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1、F-1 1 ea190712-f1_epsiumenter.htm REGISTRATION STATEMENTAs filed with the Securities and Exchange Commission on December 29,2023.Registration No.333-UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 EPSIUM ENTERPRISE LIM
2、ITED(Exact name of registrant as specified in its charter)Not Applicable(Translation of Registrants name into English)British Virgin Islands 5180 Not Applicable(State or other jurisdiction ofincorporation or organization)(Primary Standard IndustrialClassification Code Number)(I.R.S.EmployerIdentific
3、ation Number)c/o Companhia de Comrcio Luz LimitadaAlameda Dr.Carlos DassumpcaoEdf China Civil Plaza 235-243,14 Andar PMacau,SAR China(Address,including zip code,and telephone number,including area code,of registrants principal executive offices)Cogency Global Inc.122 East 42nd Street,18th FloorNew Y
4、ork,NY 10168(Name,address,including zip code,and telephone number,including area code,of agent for service)Copies to:Laura Hua Luo Hemmann,Esq.King&Wood Mallesons LLP500 Fifth Avenue,50th FloorNew York,NY 10110United States212-319-4755Fang Liu,Esq.VCL Law LLP1945 Old Gallows Road,Suite 630Vienna,VA
5、22182United States+1(301)760-7393 Approximate date of commencement of proposed sale to public:As soon as practicable after the effective date of this Registration Statement.If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under t
6、he Securities Act,check the following box.If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the
7、same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the Securities Act,check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amen
8、dment filed pursuant to Rule 462(d)under the Securities Act,check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined i
9、n Rule 405 of the Securities Act of 1933.Emerging growth company If an emerging 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 period for complying with any new or revised finan
10、cial accounting standards providedpursuant to Section 7(a)(2)(B)of the Securities Act.The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this
11、 registration statement shall thereafter becomeeffective in accordance with Section 8(a)of the Securities Act of 1933,as amended,or until the registration statement shall become effective on such date as the Securities and Exchange Commission,acting pursuant to such Section 8(a),may determine.The in
12、formation in this prospectus is not complete and may be changed.We may not sell the securities until the registration statement filed with the Securities and Exchange Commission is effective.This prospectus is not an offer to sell these securities and it is not soliciting anyoffer to buy these secur
13、ities in any jurisdiction where such offer or sale is not permitted.PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED,2023 Ordinary Shares EPSIUM ENTERPRISE LIMITED This is an initial public offering of the ordinary shares(each,an“Ordinary Share”,collectively,“Ordinary Shares”)of EPSIUM ENTERPRISE
14、LIMITED,a British Virgin Islands company.Prior to the completion of this offering,there has been no public market for our OrdinaryShares.We are offering on a firm commitment basis Ordinary Shares,par value US$0.00002 per Ordinary Share.We expect the initial public offering price will be between$“”an
15、d$“”per Ordinary Share.This offering is contingent upon us listing our OrdinaryShares on the Nasdaq Capital Market(“Nasdaq”)(or another national exchange).There is no guarantee or assurance that our Ordinary Shares will be approved for listing on Nasdaq(or another national exchange).We have reserved
16、 the symbol“EPSM”for purposes of listing theOrdinary Shares on Nasdaq and we plan to apply to list the Ordinary Shares on Nasdaq.We cannot assure you that our application will be approved;however,if it is not approved,we will not complete this offering.Investing in our Ordinary Shares involves a hig
17、h degree of risk,including the risk of losing your entire investment.See“Risk Factors”beginning on page 15 to read about factors you should consider before buying our Ordinary Shares.EPSIUM ENTERPRISE LIMITED was incorporated as a company limited by shares under the laws of the British Virgin Island
18、s,formerly known as Shengtao Investment Development Limited.As a holding company with no material operations of our own,we conduct ouroperations through Companhia de Comercio Luz Limitada,our indirectly owned subsidiary incorporated under the laws of Macau Special Administrative Region of the People
19、s Republic of China(“Macau,”“Macao,”“Macau SAR,”or“Macao SAR”).The Company controls andreceives the economic benefits of Luzs business operations through equity ownership.The Ordinary Shares offered in this offering are shares of the holding company that is incorporated in the British Virgin Islands
20、.Investors of our Ordinary Shares should be aware that they maynever directly hold equity interests in our subsidiaries.Epsium Enterprise Limited is a company organized under the laws of the Hong Kong Special Administration Region of the Peoples Republic of China(“Hong Kong”)and an 80%-owned subsidi
21、ary of Epsium BVI.Epsium HK is a holding company and does not conduct anysubstantive operations in Hong Kong except for facilitating inventory procurement in Hong Kong for our only operating subsidiary,which is in Macau.Epsium HK does not maintain any office facility or personnel.Epsium HK has no re
22、venue or expenses other than thoseassociated with inventory procurement in Hong Kong from a few Hong Kong beverage distributors.All of Epsiums operations are conducted in Macau by Luz,our Macau operating subsidiary.As a Hong Kong registered entity,Epsium HK is subject to Hong Kong laws generallyappl
23、icable to Hong Kong entities.We believe Epsium HK is compliant with the laws and regulations governing its existence and business operations in Hong Kong,including without limitation,laws and regulations relating to data privacy and anti-monopoly,to the extent suchlaws and regulations are applicable
24、 to Epsium HK.Luz is an import trading and wholesaler of primarily alcoholic beverages in Macau.As a Macau registered entity,Luz is subject to Macau laws generally applicable to Macau entities.We believe Luz is compliant with the laws and regulations governing its existence and businessoperations in
25、 Macau,including without limitation,laws and regulations relating to data privacy and unfair competition and anti-monopoly,to the extent such laws and regulations are applicable to Luz.For more details,please see“Prospectus Summary Summary of Risk Factors Risks Related to Doing Business in Macau and
26、 Risks Related to the PRC”on page 4,“Risk Factors Risks Related to the PRC”beginning on page 26 and“Risk Factors Risks Related to DoingBusiness in Macau”beginning on page 24 and“Regulations”beginning on page 89.Luz is 80%owned by Epsium HK and 20%owned by Mr.Son I Tam,our founder,CEO,CFO,Chairman,an
27、d principal shareholder.Luz operates only in Macau and is subject to Macau laws and regulations,including the Basic Law of the Macao Special Administrative Regionsof the Peoples Republic of China(the“Basic Law”).Although we and our subsidiaries are not based in China and we have no operations in Chi
28、na,we may be subject to legal and operational risks indirectly by virtue of doing business with parties in China or even directly if wedecide to operate in China in the future.We do not have any variable interest entity(“VIE”)and we currently do not have any intention of establishing any VIEs in the
29、 future.Unless otherwise indicated or the context otherwise requires,references in this prospectus to“Company”,“Epsium,”or“Epsium BVI”are to EPSIUM ENTERPRISE LIMITED,the ultimate holding company organized as a company limited by shares under the laws of the BritishVirgin Islands;references in this
30、prospectus to“Epsium HK”are to Epsium Enterprise Limited,a company organized under the laws of the Hong Kong Special Administration Region of the Peoples Republic of China(“Hong Kong”)and an 80%-owned subsidiary of EpsiumBVI;and references in this prospectus to“Luz”,the“Operating Entity”or the“Macau
31、 Subsidiary”are to Companhia de Comercio Luz Limitada,a limited liability company organized under Macau laws and an 80%-owned operating subsidiary of Epsium HK.For more detailsregarding the risks regarding the Companys holding company structure,please refer to“Prospectus Summary Corporate History an
32、d Structure”on page 1 and“Risk Factors Risks Related to our Ordinary Shares and This Offering We may not be able to pay any dividendson our Ordinary Shares in the future due to BVI law.”on page 36 of the prospectus.Our company structure is comprised of(i)a British Virgin Island holding entity,Epsium
33、 BVI,(ii)a Hong Kong holding entity,Epsium HK,which is majority-owned by Epsium BVI,and(iii)a Macau operating entity,Luz,which is majority-owned by Epsium HK.Each of Macauand Hong Kong is a Special Administrative Region of the Peoples Republic of China with its own legal system under the Chinese pol
34、icy of“one-country,two-systems,”which accords a special legal status to each of them within the Peoples Republic of China through theirrespective local laws.However,because Hong Kong and Macau are constituent parts of the Peoples Republic of China,our company structure,which is comprised of entities
35、 in Hong Kong and Macau,involves unique risks to our investors.If there is a significant change tocurrent political and legal arrangements in Macau or Hong Kong,or between China and Macau,or China and Hong Kong,or if there is a duly declared state of war or state of emergency endangering national un
36、ity or security under the existing respective Basic Law of Hong Kongand Macau,however unlikely,it could potentially impact Macau and Hong Kong companies.Companies operated in Macau or Hong Kong may face the same or similar regulatory risks as those faced by companies operated in the PRC,such as risk
37、s relating to the ability to offersecurities to investors,list securities on a U.S.or other foreign exchange,or accept foreign investment.Additionally,as a result of the foregoing scenarios,the PRC regulatory authorities could disallow our company structure,which would likely result in a material ch
38、ange in ouroperations and/or a material change in the value of the securities we are registering for sale in this offering,including that it could cause the value of such securities to significantly decline or become worthless.We operate only in Macau through our Macau operating entity,Luz.Although
