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1、2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm1/252F-1/A 1 ff12022a3_magicempire.htm REGISTRATION STATEMENTAs filed with the Securities and Exchange Commi
2、ssion on June 30,2022.Registration Statement No.UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_Amendment No.3 to Form F-1 REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933_Magic Empire Global Limited(Exact name of Registrant as specified in its charter)_Not Applic
3、able(Translation of Registrants name into English)_British Virgin Islands 6199 Not Applicable(State or otherjurisdiction ofincorporation ororganization)(Primary StandardIndustrialClassification Code Number)(I.R.S.EmployerIdentification Number)3/F,8 Wyndham StreetCentral,Hong Kong(852)3577 8770(Addre
4、ss,including zip code,and telephone number,including area code,ofRegistrants principal executive offices)_c/o Cogency Global Inc.122 East 42nd Street,18th Floor New York,NY 10168(212)947-7200(Name,address,including zip code,and telephone number,including area code,ofagent for service)_Copies of all
5、communications,including communications sent to agent forservice,should be sent to:Lawrence S.Venick,Esq.Loeb&Loeb LLP2206-19 Jardine House1 Connaught Place,CentralHong Kong SARTelephone:+852-3923-1111Fax:+852-3923-1100 William S.Rosenstadt,Esq.Yarona L.Yieh,Esq.Ortoli Rosenstadt LLP366 Madison Aven
6、ue,3rd FloorNew York,NY 10017Telephone:+1 212-588-0022_Approximate date of commencement of proposed sale to public:As soon as practicableafter this Registration Statement becomes effective.If any of the securities being registered on this form are to be offered on a delayed orcontinuous basis pursua
7、nt to Rule 415 under the Securities Act of 1933,as amended,check thefollowing box.If this Form is filed to register additional securities for an offering pursuant toRule 462(b)under the Securities Act,check the following box and list the Securities Actregistration statement number of the earlier eff
8、ective registration statement for the sameoffering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the SecuritiesAct,check the following box and list the Securities Act registration statement number of theearlier effective registration statement for the same offering.20
9、22/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm2/252If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the SecuritiesAct,check the
10、 following box and list the Securities Act registration statement number of theearlier effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule405 of the Securities Act:Emerging growth company If an emerging
11、 growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new or revised financial accounting standards provided pursuant to Section7(a)(2)(B)of the Securitie
12、s Act._ The term“new or revised financial accounting standard”refers to any update issued by theFinancial Accounting Standards Board to its Accounting Standards Codification after April 5,2012.The Registrant hereby amends this registration statement on such date or dates asmay be necessary to delay
13、its effective date until the Registrant shall file afurther amendment which specifically states that this registration statement shallthereafter become effective in accordance with Section 8(a)of the Securities Act of1933,as amended,or until the registration statement shall become effective on suchd
14、ate as the Commission,acting pursuant to such Section 8(a),may determine.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm3/252Table of ContentsThe informati
15、on in this prospectus is not complete and may be changed.We may not sell thesesecurities until the registration statement filed with the Securities and Exchange Commission iseffective.This prospectus is not an offer to sell these securities and it is not soliciting anoffer to buy these securities in
16、 any jurisdiction where the offer or sale is not permitted.PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION,DATED JUNE 30,2022Ordinary SharesMagic Empire Global LimitedThis is the initial public offering of the Ordinary Shares of Magic Empire Global Limited(“ME”).We are offering 5,000,000 Ordinary Share
17、s of ME,representing 25%of the Ordinary Sharesfollowing completion of the offering of ME.Following the offering,25%of the Ordinary Shares willbe held by public shareholders.Prior to this offering,there has been no public market for our Ordinary Shares.The offeringprice of our Ordinary Shares in this
18、 offering is expected to be$4.00 per share.We intend to applyto list our Ordinary Shares on the Nasdaq Capital Market under the symbol“MEGL”.There is noassurance that such application will be approved,and if our application is not approved,thisoffering may not be completed.ME is not a Chinese operat
19、ing company,but an offshore holding company incorporated in theBritish Virgin Islands(“BVI”).As a holding company with no material operation,we conduct ouroperations in Hong Kong through our operating subsidiary,GCL.This is an offering of the OrdinaryShares of ME,the holding company in BVI,instead o
20、f shares of our operating entity in Hong Kong,GCL.You may never directly hold any equity interest in our operating entity,GCL.References to the“Company,”“Group,”“we,”“us”,“our”and“ME”in the prospectus are to Magic EmpireGlobal Limited,the BVI entity that will issue the Ordinary Shares being offered.
21、References to“GCL”are to the Hong Kong entity operating the business.Although GCL is indirectly held by ME,and we currently do not have or intend to have any contractual arrangement to establish a variableinterest entity(“VIE”)structure with any entity in China,this structure involves unique risksto
22、 investors.See“Risk Factors”beginning on page 14 of this prospectus for a discussion of risksfacing the Company and the offering as a result of this structure.We will not be considered a“controlled company”under Nasdaq corporate governance rules aswe do not currently expect that more than 50%of our
23、voting power will be held by an individual,agroup or another company immediately following the consummation of this offering.Nonetheless,following the consummation of this offering,our directors,officers and principal shareholders willhold in aggregate approximately 63.02%or more of our Ordinary Sha
24、res.As a result,theseshareholders,if they act together,will be able to control the management and affairs of ourCompany.Because our operations are primarily located in Hong Kong and a few of our clients are PRCcorporates,we may be subject to unique risks due to uncertainty of the interpretation and
25、theapplication of the PRC laws and regulations,including but not limited to the cybersecurity reviewand regulatory review of oversea listing of our Ordinary Shares through an offshore holding company.We are also subject to the risks of uncertainty about any future actions of the Chinese governmentor
26、 authorities in Hong Kong in this regard.Should the Chinese government choose to exercisesignificant oversight and discretion over the conduct of our business,they may intervene in orinfluence our operations.Such governmental actions:could result in a material change in our operations and/or the val
27、ue of our OrdinaryShares;could significantly limit or completely hinder our ability to continue our operations;could significantly limit or hinder our ability to offer or continue to offer ourOrdinary Shares to investors;and may cause the value of our Ordinary Shares to significantly decline or be w
28、orthless.We are aware that recently,the PRC government initiated a series of regulatory actions andstatements to regulate business operations in certain areas in China with little advance notice,including cracking down on illegal activities in the securities market,enhancing supervision overChina-ba
29、sed companies listed overseas using variable interest entity structure,adopting newmeasures to extend the scope of cybersecurity reviews,and expanding the efforts in anti-monopolyenforcement.Since these statements and regulatory actions are new,it is highly uncertain how soonthe legislative or admin
30、istrative regulation making bodies will respond and what existing or newlaws or regulations or detailed implementations and interpretations will be modified or promulgated,if any.It is also highly uncertain what the potential impact such modified or new laws andregulations will have on GCLs daily bu
31、siness operation,its ability to accept foreign investmentsand the listing of our Ordinary Shares on a U.S.or other foreign exchanges.These actions couldresult in a material change in our operations and/or the value of our Ordinary Shares and couldsignificantly limit or completely hinder our ability
32、to offer or continue to offer our OrdinaryShares to investors.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm4/252We have been advised by Loeb&Loeb LLP,our
33、 U.S.and Hong Kong counsel,that based on theirunderstanding of the current Hong Kong laws,as of the date of this prospectus,GCL is not requiredto obtain any permissions or approvals from Hong Kong authorities nor any PRC authorities beforelisting in the U.S.and to issue our Ordinary Shares to foreig
34、n investors,including the CyberspaceAdministration of China(the“CAC”)or the China Securities Regulatory Commission(the“CSRC”)because(i)the CSRC currently has not issued any definitive rule or interpretation concerningwhether offerings like ours under this prospectus are subject to this regulation;an
35、d(ii)GFHL andGCL were established and operate in Hong Kong and are not included in the categories of industriesand companies whose foreign securities offerings are subject to review by the CSRC or the CAC.However,we have been advised by Loeb&Loeb LLP that uncertainties still exist,due to thepossibil
36、ity that laws,regulations,or policies in the PRC could change rapidly in the future.Inthe event that(i)the PRC government expanded the categories of industries and companies whoseforeign securities offerings are subject to review by the CSRC or the CAC and that we are requiredto obtain such permissi
37、ons or approvals;or(ii)we inadvertently concluded that relevantpermissions or approvals were not required or that we did not receive or maintain relevantpermissions or approvals required,any action taken by the PRC government could significantly limitor completely hinder our operations in Hong Kong
38、and our ability to offer or continue to offersecurities to investors and could cause the value of such securities to significantly decline or beworthless.Our Ordinary Shares may be prohibited from being trading on a national exchange under theHolding Foreign Companies Accountable Act(the“HFCA Act”)i
39、f the Public Company AccountingOversight Board(“PCAOB”)is unable to inspect our auditors for three consecutive years beginningin 2021.On June 22,2021,the U.S.Senate passed the Accelerating Holding Foreign CompaniesAccountable Act,which,if enacted,would amend the HFCA Act and require the SEC to prohi
40、bit anissuers securities from trading on any U.S.stock exchanges if its auditor is not subject to PCAOBinspections for two consecutive years instead of three.On December 16,2021,the PCAOB issued areport on its determinations that it was unable to inspect or investigate completely PCAOB-registered pu
41、blic accounting firms headquartered in Mainland China and in Hong Kong,because ofpositions taken by PRC authorities in those jurisdictions.The PCAOB made its determinationspursuant to PCAOB Rule 6100,which provides a framework for how the PCAOB fulfills itsresponsibilities under the HFCA Act.The rep
42、ort further listed in its Appendix A and Appendix B,Registered Public Accounting Firms Subject to the Mainland China Determination and Registered PublicAccounting Firms Subject to the Hong Kong Determination,respectively.Our auditor,Friedman LLP,headquartered in Manhattan,New York,is registered with
43、 the PCAOB.Our auditor is subject to lawsin the United States pursuant to which the PCAOB conducts regular inspections to assess ourauditors compliance with the applicable professional standards with the last inspection in June2018.In addition,our auditors did not appear as part of the PCAOBs report
