United States securities and exchange commission logo
August 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. 2 to
Registration Statement on Form S-1
Filed July 19, 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 July
7, 2023 letter.
Amendment No. 2 to Registration Statement on Form S-1 filed July 19,
2023
Cover Page
1. We note the repetitive
new disclosures on the cover page, such as the disclosure about:
(1) "it is uncertain
when the Administration Provision and the Measures will take effect or
if they will take
effect as currently drafted;" and (2) the "translated copy of the current and
effective regulations."
Please avoid the repetition of such disclosure on the cover page and
clarify the status and
effect of the "currently drafted" Administration Provision and
Measures.
2. We note the disclosure
on the cover page and elsewhere in your prospectus about your
beliefs concerning
authorizations and approvals, such as "[t]he Company does not believe
that it is required to
seek authorizations from Chinese authorities" and that "[w]e believe
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that we are not currently required to obtain approval from Chinese
authorities" and the
disclosure on page 14 that "[t]he Material PRC Company has obtained
all material Governmental authorizations necessary for its business as
described in the
Prospectus." Please reconcile such disclosure with the disclosure in
the: (1) penultimate
paragraph on page 29 that "[b]ased on our understanding of the Chinese
laws and
regulations in effect at the time of this prospectus, we may be
required to submit an
application to the CSRC for its approval of this offering;'' (2) first
paragraph on page 30
that "[a]s such, we will likely be required to file with the CSRC
within a reasonable time
and before the consummation of this offering; and (3) last sentence on
page 31 that
"[p]ursuant to ... if the registration statement with respect to the
Common stock to be sold
in this offering does not become effective on a date, as the
Securities and Exchange
Commission may determine, prior to the effectuation of the Trial
Administrative
Measures, or we fail to complete this offering and listing on the
Nasdaq Capital Market
before September 30, 2023, we will have to file with the CSRC in
accordance with the
Trial Administrative Measures with respect to this offering."
As requested in comment 8 of our June 6, 2023 letter, disclose each
permission or
approval that you or your subsidiaries are required to obtain from
Chinese authorities to
operate your business and to offer the securities being registered 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 or
your subsidiaries
operations, and state affirmatively whether you have received all
requisite permissions or
approvals and whether any permissions or approvals have been denied.
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 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.
3. If you continue to disclose on the cover page and on page 6 about the
translated copy of
the current and effective regulations promulgated by the CSRC, the
disclosure that the
company "does not believe that this offering is contingent upon
receipt of approval from
the CSRC" and the company "does not believe that it is required to
seek authorizations
from Chinese authorities," then expand the disclosure about your
beliefs to specifically
address whether you considered that the WFOE is an operating
subsidiary in China. 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.
4. If you continue to include disclosure in your amendment that now
appears on page 14 and
elsewhere that, [b]ased on our understanding of the explicit
provisions under PRC
Laws:" (1) elaborate upon your understanding and the basis for
your conclusions; and
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(2) clarify whether your understanding is limited to the explicit
provisions under PRC
Laws, and if so, why it is appropriate to limit your basis to your
understanding of such
explicit provisions.
5. We note your disclosure on page 14 and elsewhere that "[s]ubject to
any applicable
administrative procedures required by PRC Laws, and provided that all
required
Governmental Authorizations have been duly obtained, the due
application of the net
proceeds to be received by the Company from the issue Common Shares as
disclosed in
the Prospectus under the caption Use of Proceeds does not and
immediately after the
Offering will not contravene any applicable PRC Laws, the articles of
association or the
business licenses of the Material PRC Company, except for such
contravention or default
which would not be reasonably expected to have a Material Adverse
Effect." Please
delete these qualifications and exceptions.
6. We note your disclosure that [t]he WFOE structure is not as stable
as some have
imagined, that [t]he senior management and the shareholders of
the domestic company
play a very important role in the WFOE structure," and that [o]nce
there are changes to
such positions involving interests, potential risks of the WFOE
structure will appear.
