SUBJECT TO COMPLETION,
DATED OCTOBER 27, 2022
PRELIMINARY PROSPECTUS
$200,000,000 of
Ordinary Shares
Preferred Shares
Debt Securities
Warrants
Rights
and
Units
UNIVERSE PHARMACEUTICALS INC
This is an offering of the securities of Universe
Pharmaceuticals INC, a Cayman Islands exempted company. Unless otherwise stated, as used in this prospectus, references to “we,”
“us,” “our,” and the “Company” are to Universe Pharmaceuticals INC, a company organized under the
laws of the Cayman Islands.
We may, from time to time, in one or more offerings,
offer and sell up to $200,000,000 of our ordinary shares, preferred shares, debt securities, warrants, rights, and units, or any combination
thereof, together or separately as described in this prospectus. In this prospectus, references to the term “securities” refers,
collectively, to our ordinary shares, preferred shares, debt securities, warrants, rights, and units. The prospectus supplement for each
offering of securities will describe in detail the plan of distribution for that offering. For general information about the distribution
of the securities offered, please see “Plan of Distribution” in this prospectus.
This prospectus provides a general description
of the securities we may offer. We will provide the specific terms of the securities offered in one or more supplements to this prospectus.
We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. You should read
this prospectus, any prospectus supplement, and any free writing prospectus before you invest in any of our securities. The prospectus
supplement and any related free writing prospectus may add, update, or change information in this prospectus. You should read carefully
this prospectus, the applicable prospectus supplement, and any related free writing prospectus, as well as the documents incorporated
or deemed to be incorporated by reference, before you invest in any of our securities. This prospectus may not be used to offer or sell
any securities unless accompanied by the applicable prospectus supplement.
Our ordinary shares are listed on the Nasdaq Global
Market, or “Nasdaq,” under the symbol “UPC.” On October 20, 2022, the last reported sale price of our ordinary
shares on Nasdaq was $1.05 per share. The aggregate market value of our outstanding ordinary shares held by non-affiliates, or public
float, as of October 26, 2022, was approximately $9.73 million, which was calculated based on 9,270,000 ordinary shares held by non-affiliates
and the price of $1.05 per share, which was the closing price of our ordinary shares on Nasdaq on October 20, 2022. Pursuant to General
Instruction I.B.5 of Form F-3, in no event will we sell our securities in a public primary offering with a value exceeding more than
one-third of our public float in any 12-month period so long as our public float remains below $75 million. During the 12 calendar months
prior to and including the date of this prospectus, we have not offered or sold any securities pursuant to General Instruction I.B.5 of
Form F-3.
Investing in our securities involves a
high degree of risk. Before making an investment decision, please read the information under the heading “Risk Factors”
beginning on page 13 of this prospectus and risk factors set forth in our most recent annual report on Form 20-F (the
“2021 Annual Report”), in other reports incorporated herein by reference, and in an applicable prospectus
supplement.
We may offer and sell the securities from time
to time at fixed prices, at market prices, or at negotiated prices, to or through underwriters, to other purchasers, through agents, or
through a combination of these methods. If any underwriters are involved in the sale of any securities with respect to which this prospectus
is being delivered, the names of such underwriters and any applicable commissions or discounts will be set forth in a prospectus supplement.
The offering price of such securities and the net proceeds we expect to receive from such sale will also be set forth in a prospectus
supplement. See “Plan of Distribution” elsewhere in this prospectus for a more complete description of the ways in which the
securities may be sold.
This prospectus refers to (i) Universe Pharmaceuticals
INC, the Cayman Islands holding company, as “we”, “our”, “us”, or the “Company”, (ii)
the Company’s subsidiaries, as “our subsidiaries,” (iii) Jiangxi Universe Pharmaceuticals Co., Ltd., the Company’s
indirect wholly owned subsidiary in China (“Jiangxi Universe”) and its subsidiaries, which are domiciled in China and conducting
business operations in China, as the “operating entities.” The Company does not conduct any operations.
We are an offshore holding company with no operations
of our own and not a Chinese operating company. Our operations are conducted in China by our subsidiaries. This is an offering of securities
of the offshore holding company in the Cayman Islands, instead of securities of our operating companies in China. Investors in our securities
are not purchasing equity interests in our subsidiaries but instead are purchasing equity interests in the ultimate Cayman Islands holding
company. Therefore, you will not directly hold any equity interests in our operating companies. The Chinese regulatory authorities could
disallow this structure, which would likely result in a material change in our operations and/or a material change in the value of the
securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become
worthless. For risks facing our Company and this offering as a result of our organizational structure, see “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China” in the 2021 Annual Report.
We are subject to certain legal and operational
risks associated with having the majority of our operations in China, which could significantly limit or completely hinder our ability
to offer securities to investors and cause the value of our securities to significantly decline or be worthless. See “Item 3. Key
Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government has significant authority to
intervene or influence the China operations of an offshore holding company, such as ours, at any time. The PRC government may exert more
control over offerings conducted overseas and/or foreign investment in China-based issuers. If the PRC government exerts more oversight
and control over offerings that are conducted overseas and/or foreign investment in China-based issuers and we were to be subject to such
oversight and control, it may result in a material adverse change to our business operations, significantly limit or completely hinder
our ability to offer or continue to offer securities to investors, and cause the ordinary shares to significantly decline in value or
become worthless” in the 2021 Annual Report. Recently, the PRC government adopted a series of regulatory actions and statements
to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market,
adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the
date of this prospectus, we and our subsidiaries have not been involved in any investigations on cybersecurity review initiated by any
PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our PRC counsel, AllBright Law
Offices, we are not subject to cybersecurity review by the Cyberspace Administration of China, or the CAC, since we currently do not have
over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal
information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures. We are not
subject to network data security review by the CAC if the Draft Regulations on the Network Data Security Administration (Draft for Comments)
(the “Security Administration Draft”) are enacted as proposed, because we currently do not have over one million users’
personal information, we do not collect data that affect or may affect national security and we do not anticipate that we will be collecting
over one million users’ personal information or data that affect or may affect national security in the foreseeable future, which
we understand might otherwise subject us to the Security Administration Draft. See “Item 3. Key Information—D. Risk Factors—Risks
Related to Doing Business in China—Failure to comply with cybersecurity, data privacy, data protection, or any other laws and regulations
related to data may materially and adversely affect our business, financial condition, and results of operations” in the 2021 Annual
Report. According to our PRC counsel, AllBright Law Offices, no relevant laws or regulations in the PRC explicitly require us to seek
approval from the China Securities Regulatory Commission for our overseas listing. As of the date of this prospectus, we and our subsidiaries
have not received any inquiry, notice, warning, or sanction regarding our overseas listing from the China Securities Regulatory Commission
(the “CSRC”) or any other PRC governmental authorities. However, since these statements and regulatory actions are newly published,
official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified
or new laws and regulations will have on the daily business operations of our subsidiaries, our ability to accept foreign investments,
and our listing on an U.S. exchange. The Standing Committee of the National People’s Congress (the “SCNPC”) or PRC regulatory
authorities may in the future promulgate laws, regulations, or implementing rules that require us or our subsidiaries to obtain regulatory
approval from Chinese authorities for listing in the U.S.
In addition, our ordinary shares may be prohibited
from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act, if the Public Company Accounting
Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditor for three consecutive years beginning in 2021.
Our auditor is headquartered in California and has not been inspected by the PCAOB, but according to our auditor, it will be inspected
by the PCAOB on a regular basis, and our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021.
If trading in our ordinary shares is prohibited under the Holding Foreign Companies Accountable Act in the future because the PCAOB determines
that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our ordinary shares and trading
in our ordinary shares could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable
Act, which, if passed by the U.S. House of Representatives and signed into law, would reduce the period of time for foreign companies
to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period for triggering the prohibition on
trading. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of
Protocol (the “Protocol”), governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol
remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol
disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has
the unfettered ability to transfer information to the SEC. However, when the PCAOB reassesses its determinations by the end of 2022, it
could determine that it still unable to inspect and investigate completely audit firms based in China and Hong Kong. See “Item 3.
Key Information—D. Risk Factors—Risks Related to Doing Business in China—Our ordinary shares may be delisted or prohibited
from being traded over-the-counter under the Holding Foreign Companies Accountable Act, if the U.S. Public Company Accounting Oversight
Board, or the PCAOB, is unable to inspect our auditors. The delisting or the cessation of trading of our ordinary shares, or the threat
of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment. Additionally,
the inability of the PCAOB to conduct inspections would deprive our investors with the benefits of such inspections. Our auditor has not
been inspected by the PCAOB, but according to our auditor, it will be inspected by the PCAOB on a regular basis” in the 2021 Annual
Report.
We are an exempted company with limited liability
incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment
of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us, and as a holding
company, we will be dependent on receipt of funds from our Hong Kong subsidiary, Universe Pharmaceuticals Group (International) Limited
(“Universe HK”).
Current PRC regulations permit our indirect PRC
subsidiaries to pay dividends to Universe HK only out of their accumulated profits, if any, determined in accordance with Chinese accounting
standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits
each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China
is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be
set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other
ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve
funds are not distributable as cash dividends except in the event of liquidation.
