United States securities and exchange commission logo
February 22, 2022
Andross Chan
Chief Executive Officer
Graphex Group Ltd
11/F COFCO Tower
262 Gloucester Road
Causeway Bay, Hong Kong
Re: Graphex Group Ltd
Amendment No. 1 to
Draft Registration Statement on Form F-1
Filed February 4,
2022
CIK 0001816723
Dear Mr. Chan:
We have reviewed your amended 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.
Amendment No. 1 to Draft Registration Statement on Form F-1
Cover Page
1. We note your response
to our prior comment 5 and reissue in part. Please revise your
disclosure on the cover
and throughout your prospectus to clarify that a majority the
company s operations
are in China. Please disclose that the risks associated with having a
majority of your
operations in China may cause the value of your securities
to significantly
decline or be worthless. Please also disclose on the cover page 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.
Andross Chan
FirstName LastNameAndross Chan
Graphex Group Ltd
Comapany22,
February NameGraphex
2022 Group Ltd
February
Page 2 22, 2022 Page 2
FirstName LastName
2. We note your response to our prior comment 7 and reissue. Provide a
description of how
cash is transferred through your organization and disclosure regarding
your intentions to
distribute earnings or settle amounts owed under your agreements.
State whether any
transfers, dividends, or distributions have been made to date. Please
provide this
disclsoure on your prospectus cover page.
Prospectus Summary, page 1
3. We note your response to our prior comment 9 and reissue in part.
Please state
affirmatively whether you have received all requisite permissions or
approvals to operate
your business and to offer the securities being registered to foreign
investors. Please also
more clearly 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.
4. We note your response to our prior comment 10 and reissue in part.
Please revise page 7
to disclose your intentions to distribute earnings or settle amounts
owed under your
operating structure. 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. In
this section, 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 as well as
the ability to settle amounts owed under agreements. Please include
the referenced
information as it pertains to this comment in your prospectus summary.
5. We note your response to our prior comment 11 and reissue in part.
Please include these
disclosures in your prospectus summary.
6. We note your response to comment 12 and reissue our comment. Please
balance your
discussion of your competitive strengths with a discussion of your
history of net losses.
Risk Factors, page 41
7. We note your response to our prior comment 16 and reissue in part.
Please disclose to
what extent you believe that you are compliant with the regulations or
policies that have
been issued by the CAC to date.
8. We note your response to our prior comment 17 and reissue in part.
Please disclose that
the reduction in the number of non-inspection years from three years
to two would reduce
Andross Chan
Graphex Group Ltd
February 22, 2022
Page 3
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
9. Please remove the Filing Fee Table from the cover page and file it as
an exhibit to this
registration statement. Refer to Item 601(b)(107) of Regulation S-K.
You may contact Effie Simpson, Staff Accountant, at (202) 551-3346 or
Andrew Blume,
Staff Accountant, at (202) 551-3254 if you have questions regarding comments on
the financial
statements and related matters. Please contact Bradley Ecker, Staff Attorney,
at (202) 551-4985
or Asia Timmons-Pierce, Staff Attorney, at (202) 551-3754 with any other
questions.
FirstName LastNameAndross Chan Sincerely,
Comapany NameGraphex Group Ltd
Division of
Corporation Finance
February 22, 2022 Page 3 Office of
Manufacturing
FirstName LastName