United States securities and exchange commission logo
July 7, 2023
Min Jiang
Chief Executive Officer
SIPP International Industries, Inc.
69 Waterfall Blvd, The Ponds
Sydney, NSW 2769 Australia
Re: SIPP International
Industries, Inc.
Amendment No. 1 to
Registration Statement on Form S-1
Filed June 22, 2023
File No. 333-271830
Dear Min Jiang:
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 June
6, 2023 letter.
Amendment No. 1 to Registration Statement on Form S-1 filed June 22,
2023
Cover Page
1. Please ensure that the
disclosure on the prospectus cover page that you are not a Chinese
operating company but a
Nevada holding company with operations conducted by your
subsidiaries based in
China and that this structure involves unique risks to investors is
consistent with the
disclosure elsewhere in your prospectus. For example, it is unclear
why you refer on page 3
to "We conduct our business primarily through our WFOE, the
VIE and its
subsidiaries established in China." In this regard, we note the diagram of the
corporate structure on
page 2 does not refer to a VIE. As another example, the reference
on the cover page to
"The WFOE structure is used to provide investors with exposure to
foreign investment in
China-based companies where China law prohibits direct foreign
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investment in the operating companies" is unclear. In this regard, it
is unclear whether the
disclosure should refer to the VIE instead of the WFOE. Also, the
reference on the cover
page to control over the operations "pursuant to a series of
contractual arrangements" is
unclear. In this regard, it does not appear that the prospectus
includes disclosure about the
"series of contractual arrangements" and the exhibit index does not
refer to any
agreements related to such contractual agreements that have been filed
as exhibits.
2. We note your response to prior comment 2 and the disclosure on the
cover page that "The
legal and operational risks associated with being based in or having
the majority of the
Company s operations in China could result in a material change in
the value of the
securities of SIPN being registered we are registering for sale or
could significantly limit
or completely hinder SIPN's ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless." Please disclose
whether these risks could result in a material change in your
operations.
3. We note your response to prior comment 4 and the paragraph on the
cover page beginning
with "The Company will settle amounts ... SIPN intend to rely on
dividends .... SIPN has
made no such distributions ... SIPN will look to implement one in the
future." Please
revise to clarify whether you have received dividends from your WFOE
to date. To the
extent you have, please revise to quantify any dividends or
distributions that the
subsidiary has made to you and its tax consequences. Finally, include
summary risk
factor disclosure about transferring cash outside of the PRC.
4. We note the disclosure on the cover page about the PCAOB and your
auditor. Please
revise to disclose whether and how the Holding Foreign Companies
Accountable Act, as
amended by the Consolidated Appropriations Act, 2023, and related
regulations will affect
your company.
5. With respect to your disclosure regarding risks related to doing
business in China, please
ensure that your disclosure does not suggest there are mitigating
factors regarding the
nature of your relationship with the Chinese government, the manner in
which you are
regulated, or the degree to which your operations could be affected by
economic,
industrial, or other policies in China. For example, we note the
disclosure on the cover
page and on pages 3 and 21 that "The overall effect has been to
significantly enhance the
protections afforded to various forms of foreign investments in
China."
Prospectus Summary, page 1
6. We note the response to prior comment 7 and reissue in part. Revise
the prospectus
summary to include a summary of risk factors that discloses the risks
that your corporate
structure and being based in or having the majority of the company s
operations in China
poses to investors. For each of the risks discussed in the bullet
points in the
summary, include specific cross-references for each risk to the more
detailed discussion of
each of these risks in the prospectus. In particular, describe the
significant regulatory,
liquidity, and enforcement risks. For example, specifically discuss
risks arising from the
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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 the securities you are registering for
sale. 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.
7. We note the response to comment 8 and reissue in part. Regarding the
statement on page
11 that "The Material PRC Company has obtained all material
Governmental
Authorizations necessary for its business operations as described in
the Prospectus, and
such Governmental Authorizations are in full force and effect and all
required
Governmental Authorizations have been duly obtained," disclose each
permission or
approval that you or your subsidiary are required to obtain from
Chinese authorities to
operate your business and to offer securities to foreign investors.