The PRC government also imposes controls on the
conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in
complying with the administrative requirements necessary to obtain and remit foreign currency for the payment of dividends from our profits,
if any. Furthermore, if our subsidiaries and affiliates in the PRC incur debt on their own in the future, the instruments governing the
debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenue
from our operations, we may be unable to pay dividends on our ordinary shares.
Cash dividends, if any, on our ordinary shares
will be paid in U.S. dollars. Universe HK may be considered a non-resident enterprise for tax purposes, so that any dividends our PRC
subsidiaries pay to Universe HK may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate
of up to 10%. See “Item 10. Additional Information—E. Taxation—People’s Republic of China Taxation.” in
the 2021 Annual Report.
In order for us to pay dividends to our shareholders,
we will rely on payments made from Universe Technology’s subsidiary, Jiangxi Universe, to Universe Technology and from Universe
Technology to Universe HK and then to our Company. According to the EIT Law, such payments from subsidiaries to parent companies in China
are subject to the PRC enterprise income tax at a rate of 25%. In addition, if Jiangxi Universe or its subsidiary or branches incur 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.
Pursuant to the Double Tax Avoidance Arrangement,
the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. The 5% withholding
tax rate, however, does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the
Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than
25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a
Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax
rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we
will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax
rate of 5% under the Double Taxation Arrangement with respect to any dividends paid by our PRC subsidiaries to its immediate holding company,
Universe HK. As of the date of this annual report, we have not applied for the tax resident certificate from the relevant Hong Kong tax
authority. Universe HK intends to apply for the tax resident certificate if and when Universe Technology plan to declare and pay dividends
to Universe HK. See “Item 3. Key Information—D. Risk Factors— There are significant uncertainties under the Enterprise
Income Tax Law, or the EIT Law, relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC
subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits” in the 2021 Annual Report.
To the extent cash is located in the PRC or within
a PRC domiciled entity and may need to be used to fund operations outside of the PRC, the funds may not be available due to limitations
placed on us and our subsidiaries by the PRC government. To the extent cash in and assets of the business is in the PRC or a PRC entity,
the funds and assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition
of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash and assets. See “Risk
Factors — Risks Related to Doing Business in China — To the extent cash and assets of in the business is in
the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in
or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer
cash and assets.”
As of the date of this prospectus, none of our
subsidiaries have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our
shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends
will be paid in the foreseeable future. If we determine to pay dividends on any of our ordinary shares in the future, as a holding company,
we will rely on payments from subsidiaries of Jiangxi Universe to Jiangxi Universe, and from Jiangxi Universe to Universe Pharmaceuticals
Technology Co., Ltd., our indirect wholly owned subsidiary in China (“Universe Technology”), and the distribution of such
payments to Universe HK, and then to our Company. Our finance department is supervising cash management, following the instructions of
our management. Our finance department is responsible for establishing our cash operation plan and coordinating cash management matters
among our subsidiaries and departments. Each subsidiary and department initiates a cash request by putting forward a cash demand plan,
which explains the specific amount and timing of cash requested, and submitting it to our finance department. The finance department reviews
the cash demand plan and prepares a summary for the management of our Company. Management examines and approves the allocation of cash
based on the sources of cash and the priorities of the needs. Other than the above, we currently do not have other cash management policies
or procedures that dictate how funds are transferred. Cash flows have occurred between our Cayman
Islands holding company and our subsidiaries. The Cayman Islands holding company has not received cash transfer from its subsidiaries
for the years ended September 30, 2019, 2020 and 2021, and from October 1, 2021 to the date of this prospectus. There was no distribution
of earnings by our PRC subsidiaries to the Cayman Islands holding company during the years ended September 30, 2021, 2020 and 2019, and
from October 1, 2021 to the date of this prospectus. From October 1, 2021 to the date of this prospectus, Universe Technology transferred
cash in the amount of RMB67,277,244 (approximately $10,460) to Jiangxi Universe. In the fiscal year ended September 30, 2021, Universe
Pharmaceuticals INC transferred the net proceeds from its initial public offering, through Universe HK and Universe Technology, to Jiangxi
Universe and its subsidiaries, in the amount of RMB 43,976,156 (approximately $6,807,507), to be used for general corporate purposes.
In the years ended September 30, 2020 and 2019, there was no cash transferred from the Cayman Islands
holding company to its PRC subsidiaries. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial
Information—Dividend Policy” in the 2021 Annual Report and our audited consolidated financial statements for the fiscal years
ended September 30, 2021, 2020, and 2019.
Neither the U.S. Securities and Exchange Commission
nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2022.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, an applicable prospectus supplement,
and our SEC filings that are incorporated by reference into this prospectus contain or incorporate by reference forward-looking statements
within the meaning of Section 27A of the Securities Act of and Section 21E of the Exchange Act. All statements other than statements
of historical fact are “forward-looking statements,” including any projections of earnings, revenue or other financial items,
any statements of the plans, strategies, and objectives of management for future operations, any statements concerning proposed new projects
or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs,
goals, strategies, intentions, and objectives, and any statements of assumptions underlying any of the foregoing. The words “believe,”
“anticipate,” “estimate,” “plan,” “expect,” “intend,” “may,” “could,”
“should,” “potential,” “likely,” “projects,” “continue,” “will,”
and “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. Forward-looking statements reflect our current views with respect to future events, are based
on assumptions, and are subject to risks and uncertainties. We cannot guarantee that we actually will achieve the plans, intentions, or
expectations expressed in our forward-looking statements and you should not place undue reliance on these statements. There are a number
of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements.
These important factors include those discussed under the heading “Risk Factors” contained or incorporated by reference in
this prospectus and in the applicable prospectus supplement and any free writing prospectus we may authorize for use in connection with
a specific offering. These factors and the other cautionary statements made in this prospectus should be read as being applicable to all
related forward-looking statements whenever they appear in this prospectus. Except as required by law, we undertake no obligation to update
publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Prospectus
Summary
Overview
We are an offshore holding
company incorporated in the Cayman Islands. As a holding company with no operations of our own, our operations are conducted in China
through our wholly owned indirect PRC subsidiary, Jiangxi Universe, and its subsidiaries. This
is an offering of securities of the offshore holding company in the Cayman Islands, instead of securities of the operating entities in
China. Investors in our securities are not purchasing equity interests in our subsidiaries but instead are purchasing equity interests
in the ultimate Cayman Islands holding company. Therefore, you will not directly hold any equity interests in the operating entities.
The Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and/or
a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities
to significantly decline or become worthless. For risks facing our Company and this offering as a result of our organizational structure,
see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China” in the 2021 Annual Report.
The following diagram illustrates our corporate structure as of the
date of this prospectus.
We are subject to certain legal and operational
risks associated with having the majority of our operations in China, which could significantly limit or completely hinder our ability
to offer securities to investors and cause the value of our securities to significantly decline or be worthless. “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—The PRC government has significant authority to intervene or influence
the China operations of an offshore holding company, such as ours, at any time. The PRC government may exert more control over offerings
conducted overseas and/or foreign investment in China-based issuers. If the PRC government exerts more oversight and control over offerings
that are conducted overseas and/or foreign investment in China-based issuers and we were to be subject to such oversight and control,
it may result in a material adverse change to our business operations, significantly limit or completely hinder our ability to offer or
continue to offer securities to investors, and cause the ordinary shares to significantly decline in value or become worthless”
in the 2021 Annual Report. Recently, the PRC government adopted a series of regulatory actions and statements to regulate business operations
in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to
extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus,
we and our subsidiaries have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority,
nor has any of them received any inquiry, notice, or sanction. As confirmed by our PRC counsel, AllBright Law Offices, we are not subject
to cybersecurity review by the CAC, since we currently do not have over one million users’ personal information and do not anticipate
that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise
subject us to the Cybersecurity Review Measures. We are not subject to network data security review by the CAC if the Security Administration
Draft is enacted as proposed, because we currently do not have over one million users’ personal information, we do not collect data
that affect or may affect national security and we do not anticipate that we will be collecting over one million users’ personal
information or data that affect or may affect national security in the foreseeable future, which we understand might otherwise subject
us to the Security Administration Draft. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—Failure
to comply with cybersecurity, data privacy, data protection, or any other laws and regulations related to data may materially and adversely
affect our business, financial condition, and results of operations” in the 2021 Annual Report. According to our PRC counsel, AllBright
Law Offices, no relevant laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission
for our overseas listing. As of the date of this prospectus, we and our subsidiaries have not received any inquiry, notice, warning, or
sanction regarding our overseas listing from the CSRC or any other PRC governmental authorities. However, since these statements and regulatory
actions are newly published, official guidance and related implementation rules have not been issued. It is highly uncertain what
the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries, our ability
to accept foreign investments, and our listing on an U.S. exchange. The SCNPC or PRC regulatory authorities may in the future promulgate
laws, regulations, or implementing rules that require us or our subsidiaries to obtain regulatory approval from Chinese authorities
for listing in the U.S.