39、we believe that the laws and regulations of the PRC do not currently directly apply to us nor have any direct material negative impact on our business,financial condition or results of operations,andour corporate structure is stable without any interference from current applicable laws in PRC,Hong K
40、ong,or Macau,we face risks and uncertainties associated with the complex and evolving PRC laws and regulations and the economic conditions of the PRC because ourbusiness operations rely on the economic growth of the PRC and the smooth functioning of the PRC commercial participants in our industry,in
41、cluding manufacturers,exporters,and PRC tourists to Macau.Additionally,if there is a duly declared state of war or state of emergencyendangering national unity or security under the existing Basic Law or that the Basic Law is fundamentally amended by the National Peoples Congress of the Peoples Repu
42、blic of China by virtue of Macau being a constituent part of the Peoples Republic of China,howeverunlikely,it could potentially impact Macaus legal system and may create uncertainty in whether existing PRC laws would be made applicable in Macau.If so,and if the existing PRC laws,such as recent state
43、ments and regulatory actions by Chinas government related to datasecurity or anti-monopoly concerns,are made applicable in Macau and are negatively applied to our Macau operating entity,or the PRC government exercises its sovereign power by adopting new laws,regulations,or policies to exert more ove
44、rsight and control over offeringsconducted overseas and/or foreign investment in Macau-based issuers and to intervene or influence operations in Macau of Macau entities such as our Macau operating entity,however unlikely in each instance,it may negatively impact our ability to maintain our current c
45、orporatestructure,conduct business,accept foreign investments,list on a U.S.or other foreign exchange.Various legal and operational risks and uncertainties could result in a material change in our operations and/or the value of the securities we are registering for sale or couldsignificantly limit o
46、r completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.If such circumstances arise,relevant risks may arise and the same legal and operational risksassociated with operations in China also
47、apply to operations in Macau and/or Hong Kong,as applicable.These risks will become even more prominent and direct if we expand our operations into or develop a physical presence in China.For more details,please see“Risk Factors Risks Related to the PRC”beginning on page 26 and“Risk Factors Risks Re
48、lated to Doing Business in Macau”beginning on page 24.Please see also“Regulations The Basic Law of the Macau SAR promulgated by the NationalPeoples Congress of the PRC(“NPC”),the highest body of the PRC legislature,as Macaus Constitution”on page 89 for more details regarding the Basic Law and the po
49、tential application of the PRC national law in Macau.The PRC government recently Initiated a series of statements,regulatory actions and new policies to regulate business operations in China,including cracking down on illegal activities in securities markets,enhancing supervision over China-based co
50、mpanies listed overseas usinga VIE structure,exerting more oversight and control over offerings conducted overseas and/or foreign investment in China-based issuers,adopting new measures to extend the scope of cybersecurity reviews,and expanding the efforts in anti-monopoly enforcement.On February17,
51、2023,China Securities Regulatory Commission(the“CSRC”)promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies(the“Trial Measures”)and five guidelines,which became effective on March 31,2023,andrequires PRC companies that seek to offer secur
52、ities or list on overseas markets,either directly or indirectly,to fulfill the filing procedure with the CSRC.See“Risk Factors Risks Related to the PRC There is no assurance that Macau will not enact local laws like the TrialMeasures promulgated by the CSRC,which could subject us to additional compl
53、iance requirements in the future.”on page 31 for more details.Our Macau counsel,Vong Hin Fai Lawyers&Private Notary,has advised that,as of the date of this prospectus,the Company and its Macau subsidiary,(1)are not required to obtain permissions or approvals from any PRC national authorities to oper
54、ate their businesses or to issuethe Ordinary Shares to foreign investors;and(2)are not subject to operational approval from the Cyberspace Administration of China(the“CAC”)or the CSRC,including the Overseas Listing Trial Measures.Specifically,under the currently effective PRC laws and regulations,we
55、 are not required to seek approval from the CSRC or any other PRC governmental authorities for our overseas listing plan,nor have we received any inquiry,notice,warning,or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmentalauthorities.This conclusion is based
56、 on the fact that,as of the date of this prospectus:(1)our Companys operating subsidiary is located in Macau,(2)we and our subsidiaries have no direct operations in the PRC,and(3)pursuant to the Basic Law of the Macao SpecialAdministrative Regions of the Peoples Republic of China(the“Basic Law”),nat
57、ional laws of the PRC shall not be applied in Macau,except for those specified in Annex III of the Basic Law.However,the evolving legal systems of Macau and China,operating under the“OneCountry,Two Systems”principle,may introduce uncertainties that could potentially impact and cause uncertainties in
58、 our business,indirectly through their direct impact on our PRC suppliers and customers,and directly should we expand our business operations into the PRC.Additionally,with respect to the recent statements and regulatory actions by the PRC government,the promulgation of regulations prohibiting forei
59、gn ownership of Chinese companies operating in certain industries,which are constantly evolving,and anti-monopoly concerns,should there be fundamental changes to the Basic Law that make such laws and regulations applicable in Macau,although unlikely,we may be subject to these laws and regulations an
60、d risks of the uncertainty of any future actions of the PRC government in this regard.If it isdetermined in the future,however,that the approval of the CSRC,the CAC or any other regulatory authority is required for this offering,the offering will be delayed until we have obtained the relevant approv
61、als.There is also the possibility that we may not be able to obtain ormaintain such approval or that we erred in our conclusion that such approval was not required.If the approval was required while we mistakenly concluded that such approval was not required or if applicable laws and regulations or
62、the interpretation of such were modified torequire us to obtain approval in the future,we may face sanctions by the CSRC,the CAC or other PRC regulatory agencies.These regulatory agencies may impose fines and penalties on our operations,limit our ability to pay dividends,limit our operations,or take
63、 other actionsthat could have a material adverse effect on our business,financial condition,results of operations and prospects,as well as the trading price of our securities.For additional information,please see“Risk Factors Risks Related to the PRC Recent greater oversight by theCyberspace Adminis
64、tration of China(the“CAC”)over data security,particularly for companies seeking to list on a foreign exchange,could adversely impact our business should we start an online retail business platform directly targeting our sales at mainland consumers.”onpage 30.Pursuant to the Holding Foreign Companies
65、 Accountable Act(the“HFCAA”),if the Public Company Accounting Oversight Board(the“PCAOB”),is unable to inspect an issuers auditors for three consecutive years,the issuers securities are prohibited to trade on a U.S.stockexchange.The PCAOB issued a Determination Report on December 16,2021(the“Determi
66、nation Report”)which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in:(1)mainland China of the PeoplesRepublic of China because of a position taken by one or more authorities in mainland China;and(2)Hong Kong,a Special Administra
67、tive Region and dependency of the PRC,because of a position taken by one or more authorities in Hong Kong.Furthermore,the DeterminationReport identified the specific registered public accounting firms which are subject to these determinations(“PCAOB Identified Firms”).On June 22,2021,United States S
68、enate passed the Accelerating Holding Foreign Companies Accountable Act(the“AHFCAA”),which,ifenacted,would decrease the number of“non-inspection years”from three years to two years,and thus,would reduce the time before our securities may be prohibited from trading or delisted if the PCAOB determines
69、 that it cannot inspect or investigate completely our auditor.Our current auditor,TAAD,LLP,the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus,as an auditor of companies that are traded publicly in the United States and a firm register
70、ed with the PCAOB,is subject to laws inthe U.S.pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.TAAD,LLP,whose audit report is included in this prospectus,is headquartered in Diamond Bar,California,and,as of the date of this
71、prospectus,was not included in the list of PCAOB Identified Firms in the Determination Report.On August 26,2022,the PCAOB announced that it had signed a Statement of Protocol(the“Protocol”)with the China Securities Regulatory Commission(the“CSRC”)and the Ministry of Finance(“MOF”)of the Peoples Repu
72、blic of China,governing inspections andinvestigations of audit firms based in mainland China and Hong Kong.Pursuant to the Protocol,the PCAOB conducted inspections on select registered public accounting firms subject to the Determination Report in Hong Kong between September and November 2022.On Dec
73、ember 15,2022,the PCAOB announced that it has completed the inspections,determined that it had complete access to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong,and voted to vacate theDetermination Report.On December 29,2022,the Con
74、solidated Appropriations Act,2023(the“CAA”)was signed into law by President Biden.The CAA contained,among other things,an identical provision to the AHFCAA,which reduces the number of consecutive non-inspection years required fortriggering the prohibitions under the HFCA Act from three years to two.
