
known, when you expect the remediation to be complete.
Our directors, officers and principal shareholders have significant voting
power..., page 19
9. Please disclose whether you will be a "controlled company" following
this offering under
the applicable Nasdaq listing standard and, if so, whether you will
use related exemptions
to governance rules under those standards. We note your disclosure
that your directors,
officers and principal shareholders hold 84.03% or more of your shares
as of the date of
this prospectus.
Capitalization, page 31
10. Please explain to us your rationale for subtracting the balance of
intangible assets from
your presentation of the company's capitalization, including reference
to specific
guidance, or revise accordingly.
Corporate
FirstNameHistory and Structure,
LastNameSze page 34Chen
Hon, Johnson
Comapany
11. NameMagic
Please Empire
disclose the GlobalofLimited
percentages economic interest and voting
interest that will be held
by public stockholders
September 30, 2021 Page 3 following completion of the offering.
FirstName LastName
Sze Hon, Johnson Chen
FirstName LastNameSze Hon, Johnson Chen
Magic Empire Global Limited
Comapany 30,
September NameMagic
2021 Empire Global Limited
September
Page 4 30, 2021 Page 4
FirstName LastName
Management
Board of Directors, page 71
12. Please provide the service contract disclosure or appropriate negative
statement required
by Item 6.C.2 of Form 20-F.
Description of Securities, page 77
13. Please include here a description of the representative's warrants to
be issued on the
closing date of the offering.
Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies
Revenue recognition, page F-11
14. Please provide to us, and disclose, the significant judgments involved
in allocating the
transaction price to the performance obligations of your IPO
sponsorship services, as well
as the methods, inputs and assumptions used. Refer to ASC
606-10-50-17.b. and ASC
606-10-50-20.
Other income, page F-14
15. Please disclose here the terms of the funding received under the
Employment Support
Scheme from the Hong Kong Government. Include in your disclosure any
circumstances
under which you may be required to return the funding.
9. Income Tax, page F-20
16. Please tell us the nature of the temporary difference(s) in each year
of your rate
reconciliation at the bottom of page F-20. In your response, tell us
why these items
impact your effective tax rate when temporary differences generally
impact current and
deferred taxes and do not impact the overall effective tax rate.
General
17. Please 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. Please contact the staff member
associated with the
review of this submission to discuss how to submit the materials, if
any, to us for our
review.
Sze Hon, Johnson Chen
FirstName LastNameSze Hon, Johnson Chen
Magic Empire Global Limited
Comapany 30,
September NameMagic
2021 Empire Global Limited
September
Page 5 30, 2021 Page 5
FirstName LastName
You may contact Rolf Sundwall at (202) 551-3105 or Mark Brunhofer at
(202) 551-3638
if you have questions regarding comments on the financial statements and
related matters.
Please contact David Lin at (202) 551-3552 or J. Nolan McWilliams at (202)
551-3217 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Finance
cc: Lawrence S. Venick, Esq.