In addition, our ordinary shares may be prohibited
from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act, if the PCAOB is unable to
inspect our auditor for three consecutive years beginning in 2021. Our auditor is headquartered in California and has not been inspected
by the PCAOB, but according to our auditor, it will be inspected by the PCAOB on a regular basis, and our auditor is not subject to the
determinations announced by the PCAOB on December 16, 2021. If trading in our ordinary shares is prohibited under the Holding Foreign
Companies Accountable Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future
time, Nasdaq may determine to delist our ordinary shares and trading in our ordinary shares could be prohibited. On June 22, 2021,
the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives
and signed into law, would reduce the period of time for foreign companies to comply with PCAOB audits to two consecutive years instead
of three, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the CSRC, the MOF, and the PCAOB
signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remains unpublished
and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC,
the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability
to transfer information to the SEC. However, when the PCAOB reassesses its determinations by the end of 2022, it could determine that
it still unable to inspect and investigate completely audit firms based in China and Hong Kong. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—Our ordinary shares may be delisted or prohibited from being traded
over-the-counter under the Holding Foreign Companies Accountable Act, if the U.S. Public Company Accounting Oversight Board, or the PCAOB,
is unable to inspect our auditors. The delisting or the cessation of trading of our ordinary shares, or the threat of their being delisted
or prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, the inability of the
PCAOB to conduct inspections would deprive our investors with the benefits of such inspections. Our auditor has not been inspected by
the PCAOB, but according to our auditor, it will be inspected by the PCAOB on a regular basis” in the 2021 Annual Report.
Our Company
The operating entities are manufacturer and supplier
of traditional Chinese medicine derivatives (“TCMD”), specializing in the manufacturing, marketing, sales and distribution
of TCMD products targeting the elderly with the goal of addressing their physical conditions in the aging process and to promote their
general well-being.
The operating entities
have registered and obtained approval for 26 varieties of TCMD products from the National Medical
Products Administration (the “NMPA”), and the operating entities currently produce
13 varieties of TCMD products, which are sold in approximately 261 cities of 30 provinces in China. In addition, the operating
entities sell not only their own TCMD products, but also biomedical drugs medical instruments, Traditional
Chinese Medicine Pieces (“TCMPs”), and dietary supplements manufactured by third-party pharmaceutical companies (collectively
referred to as “third-party products”).
Products
manufactured by the operating entities. The
13 TCMD products currently manufactured by the operating entities fall into two categories:
(1) treatment and relief for common chronic health conditions in the elderly designed to achieve physical wellness and longevity (“chronic
condition treatments”), and (2) cold and flu medications.
| |
● |
Chronic condition treatments: Guben Yanling Pill, Shenrong Weisheng Pill, Quanlu Pill, Yangxue Danggui Syrup, Wuzi Yanzong Oral Liquid, Fengtong Medicinal Liquor, Shenrong Medicinal Liquor, Qishe Medicinal Liquor, Fengshitong Medicinal Liquor, and Shiquan Dabu Medicinal Liquor. |
| |
● |
Cold and flu medicines: Paracetamol Granule for Children, Isatis Root Granule and Qiangli Pipa Syrup. |
As
people age, they have an increasing risk of developing chronic health conditions. According to a report published by the Chinese Center
for Disease Control and Prevention in March 2019, 75.8% of seniors have at least one chronic health condition, and 35.1% of them have
two or more. According to the “Blue Book of Elderly Health (2020-2021)” released in December 2021 by the Chinese Academy of
Medical Sciences, the School of Public Health of Peking Union Medical College and the Social Sciences Literature Publishing House, the
prevalence of hypertension, diabetes and hypercholesterolemia in Chinese residents aged 60 and above is 58.3%, 19.4% and 10.5%, respectively,
and more than 3/4 of the residents have multiple disease coexistence, and with the increase of age, the prevalence of chronic diseases
increases. Some of the most common chronic diseases in the elderly include arthritis, chronic kidney disease, fatigue, and low back pain.
The operating entities’ products under the category of chronic condition treatments
are designed to address some of the aforementioned diseases. The operating entities’ cold
and flu medicines, on the other hand, include products designed to treat and relieve symptoms of respiratory illnesses caused by bacteria
and viruses.
The
operating entities’ third-party products. The
operating entities also distribute and sell products manufactured by third-party producers, including
biomedical drugs, medical instruments, TCMPs and dietary supplements. For the six months ended March 31, 2022 and the fiscal year ended
September 30, 2021, the operating entities distributed around 2,812 and 2,766 types of third-party
products, respectively.
The operating entities’ Customers. The
operating entities’ major customers are pharmaceutical distributors, hospitals, clinics and
drugstore chains, primarily located in Jiangxi Province, Jiangsu Province, Guangdong Province, Hubei Province, Fujian Province, Guangxi
Province and Shandong Province, and 23 other provinces in China.
We
believe the operating entities have implemented a successful business model, and their business
has grown substantially since inception. The operating entities customer base decreased from
a total of 2,603 customers as of September 30, 2019 decreased to 2,209 as of September 30, 2020 due to the impact of the COVID-19 pandemic.
In fiscal year 2021, the operating entities’ business operations gradually recovered
from the negative impact of COVID-19 and the customer base increased to 2,708 as of September 30, 2021. The operating entities’
customer base increased from 1,092 as of March 31, 2021 to 1,205 as of March 31, 2022. The revenues from selling the operating entities’
own products decreased from $20,895,542 for the fiscal year ended September 30, 2019 to $18,374,751 for the fiscal year ended September
30, 2020 due to the impact of COVID-19 pandemic and strong market competition, and increased to $29,559,286 for the fiscal year ended
September 30, 2021. The revenues from selling the operating entities’ own products increased from $13,318,921 for the six months
ended March 31, 2021 to $15,354,635 for the six months ended March 31, 2022. The revenues
from distributing and selling third-party products slightly decreased from $12,333,774 for the fiscal year ended September 30, 2019 to
$12,329,209 for the year ended September 30, 2020, and increased to $18,422,745 for the fiscal year ended September 30, 2021. The revenues
from distributing and selling third-party products decreased from $10,974,027 in the six months ended March 31, 2021 to $8,847,705 in
the six months ended March 31, 2022. Our net income was $7,551,465 for the fiscal year ended
September 30, 2019, $7,558,222 for the fiscal year ended September 30, 2020, and $11,319,952 for the fiscal year ended September 30, 2021.
Our net income was $7,147,798 for the six months ended March 31, 2021 and $1,731,735 for the six months ended March 31, 2022.
Recent Development
Completion
of the Initial Public Offering (“IPO”)
On
March 25, 2021, we closed our IPO of 5,000,000 ordinary shares, par value $0.003125 per share at a public offering price of $5.00 per
share. On March 29, 2021, the underwriter exercised in full its over-allotment option to purchase an additional 750,000 ordinary shares. The
closing for the sale of the over-allotment shares took place on March 31, 2021. Gross proceeds of our IPO, including the proceeds from
the sale of the over-allotment shares, totaled $28.75 million, before deducting underwriting discounts and other related expenses. Net
proceeds of our IPO, including over-allotment shares, were approximately $25.6 million. In connection with the IPO, our ordinary shares
began trading on the Nasdaq Global Market under the symbol “UPC” on March 23, 2021.
Newly
Established Subsidiary
On
May 12, 2021, through our PRC subsidiary, Jiangxi Universe, we established a wholly owned subsidiary, Guangzhou Universe Hanhe Medical
Research Co., Ltd. (“Universe Hanhe”) in Guangzhou City, China, for the purpose of conducting research and development of
new pharmaceutical products in order to diversify our product offerings in the near future. As of the date of this prospectus, Universe
Hanhe has no active business operations.
Prepayment
for Construction-in-progress Project (the “CIP Project”)
On
June 25, 2021, we entered into a construction contract with a sub-contractor, Jiangxi Chenyuan Construction Project Co., Ltd. (“Chenyuan”),
pursuant to which, Chenyuan will construct four manufacturing plants and an office building with a total maximum budget of RMB165 million
(approximately $25.5 million). The construction work started on August 8, 2021, with an estimated completion date on August 8, 2023. As
of March 31, 2022, we had made prepayment of approximately RMB69.2 million (approximately $10.4 million) to Chenyuan to start the construction,
including land improvement, building foundation and the construction of the manufacturing plants. As of March 31, 2022, the $10.4 million
prepayment to Chenyuan was recorded as prepayment for CIP Project on the balance sheets. There was no additional significant prepayment
to the sub-contractor during the six months ended March 31, 2022.
As
of March 31, 2022, future additional capital expenditure on this CIP Project was estimated to be approximately RMB95.8 million (equivalent
to $15.1 million), among which approximately $3.9 million is required for the fiscal year ending September 30, 2023. The Company currently
plans to support its ongoing CIP Project through cash flows from operations, proceeds received from the IPO, and if necessary, borrowings
from banks. The CIP Project is expected to be fully completed by December 2025, and the new manufacturing plants and office building are
expected to be put into use by December 2024 and December 2025, respectively.
For
a discussion of potential risks associated with our construction agreement and the CIP Project, see “Item 3. Key Information —
D. Risk Factors — Risks Related to Our Business and Industry — Our future success depends in part on our ability to increase
our production capacity, and we may not able to do so in a cost-effective manner. We have engaged a third-party sub-contractor to build
manufacturing facilities and an office building for us, and we may encounter challenges relating to the construction, management and operation
of such facilities” in the 2021 Annual Report.
