United States securities and exchange commission logo
February 2, 2022
Chen Ren
Chief Executive Officer
Trans Global Group, Inc.
Unit 5B Block 5 Zhonghai Rihui Terrace
Bantian Street
Shenzhen, China
Re: Trans Global Group,
Inc.
Registration
Statement on Form 10-12G
Filed January 6,
2022
File No. 000-56383
Dear Mr. Ren:
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.
Registration Statement on Form 10-12G filed January 6, 2022
General
1. We note your disclosure
on page 2 that the company was formed as an investment
company planning to
acquire companies in the liquor industry in China. We also note
your disclosure on page
2 that the company does not intend to limit itself to a particular
industry and has not
established any particular criteria upon which it shall consider a
business opportunity,
and your disclosure on page 10 that references resins and polymers
and biodegradable and
compostable products. Please revise to clarify your disclosure as
appropriate.
2. We note your disclosure
on page 2 that the company has not engaged in any preliminary
contact or discussions
with any representative of any other company regarding the
Chen Ren
FirstName LastNameChen
Trans Global Group, Inc. Ren
Comapany2,NameTrans
February 2022 Global Group, Inc.
February
Page 2 2, 2022 Page 2
FirstName LastName
possibility of an acquisition or merger. We also note your disclosure
on page 10 that
preliminary discussions have occurred between the majority shareholder
with finders and
broker-dealers regarding business opportunities related to resins and
polymers and
biodegradable and compostable products. Please revise to clarify as
appropriate.
3. We note your disclosure on pages 2 and 8 that the company has nominal
assets and
limited operating history and financial resources. We also note your
disclosure on page 8
that you may be unable to manage your growth. Please clarify as
appropriate.
4. Please revise your disclosure throughout so that the information
stated is given as of a date
reasonably close to the date of filing the registration statement. As
examples only, Item 1
states the number of employees as of September 16, 2021 and Item 4
states security
ownership as of September 24, 2021, yet the registration statement was
filed January 6,
2022.
Item 1. Business, page 1
5. We note that your principal executive offices are located in China,
all of your executive
officers and directors are located in and have significant ties to
China, and your disclosure
that you are seeking to acquire a company that may be based in China
in a business
combination. Please disclose this prominently in the forepart of the
business section.
Your disclosure also should describe the legal and operational risks
associated with being
based in or acquiring a company that does business in China. Your
disclosure should
make clear whether these risks could result in a material change in
your or the target
company s post-combination operations and/or the value of your
common stock or could
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, has or may impact the company s ability to conduct its
business, accept foreign
investments, or list on an U.S. or other foreign exchange. Your risk
factors section should
address, but not necessarily be limited to, the risks highlighted in
the business section.
6. Provide a description of how cash will be transferred through the
organization if you
acquire a company based in China and disclosure regarding 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, and quantify the
amounts where
applicable.
7. Given that you may be seeking to acquire a company that uses or may
use a variable
interest entity structure to conduct China-based operations, please
describe what that
organizational structure would entail. Explain that the entity in
which investors may hold
their interest may not be the entity or entities through which the
company s operations
may be conducted in China after the business combination. Discuss 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
Chen Ren
FirstName LastNameChen
Trans Global Group, Inc. Ren
Comapany2,NameTrans
February 2022 Global Group, Inc.
February
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the company may incur substantial costs to enforce the terms of the
arrangements.
Disclose the uncertainties regarding the status of the rights of a
holding company with
respect to its contractual arrangements with a VIE, its founders and
owners and the
challenges the company may face enforcing these contractual agreements
due to
uncertainties under Chinese law and jurisdictional limits.
8. Disclose the risks from acquiring a company whose corporate structure
or whose
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 risk factor section. 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 your common stock. 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.
9. Disclose each permission or approval that you are required to obtain
from Chinese
authorities to operate your business. State whether you 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: (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.