44、 of determination underthe lists in its appendix A or appendix B.The delisting of our Ordinary Shares,or the threat oftheir being delisted,may materially and adversely affect the value of your investment.During the years ended December 31,2021 and 2020 and up to the date of this prospectus,thetransf
45、er of cash among ME and its subsidiaries were in the form of dividends.ME declared and paiddividends of HK$4,000,000 and HK$3,750,000 to its shareholders in February 2022 and during the yearended December 31,2020,respectively,which were originated by payment of dividends from GCL.Wecurrently intend
46、to retain all available funds and future earnings,if any,for the operation andexpansion of our business and we do not anticipate declaring or paying a dividend in the foreseeablefuture.If we determine to pay dividends on any of our Ordinary Shares in the future,as a holdingcompany,we will be depende
47、nt on receipt of funds from our GCL by way of dividend payments.ME is aBVI company,and GFHL and GCL are all Hong Kong companies.There are no restrictions on foreignexchange and there are no limitations on the abilities of ME to transfer cash to or from GFHL andGCL or to investors under Hong Kong Law
48、.See“Dividend Policy”,“Transfers of Cash To and FromOur Subsidiaries”,Summary Consolidated Financial Data and Consolidated Statements of Change inShareholders Equity in the Report of Independent Registered Public Accounting Firm for furtherdetails.Investing in our Ordinary Shares is highly speculati
49、ve and involves a high degreeof risk.Before buying any shares,you should carefully read the discussion ofmaterial risks of investing in our Ordinary Shares in“Risk Factors”beginning onpage 14 of this prospectus.We are an“emerging growth company”as defined under the federal securitieslaws and,as such
50、,will be subject to reduced public company reporting requirements.See“Prospectus Summary Implications of Being an Emerging Growth Company and aForeign Private Issuer”for additional information.Neither the Securities and Exchange Commission nor any other regulatory body hasapproved or disapproved of
51、these securities or passed upon the accuracy or adequacyof this prospectus.Any representation to the contrary is a criminal offense.Per Share TotalInitial public offering price$Underwriting discounts and commissions(1)$Proceeds,before expenses,to us$2022/12/13https:/www.sec.gov/Archives/edgar/data/1
52、881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm5/252_(1)We have agreed to issue,on the closing date of this offering,warrants,or therepresentatives warrants,to the representative of the underwriters,Networ
53、k 1 FinancialSecurities,Inc.,in an amount equal to 10.0%of the aggregate number of Ordinary Shares soldby us in this offering.Such warrants shall have an exercise price equal to 150%of theoffering price of the Ordinary Shares sold in this offering.For a description of other termsof the representativ
54、es warrants and a description of the other compensation to be receivedby the underwriters,see“Underwriting”beginning on page 104.This offering is being conducted on a firm commitment basis.The underwriters are obligated totake and pay for all of the shares if any such shares are taken.The total unde
55、rwriting discountsand commissions payable will be$1,400,000 based on an assumed initial public offering price of$4.00 per Ordinary Share,and the total gross proceeds to us,before underwriting discounts andcommissions and expenses,will be$20,000,000.The underwriters expect to deliver the Ordinary Sha
56、res against payment as set forth under“Underwriting”,on or about*,2022.Network 1 Financial Securities,Inc.The date of this prospectus is ,2022.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/000121390
57、022036125/ff12022a3_magicempire.htm6/252Table of ContentsTABLE OF CONTENTS PageProspectus Summary 1Risk Factors 14Special Note Regarding Forward-Looking Statements 36Industry and Market Data 37Use of Proceeds 41Dividend Policy 42Capitalization 43Dilution 44Exchange Rate Information 45Corporate Histo
58、ry and Structure 46Managements Discussion and Analysis of Financial Condition and Results ofOperations 47Business 59Regulations 71Management 80Related Party Transactions 85Principal Shareholders 86Description of Securities 87Shares Eligible for Future Sale 96Material Income Tax Considerations 99Unde
59、rwriting 104Expenses Related to this Offering 109Legal Matters 110Experts 110Enforcement of Liabilities 110Where You Can Find Additional Information 112Index to Consolidated Financial Statements F-1We are responsible for the information contained in this prospectus andany free writing prospectus we
60、prepare or authorize.We have not,and theunderwriters have not,authorized anyone to provide you with differentinformation,and we and the underwriters take no responsibility for anyother information others may give you.We are not,and the underwriters arenot,making an offer to sell our Ordinary Shares
61、in any jurisdiction wherethe offer or sale is not permitted.You should not assume that theinformation contained in this prospectus is accurate as of any date otherthan the date on the front cover of this prospectus,regardless of the timeof delivery of this prospectus or the sale of any Ordinary Shar
62、es.For investors outside the United States:Neither we nor the underwriters havedone anything that would permit this offering or possession or distribution of thisprospectus in any jurisdiction,other than the United States,where action for thatpurpose is required.Persons outside the United States who
63、 come into possession ofthis prospectus must inform themselves about,and observe any restrictions relatingto,the offering of the Ordinary Shares and the distribution of this prospectusoutside the United States.ME is incorporated under the laws of the BVI as an exempted company with limitedliability
64、and a majority of our outstanding securities are owned by non-U.S.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm7/252residents.Under the rules of the U.S.
65、Securities and Exchange Commission,or theSEC,we currently qualify for treatment as a“foreign private issuer.”As a foreignprivate issuer,we will not be required to file periodic reports and financialstatements with the Securities and Exchange Commission,or the SEC,as frequently oras promptly as domes
66、tic registrants whose securities are registered under theSecurities Exchange Act of 1934,as amended,or the Exchange Act.Until and including ,2022(twenty-five(25)days after the date ofthis prospectus),all dealers that buy,sell or trade our Ordinary Shares,whether or not participating in this offering
67、,may be required to deliver aprospectus.This delivery requirement is in addition to the obligation ofdealers to deliver a prospectus when acting as underwriters and withrespect to their unsold allotments or subscriptions.i2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff
68、12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm8/252Table of ContentsCONVENTIONS THAT APPLY TO THIS PROSPECTUSUnless otherwise indicated or the context otherwise requires,all references inthis prospectus to the terms the“Company,”“Gr
69、oup,”“we,”“us”,“our”and“ME”in the prospectus are to Magic Empire Global Limited,the BVI entity that willissue the Ordinary Shares being offered.References to“GFHL”refer to GiraffeFinancial Holdings Limited.References to“GCL”are to Giraffe Capital Limited,theHong Kong entity operating the business.“P
70、RC”or“China”refers to the Peoples Republic of China,excluding,forthe purpose of this prospectus,Taiwan,Hong Kong and Macau.“HKD”or“HK$”refersto the legal currency of Hong Kong.“$”or“U.S.dollars”refers to the legalcurrency of the United States.“CFA Code”refers to the CFA Institute Code of ethics and
71、Standards ofProfessional Conduct.“Code of Conduct”refers to the Code of Conduct for Persons Licensed by orRegistered with the Securities and Futures Commission of Hong Kong.“Stock Exchange”refers to the Stock Exchange of Hong Kong Limited.“ListingRules”refers to the Rules Governing the Listing of Se
72、curities on the Stock Exchangeof Hong Kong,as amended,supplemented or otherwise modified from time to time.“GEMListing Rules”refers to the Rules Governing the Listing of Securities on GEM,asamended,supplemented or otherwise modified from time to time.“Ordinary Shares”refers our ordinary shares,par v
73、alue$0.0001 per share.“SFC”refers to Securities and Futures Commission of Hong Kong.“Sponsor Guidelines”refers to the Additional Fit and Proper Guidelines forCorporations and Authorized Financial Institutions Applying or Continuing to Act asSponsors and Compliance Advisers published by the SFC.We ha
74、ve made rounding adjustments to some of the figures included in thisprospectus.Accordingly,numerical figures shown as totals in some tables may not bean arithmetic aggregation of the figures that preceded them.Unless the context indicates otherwise,all information in this prospectusassumes no exerci
75、se of the representatives warrants.ME is a holding company with operations conducted in Hong Kong through itsoperating subsidiary in Hong Kong,GCL,using Hong Kong dollars.GCLs reportingcurrency is Hong Kong dollars.This prospectus contains translations of Hong Kongdollars into U.S.dollars solely for
76、 the convenience of the reader.Unless otherwisenoted,all translations from Hong Kong dollars to U.S.dollars and from U.S.dollarsto Hong Kong dollars in this prospectus were calculated at the noon buying rate ofUS$1=HK$7.7996 on December 30,2021,as published in H.10 statistical release ofthe United S
77、tates Federal Reserve Board.We make no representation that the HKD orU.S.dollar amounts referred to in this prospectus could have been or could beconverted into U.S.dollars or HKD,as the case may be,at any particular rate or atall.MEs fiscal year ends on December 31.ii2022/12/13https:/www.sec.gov/Ar
78、chives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm9/252Table of ContentsPROSPECTUS SUMMARYThe following summary highlights information contained elsewhere in thisprospectus and does not con
79、tain all of the information you should consider beforeinvesting in our Ordinary Shares.You should read the entire prospectus carefully,including“Risk Factors,”“Managements Discussion and Analysis of FinancialCondition and Results of Operations,”and our consolidated financial statementsand the relate
80、d notes thereto,in each case included in this prospectus.You shouldcarefully consider,among other things,the matters discussed in the section ofthis prospectus titled“Business”before making an investment decision.OverviewWe are a financial services provider in Hong Kong which principally engage inth
81、e provision of corporate finance advisory services and underwriting services.Ourservice offerings mainly comprise the following:IPO sponsorship services:We act as sponsors to companies pursuing listingon the Main Board(the“Main Board”)of the Stock Exchange and GEM(formerly knownas Growth Enterprise
82、Market)of the Stock Exchange,advising and guiding themthroughout the listing process in return for sponsors fee.Financial advisory and independent financial advisory services:Weact as(i)financial advisers(a)to our clients advising them on the terms andstructures of the proposed transactions,and the
83、relevant implications andcompliance matters under the Hong Kong regulatory framework for listed companiessuch as the Listing Rules,the GEM Listing Rules and the Takeovers Code;and(b)toclients pursuing listing on other stock exchange;and(ii)independent financialadvisers giving opinions or recommendat
84、ions to the independent board committee andindependent shareholders of listed companies,in return for advisory fee.Compliance advisory services:We act as compliance advisers to listedcompanies on the Main Board and GEM and advise them on post-listing compliancematters in return for compliance adviso
85、ry fee.Underwriting services:We provide underwriting services by acting as globalcoordinator,bookrunner,lead manager or underwriter for listing applicants in IPOsor other fundraising activities,in return for underwriting commission.We are an active financial service providers in Hong Kong with a pro