Prepayment
for Advertising
On
September 6, 2021, we entered into an advertising service agreement with a third party, Guangdong Fengyang Legend Consulting Co., Ltd.
(“Fengyang Legend”), pursuant to which Fengyang Legend agreed to assist us in developing and producing a TV advertisement
for promoting our representative TCMD products, Bai Nian Dan and Guben Yanling Pill, and coordinating with a TV channel to broadcast the
advertisement to targeted geographic market areas. The total advertising service fee under this agreement is RMB55 million (approximately
$8.5 million) with a service period of one year, from October 1, 2021 to September 30, 2022. Pursuant to the terms under this agreement,
we made an advance payment in the amount of 30% of the total advertising service fee to Fengyang Legend, and we paid Fengyang Legend another
58% of the total advertising service fee when the TV channel on which the advertisement is broadcasted was determined. As of March 31,
2022, a total of RMB48.4 million (approximately $7.5 million) had been paid to Fengyang Legend and was charged to advertising expenses
during the six months ended March 31, 2022.
For
a discussion of potential risks associated with our advertising service agreement, see “Item 3. Key Information — D. Risk
Factors — Risks Related to Our Business and Industry — We have made substantial investment in advertising our products in
order to improve our brand awareness and our market position, which efforts may not be successful, and in such event, our financial position
and results of operations may be materially and negatively affected” in the 2021 Annual Report.
Entry
Into a Strategic Cooperation Agreement with a Japanese Pharmaceutical Company
On
December 1, 2021, we entered into certain agreements (the “Agreements”) with Kitanihon Pharmaceutical Co., Ltd. (“Kitanihon”),
a Japanese pharmaceutical company, pursuant to which (i) both parties will build a manufacturing facility in Ji’an, Jiangxi, China,
for the manufacturing and research and development of traditional Chinese medicine derivatives products, with an aggregate area of over
430,000 square feet, and the Company will bear the costs associated with building the facility, and (ii) the Company will purchase 464
shares of Kitanihon for an aggregate of JPY176.32 million (approximately US$1.56 million). As the date of this prospectus, the building
of manufacturing facility has not started, and the Company has not acquired the 464 shares of Kitanihon.
In
relation to the Agreements, Sununion Holding Group Limited (“Sununion”), the controlling shareholder of the Company wholly
owned by Mr. Gang Lai, the chief executive officer and chairman of the board of directors of the Company, entered into an agreement with
Mr. Gang Lai and Kitanihon on December 1, 2021, pursuant to which Kitanihon authorizes the Company to use certain of its intangible assets,
including technologies and certain intellectual properties, in exchange for which Mr. Gang Lai transferred 1,073,280 ordinary shares of
Sununion owned by him and valued at US$2.5 million to Kitanihon.
Impact of the COVID-19 Pandemic
Due to resurgence of COVID-19 pandemic in China
in 2022 and related restrictive measures, including travel restrictions, the PRC operating entities have experienced delays in purchasing
raw materials from suppliers and in delivering products to customers on a timely basis. The prices of the raw materials have also increased
by about 5% as compared to the same period of last year. In addition, we granted some customers extended payment terms of 30 days to 120
days as a result of the COVID-19 pandemic. However, based on our present relationship with these customers and our evaluation of their
financial conditions, we do not anticipate any material collectability problems. Currently, we do not expect the COVID-19 pandemic will
have a material adverse impact on the business of the PRC operating entities and our financial results. However, due to the high uncertainty
of the evolving situation, we have limited visibility on how the COVID-19 may affect the execution of customer contracts, the collection
of customer payments, or disrupt our supply chain, and the continued uncertainties associated with COVID 19 may cause our revenue and
cash flows to underperform in the next 12 months from the date of our current report on Form 6-K, filed with the SEC on August 16, 2022.
The extent of the future impact of the COVID-19 pandemic on our business and results of operations is still uncertain.
Permissions Required from PRC Authorities
We believe that we and our subsidiaries have obtained
all material licenses and approvals necessary to operate in China and are not required to obtain approval from any PRC government authorities,
including the CSRC or the CAC, or any other government entity, to issue our ordinary shares and the securities we are registering hereby
to foreign investors. Since the recent regulatory actions are new, however, it is highly uncertain how soon legislative or administrative
regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will
be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business
operation, ability to accept foreign investments, and listing on the Nasdaq Stock Market. If we do not receive or maintain the approvals,
or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that
we are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, ordered
to suspend our relevant business and rectify, prohibited from engaging in relevant business, or subject to an order prohibiting us from
conducting an offering, and these risks could result in a material adverse change in our operations, significantly limit or completely
hinder our ability to continue to offer securities to investors, or cause such securities to significantly decline in value or become
worthless. See “Item 3. Key Information—Risk Factors—Risks Relating to Doing Business in China—Failure to comply
with cybersecurity, data privacy, data protection, or any other laws and regulations related to data may materially and adversely affect
our business, financial condition, and results of operations” in the 2021 Annual Report.
Dividends or Distributions Made to Our Company
and U.S. Investors and Tax Consequences
Cash flows
have occurred between our Cayman Islands holding company and our subsidiaries. The Cayman Islands holding company has not received cash
transfer from its subsidiaries for the years ended September 30, 2019, 2020 and 2021, and from October 1, 2021 to the date of this prospectus.
There was no distribution of earnings by our PRC subsidiaries to the Cayman Islands holding company during the years ended September 30,
2021, 2020 and 2019, and from October 1, 2021 to the date of this prospectus. From October 1, 2021 to the date of this prospectus, Universe
Technology transferred cash in the amount of RMB67,277,244 (approximately $10,460) to Jiangxi Universe In the fiscal year ended September
30, 2021, Universe Pharmaceuticals INC transferred the net proceeds from its initial public offering, through Universe HK and Universe
Technology, to Jiangxi Universe in the amount of RMB43,976,156 (approximately $6,807,507), to be used for general corporate purposes.
In the years ended September 30, 2020 and 2019, there was no cash transferred from the Cayman Islands
holding company to its PRC subsidiaries.
As of the date of this prospectus, none of our
subsidiaries have made any dividends or distributions to Universe Pharmaceuticals INC and Universe Pharmaceuticals INC has not made any
dividends or distributions to U.S. investors. We intend to keep any future earnings to finance the expansion of our business, and we do
not anticipate that any cash dividends will be paid in the foreseeable future. Subject to the PFIC rules, the gross amount of distributions
we make to investors with respect to our ordinary shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend,
to the extent that the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income
tax principles.
Our board of directors has discretion on whether
to distribute dividends. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount
recommended by our board of directors. In either case, all dividends are subject to certain restrictions under Cayman Islands law, namely
that the company may only pay dividends out of profits or share premium, and provided always that in no circumstances may a dividend be
paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if we
decide to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and
surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
We are an exempted company with limited liability
incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment
of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us, and as a holding
company, we will be dependent on receipt of funds from our Hong Kong subsidiary, Universe HK.
Current PRC regulations permit our indirect PRC
subsidiaries to pay dividends to Universe HK only out of their accumulated profits, if any, determined in accordance with Chinese accounting
standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits
each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China
is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be
set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other
ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the
reserve funds are not distributable as cash dividends except in the event of liquidation.
The PRC government also imposes controls on the
conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in
complying with the administrative requirements necessary to obtain and remit foreign currency for the payment of dividends from our profits,
if any. Furthermore, if our subsidiaries and affiliates in the PRC incur debt on their own in the future, the instruments governing the
debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenue
from our operations, we may be unable to pay dividends on our ordinary shares.
Cash dividends, if any, on our ordinary shares
will be paid in U.S. dollars. Universe HK may be considered a non-resident enterprise for tax purposes, so that any dividends our PRC
subsidiaries pay to Universe HK may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate
of up to 10%. See “Item 10. Additional Information—E. Taxation—People’s Republic of China Taxation.” in
the 2021 Annual Report.
In order for us to pay dividends to our shareholders,
we will rely on payments made from Universe Technology’s subsidiary, Jiangxi Universe, to Universe Technology and from Universe
Technology to Universe HK and then to our Company. According to the EIT Law, such payments from subsidiaries to parent companies in China
are subject to the PRC enterprise income tax at a rate of 25%. In addition, if Jiangxi Universe or its subsidiary or branches incur 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.
Pursuant to the Double Tax Avoidance Arrangement,
the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. The 5% withholding
tax rate, however, does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the
Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than
25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a
Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax
rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we
will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax
rate of 5% under the Double Taxation Arrangement with respect to any dividends paid by our PRC subsidiaries to its immediate holding company,
Universe HK. As of the date of this annual report, we have not applied for the tax resident certificate from the relevant Hong Kong tax
authority. Universe HK intends to apply for the tax resident certificate if and when Universe Technology plan to declare and pay dividends
to Universe HK. See “Item 3. Key Information—D. Risk Factors— There are significant uncertainties under the Enterprise
Income Tax Law, or the EIT Law, relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC
subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits” in the 2021 Annual Report.
