SecProbe.io

CORRESP
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filename1.htm

October
9, 2024

Via
Edgar Transmission

Ms.
Jennifer O’Brien

Securities
and Exchange Commission

Division
of Corporation Finance

Office
of Energy & Transportation

Washington,
D.C. 20549

    Re:
    Magic
                                            Empire Global Limited (the “Company”)

    Form
    20-F for Fiscal Year Ended December 31, 2023

    Response
    dated September 24, 2024

    File
    No. 001-41467

Dear
Ms. O’Brien:

As
counsel for the Company and on its behalf, this letter is being submitted in response to the letter dated September 26, 2024 from the
Securities and Exchange Commission (the “Commission”) in which the staff of the Commission (the “Staff”)
commented on the above-referenced Form 20-F for Fiscal Year Ended December 31, 2023 (the “Form 20-F”).

For
the Staff’s convenience, the Staff’s comment has been stated below in its entirety, with the Company’s response set
out immediately underneath such comment.

Form
20-F for the Fiscal Year Ended December 31, 2023

    General

    1.
    The
                                            Company’s response to prior comment 1 did not contain sufficient information and analysis
                                            to permit the staff to evaluate the Company’s position. Accordingly, we reissue the
                                            comment in its entirety. Please also note the following:

    ●
    Please ensure that all information and data is provided as of the most recent fiscal quarter end;

    ●
    Please ensure that your response addresses the Company’s subsidiaries;

    ●
    Under “Nature of Present Assets” and “Sources of Company’s Income,” please provide data on a consolidated
    basis and please also provide support for your calculations.

    Response:
                                            We respectfully advise the Staff that the Company believes that it is not an investment
                                            company under any of Section 3(a)(1)(A), (B) or (C) of the U.S. Investment Company Act of
                                            1940 (the “Act”) and therefore is not subject to the Act.

    As
    discussed below, the Company is not an “investment company” under Section 3(a)(1) of the Act because:

    (1)
    it is not and does not intend to hold itself out as being engaged primarily, or proposes to engage primarily, in the business of
    investing, reinvesting, or trading in securities;

    (2)
    it does not and does not intend to engage or proposes to engage in the business of issuing face-amount certificates of the installment
    type, or has been engaged in such business and has any such certificate outstanding; and

    (3)
    it does not and does not engage or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities,
    and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of its total assets (exclusive
    of Government securities and cash items) on an unconsolidated basis.

    The
                                            Company is not an Investment Company under Section 3(a)(1)(A)

    The
    Company is not an investment company under Section 3(a)(1)(A) of the Act because it is not primarily engaged in the business of investing,
    reinvesting or trading in securities. In determining whether or not an issuer is an investment company for purposes of Section 3(a)(1)(A),
    the courts, Commission and Staff have considered the five factors developed by the Commission in the Matter of Tonopah Mining
    Co. of Nevada (Investment Company Act Release No. 1084, 26 SEC 426 at 427, July 22, 1947) (“Tonopah”).

    Under
    Tonopah, the five factors used to determine the business in which an issuer is primarily engaged are:

    (1)
    the issuer’s historic development;

    (2)
    the issuer’s public representation of policy;

    (3)
    the activities of the issuer’s officers and directors;

    (4)
    the source of the issuer’s present income; and

    (5)
    the nature of the issuer’s present assets.

    As
    highlighted by case law, no one factor is dispositive in an analysis of an issuer’s primary business engagement and courts
    look to each individual factor in determining whether a company is an investment company that is primarily engaged in the business
    of investing, reinvesting or trading in securities.

    The
    Company does not believe it is primarily engaged in the business of investing, reinvesting or trading in securities based upon the
    following analysis:

    (1)
    Historical Development.

    The
    Company was set up in 2016 and has since been, through the Company’s operating subsidiary, Giraffe Capital Limited (“GCL”),
    a financial services provider in Hong Kong which principally engages in the provision of corporate finance advisory services. The
    Company’s principal revenue stream since its establishment up to the latest financial quarter (being nine months ended September
    30, 2024), has been derived and is deriving from the provision of corporate finance advisory services, including IPO sponsorship
    services, financial advisory services, independent financial advisory services, compliance advisory services and underwriting services.
    None of the Company nor any of its subsidiaries is engaged in the business of investing, reinvesting or trading in securities and
    nor does any of them hold itself out as being engaged primarily in such business.

    (2)
    Public Representations of Policy.