75、Notwithstanding the foregoing,to our knowledge,Macau has not been subject to PCAOB investigations that are conducted in a similar manner to those conducted upon China and Hong Kong,and the PCAOBs ability to exercise oversight authority over Macau based accountingfirms has not been called into questi
76、ons likely due to the fact there are only limited numbers of Macau based companies listed in the United States,there is no assurance that the designation of Macau would not become an issue in the future.In addition,the above rules andamendments and any additional actions,proceedings,or new rules res
77、ulting from these efforts to increase U.S.regulatory access to audit information could create some uncertainty for investors,the market price of our Ordinary Shares could be adversely affected,and we could bedelisted if we and our auditor are unable to meet the PCAOB inspection requirement or being
78、required to engage a new audit firm,which would require significant expense and management time.See“Risk Factors Risks Related to the PRC The newly enacted HoldingForeign Companies Accountable Act and the Accelerating Holding Foreign Companies Accountable Act passed by the U.S.Senate,all call for ad
79、ditional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors,especially the non-U.S.auditors who are not inspected by the Public Company Accounting Oversight Board.These developments could add uncertainties to our offering and lis
80、ting on the Nasdaq Capital Market,and Nasdaq may determine to delist our securities if the PCAOBdetermines that it cannot inspect or fully investigate our auditor.”on page 28.As of the date of this prospectus,there has been no distribution of dividends or assets among Epsium BVI(the holding company)
81、,Epsium HK(the interim holding company),or the Luz(the Operating Entity)and no transfers,dividends,or distributions to our shareholders.EpsiumBVI is permitted under the BVI laws to provide funding to our subsidiaries in Hong Kong and Macau through loans or capital contributions without restrictions
82、on the amount of the funds and such funding is not subject to government registration or filing requirements under BVIlaws.Epsium HK is permitted under the Hong Kong laws to provide funding to Luz,subject to the compliance and satisfaction of applicable government registration,approval and/or filing
83、 requirements.Epsium BVI is a holding company with no operations of its own and may rely on dividends to be paid by our Macau operating subsidiary to fund our cash and financing requirements,including the funds necessary to pay dividends and other cash distributions to our shareholders,to service an
84、y debt we may incur and to pay our operating expenses(if any).If our Macau subsidiary incurs debt on their own behalf in the future,the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.As a British VirginIslands company,our board of directors
85、 has discretion as to whether to pay a dividend on its shares subject to certain restrictions under British Virgin Islands law,namely that we may only pay dividends if it is solvent before and after the dividend payment in the sense that we willbe able to satisfy our liabilities as they become due i
86、n the ordinary course of business;and the value of assets of our company will not be less than the sum of our total liabilities.Even if our board of directors decides to pay dividends,the form,frequency,and amount will dependupon our future operations and earnings,capital requirements and surplus,ge
87、neral financial condition,contractual restrictions,and other factors that the board of directors may deem relevant.If the Company determines to pay dividends on any of the Ordinary Shares in the future,as a holding company,the Company will be dependent on receipt of funds from Epsium HK.Epsium HK,in
88、 turn,will be dependent on the receipt of funds from the Operating Entity.Payments of dividends by Epsium HK are subject to Hong Kong regulations and Epsium HK is permitted under the relevant laws of Hong Kong to provide funding through dividend distribution without restrictions on the amount of the
89、 funds.There are currently no restrictions ondividends transfers from Hong Kong to the British Virgin Islands and to U.S.investors.Current Macau regulations permit the Operating Entity to pay dividends to Epsium HK.According to Macau law,income received in Macau is subject to taxation under Macaus C
90、omplementary Tax provisions,regardless of whether the recipient is an individual or a corporation,their specific industry,or domiciliation.However,taxpayers may be eligible for particular deductions and allowances.Any dividends received by either individuals or corporate shareholders are considered
91、as income and thus are subject to complementary tax as stated above.Non-residents and companies not incorporated in Macau that do not conduct business activities in Macau,are normally not registered with the Macau Financial Services Bureau as taxpayers,and therefore are not required to submit their
92、income tax returns in Macau.However,theMacau taxation authorities may challenge the accuracy of income statements and may calculate the amounts due based on prior results or estimations.In such an event,appeals are available for unsatisfied parties.In addition,in accordance with the Basic Law of Mac
93、au,no foreignexchange control policies shall be applied within Macau,allowing for the free flow of capital within,into and out of Macau.As the Company and Epsium HK are holding companies without substantive operations(except for facilitating inventory procurement for the Operating Entity by Epsium H
94、K as described below),and neither of them generates any income,their respective payment obligationssuch as fees owned to professional service providers or government administrative fees are met by utilizing cash transfers from the Operating Entity.In 2023,Epsium HK facilitated the Operating Entity i
95、n procuring inventory in Hong Kong from Hong Kong-based alcoholic beverage suppliers.To help Epsium HK pay for these inventories,the Operating Entity transferred an aggregate of$8,637,886 to Epsium HK withamounts ranging between$12,782 and$1,822,700.In 2023,the Operating Entity also transferred to,o
96、r paid on behalf of,Epsium BVI a total of$153,682 to pay for professional service fees and other fees in connection with this offering,with amounts ranging between$33 and$55,560.For example,on January 9,2023,the Operating Entity transferred$40,170 to Epsium BVI to pay for our annual audit fee.On Jan
97、uary 11,2023,the Operating Entity transferred$50,000 to Epsium BVI to pay for professional legal service fees.In 2022,the OperatingEntity transferred a total of$12,500 to Epsium BVI for professional service fees payable to our auditor and legal counsel.We previously had no specific cash management p
98、olicies and procedures in place that dictate how funds are transferred through our organization.We adopted a cash management policy on September 27,2023,to improve our cash management in general,and cash transfers between the Company and its affiliates,in particular.Under our cash management policy,
99、to the extent a cash transfer is a part of a related partytransaction,such cash transfer is further subject to our Code of Business Conduct and Ethics governing related party transactions.Please see“Prospectus Summary Cash Transfers between the Company and Our Subsidiaries and Dividend Distribution”
100、on page 5,“Related PartyTransactions-Cash Transfers Between the Company and Our Subsidiaries”on page 100 and“Consolidated Financial Statements-Notes to the Financial Statements Note 11.Related Party Transactions”on page F-16 for more details.We are,and will be,a“controlled company”as defined under t
101、he Nasdaq Stock Market Rules as long as Mr.Son I Tam,our Chief Executive Officer(“CEO”),Chief Financial Officer(“CFO”),chairman of the Board of Directors,(“Chairman”),and principal shareholder,and hisaffiliates own and hold more than 50%of our outstanding Ordinary Shares.As of the date of this prosp
102、ectus,Mr.Tam,as the controlling shareholder of the Company,can decide on all matters requiring shareholder approval or matters which may be approved by shareholdersunder the Companys Memorandum and Articles of Association by virtue of his controlling ownership in the Company based on his direct and
103、indirect ownership(through Epsium HK)of the Companys outstanding Ordinary Shares,including the election of directors,amendmentof memorandum and articles of association,and approval or disapproval of major corporate transactions,such as a change in control,a transaction with take-over effect,merger,c
104、onsolidation,or sale of assets.The Company has adopted a Code of Business Conduct and Ethics toimpose certain review procedures that require independent director review and approval of conflict of interests and related party transactions,which applies to all directors,officers,and employees of the C
105、ompany,including Mr.Tam.Additionally,the Company plans to adopt anAudit Committee Charter effective upon the completion of this offering and the listing of our Ordinary Shares on Nasdaq to include additional internal control and risk management procedures to further address conflicts of interest iss
106、ues.For so long as we are a controlled company under that definition,we are permitted to elect to rely,and may rely,on certain exemptions from corporate governance rules,including,among others:an exemption from the rule that a majority of our board of directors must be independent directors;an exemp
107、tion from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors;and an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.As a result,you will not have the same p
108、rotection afforded to shareholders of companies that are subject to these corporate governance requirements.Although we do not intend to rely on the“controlled company”exemption under the Nasdaq listing rules,we could elect to rely onthis exemption in the future.If we elected to rely on the“controll
109、ed company”exemption,a majority of the members of our board of directors might not be independent directors and our nominating and compensation committees might not consist entirely of independent directorsupon closing of this offering.We are both an“emerging growth company”and a“foreign private iss
110、uer”under applicable U.S.Securities and Exchange Commission rules and will be eligible for reduced public company disclosure requirements.As such,in this prospectus we have taken advantage ofcertain reduced public company reporting requirements that apply to emerging growth companies regarding selec
111、ted financial data and executive compensation arrangements.See sections titled“Prospectus Summary Implications of Our Being an Emerging GrowthCompany”on page 8 and“Prospectus Summary Implications of Our Being a Foreign Private Issuer”beginning on page 8 for additional information.Unless otherwise sp
112、ecified,in the context of describing business and operations,we are referring to the business and operations conducted by Luz.Although we do not currently have cash or assets in the PRC and our Hong Kong subsidiary,Epsium HK,does not have substantiveoperations other than facilitating inventory procu
113、rement in Hong Kong,to the extent cash or assets in the business is in the PRC,Hong Kong or a PRC or Hong Kong entity in the future,the funds or assets may not be available to fund operations or for other use outside of the PRCor Hong Kong due to interventions in or the imposition of restrictions an
114、d limitations on the ability of the Company or our subsidiary by the PRC government to transfer cash or assets.See“Prospectus Summary Summary of Risk Factors Risks Related to Doing Business inMacau and Risks Related to the PRC”on page 4 and“Risk Factors Risks Related to the PRC Any restrictions of c
115、ash flows among Epsium BVI,Epsium Hong Kong,and our Operating Entity in Macau may adversely affect our ability to meet our financial requirements ormake dividend or other shareholder distributions to our shareholders.”on page 26.Cash is also transferred through our organization by way of intra-group
116、 transactions such as the cash transfers between the Company,Epsium HK,and the Operating Entity during 2023 and thefiscal year ended 2022.See“Prospectus Summary Cash Transfers Between the Company and Our Subsidiaries and Dividend Distribution”beginning on page 5.If Luz realizes accumulated after-tax
117、 profits,they may,upon satisfaction of relevant statutory conditions andprocedures,pay dividends or distribute earnings to Epsium HK.Epsium HK,in turn,may transfer cash to Epsium through dividends or other distributions.With necessary funds,the Epsium may pay dividends or make other distributions to