To the extent cash is located in the PRC or within
a PRC domiciled entity and may need to be used to fund operations outside of the PRC, the funds may not be available due to limitations
placed on us and our subsidiaries by the PRC government. To the extent cash in and assets of the business is in the PRC or a PRC entity,
the funds and assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition
of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash and assets. See “Risk
Factors — Risks Related to Doing Business in China — To the extent cash and assets of in the business is in
the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in
or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer
cash and assets.”
Summary of Risk Factors
Investing in our securities involves
significant risks. You should carefully consider all of the information in this prospectus before investing in our securities. Below
is a summary of the principal risks we face. These risks are discussed more fully under “Item 3. Key Information—D. Risk
Factors” in the 2021 Annual Report and in the “Risk Factors” section of this prospectus beginning on page 13 of
this prospectus.
Risks Related to Our Business and Industry
(for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry”
in the 2021 Annual Report)
Risks and uncertainties related to our business
include, but are not limited to, the following:
| ● | price increases in raw materials
and sourced products could harm our financial results. (see page 2 of the 2021 Annual Report); |
| ● | high quality materials for
our products may be difficult to obtain or substantially increase our production costs. (see page 2 of the 2021 Annual Report); |
| ● | we operate in a highly competitive
industry. Our failure to compete effectively could adversely affect our market share, revenues and growth prospects. (see page 2
of the 2021 Annual Report); |
| ● | high quality materials for
our products may be difficult to obtain or substantially increase our production costs. (see page 2 of the 2021 Annual Report); |
| ● | our future success depends
in part on our ability to increase our production capacity, and we may not able to do so in a cost-effective manner. We have engaged
a third-party sub-contractor to build manufacturing facilities and an office building for us, and we may encounter challenges relating
to the construction, management and operation of such facilities (see page 3 of the 2021 Annual Report); |
| ● | we are subject to evolving
regulatory requirements, non-compliance with which, or changes in which, may adversely affect our business and prospects (see page 4
of the 2021 Annual Report); |
| |
● |
if we fail to maintain or renew requisite licenses, permits, registrations and filings applicable to our business operations, or fail to obtain additional licenses, permits, registrations or filings that become necessary as a result of new enactment or promulgation of government policies, laws or regulations or the expansion of our business, our business and results of operations may be materially and adversely affected (see page 4 of the 2021 Annual Report); |
| |
● |
the global spread of COVID-19 pandemic could materially and adversely affect our business and results of operations (see page 5 of the 2021 Annual Report); |
| ● | our success depends on our
ability to protect our intellectual property (see page 5 of the 2021 Annual Report); |
| ● | because we rely on our manufacturing
operations to produce a significant amount of the products we sell, disruptions in our manufacturing system or losses of manufacturing
certifications could adversely affect our sales and customer relationships (see page 6 of the 2021 Annual Report); and |
| ● | we face risks related to our
sales of products obtained from third-party suppliers (see page 6 of the 2021 Annual Report). |
Risks Related to Doing Business in China
(for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China”
in the 2021 Annual Report and “Risk Factors—Risks Related to Doing Business in China” of this prospectus)
We face risks and uncertainties relating to doing
business in the PRC in general, including, but not limited to, the following:
| ● | the PRC government has significant
authority to intervene or influence the China operations of an offshore holding company, such as ours, at any time. The PRC government
may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers. If the PRC government exerts
more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers and we were to
be subject to such oversight and control, it may result in a material adverse change to our business operations, significantly limit
or completely hinder our ability to offer or continue to offer securities to investors, and cause the ordinary shares to significantly
decline in value or become worthless (see page 8 of the 2021 Annual Report); |
| |
● |
uncertainties arising from the legal system in China, including uncertainties regarding the interpretation and enforcement of PRC laws and the possibility that regulations and rules can change quickly with little advance notice, could hinder our ability to offer or continue to offer the ordinary shares, result in a material adverse change to our business operations, and damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause the ordinary shares to significantly decline in value or become worthless (see page 8 of the 2021 Annual Report); |
| |
● |
our ordinary shares may be delisted or prohibited from being traded over-the-counter under the Holding Foreign Companies Accountable Act, if the U.S. Public Company Accounting Oversight Board, or the PCAOB, is unable to inspect our auditors. The delisting or the cessation of trading of our ordinary shares, or the threat of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections would deprive our investors with the benefits of such inspections. Our auditor has not been inspected by the PCAOB, but according to our auditor, it will be inspected by the PCAOB on a regular basis (see page 8 of the 2021 Annual Report); |
| ● | failure to comply with cybersecurity,
data privacy, data protection, or any other laws and regulations related to data may materially and adversely affect our business, financial
condition, and results of operations (see page 9 of the 2021 Annual Report); |
| ● | the approval and/or other requirements
of the China Securities Regulatory Commission, or the CSRC, or other PRC governmental authorities may be required in connection with
an offering under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will be able to obtain
such approval (see page 11 of the 2021 Annual Report); |
| ● | PRC regulation of loans to,
and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our offerings
and/or other financing activities to make loans or additional capital contributions to our PRC operating subsidiaries (see page 12
of the 2021 Annual Report); |
| ● | we must remit proceeds of any
future offerings to China before they may be used to benefit our business in China, and this process may take several months to complete
(see page 12 of the 2021 Annual Report); |
| ● | we may rely on dividends paid
by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material
adverse effect on our ability to conduct business (see page 13 of the 2021 Annual Report); |
| ● | adverse changes in political,
economic and social conditions, as well as government policies in China could have a material adverse effect on our business results
of operations, financial conditions and prospects (see page 13 of the 2021 Annual Report); |
| ● | changes to the PRC legal system
could have an adverse effect on us (see page 13 of the 2021 Annual Report); |
| |
● |
labor Contract Law and other labor-related laws in the PRC may adversely affect our business and our results of operations. (see page 14 of the 2021 Annual Report); |
| |
● |
there are significant uncertainties under the Enterprise Income Tax Law, or the EIT Law, relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits (see page 14 of the 2021 Annual Report); |
| |
● |
failure to qualify for or obtain any preferential tax treatments that are available in China could adversely affect our results of operations and financial condition (see page 15 of the 2021 Annual Report); |
| ● | under the EIT Law, we may be
classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to
us and our non-PRC shareholders (see page 15 of the 2021 Annual Report); |
| ● | we may be exposed to liabilities
under the Foreign Corrupt Practices Act and Chinese anti-corruption law (see page 15 of the 2021 Annual Report); |
| ● | the enforcement of stricter
advertisement laws and regulations in the PRC may adversely affect our business and our profitability (see page 16 of the 2021 Annual
Report); |
| ● | we were not in compliance with
the PRC’s regulations relating to employee’s social insurance and housing funds prior to April 2020, and as a result, we
may be subject to penalties for such non-compliance (see page 16 of the 2021 Annual Report); |
| |
● |
U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China (see page 17 of the 2021 Annual Report); |
| ● | you may experience difficulty
in effecting service of process, enforcing foreign judgments or bringing actions against our directors and officers (see page 17
of the 2021 Annual Report); |
| ● | because our business is conducted
in the RMB and the price of our ordinary shares is quoted in United States dollars, changes in currency conversion rates may affect the
value of your investments (see page 17 of the 2021 Annual Report); |
| ● | government control in currency
conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment (see page 18
of the 2021 Annual Report); |
| ● | our business may be materially
and adversely affected if any of our PRC subsidiaries declare bankruptcy or become subject a dissolution or liquidation proceeding (see
page 18 of the 2021 Annual Report); |
| ● | our current corporate structure
and business operations may be affected by the newly enacted PRC Foreign Investment Law (see page 19 of the 2021 Annual Report); |
| ● | failure to comply with PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders
to personal liability, may limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, may limit the ability
of our PRC subsidiaries to distribute profits to us or may otherwise materially and adversely affect us (see page 19 of the 2021
Annual Report); |
| ● | we may be unable to complete
a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain
other PRC regulations (see page 20 of the 2021 Annual Report); |
| ● | we face uncertainties with
respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies (see page 20 of
the 2021 Annual Report); |
| ● | the Draft Rules Regarding Overseas
Listings released by the CSRC for public consultation, while not yet in effect, may cause the Chinese government to exert more oversight
and control over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder our
ability to offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline
or become worthless. (see “Risk Factors—Risks Related to Doing Business in China—The Draft Rules Regarding Overseas
Listings were released by the CSRC for public consultation. While such rules have not yet come into effect, the Chinese government may
exert more oversight and control over overseas public offerings conducted by China-based issuers, which could significantly limit or
completely hinder our ability to offer or continue to offer our securities to investors and could cause the value of our securities to
significantly decline or become worthless” on page 13 of this prospectus ); |
| ● | recent greater oversight by
the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely
impact our business and our offering (see “Risk Factors—Risks Related to Doing Business in China—Recent greater oversight
by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could
adversely impact our business and our offering” on page 14 of this prospectus ); |
| ● | to the extent cash and assets
of in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC
due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC
government to transfer cash and assets (see “Risk Factors—Risks Related to Doing Business in China—To the extent cash
and assets of in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside
of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries
by the PRC government to transfer cash and assets” on page 14 of this prospectus ). |
Risks Relating to Our Ordinary Shares and
the Trading Market (for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our
Ordinary Shares” in the 2021 Annual Report)
In addition to the risks described above, we are
subject to general risks and uncertainties relating to our ordinary shares and the trading market, including, but not limited to, the
following:
| |
● |
Our share price has recently declined substantially, and our ordinary shares could be delisted from the Nasdaq or trading could be suspended; |
| |
|
|
| |
● |
we may issue additional ordinary shares or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our ordinary shares (see page 22 of the 2021 Annual Report); |
| |
● |
we currently do not expect to pay dividends on our ordinary shares in the foreseeable future (see page 22 of the 2021 Annual Report); |
| |
● |
we are a “controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies (see page 23 of the 2021 Annual Report); |
| |
● |
a sale or perceived sale of a substantial number of our ordinary shares may cause the price of our ordinary shares to decline (see page 23 of the 2021 Annual Report); |
| |
● |
for as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies (see page 24 of the 2021 Annual Report); |
| |
● |
our ability to produce accurate financial statements have been materially adversely affected by our failure to establish proper internal financial reporting controls. If we fail to establish and maintain proper internal financial reporting controls in a reasonably timely manner, our ability to produce accurate financial statements or comply with applicable regulations may continue to be impaired (see page 25 of the 2021 Annual Report); |
| |
● |
as a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, which may limit the information publicly available to our shareholders (see page 25 of the 2021 Annual Report); and |
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as a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards (see page 26 of the 2021 Annual Report). |
Corporate Information
Our principal executive offices are located at
265 Jingjiu Avenue, Jinggangshan Economic and Technological Development Zone, Ji’an, Jiangxi Province, People’s Republic of
China, and our phone number is +86-0796-8403309. Our registered office in the Cayman Islands is located at Vistra (Cayman) Limited, P.O.
Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KYI – 1205 Cayman Islands, and the phone number of our
registered office is +1-(345)769-9372. We maintain a corporate website at http://www.universe-pharmacy.com. The information contained
in, or accessible from, our website or any other website does not constitute a part of this annual report. 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 10168.
RISK FACTORS
Investing in our securities involves risks. Before
making an investment decision, you should carefully consider the risks described under “Risk Factors” in the applicable prospectus
supplement and under the heading “Item 3. Key Information—D. Risk Factors” in the 2021 Annual Report, which is incorporated
in this prospectus by reference, together with any other information appearing or incorporated by reference in this prospectus and in
any accompanying prospectus supplement, in light of your particular investment objectives and financial circumstances. In addition to
those risk factors, there may be additional risks and uncertainties that our management is not aware of or deems immaterial. Our business,
financial condition, or results of operations could be materially and adversely affected by any of these risks. The trading price of our
securities could decline due to any of these risks, and you may lose all or part of your investment.
Risks Related to Doing Business in China
The Draft Rules Regarding Overseas Listings
were released by the CSRC for public consultation. While such rules have not yet come into effect, the Chinese government may exert more
oversight and control over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder
our ability to offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline
or become worthless.
On December 24, 2021, the CSRC and relevant departments
of the State Council issued the Draft Rules Regarding Overseas Listings, which aim to regulate overseas securities offerings and listings
by China-based companies, for public consultation. The Draft Rules Regarding Overseas Listing aim to lay out the filing regulation arrangement
for both direct and indirect overseas listing and clarify the determination criteria for indirect overseas listing in overseas markers.
Where an enterprise whose principal business activities are conducted in mainland China seeks to issue and list its shares in the name
of an overseas enterprise based on equity, assets, income, or other similar rights and interests of the relevant domestic enterprise in
mainland China, such activities are deemed an indirect overseas issuance and listing. According to the Draft Rules Regarding Overseas
Listings, among other things, after making initial applications with overseas stock markets for initial public offerings or listings,
or after the completion of issuance of overseas listed securities by the overseas listed issuer, all China-based companies shall file
the required filing materials with the CSRC within three working days. In addition, overseas offerings and listings may be prohibited
for such China-based companies when any of the following applies: (i) if the intended securities offerings and listings are specifically
prohibited by the PRC laws and regulations; (ii) if the intended securities offerings and listings may constitute a threat to, or endanger
national security as reviewed and determined by competent authorities under the State Council in accordance with laws; (iii) if there
are material ownership disputes over applicants’ equity interests, major assets, core technologies, or the others; (iv) if, in the
past three years, applicants’ domestic enterprises, controlling shareholders, or de facto controllers have committed corruption,
bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist market economy,
or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for suspicion of major violations;
(v) if, in the past three years, any directors, supervisors, or senior executives of applicants have been subject to administrative punishments
for severe violations, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for
suspicion of major violations; or (vi) other circumstances as prescribed by the State Council. The Draft Administrative Provisions further
stipulate that a fine between RMB1 million (approximately $157,255) and RMB10 million (approximately $1,572,550) may be imposed if an
applicant fails to fulfill the filing requirements with the CSRC or conducts an overseas offering or listing in violation of the Draft
Rules Regarding Overseas Listings, and in cases of severe violations, a parallel order to suspend relevant businesses or halt operations
for rectification may be issued, and relevant business permits or operational license revoked.
As of the date of this prospectus, the Draft Rules
Regarding Overseas Listings have been released for public comment only and have not been formally promulgated, and neither we, our subsidiaries,
nor any of the PRC operating entities have been required to complete the filing procedures. However, uncertainties remain as to its enactment
or future interpretations and implementations. Our PRC counsel, AllBright Law Offices, has advised us that, even if the final rules are
promulgated as proposed in the current Draft Rules Regarding Overseas Listings, none of the situations that would clearly prohibit overseas
offering and listings would apply to us. In addition, we would only need to submit the filing materials and no CSRC approval would be
required under such rules. Notwithstanding the above, our PRC counsel has further advised us that uncertainties still exist as to whether
we, our subsidiaries, or the PRC operating entities are required to obtain permissions from the Chinese government that is required to
approve of our operations and/or offering. In the event that we, our subsidiaries, or the PRC operating entities are subject to the compliance
requirements, we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a timely
manner, or at all. Any failure of our Company, our subsidiaries, or the PRC operating entities to fully comply with new regulatory requirements
may subject us to regulatory actions, such as fines, relevant businesses or operations suspension for rectification, revocation of relevant
business permits or operational license, or other sanctions, which may significantly limit or completely hinder our ability to offer or
continue to offer our securities cause significant disruption to our business operations, severely damage our reputation, materially and
adversely affect our financial condition and results of operations and cause our securities to significantly decline in value or become
worthless.
Recent greater oversight by the Cyberspace
Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our
business and our offering.
On December 28, 2021, the CAC and other relevant
PRC governmental authorities jointly promulgated the Cybersecurity Review Measures, which took effect on February 15, 2022. The Cybersecurity
Review Measures provide that, in addition to CIIOs that intend to purchase Internet products and services, net platform operators engaging
in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity
Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security
risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that
an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review
by the CAC if it intends to be listed in foreign countries.
On November 14, 2021, the CAC published the Security
Administration Draft, which provides that data processing operators engaging in data processing activities that affect or may affect national
security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Security
Administration Draft, data processing operators who possess personal data of at least one million users or collect data that affects or
may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The
deadline for public comments on the Security Administration Draft was December 13, 2021.
As of the date of this prospectus, we have not
received any notice from any authorities identifying our PRC subsidiaries or the PRC operating entities as CIIOs or requiring us to go
through cybersecurity review or network data security review by the CAC. As confirmed by our PRC counsel, AllBright Law Offices, neither
the operations of our PRC subsidiaries, nor of the PRC operating entities, nor this offering are expected to be affected, and that we
will not be subject to cybersecurity review by the CAC under the Cybersecurity Review Measures, nor will any such entity be subject to
the Security Administration Draft, if it is enacted as proposed, given that our PRC subsidiaries and the PRC operating entities possess
personal data of fewer than one million individual clients and do not collect data that affects or may affect national security in their
business operations as of the date of this prospectus and do not anticipate that they will be collecting over one million users’
personal information or data that affects or may affect national security in the near future. In general, we believe we are compliant
with the regulations or policies that have been issued by the CAC to date. There remains uncertainty, however, as to how the Cybersecurity
Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including
the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures
and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect,
we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We cannot assure you
that PRC regulatory agencies, including the CAC, would take the same view as we do. In the event that we are subject to any mandatory
cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required
actions can be timely completed, or at all. If we inadvertently conclude that such approval is not required, fail to obtain and maintain
such approvals, licenses, or permits required for our business or respond to changes in the regulatory environment, we could be subject
to liabilities, penalties and operational disruption, which may materially and adversely affect our business, operating results, financial
condition, and the value of our securities, significantly limit or completely hinder our ability to offer or continue to offer securities
to investors, or cause such securities to significantly decline in value or become worthless.
To the extent cash in and assets of the
business is in the PRC or a PRC entity, the funds and assets may not be available to fund operations or for other use outside of the PRC
due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC
government to transfer cash and assets.
