Company: MEGL
Filing Date: 2025-06-27
Form Type: F-1/A
Source: 0001641172-25-016831
Chunk: 31

Company: Magic Empire Global Ltd
Filing Date: 2025-06-27
Form: F-1/A
Chunk 31
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 sponsor in listing applications and the appointment and the role of financial adviser in specific transactions, may affect the demand for and the scope of our corporate finance advisory services which may in turn materially and adversely affect our results of operations.

Failure to comply with regulatory capital requirements set by local regulatory authorities could materially and negatively affect our business operations and overall performance.

Our regulated operating subsidiary is subject to various regulatory capital requirements, including minimum capital requirements, established by competent authorities in their respective jurisdiction. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our business and financial position. For example, our SFC licensed operating subsidiary, GCL, is required under the Securities and Future Ordinance (Cap.571) (“SFO”) of Hong Kong and Securities and Futures (Financial Resources) Rules (Chapter 571N of the Laws of Hong Kong) (the “FRR”) of Hong Kong to maintain certain level of liquid capital. See “Regulations”.

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As of the date of this prospectus, GCL was in compliance with the respective regulatory capital requirements. However, if we fail to remain well-capitalized for regulatory purposes, SFC may take actions against us and our business operations, and we may face penalties, including limitations and prohibitions on our business activities or suspension or revocation of our licenses and trading rights. This could affect client confidence, our ability to grow, our costs of funds and professional insurance costs, our ability to pay dividends on our shares, our ability to make acquisitions, and in turn, our business, results of operations and financial condition.

Our revenue is non-recurring in nature and our profitability is highly unpredictable.

The performance of our corporate finance services depends, to a large extent, on our ability to leverage our business network and relationships to source and retain clients. Since our mandates were negotiated on a project-by-project basis with our clients, revenue generated from our services may fluctuate from time to time and may not recur. The number of projects undertaken by us, the total revenue derived from our businesses and the revenue generated from each client are affected by numerous factors such as market condition, the terms of each engagement, project duration, complexity and completion timeline of each project, resulting in uncertainties in relation to the sustainability of our financial performance. There is no assurance that the clients which have previously sought our services will continue to retain us for future businesses. Further, service fees for our corporate finance advisory projects are payable by instalments according to