118、 U.S.investors and service any debt itmay have incurred.We previously had no specific cash management policies and procedures in place that dictate how funds are transferred through our organization.We adopted a cash management policy on September 27,2023 to improve our cash management in general,an
119、dcash transfers between the Company and its affiliates,in particular.Under our cash management policy,to the extent a cash transfer is a part of a related party transaction,such cash transfer is further subject to our Code of Business Conduct and Ethics governing related partytransactions.As of the
120、date of this prospectus,the Company and its Operating Entity have not distributed any earnings,nor do they have any plan to distribute earnings in the foreseeable future.As of the date of this prospectus,the Operating Entity has not made any dividends or distributionsto the Company and the Company h
121、as not made any dividends or distributions to the Companys shareholders or U.S.investors.The Company intends to keep any future earnings to finance business operations and does not anticipate that any cash dividends will be paid in theforeseeable future.If the Company decides to pay dividends on any
122、 of the Ordinary Shares in the future,as a holding company,the Company will be dependent on receipt of funds from Epsium HK,which in turn will rely on payments made from the Operating Entity.There werenumerous cash transfers among the Company,Epsium HK,and the Operating Entity during 2023 and the fi
123、scal year ended 2022.See“Prospectus Summary Cash Transfers Between the Company and Our Subsidiaries and Dividend Distribution”beginning on page 5,Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these secu
124、rities or determined if this prospectus is truthful or complete.Any representation to the contrary is a criminal offense.Per Share Total(3)Initial public offering price$Underwriters discounts(1)$Proceeds to our Company before expenses(2)$(1)Represents underwriting discounts equal to 7%per Ordinary S
125、hare.See“Underwriting”in this prospectus for more information regarding our arrangements with the Underwriter.(2)The total estimated expenses related to this offering are set forth in“Underwriting Discounts and Expenses.”(3)Assumes that the underwriter does not exercise any portion of its over-allot
126、ment option.We expect our total cash expenses for this offering(including cash expenses payable to our underwriter for its out-of-pocket expenses)not to exceed$,exclusive of the above discounts.For a detailed description of the compensation to be received by the underwriter,see“Underwriting”beginnin
127、g on page 118 of this prospectus.This offering is being conducted on a firm commitment basis.The Underwriter is obligated to take and pay for all of the Ordinary Shares if any such Ordinary Shares are taken.We have granted the underwriter an option for a period of 45 days after the effective date of
128、 thisregistration statement to purchase up to 15%of the total number of the Ordinary Shares to be offered by us pursuant to this offering(excluding Ordinary Shares subject to this option),solely for the purpose of covering over-allotments,if any,at the public offering price less theunderwriting disc
129、ounts.If the underwriter exercises the option in full,and assuming an offering price of$per Ordinary Share,which is the midpoint of the range set forth on the cover page of this prospectus,the total gross proceeds to us,before underwriting discounts andexpenses,will be$.The Underwriter expects to de
130、liver the Ordinary Shares against payment as set forth under“Underwriting”,on or about,2023.We may amend or supplement this prospectus from time to time by filing amendments or supplements as required.You should read this entire prospectus and any amendments or supplements carefully before you make
131、your investment decision.Prospectus dated,2023.TABLE OF CONTENTS PageProspectus Summary 1Summary Consolidated Financial Data And Operating Data 10Presentation Of Financial Information 13The Offering 14Risk Factors 15Disclosure Regarding Forward-Looking Statements 41Enforceability Of Civil Liabilitie
132、s 43Use of Proceeds 45Dividend Policy 46Capitalization 47Dilution 48Corporate History And Structure 49Managements Discussion And Analysis Of Financial Condition And Results Of Operations 51Industry Overview 68Business 76Regulation 89Management 93Principal Shareholders 99Related Party Transactions 10
133、0Description Of Share Capital 102Shares Eligible For Future Sale 111Material Income Tax Consideration 112Underwriting 118Expenses Relating To This Offering 121Legal Matters 122Experts 122Where You Can Find Additional Information 122Index To Financial Statements F-1 You should rely only on the inform
134、ation contained in this prospectus or in any related free-writing prospectus.We have not authorized anyone to provide you with information different from that contained in this prospectus or in any related free-writing prospectus.We are offeringto sell,and seeking offers to buy,the Ordinary Shares o
135、nly in jurisdictions where offers and sales are permitted.The information contained in this prospectus is current only as of the date of this prospectus,regardless of the time of delivery of this prospectus or of any sale of theOrdinary Shares.We have not taken any action to permit a public offering
136、 of the Ordinary Shares outside the United States or to permit the possession or distribution of this prospectus or any filed free writing prospectus outside the United States.Persons outside the United Stateswho come into possession of this prospectus or any filed free writing prospectus must infor
137、m themselves about and observe any restrictions relating to the offering of the Ordinary Shares and the distribution of this prospectus or any filed free writing prospectus outside the UnitedStates.This prospectus includes statistical and other industry and market data that we obtained from industry
138、 publications and research,surveys and studies conducted by third parties.Industry publications and third-party research,surveys and studies generally indicate that theirinformation has been obtained from sources believed to be reliable,although they do not guarantee the accuracy or completeness of
139、such information.While we believe these industry publications and third-party research,surveys and studies are reliable,you are cautioned not togive undue weight to this information.Until,2023(the th day after the date of this prospectus),all dealers that buy,sell or trade Ordinary Shares,whether or
140、 not participating in this offering,may be required to deliver a prospectus.This is in addition to the obligation of dealers to deliver a prospectus when actingas underwriters and with respect to their unsold allotments or subscriptions.i About this Prospectus We and the Underwriter have not authori
141、zed anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you.We take noresponsibility for and can provide no assurance as to the reliability of a
142、ny other information that others may give you.This prospectus is an offer to sell only the Ordinary Shares offered hereby,but only under circumstances and in jurisdictions where it is lawful to do so.We arenot making an offer to sell these securities in any jurisdiction where the offer or sale is no
143、t permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such an offer or sale.For the avoidance of doubt,nooffer or invitation to subscribe for Ordinary Shares is made to the public in the British Virgin Islands.The info
144、rmation contained in this prospectus is current only as of the date on the front cover of the prospectus.Our business,financial condition,results of operations,andprospects may have changed since that date.Conventions that Apply to this Prospectus Unless otherwise indicated or the context requires o
145、therwise,references in this prospectus to:“BVI”refers to the British Virgin Islands;“China”or the“PRC”refers to the Peoples Republic of China,excluding the special administrative regions of Hong Kong,Macau,and Taiwan for the purposes of this prospectus only;Reference to laws and regulations of“China
146、”or the“PRC”are only to such laws andregulations of mainland China;the term“Chinese”has a correlative meaning for the purpose of this prospectus;“Hong Kong”refers to the Hong Kong Special Administration Region of the Peoples Republic of China;“Macau,”“Macao,”“Macao SAR,”or“Macau SAR”refers to the Ma
147、cau Special Administration Region of the Peoples Republic of China;“shares”,“Shares”,“ordinary shares”,or“Ordinary Shares”refers to the ordinary shares of Epsium(as defined below),par value US$0.00002 per share;“the Company”,“Epsium”,or“Epsium BVI”refers to EPSIUM ENTERPRISE LIMITED,a company limite
148、d by shares under the laws of the British Virgin Islands;“Epsium HK”refers to Epsium Enterprise Limited,a company organized under the laws of the Hong Kong Special Administration Region of the Peoples Republic of China and a majority-owned subsidiary of Epsium BVI;“Luz”,“Operating Entity”,or“Macau S
149、ubsidiary”refers to Companhia de Comercio Luz Limitada(also referred to as 光貿易有限公司 in Macau),a limited liability company organized under the Macau Special Administration Region of the Peoples Republic of China,which is majority-owned by Epsium HK;“our subsidiaries”refers to Luz and Epsium HK;“U.S.do
150、llars”,“$”,“US$”,“USD”or“dollars”refers to the legal currency of the United States;“Macau Patacas”,or“MOP”refers to the legal currency of Macau;“Hong Kong dollars”,or“HKD”refers to the legal currency of Hong Kong;and “we”,“us”,“our Company”,or“our”are to EPSIUM ENTERPRISE LIMITED,together with its s
151、ubsidiaries as a group,and,in the context of describing the substantive operations,Luz.ii PROSPECTUS SUMMARY This summary highlights selected information that is presented in greater detail elsewhere in this prospectus.This summary does not contain all the information you should consider before inve
152、sting in our Shares.You should read this entire prospectus carefully,including thesections titled“Risk Factors”and“Managements Discussion and Analysis of Financial Condition and Results of Operations”and our consolidated financial statements and the related notes included elsewhere in this prospectu
153、s,before making an investment decision.Thisprospectus contains information from an industry report commissioned by us and prepared by Frost&Sullivan,an independent research firm,to provide information regarding our industry and our market position.To the extent references to“we”,“us”,and“our”are use
154、d in the context of a discussion or description of products,operations,market and other commercial activities,such references relate to Luz,the Operating Entity and not its direct or indirect parent companies unlessthe context clearly suggests otherwise.Overview We are a holding company incorporated
155、 under the laws of British Virgin Islands.As a holding company with no material operation of its own,we conduct substantially all our operations through an indirect Macau subsidiary,Companhia de Comercio Luz Limitada in Macau,orLuz.Luz is an 80%-owned subsidiary of Epsium Enterprise Limited in Hong
156、Kong,or Epsium HK.Mr.Son I Tam,our CEO,CFO,Chairman,principal shareholder,and the founder of Epsium and Luz directly holds(i)89.996%ownership interest in Epsium,(ii)19%interestin Epsium HK,and(iii)20%ownership interest in Luz.Luz is an import trading and wholesaler of primarily alcoholic beverages i
157、n Macau.Through Luz,we import and sell a broad range of premium beverages,primarily alcoholic beverages and,in 2022,a small quantity of tea and fruit juice.The alcoholic beverages we sellinclude Chinese liquor,French cognac,Scottish whiskey,fine wine,Champagne,and other miscellaneous beverage alcoho
158、l.Sales of Chinese liquor is by far our most significant operations,and we are a top wholesaler of high-end Chinese liquor in Macau.We operate only inMacau.Corporate History and Structure Epsium BVI was established on March 24,2020,in British Virgin Islands.Epsium HK was set up on March 12,2020,in H
159、ong Kong,SAR China.On March 12,2020,Mr.Chi Long Lou acquired 100%and 10,000 shares of Epsium HK by paying HKD10,000.On May 17,2021,Epsium BVI purchased 8,000 shares of Epsium HK from Mr.Chi Long Lou by paying HKD8,000.On May 17,2021,Mr.Son I Tam,our CEO,CFO,Chairman,and principal shareholder,purchas
160、ed 1,900 shares of Epsium HK from Mr.Chi Long Lou by payingHKD1,900.Mr.Chi Long Lou currently owns 1%of Epsium HK.The following diagram illustrates our corporate structure upon completion of our initial public offering(“IPO”)based on Ordinary Shares being offered.For more details on our corporate hi