10. Provide a clear description of how cash will be transferred through
the post-combination
organization if you acquire a company based in China. Describe any
restrictions on
foreign exchange and your ability to transfer cash between entities,
across borders, and to
U.S. investors that may apply after a business combination with a
company based in
China. Describe any restrictions and limitations on your ability to
distribute earnings
from your businesses, including subsidiaries and/or consolidated VIEs,
to the parent
company and U.S. investors as well as the ability to settle amounts
owed under the VIE
agreements.
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 fully
investigate your auditor or the auditor of a company you may target
for an initial business
Chen Ren
FirstName LastNameChen
Trans Global Group, Inc. Ren
Comapany2,NameTrans
February 2022 Global Group, Inc.
February
Page 4 2, 2022 Page 4
FirstName LastName
combination, 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. Additionally, please discuss the
existence of
additional legislation that would shorten the time frame in which the
PCAOB must be able
to inspect the auditor from three years to two years. Please also
revise to include a
discussion of the amendments adopted by the SEC to finalize rules
relating to the Holding
Foreign Companies Accountable Act.
Item 1A. Risk Factors, page 4
12. To the extent that you may acquire a company that uses or may use a
variable interest
entity structure to conduct China-based operations, please revise your
risk factors to
acknowledge that if the PRC government determines that the contractual
arrangements
constituting part of your VIE structure do not comply with PRC
regulations, or if these
regulations change or are interpreted differently in the future, your
shares may decline in
value or be worthless if you are unable to assert your contractual
control rights over the
assets of your PRC subsidiaries that may conduct all or substantially
all of your
operations.
13. Please expand your risk factor disclosure to address specifically any
PRC regulations
concerning mergers and acquisitions by foreign investors that your
initial business
combination transaction may be subject to, including PRC regulatory
reviews, which may
impact your ability to complete a business combination in the
prescribed time period.
14. Given the Chinese government s significant oversight and discretion
over the conduct of
your business and/or the business of any China-based company that you
may target for an
initial business combination, 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 and/or the value of your common
stock. Also, given
recent statements by the Chinese government indicating an intent to
exert more oversight
and control over foreign investment in China-based issuers,
acknowledge the risk that any
such action could cause the value of your securities to significantly
decline or be
worthless.
15. 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 could
impact the process of
searching for a target and completing an initial business combination,
and/or your
business on a post-combination basis.
16. Please disclose any material risks to the company and investors if it
is later determined
that the PCAOB is unable to inspect or investigate completely your
auditor because of a
position taken by an authority in a foreign jurisdiction. For example,
disclose the risk that
lack of inspection could cause trading in your securities to be
prohibited under the
Holding Foreign Companies Accountable Act and as a result an exchange
may determine
Chen Ren
FirstName LastNameChen
Trans Global Group, Inc. Ren
Comapany2,NameTrans
February 2022 Global Group, Inc.
February
Page 5 2, 2022 Page 5
FirstName LastName
to delist your securities. 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.
17. Please expand your risk factor disclosure to discuss that the United
States Senate passed
the Accelerating Holding Foreign Companies Accountable Act, which, if
enacted, would
decrease the number of non-inspection years from three years to two,
thus reducing the
time period before your securities may be prohibited from trading or
delisted.
Item 4. Security Ownership of Certain Beneficial Owners and Management, page 19
18. Please revise your beneficial ownership table to identify the ultimate
beneficial owners of
VS Services LLC, CEDE & CO, and National Financial Services LLC. Also
revise to
clarify the amount of holdings of Series B Preferred Stock and Series
AA Preferred Stock
held by each of Chen Ren and Jianchen Tang.
Item 5. Directors and Executive Officers, page 20
19. We note your disclosure on page 20 that your sole executive officer
and significant
employees work full-time for you. We also note, however, your
disclosure on page 4 that
you have zero full-time employees and your disclosure on page 10 that
Mr. Ren is not
required and does not commit his full time to the company s affairs.
Please clarify as
appropriate.
20. Please revise to indicate the principal business conducted by
Zuixiangui Liquor Industry
Co. Ltd., Shaanxi Yinhan Culture Media Co. Ltd., Guangdong Jialaisi
Biotechnology Co.