    As
    at the date of this response, the Company has not represented that it is involved in any business other than the provision of corporate
    finance services. The Company has consistently stated in its filings with the Commission, press releases, other public statements
    and website that it is in the business of provision of corporate finance advisory services as described above. The Company does not
    make public representations regarding its investment securities, and the Company has consistently emphasized operating results and
    has never emphasized either its investment income or the possibility of significant appreciation from its investments as a material
    factor in its business or future growth. In addition, investors and the investment media outlets do not evaluate the Company based
    on its underlying investment securities positions. Instead, analysis of the Company focuses on its financial results from its ongoing
    operations.

    (3)
    Activities of Officers and Directors.

    The
    Company’s officers and directors spend substantially all of their time managing the Company’s business of provision of
    corporate finance advisory services. The directors spend a nominal amount of time managing the Company’s investment securities.
    Further, the Company refers to the item 6. Directors, Senior Management and Employees of its annual report on Form 20-F for the year
    ended December 31, 2023, and notes the activities of its officers and directors align with the operations and service offerings of
    the Company as stated above.

 (4) Nature
of Assets.

For
the purpose of Section 3(a)(1)(C) of the Act, “investment securities” having a value in excess of 40% of the
issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis. “investment
securities” includes all securities except (A) Government securities, (B) securities issued by employees’ securities
companies, and (C) securities issued by majority-owned subsidiaries of the owner which (i) are not investment companies, and (ii)
are not relying on the exception from the definition of investment company in paragraph (1) or (7) of subsection (c) of the
Act.

The
table below set out the breakdown of the total assets of Company and its subsidiaries as of September 30, 2024, on an unconsolidated
and consolidated basis:

    As
    of September 30, 2024 (unconsolidated basis)
    Consolidated

    MEGL
    GFHL
    GCL
    GIL
    MEIL
    GCSL
    Group

    HK$
    HK$
    HK$
    HK$
    HK$
    HK$
    HK$

    Property, plant
    and equipments

      1,441,010

      1,441,010

    Righ of use assets

      236,912

      236,912

    Investment in subsidiary
      10,000
      10,000,300

    Long term investment

      8,500,000
      -

      8,500,000

    Due from subsidiaries
      105,589,080

      -

    Due from fellow subsidiaries

      1,498,627
      100
      100
      100

    Accounts receivable

      3,307,000

      3,307,000

    Other receivables

      14,500,000

      14,500,000

    Deposits and prepayments

      1,048,536

      1,048,536

    Cash
    and bank balance
      27,804,388

      4,962,029
      35,078,549
      38,540,463
      29,540
      106,414,969

      133,403,468
      10,000,300
      11,053,104
      59,519,659
      38,540,563
      29,640
      135,448,427

Note: Cash and bank balance includes time deposit with maturity not more than 3 months.

 The table below set out an analysis of percentage of investment securities over total assets as of September 30, 2024:

    As
    of September 30, 2024 (unconsolidated basis)
    Consolidated

    MEGL
    GFHL
    GCL
    GIL
    MEIL
    GCSL
    Group

    HK$
    HK$
    HK$
    HK$
    HK$
    HK$
    HK$

    Property, plant
    and equipments
      -
      -
      -
      1,441,010
      -
      -
      1,441,010

    Righ of use assets
      -
      -
      236,912
      -
      -
      -
      236,912

    Investment in subsidiary
      10,000
      10,000,300
      -
      -
      -
      -
      -

    Long term investment
      -
      -
      -
      8,500,000
      -
      -
      8,500,000

    Due from subsidiaries
      105,589,080
      -
      -
      -
      -
      -
      -

    Due from fellow subsidiaries
      -
      -
      1,498,627
      100
      100
      100
      -

    Accounts receivable
      -
      -
      3,307,000
      -
      -
      -
      3,307,000

    Other receivables

      14,500,000

      14,500,000

    Deposits
    and prepayments
      -
      -
      1,048,536
      -
      -
      -
      1,048,536

    Adjusted
    total assets
      105,599,080
      10,000,300
      6,091,075
      24,441,110
      100
      100
      29,033,458

    Investment securities
      -
      -
      -
      8,500,000
      -
      -
      8,500,000

    % of total assets
      0.0 %
      0.0 %
      0.0 %
      34.8 %
      0.0 %
      0.0 %
      29.3 %

As
set out in the calculation above, for the purpose of Section 3(a)(1)(C) of the Act, the value of “investment securities”
accounted for 0% of the Company’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis.
As of September 30, 2024, the “investment securities” accounted for less than 40% of the Group on a consolidated basis and
for each of the subsidiaries, on an unconsolidated basis.