161、story,please refer to“Corporate History and Structure”on page 49 of theprospectus.1 The following diagram illustrates our corporate structure:Notes:(1)Includes Ordinary Shares held by the minority shareholders,each a natural person or entity who,each directly or indirectly,owns less than 5%of the Co
162、mpanys Ordinary Shares.(2)EPSIUM ENTERPRISE LIMITED(or Epsium BVI),a holding company without operations,is the company issuing securities sold in the offering.(3)Companhia de Comercio Luz Limitada(or Luz)is the operating company in Macau through which Epsium BVI conducts its operations.Our Principal
163、 Business As a wholesale seller,we operate in the downstream segment of the value chain of the alcoholic beverage market in Macau.We do not conduct any manufacturing operation,directly contract with manufacturers,or act as a distributor or a sub-distributor for the manufacturers.Instead,we procure a
164、lcoholic beverages from the market ad hoc based on our business objectives and the prevailing market conditions.We sell these products to retailers,other sellers,and on-premise locations through consignment arrangements with hotels and casinos.The three main alcoholic beverages we sell are Chinese l
165、iquors,French cognac,and Scottish whiskey.Our sales of these three categories of products accounted for 99.73%of our total percentage of sales revenue for the six months ended June 30,2023,and 97.63%,97.97%,and 99.44%for the fiscal years 2020,2021 and 2022,respectively.We have been in operation sinc
166、e 2010 and are a top wholesaler of high-end Chinese liquor,including famous Chinese liquor brands such as Moutai,Wuliangye,and Xijiu.Sale of Chinese liquors is our mostsignificant operation.For the fiscal years 2020,2021 2022,and the six months ended June 30,2023,our sales of Chinese liquors were by
167、 far the most significant component of our revenues,accounting for 80.46%,79.18%,86.57%and 96.89%of our total percentage of salesrevenue in these time periods,respectively.According to the Frost&Sullivan Report,as measured by the aggregate three-year sales revenue of high-end Chinese liquor for the
168、years 2020 through 2021,we ranked as the number one wholesaler with a market share of 30.7%inMacau.In addition to alcoholic beverage products that we sell in our ordinary course of business,we also collect alcoholic beverages that are not readily available in the market.We do not currently sell thes
169、e products as part of our regular operations.Instead,we plan to sellthese products through auctions.We believe collecting and auctioning the right type of rare alcoholic beverages can be very lucrative and a great addition to our wholesale operations.Our Suppliers and Customers Luz has been in the b
170、usiness of importing and selling alcoholic beverages in Macau since its inception in 2010.Our founder Mr.Tam also founded Luz and has been an alcoholic beverages distribution and wholesale business veteran for more than 15 years.As such,we havevery established supply relationships and sales channels
171、.Our purchases have been concentrated on our major suppliers.We consider a supplier a major supplier if it accounts for more than 10%of our overall purchases.For the fiscal years 2020,2021,2022,and the six monthsended June 30,2023,our major suppliers of the applicable year supplied 80.5%,72.9%,89.6%
172、and 84.8%of our total purchases,respectively.Although we have a high concentration on our major suppliers,there was only one supplier that was consistently a major supplier ineach of fiscal years 2020,2021 and 2022.As we procure alcoholic beverages from the market ad hoc based on our business object
173、ives and the prevailing market conditions,we do not normally have long-term supply contracts with our suppliers,including our major suppliers.Instead,in our ordinary course of business,we have an established practice in issuing standard purchase orders to our suppliers for each purchase with simple
174、price,quantity,delivery,and payment terms.Likewise,and to a lesser extent,our sales are concentrated on our major customers.We consider a customer a major customer if it accounts for more than 10%of our sales revenue.For the fiscal years 2020,2021,2022,and the six months ended June 30,2023,sales to
175、ourmajor customers accounted for 45.2%,47.9%,48.8%and 40.3%of our total revenues,respectively.2 As a wholesale seller,our customer base consists of three primary categories:(i)hotel casinos,(ii)restaurants,and(iii)food and alcoholic beverages distributors and liquor stores.To cater to major hotel ca
176、sinos,we engage in an annual bid submission process.Once our bidsare accepted,hotel casino procurement departments generate purchase orders.After the hotels accounting teams have confirmed the delivery by the end of the month,payment is usually processed within 15 to 20 days through either bank tran
177、sfers or checks.Our interactionswith restaurant customers primarily revolve around telephone orders.We receive immediate payment upon delivery of the ordered products to restaurants.Payment is primarily via bank transfers,occasionally in cash.For our food and alcoholic distributor and liquor storecu
178、stomers,the ordering process is initiated through direct phone communication.Upon placing their orders,these customers settle payments via bank transfers or checks after receiving our invoices.Subsequent to the verification of payment receipt,these customers personallyvisit our warehouse for order r
179、etrieval.In addition to sales through traditional sales channels,we collaborate with major hotel casinos in Macau through consignment arrangements.Although our consignment-based sales are currently insignificant,accounting for 0.54%,2.50%,5.89%and 4.37%of our total sales forfiscal years 2020,2021,20
180、22,and the six months ended June 30,2023,respectively,we believe such collaborations represent great opportunities and are part of our growth strategies.Although our sales highly concentrated on our major customers in the fiscal years 2020 through 2022,we did not rely on sales to any single customer
181、.Except for the one customer that was a top customer for both fiscal years 2020 and 2021(but not a top customer for fiscalyear 2022),and became a top customer at the six months ended June 30,2023,we did not have any top customer that was consistently a top customer year after year,and we did not hav
182、e any customer who accounted for more than 16%of our total sales in each of 2021 and2022.In concentrating on sales to top customers in a given year without having to rely on any single customer consistently year after year,we are better able to streamline and manage our sales operations,maintain a r
183、elatively small salesforce and reduce associatedadministrative costs.Our Competitive Advantages We believe that we have the following competitive advantages which enable us to differentiate ourselves from our competitors:Through our long-standing operating history in Macaus alcoholic beverage market
184、,we have accumulated significant industry expertise,established a successful track record,and built remarkable credibility as a key industry player.Our deep roots and connections in Macau and our credibility have enabled us to establish stable relationships with suppliers and customers.Our status as
185、 a leading high-end Chinese liquor wholesaler in Macau has enabled us to establish mutually beneficial collaboration with hotel casinos with value-added services.For details,please refer to“Business Our Competitive Advantages”on page 81 of the prospectus.Growth Strategies Our objective is to leverag
186、e on our deep connections and expertise in Macaus alcoholic beverage market to pursue the following growth strategies:Create and sell highly personalized high-end alcoholic beverage products.Create our own private labeled products.Launch an E-commerce platform for retail sales and marketing.For deta
187、ils,please refer to“Business Challenges and Growth Opportunities and Strategies”on page 86 of the prospectus.Summary of Risk Factors Investing in our Ordinary Shares involves significant risks.You should carefully consider all the information in this prospectus before making an investment in our Ord
188、inary Shares.Below please find a summary of the principal risks we face,organized under relevant headings.The risks are discussed more fully in the section titled“Risk Factors.”Risks Related to Our Business and Industry Our limited history under the current business model and the risk that our histo
189、rical performance and growth rate may not be indicative of our future performance;the loss of multiple suppliers,lack of long-term contracts with suppliers,or a significant disruption in the supply chain;our ability to maintain and enhance our brand recognition;our ability to continue to attract con
190、sumers with evolving preferences through effective marketing activities;the intense competition in the industry that we operate in;and adverse effects on our business caused by health epidemics and outbreaks such as COVID-19.3 For a detailed description of the risks above,please refer to pages 15 23
191、.Risks Related to Doing Business in Macau and Risks Related to the PRC We operate in Macau through Luz,an 80%-owned subsidiary of Epsium HK.We are subject to Macau laws and regulations,including the Basic Law.Our company structure is comprised of(i)a British Virgin Island holding entity,Epsium BVI,(
192、ii)a Hong Kong holding entity,Epsium HK,which is majority-owned by Epsium BVI,and(iii)a Macau operating entity,Luz,which is majority-owned by Epsium HK.Each of Macau and Hong Kong is a Special Administrative Region of the Peoples Republic of China with its own legal system under theChinese policy of
193、“one-country,two-systems,”which accords a special legal status to each of them within the Peoples Republic of China through their respective local laws.However,because Hong Kong and Macau are constituent parts of the Peoples Republic of China,ourcompany structure,which is comprised of entities in Ho
194、ng Kong and Macau,involves unique risks to our investors.Although we believe that the laws and regulations of the PRC do not currently directly apply to us nor have any direct material negative impact on our business,financial condition or results of operations,and our corporate structure is stable
195、without any interference fromcurrent applicable laws in PRC,Hong Kong,or Macau,we face risks and uncertainties associated with the complex and evolving PRC laws and regulations and the economic conditions of the PRC because our business operations rely on the economic growth of the PRC andthe smooth
196、 functioning of the PRC commercial participants in our industry,including manufacturers,exporters,and PRC tourists to Macau.Additionally,if there is a duly declared state of war or state of emergency endangering national unity or security under the existingBasic Law or that the Basic Law is fundamen
197、tally amended by the National Peoples Congress of the Peoples Republic of China by virtue of Macau being a constituent part of the Peoples Republic of China,however unlikely,it could potentially impact Macaus legal systemand may create uncertainty in whether existing PRC laws would be made applicabl
198、e in Macau.As a result of the foregoing,the Chinese government may intervene or influence our operations at any time,or may exert more oversight and control over offerings conductedoverseas and/or foreign investment in China-based issuers and such risk could significantly limit or completely hinder
199、our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.If the existingPRC laws such as recent statements and regulatory actions by Chinas government related to data security or anti-monopoly concerns,are made
200、applicable in Macau and are negatively applied to our Macau operating entity,or the PRC government exercises its sovereign powerby adopting new laws,regulations,or policies to exert more oversight and control over offerings conducted overseas and/or foreign investment in Macau-based issuers and to i
201、ntervene or influence operations in Macau of Macau entities such as our Macau operating entity,however unlikely in each instance,it may negatively impact our ability to maintain our current corporate structure,conduct business,accept foreign investments,list on a U.S.or other foreign exchange.It may
202、 also affect our ability to offer or continue to offer securities toinvestors and significantly affect the value of such securities.If such circumstances arise,relevant risks may arise and the same legal and operational risks associated with operations in China also apply to operations in Macau and/
