SEC Comment Letter for MDJM LTD (UOKA, UOKAF) (CIK 0001741534) (UOKAF) — Jun 26, 2018
MDJM LTD (UOKA, UOKAF) (CIK 0001741534)
Date: June 26, 2018 · CIK: 0001741534 · Accession: 0000000000-18-019550
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3233 June 25, 2018 Via E -mail Siping Xu , Chairman and Chief Executive Officer MDJM LTD Suite C -1505, Saidun Center Xikang Road, Heping District, Tianjin People’s Republic of China
Re: MDJM LTD Draft Registration Statement on Form F -1 Submitted May 29, 2018 CIK No. 0001741534
Dear Mr. Xu :
We have reviewed your draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your discl osure.
Please respond to this letter by providing the requested information and either submitting an amended draft registration statement or publicly filing your registration statement on EDGAR. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments and your amended draft registration statement or filed registration statement, we may have additional comments.
General
1. Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you , or anyone authorized to do so on your behalf , present to potential invest ors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications.
Risk Factors, page 13
2. Please add risk factor disclosure , as applic able, describing any potential impact of the proposed tariffs by the United States and China on your operations .
Siping Xu , Chairman and Chief Executive Officer MDJM LTD June 25, 2018 Page 2
We may not be able to su ccessfully execute… page 15
3. We note your disclosure that you may not be able to successfully enter into new geographical markets. In your B usiness section, or elsewhere as appropriate, please disclose whether there are any regulations that may be impac t your ability to enter these new markets.
We face long cycles … page 19
4. We note your disclosure that some of your developer clients require you to pay an upfront and refundable deposit. Please revise to more specifically describe these deposits, when you are entitled to refunds of such deposits and how the se deposits impact your operations.
Our contractual agreements with Mingda Tianjin …, page 31
5. We note your disclosure that disputes between you and Mingda Tianjin will be subject to arbitration in the People’s Republic of China. Please revise your disclosure to discuss the impact, if any, of t hese provisions on shareholders ’ rights to pursue claims under the Unite States federal securities laws.
Disclosure Reg arding Forward -Looking Statements, page 37
6. We note your disclaimer as to forward -looking statements and your reference to the Private Securities Litigation Reform Act of 199 5. Please note that you do not appear eligible for the safe harbor for forward -looking s tatements available under the PSLRA because you are not currently a U.S. reporting company. Please revise your disc losure as approp riate. Additionally, we note the last sentence in the section “Industry Data and Forecasts.” This statement appear s to disclaim the issuer’s responsibility for information in the registration statement. As this is not consistent with the liability provisions of the Securities Act, p lease revise the disclosure to remove this disclaimer.
Industry, page 52
7. We note your disclo sure on page 54. Please revise the table to disclose information regarding the areas wh ere your operations are located and clarify, as applicable, the areas in which you operate.
Provisions on Foreign Investment, page 76
8. Please revi se to clar ify the status of your various PRC entities under the Interim Measures for Record -filing for the Establishment and Alteration of Foreign -invested Enterprises reference d in this section.
Siping Xu , Chairman and Chief Executive Officer MDJM LTD June 25, 2018 Page 3
Note 3 – Accounts Receivable , page F -14
9. Please expand upon your accounting policy related to the determination of the allowance for doubtful accounts. For example, clarify at what stage of delinquency you record a reserve for a delinquent account, additional factors that would trigger the recording of a reserve or impairment and at what point a receivable is written off as uncollectible. In addition, tell us the amount of receivables outstanding as of December 31, 2017 that have been subsequently collected.
You may contact William Demarest at (202)551 -3432 or Kristi Marrone at (202)551 - 3429 if you have questions regarding comments on the financial statements and re lated matters. Please contact Stacie Gorman at (202)551 -3585 or me at (202)551 -3401 with any other questions.
Sincerely,
/s/ Jennifer Gowetski
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Mail Stop 3233 June 25, 2018 Via E -mail Siping Xu , Chairman and Chief Executive Officer MDJM LTD Suite C -1505, Saidun Center Xikang Road, Heping District, Tianjin People’s Republic of China Re: MDJM LTD Draft Registration Statement on Form F -1 Submitted May 29, 2018 CIK No. 0001741534 Dear Mr. Xu : We have reviewed your draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your discl osure. Please respond to this letter by providing the requested information and either submitting an amended draft registration statement or publicly filing your registration statement on EDGAR. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing the information you provide in response to these comments and your amended draft registration statement or filed registration statement, we may have additional comments. General 1. Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you , or anyone authorized to do so on your behalf , present to potential invest ors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications. Risk Factors, page 13 2. Please add risk factor disclosure , as applic able, describing any potential impact of the proposed tariffs by the United States and China on your operations . Siping Xu , Chairman and Chief Executive Officer MDJM LTD June 25, 2018 Page 2 We may not be able to su ccessfully execute… page 15 3. We note your disclosure that you may not be able to successfully enter into new geographical markets. In your B usiness section, or elsewhere as appropriate, please disclose whether there are any regulations that may be impac t your ability to enter these new markets. We face long cycles … page 19 4. We note your disclosure that some of your developer clients require you to pay an upfront and refundable deposit. Please revise to more specifically describe these deposits, when you are entitled to refunds of such deposits and how the se deposits impact your operations. Our contractual agreements with Mingda Tianjin …, page 31 5. We note your disclosure that disputes between you and Mingda Tianjin will be subject to arbitration in the People’s Republic of China. Please revise your disclosure to discuss the impact, if any, of t hese provisions on shareholders ’ rights to pursue claims under the Unite States federal securities laws. Disclosure Reg arding Forward -Looking Statements, page 37 6. We note your disclaimer as to forward -looking statements and your reference to the Private Securities Litigation Reform Act of 199 5. Please note that you do not appear eligible for the safe harbor for forward -looking s tatements available under the PSLRA because you are not currently a U.S. reporting company. Please revise your disc losure as approp riate. Additionally, we note the last sentence in the section “Industry Data and Forecasts.” This statement appear s to disclaim the issuer’s responsibility for information in the registration statement. As this is not consistent with the liability provisions of the Securities Act, p lease revise the disclosure to remove this disclaimer. Industry, page 52 7. We note your disclo sure on page 54. Please revise the table to disclose information regarding the areas wh ere your operations are located and clarify, as applicable, the areas in which you operate. Provisions on Foreign Investment, page 76 8. Please revi se to clar ify the status of your various PRC entities under the Interim Measures for Record -filing for the Establishment and Alteration of Foreign -invested Enterprises reference d in this section. Siping Xu , Chairman and Chief Executive Officer MDJM LTD June 25, 2018 Page 3 Note 3 – Accounts Receivable , page F -14 9. Please expand upon your accounting policy related to the determination of the allowance for doubtful accounts. For example, clarify at what stage of delinquency you record a reserve for a delinquent account, additional factors that would trigger the recording of a reserve or impairment and at what point a receivable is written off as uncollectible. In addition, tell us the amount of receivables outstanding as of December 31, 2017 that have been subsequently collected. You may contact William Demarest at (202)551 -3432 or Kristi Marrone at (202)551 - 3429 if you have questions regarding comments on the financial statements and re lated matters. Please contact Stacie Gorman at (202)551 -3585 or me at (202)551 -3401 with any other questions. Sincerely, /s/ Jennifer Gowetski Jennifer Gowetski Senior Counsel Office of Real Estate and Commodities cc: Ying Li, Esq. ( via e -mail)