United States securities and exchange commission logo
July 6, 2022
Xizhen Ye
Chief Executive Officer
Longwen Group Corp.
8275 South Eastern Avenue #200
Las Vegas, NV 89123
Re: Longwen Group Corp.
Registration
Statement on Form 10-12G
Filed June 10, 2022
File No. 000-11596
Dear Mr. Ye:
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 June 10, 2022
Item 1. Description of Business
Organization and Corporate History, page 3
1. We note your disclosure
that the company was originally named Expertelligence, Inc,
however please also
include the original state of incorporation. It appears that Longwen
Cayman became the
registrant, a Nevada company; please explain when and how this
occurred. In addition,
please expand the description of corporate history to explain
corporate activities,
if any, between August 2018 and June 2021.
2. We note on page 13 that
the company's common stock are listed on the OTC Market's
"Pink Sheets." Please
include additional detail in this section identifying when the
company began trading
on the Pink Sheets.
3. Disclose clearly that
the company uses a structure that involves a subsidiary based in
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Longwen Group Corp.
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China and what that entails, and provide early in this section a
diagram of the company s
corporate structure, identifying the person or entity that owns the
equity in each depicted
entity. Describe all contracts and arrangements through which you
claim to have
economic rights and exercise control over your subsidiary's
operations. Identify clearly the
entity in which investors are purchasing their interest and the
entity(ies) in which the
company s operations are conducted. Describe the relevant
contractual agreements
between the entities and how this type of corporate structure may
affect investors and the
value of their investment, including that the company may incur
substantial costs to
enforce the terms of the arrangements and the challenges the company
may face enforcing
these arrangements due to legal uncertainties and jurisdictional
limits.
4. Disclose each permission or approval that you or your subsidiaries are
required to obtain
from Chinese authorities to operate your business and to offer
securities 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 or approve your offerings, 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.
5. Provide a clear description of how cash is transferred through your
organization. Disclose
your intentions to distribute earnings or settle amounts owed.
Quantify any cash flows and
transfers of other assets by type that have occurred between the
company and its
subsidiaries, and direction of transfer. Quantify any dividends or
distributions that a
subsidiary has made to the 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.
Provide cross-references to the consolidated financial statements.
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. Discuss the potential impact of the Accelerating Holding
Foreign Companies
Accountable Act, as well. Disclose whether your auditor is subject to
the determinations
announced by the PCAOB on December 16, 2021.
7. Include a summary of risk factors section that discloses the risks
that your corporate
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structure and being based in or having the majority of the company s
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. 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 securities. 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 securities to investors and cause the value of such
securities to significantly
decline or be worthless.
General Business Plan, page 4
8. We note your disclosure that the issuer's "primary objective is
project development and
acquisition in cultural fields." However, you also state that the
company acquired
Hangzhou Longwen for the purpose of finding merger and acquisition
targets, and that
Hangzhou Longwen is being used to enter into consulting services
contracts. Please revise
to clarify and align the principal products or services of the issuer
here and throughout the
registration statement. If your primary business plan is to engage in
a merger with a
private company, please provide your analysis of whether you are a
blank-check company
and therefore need to revise your registration statement to inform the
public of your
obligations under Rule 419 of the Securities Act.
Liquidity and Capital Resources, page 9
9. We note your disclosure on page 9 that your existing revenue will not
be sufficient to
meet your planned operating expenses. Please revise your disclosure to
describe in more
detail your plan of operations for the next 12 months, including the
anticipated timeline
and expenditures for these events, as well as the source of funds for
such expenditures.
Disclose the minimum period of time that you will be able to conduct
your planned
operations using currently available resources.
Directors and Executive Officers, page 10
10. With reference to the to the disclosure on page 10 and the description
of Mr. Ye's business
experience background, please provide more detail when referencing the
"several local
companies" Mr. Ye has operated in the past, including Mr. Ye's role as
president of the
Cayman entity Longwen Group Corporation disclosed on page 3. With
reference to the
disclosure on page 11 and the description of Mr. Lu's business
experience background,
please provide additional detail to cover the past five years,
including any material
responsibilities undertaken prior to joining the company. Please refer
to Item 401(e) of
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FirstName LastNameXizhen Ye
Longwen Group Corp.
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July 6, 2022NameLongwen Group Corp.