(5)
Sources of Income.

Since
the incorporation of the Company, through its principal operating subsidiary GCL, the Company has been a financial services provider
in Hong Kong which principally engages in the provision of corporate finance advisory services. The Company’s principal revenue
stream has been derived from the provision of corporate finance advisory services.

The
table below set for the breakdown of sources of revenue of the Company and its subsidiaries, on an unconsolidated basis and for the Group
as a consolidated basis, for the nine months ended September 30, 2024:

    For
    the nine months ended September 30, 2024 (unconsolidated basis)
    Consolidated

    MEGL
    GFHL
    GCL
    GIL
    MEIL
    GCSL
    Group

    HK$
    HK$
    HK$
    HK$
    HK$
    HK$
    HK$

    Revenue

      -
      9,865,600
      -
      -
      -
      9,865,600

    Other income
      841,421
      -
      151,720
      1,066,079
      591,131
      151
      2,650,502

    Income from investment
    securities
      -
      -
      -
      -
      1,105,998
      -
      1,105,998

    Net profit/(loss) after
    tax
      (334,453 )
      (5,205 )
      (2,578,477 )
      777,845
      1,594,750
      (5,504 )
      (51,044 )

    % of revenue from investment
    securities
      0.0 %
      0.0 %
      0.0 %
      0.0 %
      N/A
      0.0 %
      11.2 %

As
set out in the table above, 100% of the revenue of the Company were derived from its provision of corporate finance advisory services
for the nine months ended September 30, 2024. The Company and its subsidiaries also recorded other income of which substantially were
bank interest income for the nine months ended September 30, 2024. MEIL recorded investment income of HK$1,105,998 for the nine months
ended September 30, 2024. On a consolidated basis, the investment income only accounted to 11.2% of the Company’s total revenue,
for the nine months ended September 30, 2024.

As
described in the above analysis, the Company is primarily engaged in the non-investment company business of provision of corporate finance
advisory services. As a result, the Company is not an investment company under Section 3(a)(1)(A) of the Act.

The
Company is not an Investment Company under Section 3(a)(1)(B)

The
Company is not engaging, and has not engaged in, the business of issuing face-amount certificates of the installment type, and does not
propose to engage in such business, and does not have any such certificates outstanding. As a result, the Company is not an investment
company under Section 3(a)(1)(B) of the Act.

The
Company is not an Investment Company under Section 3(a)(1)(C)

Under
Section 3(a)(1)(C) of the Act, an issuer is an investment company if it is both (1) engaged or proposes to engage in the business of
investing, reinvesting, owning, holding, or trading in securities and (2) owns or proposes to acquire investment securities having a
value exceeding 40% of the issuer’s total assets (exclusive of cash items) on an unconsolidated basis. The Company satisfies the
“objective test” of Section 3(a)(1)(C), as the Company does not own or propose to acquire investment securities having a
value exceeding 40% of the Company’s total assets (exclusive of cash items) on an unconsolidated basis. Please refer to above for
detailed breakdown and calculation.

As
a result, the Company is not an investment company under Section 3(a)(1)(C) of the Act.

    Conclusion

    As
    set out in the detailed legal and factual analysis, in particular with reference to the Tonopah case, that the Company is not an
    investment company under any of Section 3(a)(1)(A), (B) or (C) of the Act:

    (1)
    the issuer’s historic development – the Company has been a financial services provider principally engages in the provision
    of corporate finance services;

    (2)
    the issuer’s public representation of policy – the Company has not represented that it is involved in any business other
    than the provision of corporate finance services;

    (3)
    the activities of the issuer’s officers and directors – the activities of the officers and directors align with the Company’s
    representation that it is not involved in any business other than the provision of corporate finance services;

    (4)
    the source of the issuer’s present income – 100% of the Company’s revenue were derived from the provision of corporate
    finance services; and

    (5)
    the nature of the issuer’s present assets – the value of investment securities was less than 40% of the total assets
    (exclusive of Government securities and cash items) for each of the Company and its subsidiaries as of September 30, 2024, both on
    an unconsolidated and consolidated basis.

    2.
    The
                                            Company’s response to prior comment 2 was cursory and did not contain sufficient information