86、ven trackrecord.Since our establishment in 2016,we completed 8 IPO projects which we actedas the sole sponsor to the listing applicants.For the years ended December 31,2021 and 2020,we had been engaged in 6 IPO sponsorship projects,31 financialadvisory and independent financial advisory projects,24
87、compliance advisoryprojects and 3 underwriting projects,respectively.We have a diversified client base and our clients engage in a diverse spectrumof industry sectors including online advertising,property development,propertymanagement services,supply chain management,manufacturing,chemicals,logisti
88、cs,education,natural resources and travel.Our IndustryHong Kong is one of the top global equity markets by market capitalization.Asan international financial hub and gateway to China,the equity market in Hong Konghas experienced remarkable growth over the years.As of December 31,2021,theequity marke
89、t in Hong Kong was ranked the seventh largest stock market in theworld,and the fourth largest stock market in Asia,in terms of marketcapitalization,with a total market capitalization of approximately US$5,434.2billion.The following table sets out the market capitalization and ranking of theglobal to
90、p 15 stock exchanges as of December 31,2021.12022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm10/252Table of ContentsStock exchanges RankingWorldwide Ranking
91、 in Asia MarketCapitalization(7)US$billionUS(NYSE)1 27,686.9US(Nasdaq)2 24,557.1China(Shanghai)3 1 8,154.7Europe(NYSE Euronext)(1)4 7,333.7Japan(Japan Exchange Group)(2)5 2 6,544.3China(Shenzhen)6 3 6,219.8China(Hong Kong)(3)7 4 5,434.2UK(London Stock Exchange Group)(4)8 3,799.5India 9 5 3,548.0Cana
92、da(Toronto)(5)10 3,264.1Saudi Arabia(Tadawul)11 2,671.3Northern Europe(NASDAQ Nordic Exchange)(6)12 2,557.4Germany(Deutsche Brse)13 2,503.0Switzerland 14 2,327.7Korea 15 6 2,218.7_Notes:(1)Comprises Euronext Amsterdam,Euronext Brussels,Euronext Lisbon and Euronext Paris(2)Comprises Tokyo Stock Excha
93、nge and Osaka Securities Exchange(3)Includes GEM(4)Comprises London Stock Exchange and Borsa Italiana(5)Includes TSX Venture(6)Comprises Copenhagen,Helsinki,Iceland,Stockholm,Tallinn,Riga and Vilnius StockExchanges(7)Ranking is based on market capitalization.Market capitalization excludes investment
94、 funds.All World Federation of Exchanges(WFE)member stock exchanges,not solely the main exchangefor each country,are included in the ranking.Ranking excludes Bombay Stock Exchange toavoid double counting with National Stock Exchange of India.Source:SFC website Market&industry statistics Table A Mark
95、etcapitalization of the worlds top stock exchanges(As of December 31,2021)Competitive StrengthsWe believe the following competitive strengths differentiate us from ourcompetitors:We are an active financial service provider with a proven track record;We have a strong client base;We provide comprehens
96、ive corporate finance advisory services to ourclients;and We have experienced and competent and processional staff.Our StrategyWe intend to pursue the following strategies to further expand our business:Furthering strengthening our corporate finance advisory business in HongKong Expanding our market
97、 presence in other international capital markets,inparticular the US;Developing our asset management business;and2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempir
98、e.htm11/252 Enhancing our brand.22022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm12/252Table of ContentsCorporate History and StructureIn May,2016,ME was in
99、corporated under the laws of the BVI,as the ultimateholding company of our Group.In June,2016,GFHL was incorporated under the laws of Hong Kong,as anintermediate holding company.In June,2016,GCL was incorporated under the laws of Hong Kong to providecorporate finance services.GCL was licensed to und
100、ertake Type 6(Advising on corporate finance)regulatedactivity and act as sponsor by the SFC in February 2017 and Type 1(dealing insecurities)regulated activity in April 2018.We are offering 5,000,000 Ordinary Shares,representing 25%of the OrdinaryShare following completion of the offering of ME.The
101、chart below illustrates ourcorporate structure and identify our subsidiaries as of the date of this prospectusand upon completion of this offering:As of the date of this prospectus,our directors,officers and principalshareholders hold in aggregate 84.03%or more of the Ordinary Shares.After thisoffer
102、ing,our directors,officers and principal shareholders will hold in aggregate63.02%or more of the Ordinary Shares.Although we will not be considered a“controlled company”under Nasdaq corporate governance rules as we do notcurrently expect that more than 50%of our voting power will be held by anindivi
103、dual,a group or another company immediately following the consummation ofthis offering,the abovementioned shareholders,if they act together,will be ableto control the management and affairs of our Company.Transfers of Cash To and From Our SubsidiariesDuring the years ended December 31,2021 and 2020
104、and up to the date of thisprospectus,the only transfer of assets among ME and its subsidiaries consisted ofcash.ME declared and paid dividends of HK$4,000,000 and HK$3,750,000,to itsshareholders in February 2022 and during the year ended December 31,2020,respectively,which were originated by payment
105、 of dividends from GCL,the principaloperating subsidiary.If we determine to pay dividends on any of our Ordinary Shares in the future,as a holding company,we will be dependent on receipt of funds from our Hong Kongsubsidiary GCL by way of dividend payments.ME is permitted under the laws of BVI to pr
106、ovide funding to our subsidiaries inHong Kong(GFHL and GCL)through loans or capital contributions withoutrestrictions on the amount of the funds.GFHL and GCL are permitted under the lawsof Hong Kong to provide funding to ME through dividend distribution withoutrestrictions on the amount of the funds
107、.We currently intend to retain all available funds and future earnings,if any,for the operation and expansion of our business and do not anticipate declaring orpaying any dividends in the foreseeable future.Any future determination related toour dividend policy will be made at the discretion of our
108、board of directors afterconsidering our financial condition,results of operations,capital requirements,2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm13/25
109、2contractual requirements,business prospects and other factors the board ofdirectors deems relevant,and subject to the restrictions contained in any futurefinancing instruments.Subject to the BVI Act and our Memorandum and Articles of Association,ourboard of directors may authorize and declare a div
110、idend to shareholders at suchtime and of such an amount as they think fit if they are satisfied,on reasonablegrounds,that immediately following the dividend the value of our assets willexceed our liabilities and we will be able to pay our debts as they become due.There is no further BVI statutory re
111、striction on the amount of funds which may bedistributed by us by dividend.32022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm14/252Table of ContentsUnder Hon
112、g Kong law,dividends could only be paid out of distributable profits(that is,accumulated realized profits less accumulated realized losses)or otherdistributable reserves.Dividends cannot be paid out of share capital.Under thecurrent practice of the Inland Revenue Department of Hong Kong,no tax is pa
113、yablein Hong Kong in respect of dividends paid by us.ME is a BVI company,and GFHL and GCL are all Hong Kong companies.There are norestrictions on foreign exchange and there are no limitations on the abilities ofME to transfer cash to or from GFHL and GCL or to investors under Hong Kong Law.There are
114、 no restrictions or limitation under the laws of Hong Kong imposed on theconversion of HK dollar into foreign currencies and the remittance of currenciesout of Hong Kong,nor there is any restriction on foreign exchange to transfer cashbetween ME and its subsidiaries(GFHL and GCL),across borders and
115、to U.Sinvestors,nor there is any restrictions and limitations to distribute earningsfrom our business and subsidiaries(GFHL and GCL),to ME and U.S.investors andamounts owed.Since the only transfer of cash among ME and GFHL and GCL were in theform of dividends and there are no limitations on the abil
116、ities of ME to transfercash to or from GFHL and GCL or to investors under Hong Kong Law,ME has notestablished cash management policies that dictate how funds are transferred.See“Dividend Policy”,“Risk Factors We rely on dividends and otherdistributions on equity paid by our subsidiaries to fund any
117、cash and financingrequirements we may have,and any limitation on the ability of our subsidiaries tomake payments to us could have a material adverse effect on our ability to conductour business.”,Summary Consolidated Financial Data and Consolidated Statements ofChange in Shareholders Equity in the R
118、eport of Independent Registered PublicAccounting Firm for more information.Summary of Key RisksOur business is subject to a number of risks,including risks that may preventus from achieving our business objectives or may materially and adversely affectour business,financial condition,results of oper
119、ations,cash flows and prospectsthat you should consider before making a decision to invest in our Ordinary Shares.These risks are discussed more fully in“Risk Factors”.These risks include,butare not limited to,the following:Risks Related to Our Business and Industry(for a more detaileddiscussion,see
120、“Risk Factors Risks Related to Our Business andIndustry”beginning on page 14 of this prospectus)Our business performance is highly influenced by the conditions of capitalmarket in Hong Kong.See page 14 of“Risk Factors Risks Related to OurBusiness and Industry”for further details.We operate in a heav
121、ily regulated industry,and are subject to extensiveand evolving regulatory requirements in the jurisdictions in which weoperate.See page 14 of“Risk Factors Risks Related to Our Businessand Industry”for further details.Our future financial performance and ability to succeed may be difficultto predict
122、 given that our operating history in the corporate financeservices industry in Hong Kong is relatively short.See page 14 of“RiskFactors Risks Related to Our Business and Industry”for furtherdetails.We face fierce competition in the corporate finance services industry inHong Kong and may lose our com
123、petitive edge to our competitors.See page15 of“Risk Factors Risks Related to Our Business and Industry”forfurther details.We rely on a limited number of key customers for our business.See page 15of“Risk Factors Risks Related to Our Business and Industry”forfurther details.We are affected by the rule
124、s and regulations governing listed companies onthe Stock Exchange.See page 15 of“Risk Factors Risks Related to OurBusiness and Industry”for further details.The revenue from our corporate finance advisory business and underwritingbusiness is non-recurring in nature and our profitability is highly2022
125、/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm15/252unpredictable.See page 16 of“Risk Factors Risks Related to OurBusiness and Industry”for further details.We
126、 may be unable to receive mandated payments in a timely manner or infull if milestone events stipulated in our mandates for IPO sponsorship,financial advisory and underwriting services are not achieved asstipulated or if client withdraws from or terminates the transaction.Seepage 16 of“Risk Factors
127、Risks Related to Our Business and Industry”for further details.42022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm16/252Table of Contents We rely on our key m
128、anagement and professional staff,the loss of whom mayaffect our operations.See page 17 of“Risk Factors Risks Related toOur Business and Industry”for further details.Our financial result for the year ending December 31,2022 is expected tobe adversely affected by the non-recurring listing expenses.See