State whether you or
your subsidiary are covered by permissions requirements from the
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. We
also note the statements on the cover page and on page 5 that you are
not subject to the
pre-approval requirements of the CSRC. Please revise to disclose how
you determined
that you are not subject to pre-approval requirements of CSRC. If you
relied on the advice
of counsel in making these determinations, please identify counsel and
file their consent.
If you did not consult counsel in making these determinations, please
explain why you did
not obtain the advice of counsel. Please also describe the
consequences to you and your
investors if you or your subsidiary: (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.
We may be exposed to potential risks, page 19
8. We note your response to prior comment 16. Please revise the
disclosure in this risk
factor to highlight the risks mentioned on page 43, such as the
conclusion that your
disclosure controls and procedures were not effective and the material
weaknesses
identified by your CEO and CFO.
Risks Related to Doing Business in China, page 20
9. We note your response to prior comment 19 and reissue in part. Given
the Chinese
government s significant oversight and discretion over the conduct
of your business,
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Comapany
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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.
10. It appears that you revised the disclosure on page 5 in the Prospectus
Summary in
response to prior comment 20. Please instead revise the disclosure in
the Risk Factors
section in response to prior comment 20. Regarding your disclosure on
page 5 that "This
oversight by the CAC could also impact the Company's ability to offer
securities in the
U.S. or elsewhere," please clarify whether you and your subsidiaries
are required to go
through cybersecurity review by the CAC. Please note that even if you
believe you or
your subsidiaries are not subject to CAC oversight, please clearly
disclose how oversight
may impact your business and your securities if you or your
subsidiaries become subject
to CAC oversight. If you believe that you are not subject to the
review or required to
obtain prior approval of the CAC, then explain the basis for your
belief. If you relied on
the advice of counsel, revise to identify counsel. If you did not rely
on advice of counsel,
explain why you did not rely on advice of counsel.
Managements Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources, page 40
11. We note that you will need to raise approximately $545,000 in order to
continue
operations for the next twelve months in order to continue as a going
concern. Please
revise to disclose how you plan to raise the required capital.
Our Business, page 41
12. We note your response to prior comment 22. Please continue to revise
your disclosure to
discuss your business operations clearly. For example, we note the
following:
Revise the disclosure on page 46 about "targeting individuals and
families who seek
convenient and standardized Chinese food options" to be more specific
in what
markets you serve.
Revise the disclosure on page 47 about the distribution process to
clarify what you mean
by the phrase "a cold chain logistics system."
Revise the disclosure on page 47 about "partnerships with reliable
suppliers, farms
and agricultural producers" to clarify whether you have entered into
written agreements in
connection with such partnerships and, if applicable, discuss the
material terms of the
agreements.
Enforceability of Civil Liabilities, page 52
13. We note your response to prior comment 5. Please revise to explicitly
address the
investor's ability to enforce judgements obtained in U.S. courts in an
appropriate foreign
court and the investor's ability to bring an original action in an
appropriate foreign court to
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enforce liabilities against the foreign private issuer or any person
based upon the U.S.
federal securities laws. For guidance, see Item 101(g)(1)(iii) and
(iv) of Regulation S-K.
Directors and Executive Officers, page 53
14. We note your response to prior comment 24. Please revise your
disclosure regarding the
business experience of Mr. Wu to clarify how you have addressed his
experience during
the last five years. Also, make clear when Mr. Wu began performing
services as
Managing Director of Shanghai JAZ Management Consulting Co. Ltd. in
Shanghai.
Certain Relationships and Related Transactions, page 58
15. We note your response to prior comment 29. Please expand the
disclosure in this section
to disclose the principle followed in determining the amount at which
the assets of CIHL
were acquired by the company, disclose the identity of the persons
making the
determination and their relationship with the company. If the assets
were acquired by
CIHL within two years prior to their transfer to the company, also
state the cost thereof to
CIHL. For guidance, see Item 404(c)(1)(ii) of Regulation S-K.
