United States securities and exchange commission logo
January 31, 2022
Sally Lo
Chief Executive Officer
DH Enchantment, Inc.
Unit A, 13/F, Gee Luen Factory Building
316-318 Kwun Tong Road
Kowloon, Hong Kong
Re: DH Enchantment,
Inc.
Amendment No. 3 to
Registration Statement on Form 10-12G
Filed December 15,
2021
File No. 000-56322
Dear Ms. Lo:
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 and any amendment you may file in
response to these
comments, we may have additional comments.
Amendment No. 3 to Form 10-12G filed December 15, 2021
Item 1. Business, page 1
1. Clearly disclose how
you will refer to the holding company and its 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 or functions
of a subsidiary. For example, disclose, if true, that the holding
company does not
conduct operations. Disclose clearly the entity (including the domicile)
in which investors are
purchasing an interest.
2. We note your disclosure
in response to comment 3. Please expand the first paragraph on
page 1 and elsewhere as
applicable to disclose the basis for your statement that "Our Hong
Sally Lo
FirstName LastNameSally Lo
DH Enchantment, Inc.
Comapany
January 31,NameDH
2022 Enchantment, Inc.
January
Page 2 31, 2022 Page 2
FirstName LastName
Kong subsidiary is currently not required to obtain permission from
the Chinese
authorities..." In addition, affirmatively disclose each permission or
approval that you
or your subsidiaries are required to obtain from Chinese authorities
to operate your
business and to offer the securities being registered to foreign
investors. State whether you
or your subsidiaries 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 your 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 or your subsidiaries:
(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.
3. Please expand the second paragraph on page 1 to provide a
cross-reference to your
detailed discussion of risks facing the company and the offering as a
result of your
structure as a Nevada holding company with operations conducted
through your wholly
owned subsidiaries based in Hong Kong.
4. We note your response to comment 4. Please also specifically discuss
in this section 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."
5. 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.
6. 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.
Sally Lo
FirstName LastNameSally Lo
DH Enchantment, Inc.
Comapany
January 31,NameDH
2022 Enchantment, Inc.
January
Page 3 31, 2022 Page 3
FirstName LastName
Transfers of Cash to and from Our Subsidiaries, page 3
7. Please expand this discussion to 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. 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, to the parent
company and U.S. investors.
Item 1A. Risk Factors
Risks Related to Doing Business in Hong Kong, page 15
8. 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. We note your
current disclosure on page 16.
9. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China (CAC) 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. In
doing so, please
address the applicability of new regulations that will go into effect
on February 15 that
will require internet platform operators holding data of more than 1
million users to
undergo a network security review. We note your current disclosure on
page 19.
The Holding Foreign Companies Accountable Act requires the Public Company
Accounting
Oversight Board, page 17
10. We note your disclosure in response to comment 6 and your disclosure
about the Holding
Foreign Companies Accountable Act. Please expand to disclose that the
United States
Senate has passed the Accelerating Holding Foreign Companies
Accountable Act
(emphasis added), which, if enacted, would decrease the number of
non-inspection
Sally Lo
DH Enchantment, Inc.
January 31, 2022
Page 4
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.
General
11. To the extent you make changes to your registration statement in response
to the
comments below, please make conforming changes, as applicable, to your
periodic
reports.
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.
Please contact Stacey Peikin at 202-551-6223 or Dietrich King at
202-551-8071 with any
questions.
Sincerely,
FirstName LastNameSally Lo
Division of
Corporation Finance
Comapany NameDH Enchantment, Inc.
Office of Trade &
Services
January 31, 2022 Page 4
cc: Jenny Chen-Drake
FirstName LastName