203、or Hong Kong,as applicable.These risks willbecome even more prominent and direct if we expand our operations into or develop a physical presence in China.For more details,please see“Regulations The Basic Law of the Macau SAR promulgated by the National Peoples Congress of the PRC(“NPC”),the highestb
204、ody of the PRC legislature,as Macaus Constitution”on page 89,“Risk Factors Risks Related to the PRC”beginning on page 26 and“Risk Factors Risks Related to Doing Business in Macau”beginning on page 24.Epsium Enterprise Limited is a company organized under the laws of the Hong Kong and an 80%-owned su
205、bsidiary of Epsium BVI.Epsium HK is a holding company and does not conduct any substantive operations in Hong Kong except for facilitating inventory procurementin Hong Kong for our only operating subsidiary,which is in Macau.Epsium HK does not maintain any office facility or personnel.It has no reve
206、nue or expenses other than those associated with inventory procurement in Hong Kong from a few Hong Kong beveragedistributors.All of Epsiums operations are conducted in Macau by Luz,our Macau operating subsidiary.As a Hong Kong registered entity,Epsium HK is subject to Hong Kong laws generally appli
207、cable to Hong Kong entities.We believe Epsium HK is compliant with thelaws and regulations governing its existence,operations,and taxes in Hong Kong,including without limitation,laws and regulations relating to data privacy and anti-monopoly,to the extent such laws and regulations are applicable to
208、Epsium HK.Please see“Enforceability ofCivil Liabilities”on page 43 for more details of enforceability of liabilities in Hong Kong.Luz is an import trading and wholesaler of primarily alcoholic beverages in Macau.Luzs direct customers primarily consist of supermarkets,restaurants,hotel casinos and ot
209、her retailers in Macau and it generally does not conduct retail sales.Due to the predominantly whole-sale nature and limited scale of our operations solely via Luz in Macau,it is not part of Luzs business activities,nor does it have any access,to gather private data from the ultimate retail consumer
210、s of our downstream distributors such as supermarkets,restaurants,hotelcasinos and other retailers in Macau.As a Macau registered entity,Luz is subject to Macau laws generally applicable to Macau entities.We believe Luz is compliant with the laws and regulations governing its existence and operation
211、s in Macau,including without limitation,laws and regulations relating to data privacy and unfair competition and anti-monopoly,to the extent such laws and regulations are applicable to Luz.For more details,please see“Regulations”beginning on page 89,“Risk Factors Risks Related to the PRC”beginning o
212、npage 26 and“Risk Factors Risks Related to Doing Business in Macau”beginning on page 24.Additionally,although we and our subsidiaries are not based in China and we have no operations in China,we may be subject to legal and operational risks indirectly by virtue of doing business with parties in Chin
213、a or even directly if we decide to operate in China in thefuture.Our business and operations could be affected by changes in Chinas economic,political,or social conditions or government policies.The evolving legal systems of Macau and China,operating under the“One Country,Two Systems”principle,intro
214、duce uncertainties that may impact and cause uncertainties in our business,as potential changes in the Basic Law or extraordinary circumstances couldlead to the application of PRC laws in Macau,affecting our operations and the value of our Ordinary Shares.4 While Macau has not faced Public Company A
215、ccounting Oversight Board(“PCAOB”)investigations like China and Hong Kong due to limited Macau-based companies being listed in the US,the potential for future concerns regarding Macaus designation cannot beruled out.The success of our business relies on the gaming and tourism industries of Macau.Con
216、ducting business in Macau involves certain economic and political risks relating to changes in Macaus and Chinas political,economic,and social conditions.The level of visitor arrivals to Macau from China,Hong Kong,and elsewhere may decline due to,or travel to Macau may be disrupted by,natural disast
217、ers,outbreaks of disease,terrorist attacks,security alerts,military conflicts,or other factors.And the number ofvisitors may also decline due to government restrictions imposed by China and other governments.Epsium BVI is a holding company with no operations of its own and may rely on dividends to b
218、e paid by our Macau subsidiary to fund our cash and financing requirements,and our dividend payments and other cash distributions to our shareholders,and to service anydebt we may incur and to pay our operating expenses;Although we do not currently have cash or assets in the PRC and our Hong Kong su
219、bsidiary,Epsium HK,does not have substantive operations other than facilitating inventory procurement in Hong Kong,to theextent cash or assets in the business is in the PRC,Hong Kong or a PRC or Hong Kong entity in the future,the funds or assets may not be available to fund operations or for other u
220、se outside of the PRC or Hong Kong due to interventions in or the imposition ofrestrictions and limitations on the ability of the Company or our subsidiary by the PRC government to transfer cash or assets.For a detailed description of the risks above,please refer to pages 24 31.Risks Related to Our
221、Ordinary Shares and This Offering Because Epsium BVI is incorporated under the laws of the British Virgin Islands,you may face difficulties in protecting your interests,and your ability to protect your rights through the U.S.Federal courts may be limited.There has been no public market for our Ordin
222、ary Shares prior to this offering,an active trading market for our Ordinary Shares may not develop after this offering,and the trading price of the Ordinary Shares is likely to be volatile you may not be able to resell ourOrdinary Shares at or above the price you paid,or at all.Because our initial p
223、ublic offering price is substantially higher than our net tangible book value per share,you will experience immediate and substantial dilution.The trading price of our Ordinary Shares is likely to be volatile,which could result in substantial losses to investors.Epsium BVI is an emerging growth comp
224、any within the meaning of the Securities Act of 1933(“Securities Act”)and may take advantage of certain reduced reporting requirements.Epsium BVI is a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934(the“Exchange Act”)and are exempt from certain provis
225、ions applicable to U.S.domestic public companies.Epsium BVI is a controlled company within the meaning of the Nasdaq Market Rules and may elect to exempt from corporate governance requirements.For a detailed description of the risks above,please refer to pages 32 40.Cash Transfers Between the Compan
226、y and Our Subsidiaries and Dividend Distribution As the Company and Epsium HK are holding companies without substantive operations except as described in the paragraph immediately below in this prospectus,and neither of them generates any income,their respective payment obligations such as fees owne
227、d toprofessional service providers or government administrative fees are met by utilizing cash transfers from the Operating Entity.Additionally,in early 2023,Epsium HK facilitated the Operating Entity in procuring inventory in Hong Kong from Hong Kong-based alcoholic beverage suppliers.These supplie
228、rs preferred to deal with the Companys Hong Kong subsidiary as opposed to its Macau subsidiarybefore we established a business track record in Hong Kong.Epsium HK purchased from these Hong Kong suppliers,and sold to the Operating Entity without gross margin,alcoholic beverages in 32 transactions.To
229、help Epsium HK pay for these inventories,the OperatingEntity transferred an aggregate of$8,637,886 to Epsium HK with amounts ranging between$12,782 and$1,822,700.5 In 2023,the Operating Entity also transferred to,or paid on behalf of,Epsium BVI a total of$153,682 to pay for professional service fees
230、 and other fees in connection with this offering,with amounts ranging between$33 and$55,560.For example,on January 9,2023,theOperating Entity transferred$40,170 to Epsium BVI to pay for our annual audit fee.On January 11,2023,the Operating Entity transferred$50,000 to Epsium BVI to pay for professio
231、nal legal service fees.In 2022,the Operating Entity transferred a total of$12,500 to Epsium BVI for professional service fees payable to our auditor and legal counsel.We previously had no specific cash management policies and procedures in place that dictate how funds are transferred through our org
232、anization.We adopted a cash management policy on September 27,2023 to improve our cash management in general,and cash transfersbetween the Company and its affiliates,in particular.Under our cash management policy,to the extent a cash transfer is a part of a related party transaction,such cash transf
233、er is further subject to our Code of Business Conduct and Ethics governing related party transactions.Epsium BVI is permitted under the BVI laws to provide funding to our subsidiaries in Hong Kong and Macau through loans or capital contributions without restrictions on the amount of the funds and su
234、ch funding is not subject to government registration or filing requirementsunder BVI laws.Epsium HK is permitted under the Hong Kong laws to provide funding to Luz,subject to the compliance and satisfaction of applicable government registration,approval and/or filing requirements.As of the date of t
235、his prospectus,there has been no distribution of dividends or assets among the holding company(Epsium BVI),the interim holding company(Epsium HK),or the Operating Entity(Luz)and no transfers,dividends,or distributions to our shareholders.Epsium BVI is a holding company with no operations of its own.
236、We conduct our operations in Macau primarily through our Macau subsidiary.We may rely on dividends to be paid by our Macau subsidiary to fund our cash and financing requirements,including the fundsnecessary to pay dividends and other cash distributions to our shareholders,to service any debt we may
237、incur and to pay our operating expenses.If our Macau subsidiary incurs debt on their own behalf in the future,the instruments governing the debt may restrict its ability topay dividends or make other distributions to us.As a British Virgin Islands company,our board of directors has discretion as to
238、whether to pay a dividend on its shares subject to certain restrictions under British Virgin Islands law,namely that we may only pay dividends if it is solvent before and after the dividend payment inthe sense that we will be able to satisfy our liabilities as they become due in the ordinary course
239、of business;and the value of assets of our company will not be less than the sum of our total liabilities.Even if our board of directors decides to pay dividends,the form,frequency,and amount will depend upon our future operations and earnings,capital requirements and surplus,general financial condi
240、tion,contractual restrictions,and other factors that the board of directors may deem relevant.If the Company determines to pay dividends on any of the Ordinary Shares in the future,as a holding company incorporated in the British Virgin Islands,the Company will be dependent on receipt of funds from
241、Epsium HK.Epsium HK,in turn,will be dependent on thereceipt of funds from the Operating Entity.Payments of dividends by Epsium HK are subject to Hong Kong regulations and Epsium HK is permitted under the relevant laws of Hong Kong to provide funding through dividend distribution without restrictions
242、 on the amount ofthe funds.There are currently no restrictions on dividends transfers from Hong Kong to the British Virgin Islands and to U.S.investors.Epsium HK is a company organized under Hong Kong law and a majority-owned subsidiary of the Company.Epsium HK is not an operating company,but an int
243、erim Hong Kong holding company with operations conducted by the Operating Entity in Macau.The 32 inventoryprocurement transaction arrangements discussed above were stand-alone temporary arrangements,and we have ceased,and do not expect to continue,this type of arrangement involving Epsium HK.Other t
244、han the foregoing,Epsium HK has not carried out other activities,anddoes not maintain any office facility or personnel.Apart from the above-mentioned procurement-related expenditures and immaterial amounts of fees and expenses associated with Epsium HKs maintaining its legal existence as a Hong Kong
245、 entity paid with funds supplied bythe Operating Entity,Epsium HK does not have revenues or expenditures.Current Macau regulations permit the Operating Entity to pay dividends to Epsium HK.According to Macau law,income received in Macau is subject to taxation under Macaus Complementary Tax provision