129、 page 18of“Risk Factors Risks Related to Our Business and Industry”forfurther details.A sustained outbreak of the COVID-19 pandemic could have a materialadverse impact on our business,operating results and financial condition.See page 20 of“Risk Factors Risks Related to Our Business andIndustry”for
130、further details.Risks Related to Our Corporate Structure(for a more detailed discussion,see“Risk Factors Risks Related to Our Corporate Structure”beginningon page 21 of this prospectus)We rely on dividends and other distributions on equity paid by oursubsidiaries to fund any cash and financing requi
131、rements we may have,andany limitation on the ability of our subsidiaries to make payments to uscould have a material adverse effect on our ability to conduct ourbusiness.See page 21 of“Risk Factors Risks Related to Our CorporateStructure”for further details.Our lack of effective internal controls ov
132、er financial reporting mayaffect our ability to accurately report our financial results or preventfraud which may affect the market for and price of our Ordinary Share.Seepage 21 of“Risk Factors Risks Related to Our Corporate Structure”forfurther details.Risks Relating to Doing Business in Jurisdict
133、ions We Operate(for a moredetailed discussion,see“Risk Factors Risks Relating to DoingBusiness in Jurisdictions We Operate”beginning on page 22 of thisprospectus)All our operations are in Hong Kong.However,due to the long armprovisions under the current PRC laws and regulations,the Chinesegovernment
134、 may exercise significant oversight and discretion over theconduct of our business and may intervene in or influence our operationsat any time,which could result in a material change in our operationsand/or the value of our Ordinary Shares.Changes in the policies,regulations,rules,and the enforcemen
135、t of laws of the Chinese governmentmay also be quick with little advance notice and our assertions andbeliefs of the risk imposed by the PRC legal and regulatory system cannotbe certain.See page 22 of“Risk Factors Risks Relating to DoingBusiness in Jurisdictions We Operate”for further details.If the
136、 Chinese government chooses to exert more oversight and control overofferings that are conducted overseas and/or foreign investment in Chinabased issuers,such action may significantly limit or completely hinderour ability to offer or continue to offer Ordinary Shares to investors andcause the value
137、of our Ordinary Shares to significantly decline or beworthless.See page 23 of“Risk Factors Risks Relating to DoingBusiness in Jurisdictions We Operate”for further details.Although the audit report included in this prospectus is prepared by U.S.auditors who are currently inspected by the PCAOB,there
138、is no guaranteethat future audit reports will be prepared by auditors inspected by thePCAOB and,as such,in the future investors may be deprived of thebenefits of such inspection.Furthermore,trading in our Ordinary Sharesmay be prohibited under the HFCA Act if the SEC subsequently determinesour audit
139、 work is performed by auditors that the PCAOB is unable toinspect or investigate completely,and as a result,U.S.nationalsecurities exchanges,such as the Nasdaq,may determine to delist oursecurities.Furthermore,on June 22,2021,the U.S.Senate passed theAccelerating Holding Foreign Companies Accountabl
140、e Act,which,if enacted,would amend the HFCA Act and require the SEC to prohibit an issuers2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm17/252securities f
141、rom trading on any U.S.stock exchanges if its auditor is notsubject to PCAOB inspections for two consecutive years instead of three,and thus,would reduce the time before our Ordinary Shares may beprohibited from trading or delisted.See page 24 and page 25 of“RiskFactors Risks Relating to Doing Busin
142、ess in Jurisdictions We Operate”for further details.The recent joint statement by the SEC,proposed rule changes submitted byNasdaq,and an act passed by the U.S.Senate and the U.S.House ofRepresentatives,all call for additional and more stringent criteria to beapplied to emerging market companies.The
143、se developments could adduncertainties to our offering,business operations,share price andreputation.See page 25 and page 26 of“Risk Factors Risks Relating toDoing Business in Jurisdictions We Operate”for further details.52022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff
144、12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm18/252Table of Contents The enactment of Law of the PRC on Safeguarding National Security in theHong Kong Special Administrative Region(the“Hong Kong National SecurityLaw”)could impact o
145、ur Hong Kong subsidiaries,which representsubstantially all of our business.See page 27 of“Risk Factors RisksRelating to Doing Business in Jurisdictions We Operate”for furtherdetails.Risks Related to our Ordinary Shares(for a more detailed discussion,see“Risk Factors Risks Related to our Ordinary Sha
146、res”beginning on page29 of this prospectus)There has been no public market for our Shares prior to this offering,andyou may not be able to resell our Shares at or above the price you pay forthem,or at all.See page 29 of“Risk Factors Risks Related to ourOrdinary Shares”for further details.If we fail
147、to meet applicable listing requirements,Nasdaq may delist ourOrdinary Shares from trading,in which case the liquidity and market priceof our Ordinary Shares could decline.See page 29 of“Risk Factors Risks Related to our Ordinary Shares”for further details.Our management has broad discretion to deter
148、mine how to use the fundsraised in the offering and may use them in ways that may not enhance ourresults of operations or the price of our Ordinary Shares.See page 31 of“Risk Factors Risks Related to our Ordinary Shares”for furtherdetails.We qualify as a foreign private issuer and,as a result,we wil
149、l not besubject to U.S.proxy rules and will be subject to Exchange Act reportingobligations that permit less detailed and less frequent reporting thanthat of a U.S.domestic public company.See page 33 of“Risk Factors Risks Related to our Ordinary Shares”for further details.Investors may have difficul
150、ty enforcing judgments against us,ourdirectors and management.Investors may incur additional costs andprocedural obstacles in effecting service of legal process,enforcingforeign judgments or bringing actions in BVI or Hong Kong against us orour management named in the prospectus based on BVI or Hong
151、 Kong laws.Seepage 31 of“Risk Factors Risks Related to our Ordinary Shares”forfurther details.As a foreign private issuer,we are permitted to adopt certain homecountry practices in relation to corporate governance matters that differsignificantly from Nasdaq corporate governance listing standards.Th
152、esepractices may afford less protection to shareholders than they would enjoyif we complied fully with corporate governance listing standards.See page34 of“Risk Factors Risks Related to our Ordinary Shares”for furtherdetails.We are an emerging growth company within the meaning of the Securities Acta
153、nd may take advantage of certain reduced reporting requirements.See page35 of“Risk Factors Risks Related to our Ordinary Shares”for furtherdetails.Recent Regulatory Development in the PRCWe are aware that,recently,the PRC government initiated a series ofregulatory actions and statements to regulate
154、business operations in certain areasin China with little advance notice,including cracking down on illegal activitiesin the securities market,enhancing supervision over China-based companies listedoverseas using VIE structure,adopting new measures to extend the scope ofcybersecurity reviews,and expa
155、nding the efforts in anti-monopoly enforcement.On July 6,2021,the General Office of the Communist Party of China CentralCommittee and the General Office of the State Council jointly issued a document tocrack down on illegal activities in the securities market and promote the high-quality development
156、 of the capital market,which,among other things,requires therelevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,to enhance supervision over China-based2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_
157、magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm19/252companies listed overseas,and to establish and improve the system ofextraterritorial application of the PRC securities laws.On December 24,2021,theChina Securities Regulatory Commission(“C
158、SRC”)published the Provisions of theState Council on the Administration of Overseas Securities Offering and Listing byDomestic Companies(the“Administration Provisions”),and the AdministrativeMeasures for the Filing of Overseas Securities Offering and Listing by DomesticCompanies(the“Measures”),which
159、 are now open for public comment.Furthermore,on July 10,2021,the CAC issued a revised draft of the Measuresfor Cybersecurity Review for public comments,which required that,among others,inaddition to“operator of critical information infrastructure”,any“dataprocessor”controlling personal information o
160、f no less than one million userswhich seeks to list in a foreign stock exchange should also be subject tocybersecurity review,and further elaborated the factors to be considered whenassessing the62022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhtt
161、ps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm20/252Table of Contentsnational security risks of the relevant activities.On December 28,2021,the CAC,the National Development and Reform Commission(“NDRC”),and several otheradministrations jointly issued the rev
162、ised Measures for Cybersecurity Review,orthe“Revised Review Measures”,which became effective and replaced the existingMeasures for Cybersecurity Review on February 15,2022.According to the RevisedReview Measures,if an“online platform operator”that is in possession ofpersonal data of more than one mi
163、llion users intends to list in a foreign country,it must apply for a cybersecurity review.Based on a set of Q&A published on theofficial website of the State Cipher Code Administration in connection with theissuance of the Revised Review Measures,an official of the said administrationindicated that
164、an online platform operator should apply for a cybersecurity reviewprior to the submission of its listing application with non-PRC securitiesregulators.Moreover,the CAC released the draft of the Regulations on Network DataSecurity Management in November 2021 for public consultation,which among other
165、things,stipulates that a data processor listed overseas must conduct an annualdata security review by itself or by engaging a data security service provider andsubmit the annual data security review report for a given year to the municipalcybersecurity department before January 31 of the following y
166、ear.Given the recencyof the issuance of the Revised Review Measures and their pending effectiveness,there is a general lack of guidance and substantial uncertainties exist withrespect to their interpretation and implementation.It remains unclear whether a Hong Kong company which collects personalinf
167、ormation from PRC individuals shall be subject to the Revised Review Measures.We do not currently expect the Revised Review Measures to have an impact on ourbusiness,operations or this offering as we do not believe that GCL is deemed to bean“operator of critical information infrastructure”or a“data
168、processor”controlling personal information of no less than one million users,that arerequired to file for cybersecurity review before listing in the U.S.,because(i)GCL is incorporated and operating in Hong Kong and the Revised Review Measuresremains unclear whether it shall be applied to a Hong Kong
169、 company;(ii)GCLoperates without any subsidiary or VIE structure in mainland China;(iii)as ofdate of this prospectus,GCL has collected and stored personal information of lessthan 100 PRC individual clients,far less than one million users;and(vi)as ofthe date of this prospectus,GCL has not been infor