Ltd., China International Rescue Center, Hong Kong Zhicheng Investment
Co. Ltd., and
Guiling Huimingu Resident Service Co. Ltd.
21. Please discuss the specific experience, qualifications, attributes or
skills that led to the
conclusion that Mr. Ren and Mr. Tang, respectively, should serve as
directors, as required
by Item 401(e) of Regulation S-K.
22. We note your disclosure on pages 4 and 10 regarding conflicts of
interest. Please provide
disclosure of the specific conflicts of interest, specifically
identifying the businesses that
present a conflict of interest with this company.
Item 6. Executive Compensation, page 21
23. Please update the compensation disclosure for the fiscal year ended
December 31, 2021.
24. We note your disclosure on page 22 regarding director compensation. It
appears this
information duplicates your disclosure on page 21, as both Mr. Ren and
Mr. Dwyer were
also officers of the company during the periods presented. Please
revise. See Items
402(n) and 402(r) of Regulation S-K.
Chen Ren
FirstName LastNameChen
Trans Global Group, Inc. Ren
Comapany2,NameTrans
February 2022 Global Group, Inc.
February
Page 6 2, 2022 Page 6
FirstName LastName
Item 9. Market Price of, and Dividends on, the Registrants Common Equity ...
(b) Derivative Securities, page 23
25. We note your statement that there are no outstanding securities
that are convertible into
the Company s common stock . We also note that Chen Ren and
Jianchen Tang hold
Series B Preferred Stock and Series AA Preferred Stock that are
convertible into common
stock. Please revise as appropriate.
Item 11. Description of Registrant's Securities to be Registered, page 25
26. We note your disclosure on page 25 regarding the company's stock. We
also note the
provisions of Article IV of the company's restated certificate of
incorporation, filed as
Exhibit 3.1. Please reconcile the discrepancies between your
disclosure and the restated
certificate of incorporation, including the following:
Applicable state law;
Number of shares of common stock and preferred stock authorized;
Number of shares of preferred stock designated Series AA;
Voting rights of the Series AA Preferred Stock;
Conversion rights of the Series AA Preferred Stock; and
Conversion rights of the Series B Preferred Stock.
Financial Statements
Report of Independent Registered Public Accounting Firm, page F-1
27. We note the audit report issued by your independent registered public
accounting firm
only covers fiscal year 2020. Such firm must opine on all years of the
annual financial
statements required to be included in the filing. Please amend to have
your
independent accounting firm revise its report to opine on your
financial statements as of
and for the fiscal year ended December 31, 2019.
Annual Financial Statements (audited)
General, page F-2
28. Please revise to update the financial statements by reference to Rule
8-08 of Regulation S-
X.
29. We note that the captioning and order of presentation of various line
items within the
financial statements does not conform to the customary form and
terminology of financial
statements filed under US GAAP. For instance, under US GAAP, balance
sheets
reconcile total assets to total liabilities and equity while the
balance sheets
included reconcile net liabilities to total equity. Additionally,
given your presentation of a
classified balance sheet, you have inadvertently presented current
assets subsequent
to non-current assets Please revise the captioning and order of
presentation within your
annual, as well as interim financial statements so that such financial
statements conform to
customary form and terminology used under US GAAP; refer to Articles 4
and 5 of
Chen Ren
Trans Global Group, Inc.
February 2, 2022
Page 7
Regulation S-X for guidance.
Balance Sheets, page F-2
30. We note you have presented a negative Additional paid-in capital balance.
Please advise
and cite the accounting literature relied upon, detailing your
consideration of paragraph 1
of ASC 505-10-25 or revise.
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.
You may contact Paul Cline at 202-551-3851 or Mark Rakip at 202-551-3573
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Benjamin Holt at 202-551-6614 or David Link at 202-551-3356 with any other
questions.
Sincerely,
FirstName LastNameChen Ren
Division of
Corporation Finance
Comapany NameTrans Global Group, Inc.
Office of Real
Estate & Construction
February 2, 2022 Page 7
cc: Scott Kline
FirstName LastName