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Regulation S-K.
General
11. In a section preceding Item 1, please disclose prominently that you
are not a Chinese
operating company but, if true, a Nevada holding company with
operations conducted by
Hangzhou Longwen, your sole subsidiary, and that this structure
involves unique risks to
investors. Disclose that investors may never hold equity interests in
the Chinese operating
company. Your disclosure should acknowledge that Chinese regulatory
authorities
could disallow this structure, which would likely result in a material
change in your
operations and/or a material change in the value of your securities,
including that it could
cause the value of such securities to significantly decline or become
worthless. Provide a
cross-reference to your detailed discussion of risks facing the
company as a result of this
structure.
12. Also in the section preceding Item 1, 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 your
securities or could
significantly limit or completely hinder your ability 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,
Accelerating Holding Foreign Companies Accountable Act and related
regulations will
affect your company. Item 1 should address, but not necessarily be
limited to, the risks
highlighted in this section.
13. Also in the section preceding Item 1, 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. For example,
disclose, if true, that your
sole subsidiary conducts operations in China and that the registrant
company is a holding
company that does not conduct operations. Disclose clearly the entity
(including the
domicile) in which investors are purchasing an interest.
14. Also in the section preceding Item 1:
Provide a description of how cash is transferred through your
organization and
disclose your intentions to distribute earnings or settle amounts
owed. State whether
any transfers, dividends, or distributions have been made to date
between the holding
company and its subsidiaries, or to investors, and quantify the
amounts where
applicable. Provide cross-references to the consolidated financial
statements.
Xizhen Ye
FirstName LastNameXizhen Ye
Longwen Group Corp.
Comapany
July 6, 2022NameLongwen Group Corp.
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Amend your disclosure here and in Item 1, the summary risk
factors and risk factors
sections to state that, to the extent cash/assets in the business
is in the PRC or a
PRC entity, the cash/assets may not be available to fund
operations or for other use
outside of the PRC due to interventions in or the imposition of
restrictions and
limitations on the ability of you or your subsidiaries by the PRC
government to
transfer cash/assets; provide cross-references to these other
discussions. Discuss
whether there are limitations on your ability to transfer cash
between you, your
subsidiaries or investors; provide a cross-reference to your
discussion of this issue in
Item 1 and the summary risk factors and risk factors sections, as
well.
To the extent you have cash management policies that dictate
how funds are
transferred between you, your subsidiaries or investors,
summarize the policies in this
section and in Item 1, and disclose the source of such policies
(e.g., whether they are
contractual in nature, pursuant to regulations, etc.);
alternatively, state in this section
and in Item 1 that you have no such cash management policies that
dictate how funds
are transferred. Provide a cross-reference in this section to the
discussion of this issue
in Item 1.
15. Revise your risk factors to acknowledge that if the PRC government
determines that your
corporate structure does not comply with PRC regulations, or if these
regulations change
or are interpreted differently in the future, your securities may
decline in value or become
worthless if the determinations, changes, or interpretations result in
your
inability to assert control over the assets of your PRC subsidiaries
that, if true, conduct all
or substantially all of your operations.
16. Disclose the risks relating to the Holding Foreign Companies
Accountable Act. Disclose
that the United States Senate has passed the Accelerating Holding
Foreign Companies
Accountable Act, which, if enacted, would decrease the number of
noninspection 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. Please disclose whether your auditor is subject to
the determinations
announced by the PCAOB on December 16, 2021.
17. 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 your securities. 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 securities to investors and
cause the value of such
securities to significantly decline or be worthless.
Xizhen Ye
Longwen Group Corp.
July 6, 2022
Page 6
18. 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 future offerings, and to what extent you believe that you
are compliant with
the regulations or policies that have been issued by the CAC to date.
19. Please file the exhibits required by Item 601 of Regulation S-K.
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 Amy Geddes at 202-551-3304 or Rufus Decker at
202-551-3769 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Nicholas Nalbantian at 202-551-7470 or Lilyanna Peyser at 202-551-3222
with any other
questions.
Sincerely,
FirstName LastNameXizhen Ye
Division of
Corporation Finance
Comapany NameLongwen Group Corp.
Office of Trade &
Services
July 6, 2022 Page 6
cc: William Barnett
FirstName LastName