Company: MEGL
Filing Date: 2025-04-14
Form Type: 20-F
Source: 0001641172-25-004566
Chunk: 25

Company: Magic Empire Global Ltd
Filing Date: 2025-04-14
Form: 20-F
Item: Item 3
Chunk 25
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 shareholder lawsuits
and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect
this sector-wide scrutiny, criticism and negative publicity will have on us, our offering, business and our share price. If we become
the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant
resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our
management from developing our growth. If such allegations are not proven to be groundless, we and our business operations will be severely
affected and you could sustain a significant decline in the value of our shares.

If
we become directly subject to the recent scrutiny, criticism and negative publicity involving U. S.-listed Chinese companies, we may have
to expend significant resources to investigate and resolve the matter which could harm our business operations, price of our shares and
reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.

Recently,
U. S. public companies that have substantially all of their operations in China, have been the subject of intense scrutiny, criticism
and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism
and negative publicity has centered around financial and accounting irregularities and mistakes, a lack of effective internal controls
over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of
fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U. S. listed Chinese companies
has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder
lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what
effect this sector-wide scrutiny, criticism and negative publicity will have on our Company, our business and price of our shares. Although
substantially all of our operations are based in Hong Kong, we do have a few corporate clients who are based in mainland China. If we
become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant
resources to investigate such allegations and/or defend our Company. This situation will be costly and time consuming and distract our
management from growing our Company.

Failure
to comply with the