170、med by any PRC governmentalauthority of any requirement that it files for a cybersecurity review.However,there remains significant uncertainty in the interpretation and enforcement ofrelevant PRC cybersecurity laws and regulations.If GCL is deemed to be an“operator of critical information infrastruc
171、ture”or a“data processor”controlling personal information of no less than one million users,GCLsoperation and the listing of our Ordinary Shares in the U.S.could be subject toCACs cybersecurity review in the future.If CGL(i)does not receive or maintainsuch permissions or approvals,should the approva
172、l is required in the future by thePRC government,(ii)inadvertently concluded that such permissions or approvals arenot required,or(iii)applicable laws,regulations,or interpretations change andCGL is required to obtain such permissions or approvals in the future,ouroperations and financial conditions
173、 could be materially adversely affected,and ourability to offer securities to investors could be significantly limited orcompletely hindered and the securities currently being offered may substantiallydecline in value and be worthless.Nevertheless,since these statements and regulatory actions are ne
174、w,it ishighly uncertain how soon the legislative or administrative regulation makingbodies will respond and what existing or new laws or regulations or detailedimplementations and interpretations will be modified or promulgated,if any.It isalso highly uncertain what the potential impact such modifie
175、d or new laws andregulations will have on GCLs daily business operation,its ability to acceptforeign investments and the listing of our Ordinary Shares on a U.S.or otherforeign exchanges.Permission required from Hong Kong and Chinese authoritiesWe have been advised by Loeb&Loeb LLP,our U.S.and Hong
176、Kong counsel,thatbased on their understanding of the current Hong Kong laws,as of the date of thisprospectus,GCL is not required to obtain any permission or approval from Hong Kongauthorities to operate our business.We are also not required to obtain permissionsor approvals from Hong Kong authoritie
177、s nor any PRC authorities before listing inthe U.S.and to issue our Ordinary Shares to foreign investors,including the CSRC2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_
178、magicempire.htm21/252or the CAC,because(i)the CSRC currently has not issued any definitive rule orinterpretation concerning whether offerings like ours under this prospectus aresubject to this regulation;and(ii)GFHL and GCL were established and operate inHong Kong and are not included in the categor
179、ies of industries and companies whoseforeign securities offerings are subject to review by the CSRC or the CAC.Under the licensing requirements of the SFC,GCL is required to obtainnecessary licenses to carry out regulated activities in Hong Kong and responsiblepersonnel are subject to the relevant l
180、aws and regulations and the respective rulesof the SFC.GCL currently holds Type 1 license(dealing in securities)and Type 6license(advising on corporate finance).These licenses have no expiration date andwill remain valid unless they are suspended,revoked or cancelled by the SFC.Wepay standard govern
181、mental annual fees to the SFC and are subject to continuedregulatory obligations and requirements.See“Regulation”on page 71.72022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a
182、3_magicempire.htm22/252Table of ContentsWe have also been advised by Loeb&Loeb LLP that uncertainties still exist,due to the possibility that laws,regulations,or policies in the PRC could changerapidly in the future.In the event that(i)the PRC government expanded thecategories of industries and comp
183、anies whose foreign securities offerings aresubject to review by the CSRC or the CAC and that we are required to obtain suchpermissions or approvals;or(ii)we inadvertently concluded that relevantpermissions or approvals were not required or that we did not receive or maintainrelevant permissions or
184、approvals required,any action taken by the PRC governmentcould significantly limit or completely hinder our operations in Hong Kong and ourability and to offer or continue to offer securities to investors and could causethe value of such securities to significantly decline or be worthless.Recent PCA
185、OB DevelopmentsOur Ordinary Shares may be prohibited from being trading on a national exchangeunder the HFCA Act if the PCAOB is unable to inspect our auditors for threeconsecutive years beginning in 2021.On June 22,2021,the U.S.Senate passed theAccelerating Holding Foreign Companies Accountable Act
186、,which,if enacted,wouldamend the HFCA Act and require the SEC to prohibit an issuers securities fromtrading on any U.S.stock exchanges if its auditor is not subject to PCAOBinspections for two consecutive years instead of three.The delisting of ourOrdinary Shares,or the threat of their being deliste
187、d,may materially andadversely affect the value of your investment.Our auditor,Friedman LLP,the independent registered public accounting firmthat issues the audit report included elsewhere in this prospectus,as an auditorof companies that are traded publicly in the United States and a firm registered
188、with the PCAOB,is subject to laws in the United States pursuant to which the PCAOBconducts regular inspections to assess our auditors compliance with theapplicable professional standards.Our auditor has been inspected by the PCAOB on aregular basis with the last inspection in June 2018.On December 1
189、6,2021,the PCAOB issued a report on its determinations that itwas unable to inspect or investigate completely PCAOB-registered public accountingfirms headquartered in Mainland China and in Hong Kong,because of positions takenby PRC authorities in those jurisdictions.The PCAOB made its determinations
190、pursuant to PCAOB Rule 6100,which provides a framework for how the PCAOB fulfillsits responsibilities under the HFCA Act.The report further listed in its AppendixA and Appendix B,Registered Public Accounting Firms Subject to the Mainland ChinaDetermination and Registered Public Accounting Firms Subj
191、ect to the Hong KongDetermination,respectively.Our auditor,Friedman LLP is headquartered inManhattan,New York,and did not appear as part of the report and was not listedunder its appendix A or appendix B.For more detailed information,see“Risks Related to Doing Business inJurisdictions We Operate Alt
192、hough the audit report included in this prospectusis prepared by U.S.auditors who are currently inspected by the PCAOB,there is noguarantee that future audit reports will be prepared by auditors inspected by thePCAOB and,as such,in the future investors may be deprived of the benefits of suchinspecti
193、on.Furthermore,trading in our Ordinary Shares may be prohibited under theHFCA if the SEC subsequently determines our audit work is performed by auditorsthat the PCAOB is unable to inspect or investigate completely,and as a result,U.S.national securities exchanges,such as the Nasdaq,may determine to
194、delist oursecurities.On June 22,2021,the U.S.Senate passed the Accelerating HoldingForeign Companies Accountable Act,which,if enacted,would amend the HFCA andrequire the SEC to prohibit an issuers securities from trading on any U.S.stockexchanges if its auditor is not subject to PCAOB inspections fo
195、r two consecutiveyears instead of three,and thus,would reduce the time before our Ordinary Sharesmay be prohibited from trading or delisted.”Implications of Being an Emerging Growth Company and a Foreign PrivateIssuerAs a company with less than$1.07 billion in revenue during our last fiscalyear,we q
196、ualify as an“emerging growth company”as defined in the Jumpstart OurBusiness Startups Act,or JOBS Act,enacted in April 2012,and may take advantageof reduced reporting requirements that are otherwise applicable to publiccompanies.These provisions include,but are not limited to:2022/12/13https:/www.se
197、c.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm23/252 being permitted to present only two years of audited financial statementsand only two years of related Managements Discussio
198、n and Analysis ofFinancial Condition and Results of Operations in our filings with the SEC;not being required to comply with the auditor attestation requirements inthe assessment of our internal control over financial reporting;82022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/000
199、6125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm24/252Table of Contents reduced disclosure obligations regarding executive compensation inperiodic reports,proxy statements and registration statements;and exemptions from the req
200、uirements of holding a nonbinding advisory vote onexecutive compensation and shareholder approval of any golden parachutepayments not previously approved.We may take advantage of these provisions until the last day of our fiscal yearfollowing the fifth anniversary of the date of the first sale of ou
201、r OrdinaryShares pursuant to this offering.However,if certain events occur before the endof such five-year period,including if we become a“large accelerated filer,”ourannual gross revenues exceed$1.07 billion or we issue more than$1.0 billion ofnon-convertible debt in any three-year period,we will c
202、ease to be an emerginggrowth company before the end of such five-year period.In addition,Section 107 of the JOBS Act provides that an“emerging growthcompany”can take advantage of the extended transition period provided in Section7(a)(2)(B)of the Securities Act of 1933,as amended,or the Securities Ac
203、t,forcomplying with new or revised accounting standards.We have elected to takeadvantage of the extended transition period for complying with new or revisedaccounting standards and acknowledge such election is irrevocable pursuant toSection 107 of the JOBS Act.We are a“foreign private issuer,”as def
204、ined by the SEC.As a result,inaccordance with the rules and regulations of The Nasdaq Stock Market LLC,orNasdaq,we may comply with home country governance requirements and certainexemptions thereunder rather than complying with Nasdaq corporate governancestandards.We may choose to take advantage of
205、the following exemptions afforded toforeign private issuers:Exemption from filing quarterly reports on Form 10-Q or provide currentreports on Form 8-K disclosing significant events within four(4)days oftheir occurrence.Exemption from Section 16 rules regarding sales of Ordinary Shares byinsiders,whi
206、ch will provide less data in this regard than shareholders ofU.S.companies that are subject to the Exchange Act.Exemption from the Nasdaq rules applicable to domestic issuers requiringdisclosure within four(4)business days of any determination to grant awaiver of the code of business conduct and eth
207、ics to directors andofficers.Although we will require board approval of any such waiver,wemay choose not to disclose the waiver in the manner set forth in theNasdaq rules,as permitted by the foreign private issuer exemption.Furthermore,Nasdaq Rule 5615(a)(3)provides that a foreign private issuer,suc
208、h as us,may rely on our home country corporate governance practices in lieu ofcertain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d),provided thatwe nevertheless comply with Nasdaqs Notification of Noncompliance requirement(Rule 5625),the Voting Rights requirement(Rule 5640)and that we
209、 have an auditcommittee that satisfies Rule 5605(c)(3),consisting of committee members that meetthe independence requirements of Rule 5605(c)(2)(A)(ii).If we rely on our homecountry corporate governance practices in lieu of certain of the rules of Nasdaq,our shareholders may not have the same protec
210、tions afforded to shareholders ofcompanies that are subject to all of the corporate governance requirements ofNasdaq.If we choose to do so,we may utilize these exemptions for as long as wecontinue to qualify as a foreign private issuer.Although we are permitted to follow certain corporate governance
211、 rules thatconform to BVI requirements in lieu of many of the Nasdaq corporate governancerules,we intend to comply with the Nasdaq corporate governance rules applicable toforeign private issuers.Corporate InformationOur principal executive office is located at 3/F,8 Wyndham Street,Central,Hong Kong.