Elaborate upon what you mean by as some have imagined or
alternatively remove such
disclosure and provide more detailed and clear disclosure regarding
the risks facing the
company as a result of your holding company structure. In addition,
clarify what types of
changes may cause certain risks to appear, and include a more detailed
discussion of such
potential risks. In the alternative, to the extent that the
risks related to your holding
company structure are already discussed, remove such disclosure
regarding changes to
such positions involving interests . . . .
7. We note your response to prior comment 5 with respect to your
disclosure regarding risks
related to doing business in China. Please continue to 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 you continue to disclose: (1) on the cover page that
"[t]here are specific
risks related to having operations in China that the Company has been
organized to
avoid;" (2) on the cover page that "[t]he overall effect has been to
significantly enhance
the protections afforded to various forms of foreign investments in
China;" and (3) on the
pages 3, 5, and 13 that "based on our current structure, these risks
remain immaterial,
regardless of the recent statements and regulatory actions by China
s government."
Certain Risks and Limitations Related to Doing Business in China, page 7
8. We note your response to prior comment 6 and the Certain Risks and
Limitations Related
to Doing Business in China section beginning on page 7. Please 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 poses to
investors. For each of the risks discussed in the bullet points in the
summary of risk
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factors, include specific cross-references for each risk to the more
detailed discussion of
each of these risks in the prospectus. Also, include in the summary of
risk factors the risk
concerning your auditor is among those listed by the PCAOB Mainland
China
Determination. In this regard, we note the disclosure in the risk
factor on pages 40-41.
Risk Factors, page 16
9. Please include risk factors to highlight the following:
the risks concerning the offering is being conducted on a
best-efforts, no minimum basis
with no arrangements for funds to be placed in an escrow, trust or
similar account. For
example, disclose that you may complete the offering even if only a
small portion of the
total offering is raised and that amount may be substantially less
than the total maximum
offering amount. Also, disclose what may happen to investor funds not
placed in escrow
pending closing with respect to that investor if you are voluntarily
or involuntarily placed
into bankruptcy or receivership prior to that closing;
the difference between the price per share of the shares of common
stock offered in this
offering compared to the price per share incurred by Min Jiang to
acquire the shares
disclosed in the table on page 70. In this regard, we note the
disclosure on page 48 that
"[w]e are offering our common stock at a price per share that is
significantly more than
the price per share paid by our current stockholders for our common
stock;"
that there is substantial doubt about the company's ability to
continue as a going
concern. In this regard, we note the disclosure on page 53 and in the
financial statements,
such as on page F-2; and
the anti-takeover effects that may be caused by your disparate
voting rights. In this
regard, we note the disclosure on page 72 about the voting rights of
the Series A Preferred
Stock.
Directors and Executive Officers, page 66
10. We note your response to prior comment 14. Please tell us the size of
the operations that
you disclose your directors and officers supervise, if the disclosed
entity does not file
periodic reports with the Commission. In this regard, it remains
unclear whether
additional disclosure is required in your amendment to comply with the
last sentence of
Item 401(e) of Regulation S-K.
Certain Relationships and Related Transactions, page 71
11. We note your response to prior comment 15. Please disclose the
principle followed in
determining to issue 100 million shares of common stock of the company
to acquire the
assets of CIHL, 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.
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FirstName LastNameMin Jiang
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Plan of Distribution, page 75
12. We note the disclosure in this section that the company "will sell the
shares in this
offering exclusively through [y]our officers and directors, Min Jiang
and Zonghan Wu.
Tell us, with specificity, the steps that you have taken to determine
that your officers and
directors have not participated in selling and offering securities for
any issuer more than
once every 12 months. In this regard, we note the disclosure about
best-efforts offerings
by SSHT S&T Group Ltd. and Alpine Auto Brokers, Inc. in their recent
filings with the
SEC. Also tell us, with a view to disclosure, why the disclosure in
this section does not
mention the assumption disclosed on page 5 and elsewhere in your
prospectus about
"Assuming no offer, issuance or sale of the Common Shares has been or
will be made
directly or indirectly within the PRC." In addition, revise the
disclosure on the cover page
and in this section and elsewhere, as appropriate, to clarify that you
are not offering,
issuing or selling common shares within the PRC, if true, as opposed
to assuming that you
are not offering, issuing or selling common shares in the PRC.