Relevant PRC laws and regulations permit the companies
in mainland China to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards
and regulations. Additionally, each of the companies in mainland China are required to set aside at least 10% of its after-tax profits
each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. The companies in mainland China
are also required to further set aside a portion of their after-tax profits to fund the employee welfare fund, although the amount to
be set aside, if any, is determined at their discretion. These reserves are not distributable as cash dividends. Furthermore, if we determine
to pay dividends on any of our ordinary shares in the future, as a holding company, we will rely on payments from subsidiaries of Jiangxi
Universe to Jiangxi Universe, and from Jiangxi Universe to Universe Technology, and the distribution of such payments to Universe HK,
and then to our Company. If our PRC subsidiaries and the PRC operating entities incur debt on their own behalf in the future, the instruments
governing the debt may restrict their ability to pay dividends or make other payments to us.
Our cash dividends, if any, will be paid in U.S.
dollars. If we are considered a tax resident enterprise of mainland China for tax purposes, any dividends we pay to our overseas shareholders
may be regarded as China-sourced income and as a result may be subject to PRC withholding tax. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—under the EIT Law, we may be classified as a ‘Resident Enterprise’
of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.” of the 2021
Annual Report.
The PRC government also imposes controls on the
convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. The majority
of our and the PRC operating entities’ income is received in Renminbi and shortages in foreign currencies may restrict our ability
to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign
exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related
transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange as long as certain
procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency
and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government
may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the
future, we may not be able to pay dividends in foreign currencies to our shareholders.
Any limitation on the ability of our PRC subsidiaries
and the PRC operating entities to distribute dividends or other payments to their respective shareholders could materially and adversely
limit our ability to conduct operations, make investments, engage in acquisitions, or undertake other activities requiring working capital.
However, our operations and business, including investment and/or acquisitions by our PRC subsidiaries and the PRC operating entities
within mainland China, will not be affected as long as the capital is not transferred in or out of mainland China.
Risks Relating to Our Ordinary Shares and the
Trading Market
Our share price has recently declined
substantially, and our ordinary shares could be delisted from the Nasdaq or trading could be suspended.
The listing of our ordinary
shares on the Nasdaq Global Market is contingent on our compliance with the Nasdaq Global Market’s conditions for continued listing.
On July 15, 2022, we received written notification (the “Notification Letter”) from the Nasdaq Stock Market LLC (“Nasdaq”)
that we were not in compliance with the minimum bid price requirement of US$1.00 per share under the Nasdaq Listing Rules. In accordance
with Nasdaq Listing Rules, we must regain compliance within 180 calendar days, or until January 11, 2023. To regain compliance, our ordinary
shares must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days. In the event we do not regain
compliance by January 11 , 2023, we may be eligible for an additional 180 calendar days to regain compliance or face delisting. On September
23, 2022, we held our 2022 annual general meeting of shareholders, during which our shareholders approved the proposal to authorize our
board of directors to effect a share consolidation at a ratio of no less than 2-for-1, and no greater than 10-for-1 (the “Share
Consolidation”). As of the date of this prospectus, our board of directors has not adopted resolutions to effect the Share Consolidation.
Even if the Share Consolidation
is effected, we cannot assure you that we will be able to regain compliance with the minimum bid price requirement under the Nasdaq Listing
Rules. Even if we are able to regain compliance, we cannot assure you that we will not receive other deficiency notifications from Nasdaq
in the future. A decline in the closing price of our ordinary shares could result in a breach of the requirements for listing on the Nasdaq
Global Market. If we do not maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of our ordinary shares.
The commencement of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly
announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or
delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly
impaired. Furthermore, with respect to any suspended or delisted ordinary shares, we would expect decreases in institutional and other
investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers
would be willing to execute trades with respect to such ordinary shares. A suspension or delisting would likely decrease the attractiveness
of our ordinary shares to investors and cause the trading volume of our ordinary shares to decline, which could result in a further decline
in the market price of our ordinary shares.
OFFER STATISTICS AND EXPECTED TIMETABLE
We may, from time to time, offer and sell any
combination of the securities described in this prospectus up to a total dollar amount of $200,000,000 in one or more offerings. The securities
offered under this prospectus may be offered separately, together, or in separate series, and in amounts, at prices, and on terms to be
determined at the time of sale. We will keep the registration statement of which this prospectus is a part effective until such time as
all of the securities covered by this prospectus have been disposed of pursuant to such registration statement.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization will be set forth in the applicable
prospectus supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated by reference into
this prospectus.
DILUTION
If required, we will set forth in a prospectus
supplement the following information regarding any material dilution of the equity interests of investors purchasing securities in an
offering under this prospectus:
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the net tangible book value per share of our equity securities before and after the offering; |
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the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering; and |
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the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers. |
USE OF PROCEEDS
We intend to use the net proceeds from the sale
of securities we offer as indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
DESCRIPTION OF SHARE CAPITAL
The following description of our share capital
and provisions of our amended and restated memorandum and articles of association are summaries and do not purport to be complete. References
are made to our amended and restated memorandum and articles of association, forms of which are filed as an exhibit to the registration
statement of which this prospectus is a part (and which is referred to in this section as, respectively, the “memorandum”
and the “articles”).
Our authorized share capital is $312,500 divided
into 90,000,000 ordinary shares, par value $0.003125 per share and 10,000,000
preferred shares, par value $0.003125 per share.
Ordinary Shares
As of the date of this prospectus, an aggregate
of 21,750,000 ordinary shares are issued and outstanding. All of our issued and outstanding ordinary shares are fully paid and non-assessable.
Ordinary shares are issued in registered form. Ordinary shares have the following characteristics:
Voting. Subject to any rights or restrictions
as to voting attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present
in person and every person representing a shareholder by proxy shall have one vote per ordinary share. On a poll, every shareholder who
is present in person and every person representing a shareholder by proxy shall have one vote for each share of which he or the person
represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting
of the holders of that class of shares. Votes may be given either personally or by proxy.
Dividends. Subject to the provisions of
the Companies Act (Revised) of the Cayman Islands (the “Cayman Companies Act”) and any rights attaching to any
class or classes of shares under and in accordance with the articles:
| (a) | the directors may declare dividends
or distributions out of our funds which are lawfully available for that purpose; and |
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(b) |
the Company’s shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors. |
Subject to the requirements of the Cayman Companies
Act regarding the application of a company’s share premium account and with the sanction of an ordinary resolution, dividends may
also be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment
either in cash or in specie.
Unless provided by the rights attached to a share,
no dividend shall bear interest.
Cumulative Voting Rights
There is nothing under Cayman Islands law which
specifically prohibits or restrict the creation of cumulative voting rights for the election of our directors. Our articles do not provide
for cumulative voting for elections of directors.
Variation of Rights of Shares
Whenever our capital is divided into different
classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class)
may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with
the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present in person
or by proxy at a separate general meeting of the holders of shares of that class.
Unless the terms on which a class of shares was
issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation
or issue of further shares ranking pari passu with the existing shares of that class.
Rights of Non-Resident or Foreign Shareholders
There are no limitations imposed by our memorandum
and articles on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there
are no provisions in our memorandum and articles governing the ownership threshold above which shareholder ownership must be disclosed.
Redemption and Purchase of Shares
Subject to the Cayman Companies Act and any rights
for the time being conferred on the shareholders holding a particular class of shares, we may by action of our directors:
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issue shares that are to be redeemed or liable to be redeemed, at our option or the shareholder holding those redeemable shares, on the terms and in the manner our directors determine before the issue of those shares; |
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with the consent by special resolution of the shareholders holding shares of a particular class, vary the rights attaching to that class of shares so as to provide that those shares are to be redeemed or are liable to be redeemed at our option on the terms and in the manner which the directors determine at the time of such variation; and |
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purchase all or any of our own shares of any class including any redeemable shares on the terms and in the manner which the directors determine at the time of such purchase. |
We may make a payment in respect of the redemption
or purchase of its own shares in any manner authorized by the Companies Act, including out of any combination of capital, our profits
and the proceeds of a fresh issue of shares.
When making a payment in respect of the redemption
or purchase of shares, the directors may make the payment in cash or in specie (or partly in one and partly in the other) if so authorized
by the terms of the allotment of those shares or by the terms applying to those shares, or otherwise by agreement with the shareholder
holding those shares.
Alteration of Share Capital
Subject to the Cayman Companies Act, our shareholders
may, by ordinary resolution:
| (a) | increase our share capital
by new shares of the amount fixed by that ordinary resolution and with the attached rights, priorities and privileges set out in that
ordinary resolution; |
| (b) | consolidate and divide all
or any of our share capital into shares of larger amount than our existing shares; |
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(c) |
convert all or any of our paid up shares into stock, and reconvert that stock into paid up shares of any denomination; |
| (d) | sub-divide
our shares or any of them into shares of an amount smaller than that fixed, so, however, that in the sub-division, the proportion between
the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the
reduced share is derived; and |
| (e) | cancel
shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person and diminish
the amount of our share capital by the amount of the shares so cancelled or, in the case of shares without nominal par value, diminish
the number of shares into which our capital is divided. |
Subject
to the Cayman Companies Act and to any rights for the time being conferred on the shareholders holding a particular class of shares,
our shareholders may, by special resolution, reduce its share capital in any way.