Notes to the Consolidated Financial Statements
Note 7. Acquisitions, page F-15
16. We note your revised disclosures in response to our prior comment 34.
Please revise to
present the following in statements of changes in shareholders
equity: (1) the issuance of
100,000,000 shares of the Company s common stock to CIHL
shareholder; and (2)
$489,558 allocated to equity in connection with the common control
transaction. Please
also clarify what is reflected in the Shares issued to acquire CIHL
line item recorded in
additional paid-in capital.
Condensed Consolidated Balance Sheets, page F-18
17. Please revise your presentation here to replace the comparative
balance sheet as of March
31, 2022 with the latest year-end balance sheet. Refer to Rule 8-03 of
Regulation S-X.
Condensed Consolidated Statements of Changes in Stockholders Equity (Deficit),
page F-20
18. Please revise your Statements of Changes in Stockholders Equity
(Deficit) to provide the
following:
You appear to present the changes between December 31, 2021 and
December 31,
2022. Please revise to only present the comparative prior year
information for the
period between December 31, 2021 and March 31, 2022. Refer to
Rule 8-03 of
Regulation S-X;
Present the current year information for the period between
December 31, 2022 and
March 31, 2023; and
In addition to the month, the total and subtotal line items should
include the
appropriate date and year. Please revise accordingly.
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Note 4 - Acquisitions, page F-26
19. Please revise your disclosures here to be consistent with the revised
disclosures in Note 7 -
Acquisitions on page F-15. Please remove the references to fair value,
goodwill and
impairment of goodwill during the year ended March 31, 2023 as your
acquisition
was treated as a business combination under common control.
Recent Sales of Unregistered Securities, page II-1
20. We note your response to prior comment 36. Please continue to revise
this section to
include the information required by Item 701 of Regulation S-K. For
example, the
disclosure on page F-6 refers to the issuance of 600 million shares of
common stock in the
fiscal year ended December 21, 2022. However, the information on page
II-1 mentions
only the issuance of 100 million shares of common stock in the fiscal
year ended
December 31, 2022. As another example, the information on page II-1
does not mention
the issuance of any shares in the fiscal year ended December 31, 2021.
However, the
disclosure on page F-6 refers to the issuance of 248,101,224 shares of
common stock in
the fiscal year ended December 31, 2021.
Exhibits
21. We reissue prior comment 38. The exhibit continues to not be in a
text-searchable format
and the exhibit is not a single complete copy of your articles.
Instead, it appears to be a
collection of multiple documents.
22. We note your response to prior comment 39. The auditor s consent
continues to refer to
an audit report dated April 28, 2023, while the audit report included
in your filing is dated
May 10, 2023. Please have the auditor revise their consent to
reference the appropriate
audit report included in your current filing.
General
23. We note your response to prior comment 43. Please continue to ensure
that the disclosure
throughout your filing is consistent and applicable to you. For
example, we note the
disclosure on page 10 about net proceeds of approximately $1,200,000
if you were to sell
the entire number of shares registered is not consistent with the
disclosure in the second
paragraph on page 34 about maximum net proceeds of $1,350,000.
24. It appears that you revised the disclosure in the first paragraph on
the cover page in
response to prior comment 45. If you do not intend to register a class
of your securities
under Section 12 of the Exchange Act, please expand the Risk Factors
section to include a
separate risk factor to highlight the risks related to not being
subject to Exchange Act
Sections 13, 14 and 16.
25. We note that the CSRC recently published Trial Measures that impose
certain filing
requirements for direct and indirect overseas listings and offerings.
Please disclose how,
Min Jiang
SIPP International Industries, Inc.
July 7, 2023
Page 7
if at all, the Trial Measures apply to this transaction, whether you and
relevant parties to
this transaction have complied with your obligations under the Trial
Measures, and the
risks to investors of non-compliance.
You may contact Eiko Yaoita Pyles at 202-551-3587 or Ernest Greene at
202-551-3733 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Thomas Jones at 202-551-3602 or Geoff Kruczek at 202-551-3641 with any
other
questions.
Sincerely,
FirstName LastNameMin Jiang
Division of
Corporation Finance
Comapany NameSIPP International Industries, Inc.
Office of
Manufacturing
July 7, 2023 Page 7
cc: Matthew McMurdo
FirstName LastName