Exhibits
13. We reissue prior comment 21. Exhibit 3.3 is still not a single
complete copy of your
articles. Instead, it appears to still be a collection of multiple
documents.
General
14. We note your response to prior comment 23. Please continue to ensure
that the disclosure
throughout your filing is consistent and applicable to you. For
example, we note that you:
(1) continue to refer on page 46 to proceeds of $1,350,000, but you
refer on page 48 to
proceeds of $1,150,000; and (2) continue to disclose on page 47 that
your "offering price
of $0.01 per share was arbitrarily determined based upon a discount to
the current market
price." However, you disclose on page 48 that "[w]e are offering our
common stock at a
price per share that is significantly more than ... the current market
price of our common
stock;" As further examples, we note the following:
the disclosure on the cover page about "intends to rely on
dividends" and "has made no
such distributions to date" is not consistent with disclosure
elsewhere in the prospectus,
such as the disclosure in the last paragraph on page 14 and the
disclosure in the first risk
factor on page 22 that "[w]e rely primarily on dividends paid by WFOE
for our cash
needs." In this regard, it is unclear how you rely primarily on
dividends and distributions
despite having made no such distributions to date.
the disclosure in the last paragraph on page 7 about "our officers
or directors, many of
whom are not residents in the United States" is not consistent with
the disclosure in the
last paragraph on page 54 that you currently have two officers and
directors;
the disclosure in the second paragraph in the last risk factor on
page 22 about material
weaknesses is not consistent with the disclosure in the fourth
paragraph on page 55 about
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material weaknesses;
the disclosure in the last paragraph on page 22 about "a report
from management on our
internal control over financial reporting in our annual report on Form
20-F beginning with
our annual report for the fiscal year ending December 31, 2022" does
not appear to be
applicable to you;
the disclosure in the last paragraph on page 22 about "once we
cease to be an emerging
growth company" does not appear to be applicable to you; and
the disclosure in the last risk factor on page 33 about the courts
of the Cayman Islands
does not appear to be applicable to you based on your disclosure in
the diagram on page
2. In this regard, please ensure that that the disclosure about the
risks in the Service of
Process and Enforceability of Civil Liabilities section on page 65 is
consistent with the
disclosure in the last risk factor on page 33. Also, disclose the name
of the officer and
director that is based in China.
15. Please update your disclosure throughout your prospectus to the extent
appropriate. For
example, we note the following:
update the disclosure on page 21 that "The Ministry of Commerce of
the People s
Republic of China ( MOFCOM ) published a discussion draft of the
proposed Foreign
Investment law ( Draft Foreign Investment Law ) in January 2015"
and "The MOFCOM
is currently soliciting comments on this draft and substantial
uncertainties exist with
respect to its enactment timetable, interpretation and
implementation;"
update the disclosure on page 71 in the Certain Relationships and
Related Transactions
section. In this regard, we note the disclosure on page F-26 that "As
at March 31, 2023,
Mr. Zonghan Wu advanced a total of $14,885 ... remains due and
payable." In
addition, file as an exhibit, if applicable, the written agreement
between you and Zonghan
Wu concerning the advances and disclose the material terms of the
agreement.
Also, revise the disclosure on page 46 to clarify whether you intend
to use a portion of the
proceeds to repay the amount advanced by Zonghan Wu.
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,
Min Jiang
SIPP International Industries, Inc.
August 7, 2023
Page 7
FirstName LastNameMin Jiang
Division of Corporation
Finance
Comapany NameSIPP International Industries, Inc.
Office of Manufacturing
August 7, 2023 Page 7
cc: Matthew McMurdo
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