246、s,regardless of whether the recipient is an individual or acorporation,their specific industry,or domiciliation.However,taxpayers may be eligible for particular deductions and allowances.Any dividends received by either individuals or corporate shareholders are considered as income and thus are subj
247、ect to complementary tax asstated above.Non-residents and companies not incorporated in Macau that do not conduct business activities in Macau,are normally not registered with the Macau Financial Services Bureau as taxpayers,and therefore are not required to submit their income tax returns inMacau.H
248、owever,the Macau taxation authorities may challenge the accuracy of income statements and may calculate the amounts due based on prior results or estimations.In such event,appeals are available for unsatisfied parties.In addition,in accordance with the Basic Law of Macau,no foreign exchange control
249、policies shall be applied within Macau,allowing for the free flow of capital within,into and out of the Region.It is important to note that the Macau Monetary Authoritys“Guidelines on Anti-Money Laundering and Anti-Terrorism Financing”require all banks approved to operate in Macau to establish and i
250、mplement adequate and appropriate anti-money laundering and anti-terrorismfinancing system.Banks are also required to conduct appropriate and reasonable due diligence measures when opening accounts for customers or conducting transactions.Furthermore,they must effectively and continuously monitor cu
251、stomer account activities to identifyunusual transaction patterns and report any suspicious transactions to the Macau Financial Intelligence Office.6 Although we do not currently have cash or assets in the PRC and our Hong Kong subsidiary,Epsium HK,does not have substantive operations other than fac
252、ilitating inventory procurement in Hong Kong,to the extent cash or assets in the business is in the PRC,Hong Kong ora PRC or Hong Kong entity in the future,the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the impo
253、sition of restrictions and limitations on the ability of the Company or our subsidiary by thePRC government to transfer cash or assets.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 or payin
254、g any dividends in the foreseeable future.Any future determination related to our dividend policy will be made atthe discretion of our board of directors after considering our financial condition,results of operations,capital requirements,contractual requirements,business prospects and other factors
255、 the board of directors deems relevant,and subject to the restrictions contained in anyfuture financing instruments.Permissions Required from the Macau and the PRC Authorities for our Business Operation and This Offering Our Macau counsel,Vong Hin Fai Lawyers&Private Notary,has advised that,as of th
256、e date of this prospectus,the Company and its Macau subsidiary(1)are not required permissions or approvals from any PRC national authorities to operate their businesses or to issue theOrdinary Shares to foreign investors;and(2)are not subject to permission requirements from the CSRC,the CAC or any o
257、ther entity that is required to approve our operations.This conclusion is based on the fact that:(1)our Companys operating subsidiary is located inMacau,(2)we and our subsidiary have no direct operations in China,and(3)pursuant to the Basic Law,national laws of the PRC shall not be applied in Macau,
258、except for those specified in Annex III of the Basic Law.However,the evolving legal systems of Macau and China,operating under the“One Country,Two Systems”principle,may introduce uncertainties that could potentially impact and cause uncertainties in our business,indirectly through their direct impac
259、t on our PRC suppliers and customers,and directly should we expand our businessoperations into the PRC.Additionally,with respect to the recent statements and regulatory actions by the PRC government,the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certa
260、in industries,which are constantly evolving,andanti-monopoly concerns,should there be fundamental changes to the Basic Law that make such laws and regulations applicable in Macau,although unlikely,we may be subject to these laws and regulations and risks of the uncertainty of any future actions of t
261、he PRCgovernment in this regard.If it is determined in the future that the approval of the CSRC,the CAC or any other regulatory authority is required for this offering,the offering will be delayed until we have obtained the relevant approvals.There is also the possibility that we may not be able to
262、obtain ormaintain such approval or that we inadvertently concluded that such approval was not required.If the approval was required while we inadvertently concluded that such approval was not required or if applicable laws and regulations or the interpretation of such were modifiedto require us to o
263、btain the CSRC approval in the future,we may face sanctions by the CSRC,the CAC or other PRC regulatory agencies.These regulatory agencies may impose fines and penalties on our operations,limit our ability to pay dividends,limit our operations,or takeother actions that could have a material adverse
264、effect on our business,financial condition,results of operations and prospects,as well as the trading price of our securities.The CSRC,the CAC,or other PRC regulatory agencies also may take actions requiring us,or making itadvisable for us,to halt this offering before settlement and delivery of our
265、Ordinary Shares.We also expect to become subject to PRC laws if we expand operations into or develop a physical presence in China.As of the date of this prospectus,we and our Macau operating subsidiary,Luz,also are not required to obtain permissions or approvals from any Macau authorities to operate
266、 our business or to issue the Ordinary Shares to foreign investors.Implications of the Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act(“HFCAA”)was enacted on December 18,2020,which states that if the SEC determines that an issuers audit reports issued by a reg
267、istered public accounting firm have not been subject to inspection by the PCAOB for threeconsecutive years beginning in 2021,the SEC shall prohibit such issuers securities from being traded on a national securities exchange or in the over-the-counter trading market in the United States.In June 2021,
268、the Senate passed the AHFCAA,which,if signed into law,would reduce the time period for the delisting of foreign companies under the HFCAA to two consecutive years instead of three years.If our auditor cannot be inspected by the PCAOB for two consecutive years,the trading of our securities on any U.S
269、.national securitiesexchanges,as well as any over-the-counter trading in the U.S.,will be prohibited.On September 22,2021,the PCAOB adopted a final rule implementing the HFCAA,which provides a framework for the PCAOB to use when determining,as contemplated under the HFCAA,whether the PCAOB is unable
270、 to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.On December 2,2021,the SEC issued amendments to finalize rulesimplementing the submission and disclosure requirements
271、 in the HFCAA.The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and thatPCAOB is unable to inspect or investigate completely because of a position taken
272、by an authority in foreign jurisdictions.On December 16,2021,the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered publicaccounting firms headquartered in the PRC and in Hong Kong,because of positions taken by PRC authorities in those
273、 jurisdictions.On August 26,2022,the PCAOB announced that it had signed a Statement of Protocol(the“Protocol”)with the CSRC and the Ministry ofFinance of China.The Protocol establishes a specific,accountable framework to make possible complete inspections and investigations by the PCAOB of audit fir
274、ms based in China and Hong Kong,as required under U.S.law.On December 15,2022,the PCAOB announcedthat it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in China and Hong Kong and subsequently vacated its previous 2021 determinatio
275、n that the PCAOB was unable to inspect or investigate completelyregistered public accounting firms headquartered in China and Hong Kong.However,whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in China and Hong
276、 Kong is subject touncertainties and depends on a number of factors out of our and our auditors control.The PCAOB continues to demand complete access in China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond,as well as tocontinue pursuing ongoin
277、g investigations and initiate new investigations as needed.The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed.7 As of the date of the prospectus,TAAD,LLP,our auditor,is not subject to the determinations as to inability
278、to inspect or investigate registered firms completely announced by the PCAOB in December 2021.Notwithstanding the foregoing,to our knowledge,Macau has notbeen subject to PCAOB investigations that are conducted in a similar manner to those conducted upon China and Hong Kong,and the PCAOBs ability to
279、exercise oversight authority over Macau based accounting firms has not been called into questions likely due to the factthere are only limited numbers of Macau based companies listed in the United States,there is no assurance that the designation of Macau would not become an issue in the future.In a
280、ddition,the above rules and amendments and any additional actions,proceedings,or newrules resulting from these efforts to increase U.S.regulatory access to audit information could create some uncertainty for investors,the market price of our Ordinary Shares could be adversely affected,and we could b
281、e delisted if we and our auditor are unable to meet thePCAOB inspection requirement or being required to engage a new audit firm,which would require significant expense and management time Implications of Our Being an“Emerging Growth Company”The Company is an“emerging growth company”as defined in th
282、e Jumpstart Our Business Startups Act of 2012,or the“JOBS Act.”An“emerging growth company”may take advantage of reduced reporting requirements that are otherwise applicable to larger publiccompanies that are not emerging growth companies.As an emerging growth company,we:may present only two years of
283、 audited financial statements and only two years of related Managements Discussion and Analysis of Financial Condition and Results of Operations,or“MD&A”;are not required to disclose certain executive compensation related items such as the correlation between executive compensation and performance a
284、nd comparisons of the chief executive officers compensation to median employee compensation;are not required to obtain an attestation and report from our auditors on our managements assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002(
285、“Sarbanes-Oxley Act”);are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements(commonly referred to as the“say-on-pay,”“say-on frequency”and“say-on-golden-parachute”votes);are eligible to claim longer phase-in periods for
286、 the adoption of new or revised financial accounting standards under 107 of the JOBS Act;and will not be required to evaluate our internal control over financial reporting until our second annual report on Form 20-F after our initial public offering.We intend to take advantage of all these reduced r
287、eporting requirements and exemptions,including the longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act.Our election to use the phase-in periods may make itdifficult to compare our financial statements to those of non-emerging growth com
288、panies and other emerging growth companies that have opted out of the phase-in periods under 107 of the JOBS Act.Under the JOBS Act,we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company.The JOBS
289、 Act provides that we would cease to be an“emerging growth company”atthe end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act occurred,if we have more than$1.07 billion in annual re
290、venues,have more than$700 million in themarket value of our Ordinary Share held by non-affiliates,or issue more than$1 billion in principal amount of non-convertible debt over a three-year period.Implications of Our Being a Foreign Private Issuer Upon the completion of this offering,the Company will
291、 report with foreign private issuer status within the meaning of the rules under the Exchange Act.As such,the Company is exempt from certain provisions applicable to United States domestic public companies.Forexample,the Company is:exempt from filing quarterly reports on Form 10-Q,from filing proxy