212、Our telephone number is(+852)3577 8770.Our registered office in theBVI is located at the office of P.O.Box 957,Offshore Incorporations Centre,RoadTown,Tortola,BVI.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/da
213、ta/1881472/0006125/ff12022a3_magicempire.htm25/252Our agent for service of process in the United States is Cogency Global Inc.,located at 122 East 42nd Street,18th Floor New York,NY 10168.Our website islocated at .Information contained on,or that can be accessedthrough,our website is not
214、a part of,and shall not be incorporated by referenceinto,this prospectus.92022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm26/252Table of ContentsImpact of C
215、OVID-19Since late December 2019,the outbreak of a novel strain of coronavirus,laternamed COVID-19,spread rapidly throughout China and later to the rest of the world.On January 30,2020,the International Health Regulations Emergency Committee ofthe World Health Organization declared the outbreak a“Pub
216、lic Health Emergency ofInternational Concern(PHEIC),”and later on March 11,2020 a global pandemic.TheCOVID-19 outbreak has led governments across the globe to impose a series ofmeasures intended to contain its spread,including border closures,travel bans,quarantine measures,social distancing,and res
217、trictions on business operations andlarge gatherings.From 2020 to the middle of 2021,COVID-19 vaccination program hadbeen greatly promoted around the globe,however several types of COVID-19 variantsemerged in different parts of the world.This outbreak of COVID-19 has caused companies such as ours,as
218、 well as ourbusiness partners,to implement temporary adjustments to work schedules and travelplans,mandating employees to work from home and collaborate remotely.As a result,we may have experienced lower efficiency and productivity,internally andexternally,which may adversely affect our service qual
219、ity.Moreover,our businessdepends on our employees.If any of our employees has contracted or is suspected ofhaving contracted COVID-19,these employees will be required to be quarantined andthey could pass it to other of our employees,potentially resulting in severedisruption to our business.Furthermo
220、re,our results of operations have been affected by the COVID-19outbreak.Due to the instability of global financial markets and other economic andfinancial challenges brought about by COVID-19,our businesses and clients havebeen adversely affected by travel restrictions preventing PRC residents fromt
221、ravelling to Hong Kong.More broadly,the COVID-19 outbreak threatens globaleconomies and has caused significant market volatility and declines in generaleconomic activities.This may have severely dampened the confidence in globalmarkets and potential clients.Any future impact on our results of operat
222、ions will depend on,to a largeextent,future developments and new information that may emerge regarding theduration and severity of the COVID-19 pandemic and the actions taken by governmentauthorities and other entities to contain the spread or treat its impact,almostall of which are beyond our contr
223、ol.We will continue to closely monitor thesituation throughout 2022 and beyond.102022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm27/252Table of ContentsThe
224、Offering(1)Securities being offered:5,000,000 Ordinary Shares.Initial public offering price:We estimate the initial public offeringprice will be$4.00 per Ordinary Share.Number of Ordinary Shares outstandingbefore this offering:15,000,000 Ordinary Shares.Number of Ordinary Shares outstandingafter thi
225、s offering:20,000,000 Ordinary Shares.Representatives warrants:We have agreed to issue,on the closing dateof this offering,warrants,or therepresentatives warrants,to therepresentative of the underwriters,Network1 Financial Securities,Inc.,in an amountequal to 10%of the aggregate number ofordinary sh
226、ares sold by us in this offering.The exercise price of the representativeswarrants is equal to 150%of the price ofour ordinary shares offered hereby.Therepresentatives warrants are exercisablefor a period of five years expiring on thefifth anniversary of the commencement ofsales of this offering.Use
227、 of proceeds:We estimate that we will receive netproceeds from this offering,after deductingthe estimated underwriting discounts and theestimated offering expenses payable by us,of approximately$17,715,568,afterdeducting the underwriting discounts andcommissions,non-accountable expenseallowance and
228、estimated offering expensespayable by us.We plan to use the net proceeds of thisoffering as follows:Approximately 50%for strengthening ofour corporate finance advisory businessin Hong Kong and expanding marketpresence in other international capitalmarkets,in particular the US;Approximately 10%for ex
229、panding intothe asset management business;Approximately 10%for enhancing ourbrand and expanding our officeoperation;and The balance to fund working capital andfor other general corporate purposes.For more information on the use of proceeds,see“Use of Proceeds”on page 41.112022/12/13https:/www.sec.go
230、v/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm28/252Table of ContentsLock-up:All of our directors,officers and principalshareholders(defined as owners of 5%ormore of our Ordinary Sh
231、ares)have agreedwith the underwriters,subject to certainexceptions,not to offer,issue,sell,transfer,contract to sell,encumber,grantany option for the sale of or otherwisedispose of,directly or indirectly,any ofour Ordinary Shares or securitiesconvertible into or exercisable orexchangeable for our Or
232、dinary Shares for aperiod of 180 days from the effective dateof the registration statement of which thisprospectus forms a part of this prospectus.See“Shares Eligible for Future Sale”and“Underwriting”for more information.Proposed Nasdaq symbol:We intend to apply to have our OrdinaryShares listed on
233、the Nasdaq Capital Marketunder the symbol“MEGL”.We do not intendto apply to list the representativeswarrants on any security exchange.Risk factors:Investing in our Ordinary Shares ishighly speculative and involves a highdegree of risk.As an investor you shouldbe able to bear a complete loss of youri
234、nvestment.You should carefully considerthe information set forth in the“RiskFactors”section beginning on page 14.Unless otherwise indicated,all information contained in this prospectusassumes no exercise of the representatives warrants and is based on 15,000,000Ordinary Shares outstanding as of the
235、date of this prospectus.122022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm29/252Table of ContentsSummary Consolidated Financial DataThe following selected c
236、onsolidated statements of income for the years endedDecember 31,2021 and 2020 and selected consolidated balance sheets data as ofDecember 31,2021 and 2020 have been derived from our consolidated financialstatements included elsewhere in this prospectus.Our consolidated financial statements are prepa
237、red and presented in accordancewith U.S.GAAP.Our historical results are not necessarily indicative of theresults that may be expected in the future.The following summary consolidatedfinancial data should be read in conjunction with“Managements Discussion andAnalysis of Financial Condition and Result
238、s of Operations,”“Exchange RateInformation”and our consolidated financial statements included elsewhere in thisprospectus.Years ended December 31,2020 2021 2021 HK$HK$US$REVENUE IPO sponsorship services 10,720,000 6,775,000 868,634 Financial advisory and independentfinancial advisory services 1,666,
239、900 4,927,550 631,770 Compliance advisory services 6,479,040 5,168,198 662,623 Underwriting services 1,550,840 Total revenue 20,416,780 16,870,748 2,163,027 Operating expenses Selling,general and administrativeexpenses(16,553,262)(15,140,959)(1,941,248)Income from operation 3,863,518 1,729,789 221,7
240、79 Other income/(expense)Interest income 209,293 1,219 156 Other income 753,518 Other expenses(195,193)(82,200)(10,539)Total other income/(expense),net 767,618 (80,981)(10,383)INCOME BEFORE INCOME TAXES 4,631,136 1,648,808 211,396 Income tax expenses(431,511)(70,184)(8,998)NET INCOME 4,199,625 1,578
241、,624 202,398 As of December 31,2020 2021 2021 HK$HK$US$Current assets 13,311,770 19,791,592 2,537,514Non-current assets 3,028,874 5,903,474 756,894Total assets 16,340,644 25,695,066 3,294,408Current liabilities 12,410,405 16,535,161 2,120,001Non-current liabilities 3,651,042 468,106Total liabilities
242、 12,410,405 20,186,203 2,588,107Total shareholders equity 3,930,239 5,508,863 706,3012022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm30/252132022/12/13https
243、:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm31/252Table of ContentsRISK FACTORSAn investment in our Ordinary Shares involves a high degree of risk.You shouldcarefully
244、consider the following information about these risks,together with theother information appearing elsewhere in this prospectus,before deciding to investin our Ordinary Shares.The occurrence of any of the following risks could have amaterial adverse effect on our business,financial condition,results
245、of operationsand future growth prospects.In these circumstances,the market price of our OrdinaryShares could decline,and you may lose all or part of your investment.Risks Related to Our Business and IndustryOur business performance is highly influenced by the conditions of capitalmarket in Hong Kong
246、.All our business operations were concentrated in the capital market sector inHong Kong during the years ended December 31,2021 and 2020 and up to the date ofthis prospectus.Any material deterioration in the financial and economic conditionsof the capital market in Hong Kong could materially and adv
247、ersely affect our businessand prospects.The Hong Kong corporate finance market is susceptible to changes inthe global as well as domestic economic,social and political conditions including,without limitation,interest rate fluctuations,volatility of foreign currencyexchange rates,monetary policy chan
248、ges,outcome of the Sino-US trade dispute,theU.S.interest rate outlook,social unrest in Hong Kong and legal and regulatorychanges.When there are unfavorable changes to the global or local market conditions,the capital market in Hong Kong may experience negative fluctuations in itsperformance.It may d
249、irectly affect the demand for our services,our pricingstrategies,the level of our business activities and consequently our revenue derivedtherefrom.This may materially and adversely affect our financial condition andresults of operations.We operate in a heavily regulated industry,and are subject to
250、extensiveand evolving regulatory requirements in the jurisdictions in which weoperate.The corporate finance services industry in which we operate is highly regulatedand any material changes to the laws and regulations applicable to us couldsignificantly affect our operations.We cannot assure you tha
251、t the business model andoperations we currently have in place would be in compliance with any changes orupdates to the regulatory requirements.Costs of compliance could increase and ourfee structure may have to be adjusted.For instance,we may need to increase ourheadcounts if requirements over spons
252、or work become more stringent or obtain morelicenses if the licensing requirements change.The sanctions imposed by the SFCagainst large sponsor firms for substandard due diligence in several recent widely-publicized cases demonstrate that the SFC expects high standards of sponsorsconduct and we will
253、 need to continue to enhance our internal controls and systems inrespect of our sponsor work in accordance with new regulatory requirements orguidance.If capital ratio requirements increase and certain products or activitiesare subject to limitations,the range of services we offer could be restricte
