United States securities and exchange commission logo
March 27, 2022
Siping Xu
Chief Executive Officer
MDJM LTD
Xikang Road, Heping District, Tianjin
Suite C-1505, Saidun Center
People's Republic of China
Re: MDJM LTD
Amendment No. 1 to
Registration Statement on Form F-3/A
Filed January 28,
2022
File No. 333-261347
Dear Mr. Xu:
We have reviewed your amended 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.
Unless we note
otherwise, our references to prior comments are to comments in our
December 21, 2021 letter.
Amendment No. 1 to Form F-3/A Filed January 28, 2022
Cover Page
1. We note your amended
disclosure in response to comment 1. We reissue the comment in
part. Please revise
your amended disclosure regarding the legal and operational risks
associated with being
based in or having the majority of the company's operations in
China to make clear
that these risks could cause the value of your securities to
significantly decline
or be worthless.
2. We note your amended
disclosure in response to comment 2 from our previous letter. We
reissue the comment in
part. Please clearly disclose, on the Cover Page, how you will
Siping Xu
FirstName LastNameSiping Xu
MDJM LTD
Comapany
March NameMDJM LTD
27, 2022
March2 27, 2022 Page 2
Page
FirstName LastName
refer to the numerous subsidiaries of the Company throughout the
filing when providing
disclosure. Additionally, we note you refer to "our ... VIE" on the
Cover Page and page
12. Please revise to refrain from using terms such as "our" when
describing activities or
functions of the VIE.
3. We note your response to comment 3 and the related changes to your
disclosure. Please
expand your disclosure to discuss any cash transfers made by the
parent to other
subsidiaries to fund operations. For example, it appears from your
condensed
consolidating statement of cash flows for the period ended June 30,
2021 approximately
$3.1 million was transferred from the parent to the other
subsidiaries.
4. We note references here, page 3, page 6 and elsewhere that you do not
"directly hold"
equity interests in the VIE. As this implies an indirect equity
interest, please revise to
avoid suggesting that the contractual agreements are equivalent to
equity ownership in the
business of the VIE.
5. We note disclosure on page 12 and elsewhere that you are not required
to obtain certain
permissions or approvals. Please revise the Cover Page and elsewhere
to address the
extent to which you, your subsidiaries, or VIEs 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 the VIE s
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, your
subsidiaries, or the VIEs:
(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. In this regard, we note the statement that "[a]ccording to our
PRC counsel, no
relevant laws or regulations in the PRC explicitly require us to seek
approval from the
China Securities Regulatory Commission for our overseas listing."
Identify counsel
providing this and other opinions regarding statements about
permissions and file a
consent under Item 601(b)(23) of Regulation S-K.
6. We note the statement that "[a]s confirmed by our PRC counsel, we will
not be subject to
cybersecurity review with the Cyberspace Administration of China."
Please identify
counsel and file a consent under Item 601(b)(23) of Regulation S-K.
Summary, page 3
7. Please revise to 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 and/or the consolidated VIEs, to the parent company and
U.S. investors as
well as the ability to settle amounts owed under the VIE agreements.
8. We note your revised disclosure in response to comment 5. Please
revise to clearly
Siping Xu
MDJM LTD
March 27, 2022
Page 3
identify the entity(ies) in which the company s operations are
conducted.
9. We note your revised disclosure and response to comment 7. Please revise
to include
summary risk factors and cross references to the more detailed
disclosure for all relevant
risks. As non-exclusive examples, you do not include summary risk
factors for the risks
referenced in prior comments 1 or 11.
10. We note your revised disclosure in response to comment 9. Please note we
are continuing
to consider your disclosure and may have further comment.
Risk Factors, page 18
11. We note your amended disclosure in response to comment 11. We reissue
the comment in
part. Please revise your disclosure to provide that under either the
Holding Foreign
Companies Accountable Act and/or the Accelerating Holding Foreign
Companies
Accountable Act, a material risk to investors if the PCAOB cannot
inspect your auditor is
that your securities may be delisted and/or trading in your securities
could be prohibited.
12. We note your revised disclosure in the last risk factor on page 19
regarding greater
oversight by the Cyberspace Administration of China (CAC) over data
security and the
statement that you believe you "will not be subject to cybersecurity
review by the CAC
for this offering." Please revise to expand your affirmative statement
to also address your
business generally and not just this offering.
Enforceability of Civil Liabilities, page 46
13. We note the discussion of difficulties and uncertainties regarding
enforcement of civil
liabilities, especially with respect to the Cayman Islands. Please
revise here and the
related Risk Factors disclosure to clearly describe the additional
difficulties and
uncertainties arising from the fact that "[s]ubstantially all of our
assets are located in
China." Please provide similar disclosure here and in Risk Factors
regarding the difficulty
of shareholders to enforce their legal rights under United States
securities laws given that
all of your directors and executive officers appear to be in China.
Please contact Austin Wood at 202-551-5586 or Jim Lopez at 202-551-3536
with
any questions.
Sincerely,
FirstName LastNameSiping Xu
Division of
Corporation Finance
Comapany NameMDJM LTD
Office of Real
Estate & Construction
March 27, 2022 Page 3
cc: Ying Li
FirstName LastName