292、solicitation materials on Schedule 14A or 14C in connection with annual or special meetings of shareholders,or from providing current reports on Form 8-K disclosing significant eventswithin four(4)days of their occurrence,and from the disclosure requirements of Regulation FD;exempt from Section 16 r
293、ules regarding sales of Ordinary Shares by insiders,which will provide less data in this regard than shareholders of U.S.companies that are subject to the Exchange Act;exempt from the Nasdaq rules applicable to domestic issuers requiring disclosure within four(4)business days of any determination to
294、 grant a waiver of the code of business conduct and ethics to directors and officers.Although we will require boardapproval of any such waiver,we may choose not to disclose the waiver in the manner set forth in the Nasdaq rules,as permitted by the foreign private issuer exemption;8 exempt from the r
295、equirement that a majority of our board of directors consists of independent directors;exempt from the requirement that our compensation committee and nominating committee consist entirely of independent directors;and exempt from the requirement that our audit committee and compensation committee ha
296、ve a written charter addressing the respective committees responsibilities and authority as set forth in Nasdaq Rule 5605(c)(1)and 5605(d),respectively.Additionally,Nasdaq Rule 5615(a)(3)provides that a foreign private issuer,such as us,may rely on our home country corporate governance practices in
297、lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d),provided that we nevertheless comply withNasdaqs Notification of Noncompliance requirement(Rule 5625),the Voting Rights requirement(Rule 5640)and that we have an audit committee that satisfies Rule 5605(c)(3),consisting of
298、committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii).If we rely on our home country corporate governance practices in lieu of certain of the rules of Nasdaq,our shareholders may not have the same protections afforded to shareholders of companies that are subject to all
299、 the corporate governance requirements of Nasdaq.Ifwe choose to do so,we may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.Implications of Our Being a Controlled Company We are,and will be,a“controlled company”as defined under the Nasdaq Stock Market Rule
300、s as long as Mr.Son I Tam,our CEO,CFO,Chairman,and principal shareholder,and his affiliates own and hold more than 50%of our outstanding Ordinary Shares.As of the date ofthis prospectus,Mr.Tam,as the controlling shareholder of the Company,can decide on all matters requiring shareholder approval or m
301、atters which may be approved by shareholders under the Companys Memorandum and Articles of Association by virtue of his controllingownership in the Company based on his direct and indirect ownership(through Epsium HK)of the Companys outstanding Ordinary Shares,including the election of directors,ame
302、ndment of memorandum and articles of association,and approval or disapproval of majorcorporate transactions,such as a change in control,a transaction with take-over effect,merger,consolidation,or sale of assets.The Company has adopted a Code of Business Conduct and Ethics to impose certain review pr
303、ocedures that require the review and approval ofconflict of interests and related party transactions by the non-interested directors or the Audit Committee,which applies to all directors,officers,and employees of the Company,including Mr.Tam.Additionally,the Company plans to adopt an Audit Committee
304、 Chartereffective upon the completion of this offering and the listing of our Ordinary Shares on Nasdaq to include additional internal control and risk management procedures to further address conflicts of interest issues.Additionally,for so long as we are a controlled company under that definition,
305、we are permitted to elect to rely,and may rely,on certain exemptions from corporate governance rules,including:an exemption from the rule that a majority of our board of directors must be independent directors;an exemption from the rule that the compensation of our chief executive officer must be de
306、termined or recommended solely by independent directors;and an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.Although we do not intend to rely on the“controlled company”exemption under the Nasdaq listing rules,we could elect to rel
307、y on this exemption in the future.If we elected to rely on the“controlled company”exemption,a majority of the members of our board of directorsmight not be independent directors and our nominating and compensation committees might not consist entirely of independent directors upon closing of the off
308、ering.As a result,you may not have the same protection afforded to shareholders of companies that are subject tothese corporate governance requirements.Corporate Information Our principal executive office is located at Alameda Dr.Carlos Dassumpcao,Edf China Civil Plaza 235-243,14 Andar P,Macau,SAR C
309、hina,and our phone number is+853-2857-5252.Our duly appointed registered agent in the British Virgin Islands is Vistra(BVI)Limitedof Vistra Corporate Services Centre,whose office is located at Wickhams Cay II,Road Town,Tortola,VG1110,British Virgin Islands.We maintain a corporate domain name at thro
310、ugh Luz,and epsium- through Epsium BVI.The informationcontained in,or accessible from,our domain name or any other website does not constitute a part of this prospectus.Our agent for service of process in the United States is Cogency Global Inc.,located at 122 East 42nd Street,18th Floor,New York,NY
311、 10168.9 SUMMARY CONSOLIDATED FINANCIAL DATA AND OPERATING DATA The following summary consolidated balance sheets data for six months ended June 30,2023,and the years ended December 31,2022,and 2021,summary consolidated statements of comprehensive income data as of June 30,2023,June 30,2022,December
312、 31,2022,andDecember 31,2021,and summary consolidated statements of cash flows data for the time periods ended June 30,2023,and June 30,2022,and years ended December 31,2022 and 2021 have been derived from the consolidated financial statements of the Company includedelsewhere in this prospectus,whic
313、h were prepared and presented in accordance with U.S.GAAP.Our historical results are not necessarily indicative of results expected for future periods.You should read this Our Summary Consolidated Financial Data and Operating Datasection together with the Companys consolidated financial statements a
314、nd the related notes and“Managements Discussion and Analysis of Financial Condition and Results of Operations”included elsewhere in this prospectus.The following table presents the Companys summary consolidated balance sheets data as of June 30,2023,December 31,2022,and 2021:Epsium Enterprise Limite
315、d and SubsidiariesConsolidated Balance Sheets June 30,2023 December 31,2022 December 31,2021 Assets(Unaudited)Current assets:Cash and cash equivalents$457,280$525,561$272,012 Accounts receivable 803,812 247,725 316,427 Prepaid expense 69,819 8,852 302,285 Advances payments for goods 2,666,927 -Other
316、 receivables 17,511 16,332 16,976 Inventories 4,473,262 5,858,168 4,800,166 Amount due from related parties 1,205,375 -Total current assets 9,693,986 6,656,638 5,707,865 Long-term assets:Property and equipment,net 19,912 29,243 47,748 Leased right-of-use assets 216,797 255,681 273,957 Long-term defe
317、rred expenses -2,272 2,354 Total long-term assets 236,709 287,196 324,059 Total assets$9,930,695$6,943,834$6,031,924 Liabilities and Stockholders Equity Current liabilities:Accounts payable$946,783$850,914$144,180 Short-term loans -26,896 131,860 Advances from customers 11,227 -Employee benefits pay
318、able 996 867 1,203 Taxes payable 1,097,737 600,864 426,157 Lease liability-current 56,055 76,050 69,262 Amount due to related parties -1,054,833 2,087,379 Total current liabilities 2,112,798 2,610,424 2,860,041 Long-term liabilities:Lease liabilities non-current 160,742 187,933 226,337 Total long-te
319、rm liabilities 160,742 187,933 226,337 Total liabilities 2,273,540 2,798,357 3,086,378 Stockholders equity:Ordinary shares(par value$0.00002 per share,800,000,000 shares authorized;60,002,670 and 60,002,670 shares issued and outstanding at June 30,2023,December 31,2022,and December 31,2021respective
320、ly 1,200 1,200 1,200 Preferred shares(par value$0.00002 per share,200,000,000 shares authorized;no preferred shares issued and outstanding at June 30,2023,December 31,2022,andDecember 31,2021 -Paid-in capital 324,935 322,270 252,115 Reserve Capital 1,550 1,550 1,550 Accumulated Other Comprehensive I
321、ncome(Loss)(24,152)(8,924)(7,714)Retained earnings 7,275,754 3,788,797 2,671,329 Total Epsium stockholders equity 7,759,287 4,104,893 2,918,480 Non-controlling interest 77,868 40,584 27,066 Total stockholders equity 7,657,155 4,145,477 2,945,546 Total liabilities and stockholders equity$9,930,695$6,
322、943,834$6,031,924 10 The following table presents the Companys summary Operations and Comprehensive Income data for the six months ended June 30,2023,and 2022;years ended December 31,2022,and 2021.Epsium Enterprise Limited and SubsidiariesConsolidated Statements of Operations and Comprehensive Incom
323、e Six MonthsendedJune 30,2023 Six MonthsendedJune 30,2022 Year endedDecember 31,2022 Year endedDecember 31,2021 (Unaudited)(Unaudited)Revenue,net$18,403,610$1,019,951$11,173,092$18,203,802 Cost of goods sold 13,913,819 797,735 9,250,981 16,179,235 Gross profit 4,489,791 222,216 1,922,111 2,024,567 O
324、perating expenses:Selling and distribution expenses 1,229 1,625 3,047 4,492 General and administrative expenses 446,187 302,948 681,232 707,160 Total operating expenses 447,416 304,573 684,279 711,652 Operating income(loss)4,042,375 (82,357)1,237,832 1,312,915 Interest expense 2,900 40,353 74,248 13
325、9,759 Other(income)and other expense,net 16,592 (63,900)(142,364)(35,408)Total other expense,net 19,492 (23,547)(68,116)104,351 Income(loss)before provision for taxes 4,022,883 (58,810)1,305,948 1,208,564 Provision for income taxes 498,661 -175,002 156,543 Net income(loss)$3,524,222$(58,810)$1,130,9
326、46$1,052,021 Less:net income attributable to non-controlling interest 37,265 77 13,478 10,520 Net income(loss)attributable to Epsium Enterprise Limited$3,486,957$(58,887)$1,117,468$1,041,501 Other comprehensive income(loss)Foreign currency translation gain(loss)(15,228)(18,435)(1,210)(373,289)Compre
327、hensive Income(loss)attributable to Epsium Enterprise Limited$3,471,729$(77,322)$1,116,258$668,212 Earnings(loss)per ordinary share Basic and diluted$0.06$(0.00)$0.02$0.05 Weighted average number of ordinary shares outstanding Basic and diluted 60,002,670 60,002,670 60,002,670 20,608,701 11 The foll
328、owing table presents the Companys summary consolidated statements of cash flows data for the six months ended June 30,2023,and 2022;years ended December 31,2022,and 2021.Epsium Enterprise Limited and SubsidiariesConsolidated Statements of Cash Flows Six Months endedJune 30,2023 Six Months endedJune
329、30,2022 Year endedDecember 31,2022 Year endedDecember 31,2021 (Unaudited)(Unaudited)Cash flows from Operating Activities Net income$3,524,222$(58,810)$1,130,946$1,052,021 Adjustments to Reconcile Net Income to Net Cash Used In Operating Activities:Depreciation 10,002 11,413 22,594 22,861 Imputed int
330、erest expense 2,684 37,557 70,666 131,795 Changes in operating assets and liabilities:Long-term deferred expenses -7,585 28 Inventories 1,365,626 132,566 (1,063,646)(2,440,986)Accounts receivable (556,719)216,122 67,979 (103,511)Prepayments (2,724,749)258,619 292,162 2,367,726 Other receivables 11,2
331、42 (4)613 36,065 Lease right-of-use assets 38,049 21,946 17,754 86,532 Accounts payable 98,114 (140,602)705,448 118,147 Advances from customers 11,223 1,690 -(359,125)Employee benefits payable 131 (188)(333)(12)Taxes and surcharges payable 498,661 -175,002 156,543 Lease liabilities (46,322)(34,689)(
332、31,023)(79,236)Other payables (12,500)-(23)Net cash flows provided by operating activities 2,219,664 445,620 1,395,747 988,825 Cash flows from investing activities:Cash paid for property and equipment (768)-(4,218)(916)Cash paid for long-term deferred expenses -(7,507)-Net cash flows used in investi
333、ng activities (768)-(11,725)(916)Cash Flow from Financing Activities:Due from related parties -1,521,879 Proceeds from issuance of shares -120,162 Receipts from related parties 1,480,167 204,816 -Payments to related parties (3,736,275)(846,119)(1,026,414)(2,619,965)Repayments to bank loans (26,801)(51,725)(104,468)(100,867)Net cash used in financing activities (2,282,909)(693,028)(1,130,882)(1,078