254、d,andrevenue growth and profitability could be materially and adversely impacted.Moreover,our licensed entity is under the supervision and monitoring of the SFC andthe Stock Exchange and must remain fit and proper to the satisfaction of theregulators in order to retain its license(s).The SFC may als
255、o conduct regulatoryinspections and investigations on our business activities from time to time.Any non-compliance with applicable laws,regulations,guidance or codes or any negativefindings made by the regulators may result in(i)fines,deterrent penalties,disciplinary actions against us,our Responsib
256、le Officers,Licensed Representativesor any of our personnel;or(ii)suspension or revocation of some or all of(a)ourregistrations or licenses for carrying on our business activities;or(b)theapprovals or licenses granted to our personnel enabling them to carry out theirresponsibilities in our Group.For
257、 instance,conditions may be imposed on ourlicenses restricting us to carry on our business or our Responsible Officers orLicensed Representatives may be banned from the industry,for a specific period oftime.Accordingly,our business operation,reputation,financial condition andresults of operations mi
258、ght be materially and adversely affected.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm32/252Our future financial performance and ability to succeed may b
259、e difficult topredict given that our operating history in the corporate finance servicesindustry in Hong Kong is relatively short.Our future revenues and cash flows may fluctuate significantly given that ouroperating history in the corporate finance services industry in Hong Kong isrelatively short,
260、rendering it difficult to predict our results of operations andprospects.We started to provide corporate finance advisory services,including IPOsponsorship services,financial advisory,independent financial advisory services andcompliance advisory services in February,2017 and we commenced to provide
261、underwriting services to our clients in April,2018.142022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm33/252Table of ContentsWe only have a limited operating
262、 history with regards to such business upon whichan evaluation of our prospects can be based.Such prospects must be considered inlight of the risks,expenses and difficulties encountered by any new company.Suchrisks include our continued market acceptance as a reliable and attentive corporatefinance
263、service provider,ability to develop our business scale,and potentialcompetition from our competitors.There is no assurance that we will sustainprofitability or positive cash flow from our existing operations or from any expandedor new operations,nor that we will be able,upon the completion of the of
264、fering,toexpand operations beyond our current level.We face fierce competition in the corporate finance services industry inHong Kong and may lose our competitive edge to our competitors.There is a significant number of existing market participants in the corporatefinance services industry in Hong K
265、ong providing services similar to ours.Our largercompetitors may have advantages over us such as having better brand recognition andreputation in the market,wider range of value-adding services,stronger human andfinancial resources,longer operating histories,and operational presence in moregeographi
266、c locations.We also face competition from local medium and small-sizedsponsors which offer similar range of services.New participants may enter into themarket insofar as they have engaged appropriate qualified professionals and obtainedthe requisite regulatory licenses and permits.Given the keen com
267、petition,we cannotassure that we will be able to maintain our competitive edge in response to the fast-changing business environment.In addition,competition creates an unfavorablepricing environment in the market in which we operate.Intensified competition maycause us to reduce our service fees or c
268、ommission rates in order to compete withother market players,which could place significant pressure on our ability tomaintain gross margins and is particularly acute during market slowdowns,and will inturn materially and adversely affect our market share,financial condition andresults of operations.
269、We rely on a limited number of key customers for our business.For the years ended December 31,2021 and 2020,our largest customer accountedfor 17.5%and 32.5%of our total revenue,respectively,mainly due to our IPOsponsorship and underwriting services which had larger contract sum.Our customersare fair
270、ly concentrated and we rely on a limited number of key customers during eachperiod of our business.Our customer concentration risk is exacerbated due to ourreliance on different customers in different periods,and the largest customer ineach period for the years ended December 31,2021 and 2020 was a
271、different customer.For the years ended December 31,2021 and 2020,we were engaged in six IPOprojects and successfully completed one IPO sponsorship projects on the Main Board ofthe Stock Exchange in the year ended December 31,2020.We recognized revenue fromboth IPO sponsorship,underwriting services a
272、nd compliance advisory services fromthis customer and this customer became our largest customer in the year endedDecember 31,2020.Our concentration risk may be amplified due to the limited numberof IPO sponsorship project that we may sponsor in a given year.Nevertheless,webelieve that a number of fa
273、ctors will help mitigate any material adverse impact ofsuch concentration on our business operations and financial condition.We offeredcomprehensive corporate finance services ranging from IPO sponsorship services,financial advisory and independent financial advisory services,compliance advisoryserv
274、ices and underwriting services.We will continue to monitor and diversify ourincome stream to enhance our provision of financial and independent financialservices.Our number of financial advisory and independent financial advisoryprojects increased from 10 projects for the year ended December 31,2020
275、 to 23 forthe year ended December 31,2021.During the year ended December 31,2021,GCL wasengaged in eight financial advisory projects for companies seeking listing in theU.S.We are also able to adjust our professional team and/or recruit additionaltalents to cope with the provision of such services.O
276、ur goal is to diversify our customer base and revenue source and positionourselves as a trusted financial services provider.However,we cannot assure youthat we will be successful in diversifying our customer base and reducing ourcustomer concentration risk.Moreover,if we lose a key customer or if a
277、customerdecides to engage in a competitor,and if we are unable to secure new customersduring a period of time in the future,our results of operations,financialconditions,cashflow positions may be adversely and materially impacted.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0001213900220
278、36125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm34/252We are affected by the rules and regulations governing listed companies onthe Stock Exchange.During the years ended December 31,2021 and 2020 and up to the date of thispros
279、pectus,we provided corporate finance advisory services to clients who arelisting applicants or listed companies or their shareholders or investors on theStock Exchange.These clients are required to comply with the Listing Rules,the GEMListing Rules,the Takeovers152022/12/13https:/www.sec.gov/Archive
280、s/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm35/252Table of ContentsCode and other rules and regulations where applicable.Any changes to such rules andregulations,particularly those affecti
281、ng the appointment and the role of sponsor inlisting applications and the appointment and the role of financial adviser inspecific transactions,may affect the demand for and the scope of our corporatefinance advisory services which may in turn materially and adversely affect ourresults of operations
282、.Failure to comply with regulatory capital requirements set by localregulatory authorities could materially and negatively affect our businessoperation and overall performance.Our regulated operating subsidiary is subject to various regulatory capitalrequirements,including minimum capital requiremen
283、ts,established by competentauthorities in their respective jurisdiction.Failure to meet minimum capitalrequirements can initiate certain mandatory,and possibly additional discretionaryactions by regulators that,if undertaken,could have a direct material effect on ourbusiness and financial position.F
284、or example,our SFC licensed operating subsidiary,GCL,is required under the Securities and Future Ordinance(Cap.571)(“SFO”)of HongKong and Securities and Futures(Financial Resources)Rules(Chapter 571N of the Lawsof Hong Kong)(the“FRR”)of Hong Kong to maintain certain level of liquid capital.See“Regul
285、ations”.As of the date of this prospectus,our operating subsidiary was in compliancewith the respective regulatory capital requirements.However,if we fail to remainwell-capitalized for regulatory purposes,SFC may take actions against us and ourbusiness operation,and we may face penalties,including l
286、imitations and prohibitionson our business activities or suspension or revocation of our licenses and tradingrights.This could affect client confidence,our ability to grow,our costs of fundsand professional insurance costs,our ability to pay dividends on Ordinary Shares,our ability to make acquisiti
287、ons,and in turn,our business,results of operationsand financial condition.The revenue from our corporate finance advisory business and underwritingbusiness is non-recurring in nature and our profitability is highlyunpredictable.The performance of our corporate finance services depends,to a large ext
288、ent,onour ability to leverage our business network and relationships to source and retainclients.Since our mandates were negotiated on a project-by-project basis with ourclients,revenue generated from our services may fluctuate from time to time and maynot recur.The number of projects undertaken by
289、us,the total revenue derived fromour businesses and the revenue generated from each client are affected by numerousfactors such as market condition,the terms of each engagement,project duration,complexity and completion timeline of each project,resulting in uncertainties inrelation to the sustainabi
290、lity of our financial performance.There is no assurancethat the clients which have previously sought our services will continue to retain usfor future businesses.Further,service fees for our corporate finance advisoryprojects are payable by instalments according to different milestones stipulated in
291、our mandates and underwriting commissions are payable upon successful completion ofthe relevant IPO or fund raising exercise.We may not receive the mandated paymentsin full for services provided or after we have expended substantial effort and timeas scheduled or at all.Therefore,the revenue generat
292、ed from each client orengagement differs and we cannot assure that our future engagement fee rates will becomparable to those accepted by our clients during the years ended December 31,2021and 2020.Moreover,the demand for our corporate finance advisory and underwriting servicesare heavily dependent
293、on the market conditions.Any adverse market condition ormarket sentiment will affect clients decision on the scale,timing and stock marketchoices in respect of their fundraising needs,which may lead to lower demand for,delay to or termination of fundraising activities and our services and in turn af
294、fectthe financial performance of our financial advisory and underwriting services.If weare unable to continuously secure new sizable mandates,or if the market conditionsbecome unfavorable,our business and results of operations may be materially andadversely affected.In these circumstances,our revenu
295、e and profitability may fluctuate from year toyear and our financial performance is highly unpredictable.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm36/
296、252We may be unable to receive mandated payments in a timely manner or in fullif milestone events stipulated in our mandates for IPO sponsorship,financial advisory and underwriting services are not achieved as stipulatedor if client withdraws from or terminates the transaction.During the years ended
297、 December 31,2021 and 2020 and up to the date of thisprospectus,our business was heavily premised on the provision of IPO sponsorship andfinancial advisory services,which constituted a substantial portion of our corporatefinance advisory business.The payment terms of our mandates for these servicesn
298、ormally involve an initial retainer fee and progress payments based on milestonesachieved,and not necessarily based on the time or costs162022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/000
299、6125/ff12022a3_magicempire.htm37/252Table of Contentswe have incurred for the project.Underwriting commission is payable to us uponsuccessful completion of an IPO or the fundraising exercise where we act as anunderwriter.If a milestone is not achieved or if a transaction is terminated beforecompleti
300、on,our clients may delay in settling our invoices which are presented tothem when due,or not settle them at all.In the case of default payments,if we havealready incurred significant amount of costs and expenditures for the project and theinitial retainer fee or any progress payments received do not
301、 cover our total costsincurred,our results of operations may be materially and adversely affected.Failures or delays in receiving payments from our clients may adversely affect ourcash flow position and our ability to meet the working capital requirement.The grantof approvals by the regulators such
302、as the Stock Exchange and the SFC will usuallyaffect the project timeline.Failure in obtaining the necessary approvals asstipulated or at all could result in the delay or abortion of the transactions.Any deterioration of our IPO sponsorship services may adversely affect ourother financial services b
303、usiness.Revenue generated from our IPO sponsorship business contributed substantially toour total revenue.For the years ended December 31,2021 and 2020,we recognized IPOsponsorship income of approximately HK$6,775,000(approximately US$868,634)andHK$10,720,000,respectively,representing approximately
304、40.2%and 52.5%of our totalrevenue for the respective periods.Our provision of IPO sponsorship services helpsto induce a substantial amount of underwriting business where we may act as theglobal coordinator,bookrunner,lead manager or underwriter for such IPOs.Inaddition,during the same periods,all cl
305、ients of our IPO sponsorship projectsengaged us as their compliance advisers.Therefore,any decline in our IPOsponsorship business may adversely affect the revenue and profitability of ourbusiness.We are subject to market and financial risks arising from our underwritingbusiness if the securities und
306、erwritten by us are undersubscribed.We generally underwrite IPOs on a fully-underwritten basis.If the securitiesunderwritten by us are undersubscribed and we fail to procure subscriptions to suchsecurities,we would be bound to purchase the undersubscribed portion on our ownaccount up to our maximum
307、underwriting commitment,which would materially andadversely affect our liquidity.If we fail to sell the securities we haveunderwritten,we would incur expenditure,expose ourselves to market risk and capitalavailable to us would be reduced,which may in turn materially and adversely affectour results o
308、f operations and financial conditions.In the event that such securitiespurchased by us become illiquid and/or their market value drops,our liquidity andfinancial position would also be adversely affected.Under the FRR,the value of theopen position of any underwriting commitment or the market value o
309、f the securitiespurchased by us to fulfil our underwriting obligations would have an impact on ourliquid capital.If our liquid capital falls below the minimum requirement under theFRR,we will be in breach of the FRR resulting in SFC suspending our licence orimposing conditions in relation to our reg
310、ulated activities.Further,ourunderwriting commission income is directly related to the number of underwritingexercises secured and completed by us,the total fundraising size of the underwritingprojects,our underwriting commitment and the expected commission rates.Such factorsare susceptible to marke
311、t conditions which are beyond our control.We rely on our key management and professional staff,the loss of whom mayaffect our operations.Our Group has a team of experienced and competent management who is responsiblefor directing and managing daily operations,monitoring and supervising complianceand
312、 risk management,overseeing financial condition and performance,allocating andbudgeting human resources and formulating business strategies.Leveraging on theirexperience and network in the industry,we have been successfully expanding ourclient base and source of deals and transactions.However,we can
313、not assure you thatwe can retain the services of our key management and find suitable replacement if anyof them terminate their engagement with us given the competition for experienced andcompetent personnel in the industry is intense.Other than our senior management,we also rely on our professional
314、 staff indifferent business operations to implement our business strategies,provide qualityservices to clients,manage our compliance and risks,identify and capture business2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives
315、/edgar/data/1881472/0006125/ff12022a3_magicempire.htm38/252opportunities,maintain relationship with clients and procure new clients.Loss ofour professional staff and failure to recruit replacement will materially andadversely affect our business operations.172022/12/13https:/www.sec.gov/A
316、rchives/edgar/data/1881472/0006125/ff12022a3_magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm39/252Table of ContentsOur financial result for the year ending December 31,2022 is expected tobe adversely affected by the non-recurring
317、listing expenses.Our directors are of the view that the financial result of our Group for the yearending December 31,2022 is expected to be adversely affected by the listing expensesin relation to the offering,the nature of which is non-recurring.See“Expensesrelated to this offering”for details.Part
318、 of the listing expenses is expected tobe accounted for as a deduction from equity upon listing while part of the listingexpenses has been and is expected to be recognized as expenses in our consolidatedstatements of income which is expected to be recognized for the year ending December31,2022.Accor
319、dingly,our results of operation and financial performance for theyear ending December 31,2022 may be adversely impacted,and may or may not becomparable to our financial performance in the past.We recorded net operating cash outflow for the year ended December 31,2020.For the year ended December 31,2
320、020,we recorded net operating cash outflow ofHK$3,987,218.We cannot assure you that we will not record net current liabilities orexperience another period of net cash outflow in the future.If we are unable toobtain sufficient funds to finance our business,our liquidity,results of operationsand finan
321、cial condition may be materially and adversely affected.If we need toresort to other financing activities to generate additional cash,we may incuradditional financing costs,and we cannot assure you that we will be able to obtainthe required financing on terms acceptable to us,or at all,at the materi
322、al time.We may encounter potential conflicts of interest from time to time,and thefailure to identify and address such conflicts of interest could adverselyaffect our business.We face the possibility of actual,potential,or perceived conflicts of interestin the ordinary course of our business operati
323、ons.Conflicts of interest may existbetween(i)our different businesses;(ii)us and our clients;(iii)our clients;(iv)us and our employees;and(v)our clients and our employees.As we expand thescope of our business and client base,it is critical for us to be able to timelyaddress potential conflicts of in
324、terest,including situations where two or moreinterests within our businesses naturally exist but are in competition or conflict.We have put in place internal control and risk management procedures that aredesigned to identify and address conflicts of interest.However,appropriatelyidentifying and man
325、aging actual,potential,or perceived conflicts of interest iscomplex and difficult,and our reputation and our clients confidence in us could bedamaged if we fail,or appears to fail,to deals appropriately with one or moreactual,potential,or perceived conflicts of interest.It is possible that actual,po
326、tential,or perceived conflicts of interest could also give rise to clientdissatisfaction,litigation,or regulatory enforcement actions.Regulatory scrutinyof,or litigation in connection with,conflicts of interest could have a materialadverse effect on our reputation,which could materially and adversel
327、y affect ourbusiness in a number of ways,including a reluctance of some potential clients andcounterparties to do business with us.Any of the foregoing could materially andadversely affect our reputation,business,financial condition,and results ofoperations.Our corporate finance advisory business ma
328、y be subject to professionalliabilities.We provide professional advices when providing corporate finance advisoryservices to our clients.Our clients relying on our professional advice may sufferloss as a result of our negligence in providing such advice and may claimcompensation against us.We are th
329、erefore exposed to the risks arising from,amongothers,possible claims or lawsuits in respect of professional negligence andemployee infidelity.Although we have adopted relevant internal control measures,there is no assurance that the measures can completely eliminate all future possibleprofessional
330、negligence and/or employee infidelity.Should we experience any event ofprofessional liabilities,such as claims or lawsuits,our prospects,financialcondition and reputation could be materially and adversely affected.2022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_
331、magicempire.htmhttps:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magicempire.htm40/252We may be subject to litigation,arbitration or other legal proceedingrisk.We may be subject to arbitration claims and lawsuits in the ordinary course ofour business.As of the date of this
332、registration statement,we are not a party to,and are not aware of any threat of,any legal proceeding that,in the opinion of ourmanagement,is likely to have a material adverse effect on our business,financialcondition or operations.Actions brought against us may result in settlements,awards,injunctio
333、ns,fines,penalties and other results adverse to us.A substantialjudgment,settlement,fine or penalty could be material to our operating results orcash flows for a particular period,depending on our results for that period,orcould cause us significant reputational harm,which could harm our businessprospects.182022/12/13https:/www.sec.gov/Archives/edgar/data/1881472/0006125/ff12022a3_magic