Calls
on Shares and Forfeiture of Shares
Subject
to the terms of allotment, the directors may make calls on the shareholders in respect of any monies unpaid on their shares including
any premium and each shareholder shall (subject to receiving at least 14 clear days’ notice specifying when and where payment is
to be made), pay to us the amount called on his shares. Shareholders registered as the joint holders of a share shall be jointly and
severally liable to pay all calls in respect of the share. If a call remains unpaid after it has become due and payable the person from
whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate
fixed by the terms of allotment of the share or in the notice of the call or if no rate is fixed, at the rate of ten percent per annum.
The directors may, at their discretion, waive payment of the interest wholly or in part.
We
have a first and paramount lien on all shares (whether fully paid up or not) registered in the name of a shareholder (whether solely
or jointly with others). The lien is for all monies payable to us by the shareholder or the shareholder’s estate:
| (a) | either
alone or jointly with any other person, whether or not that other person is a shareholder; and |
| (b) | whether
or not those monies are presently payable. |
At
any time the directors may declare any share to be wholly or partly exempt from the lien on shares provisions of the articles.
We
may sell, in such manner as the directors may determine, any share on which the sum in respect of which the lien exists is presently
payable, if due notice that such sum is payable has been given (as prescribed by the articles) and, within 14 days of the date on which
the notice is deemed to be given under the articles, such notice has not been complied with.
Listing
On
March 23, 2021, our ordinary shares commenced trading on the Nasdaq Global Market under the symbol “UPC.”
Transfer
Agent and Registrar
The
transfer agent and registrar for our ordinary shares is Transhare Corporation.
Transfer
of Shares
Provided
that a transfer of ordinary shares complies with applicable rules of Nasdaq, a shareholder may transfer ordinary shares to another person
by completing an instrument of transfer in a common form or in a form prescribed by Nasdaq or in any other form approved by the directors,
executed:
| (a) | where
the ordinary shares are fully paid, by or on behalf of that shareholder; and |
| (b) | where
the ordinary shares are partly paid, by or on behalf of that shareholder and the transferee. |
The
transferor shall be deemed to remain the holder of an ordinary share until the name of the transferee is entered into the register of
members of the Company.
Our
board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share that has not been fully paid
up or is subject to a company lien. Our board of directors may also decline to register any transfer of such ordinary share unless:
| (a) | the
instrument of transfer is lodged with the Company, accompanied by the certificate for the ordinary shares to which it relates and such
other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
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the instrument of transfer
is in respect of only one class of ordinary shares; |
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the instrument of transfer
is properly stamped, if required; |
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the ordinary shares transferred
is fully paid and free of any lien in favor of us; |
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any fee related to the
transfer has been paid to us; and |
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the transfer is not to
more than four joint holders. |
If
our directors refuse to register a transfer, they are required, within three months after the date on which the instrument of transfer
was lodged, to send to each of the transferor and the transferee notice of such refusal.
This,
however, is unlikely to affect market transactions of the ordinary shares purchased by investors in the public offering. The legal title
to such ordinary shares and the registration details of those ordinary shares in the Company’s register of members will remain
with Depository Trust Company (“DTC”). All market transactions with respect to those ordinary shares will then be carried
out without the need for any kind of registration by the directors, as the market transactions will all be conducted through the DTC
systems.
The
registration of transfers may, on 14 calendar days’ notice being given by advertisement in such one or more newspapers or by electronic
means, be suspended and our register of members closed at such times and for such periods as our board of directors may from time to
time determine. The registration of transfers, however, may not be suspended, and the register may not be closed, for more than 30 days
in any year.
Meetings
of Shareholders
As
a Cayman Islands exempted company, we are not obligated by the Cayman Companies Act to call shareholders’ annual general meetings.
Accordingly, we may, but shall not be obliged to, in each year hold a general meeting as an annual general meeting. Any annual general
meeting held shall be held at such time and place as may be determined by our board of directors. All general meetings other than annual
general meetings shall be called extraordinary general meetings.
The
directors may convene general meetings whenever they think fit. General meetings shall also be convened on the written requisition of
one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than ten percent of
the rights to vote at such general meeting in accordance with the notice provisions in the articles, specifying the purpose of the meeting
and signed by each of the shareholders making the requisition. If the directors do not convene such meeting for a date not later than
21 clear days’ after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the
general meeting themselves within three months after the end of such period of 21 clear days in which case reasonable expenses incurred
by them as a result of the directors failing to convene a meeting shall be reimbursed by us.
At
least 14 days’ notice of an extraordinary general meeting and 21 days’ notice of an annual general meeting shall be given
to shareholders entitled to attend and vote at such meeting. The notice shall specify the place, the day and the hour of the meeting
and the general nature of that business. In addition, if a resolution is proposed as a special resolution, the text of that resolution
shall be given to all shareholders. Notice of every general meeting shall also be given to the directors and our auditors.
Subject
to the Cayman Companies Act and with the consent of the shareholders who, individually or collectively, hold at least 90 percent of the
voting rights of all those who have a right to vote at a general meeting, a general meeting may be convened on shorter notice.
A
quorum shall consist of the presence (whether in person or represented by proxy) of one or more shareholders holding shares that represent
not less than one-third of the outstanding shares carrying the right to vote at such general meeting.
If,
within 15 minutes from the time appointed for the general meeting, or at any time during the meeting, a quorum is not present, the meeting,
if convened upon the requisition of shareholders, shall be cancelled. In any other case it shall stand adjourned to the same time and
place seven days or to such other time or place as is determined by the directors.
The
chairman may, with the consent of a meeting at which a quorum is present, adjourn the meeting. When a meeting is adjourned for seven
days or more, notice of the adjourned meeting shall be given in accordance with the articles.
At
any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on,
the declaration of the result of the show of hands) demanded by the chairman of the meeting or by at least two shareholders having the
right to vote on the resolutions or one or more shareholders present who together hold not less than ten percent of the voting rights
of all those who are entitled to vote on the resolution. Unless a poll is so demanded, a declaration by the chairman as to the result
of a resolution and an entry to that effect in the minutes of the meeting, shall be conclusive evidence of the outcome of a show of hands,
without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.
If
a poll is duly demanded it shall be taken in such manner as the chairman directs and the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded.
In
the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes
place or at which the poll is demanded, shall not be entitled to a second or casting vote.
Powers
and Duties of Directors
Subject
to the provisions of the Cayman Companies Act and our memorandum and articles, our business shall be managed by the directors, who may
exercise all our powers. No prior act of the directors shall be invalidated by any subsequent alteration of our memorandum or articles
of association. To the extent allowed by the Companies Act, however, shareholders may by special resolution validate any prior or future
act of the directors which would otherwise be in breach of their duties.
The
directors may delegate any of their powers to any committee consisting of one or more persons who need not be shareholders and may include
non-directors so long as the majority of those persons are directors; any committee so formed shall in the exercise of the powers so
delegated conform to any regulations that may be imposed on it by the directors. Our board of directors have established an audit committee,
compensation committee, and nomination and corporate governance committee.
The
board of directors may establish any local or divisional board of directors or agency and delegate to it its powers and authorities (with
power to sub-delegate) for managing any of our affairs whether in the Cayman Islands or elsewhere and may appoint any persons to be members
of a local or divisional board of directors, or to be managers or agents, and may fix their remuneration.
The
directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, either
generally or in respect of any specific matter, to be our agent with or without authority for that person to delegate all or any of that
person’s powers.
The
directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, whether
nominated directly or indirectly by the directors, to be our attorney or our authorized signatory and for such period and subject to
such conditions as they may think fit. The powers, authorities and discretions, however, must not exceed those vested in, or exercisable,
by the directors under the articles.
The
board of directors may remove any person so appointed and may revoke or vary the delegation.
The
directors may exercise all of our powers to borrow money and to mortgage or charge its undertaking, property and assets both present
and future and uncalled capital or any part thereof, to issue debentures and other securities whether outright or as collateral security
for any debt, liability or obligation of ours or our parent undertaking (if any) or any subsidiary undertaking of us or of any third
party.
A
director shall not, as a director, vote in respect of any contract, transaction, arrangement or proposal in which he has an interest
which (together with any interest of any person connected with him) is a material interest (otherwise than by virtue of his interests,
direct or indirect, in shares or debentures or other securities of, or otherwise in or through, us) and if he shall do so his vote shall
not be counted, nor in relation thereto shall he be counted in the quorum present at the meeting, but (in the absence of some other material
interest than is mentioned below) none of these prohibitions shall apply to:
| (a) | the
giving of any security, guarantee or indemnity in respect of: |
| (i) | money
lent or obligations incurred by him or by any other person for our benefit or any of our subsidiaries; or |
| (ii) | a
debt or obligation of ours or any of our subsidiaries for which the director himself has assumed responsibility in whole or in part and
whether alone or jointly with others under a guarantee or indemnity or by the giving of security; |
| (b) | where
we or any of our subsidiaries is offering securities in which offer the director is or may be entitled to participate as a holder of
securities or in the underwriting or sub-underwriting of which the director is to or may participate; |
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(c) |
any contract, transaction,
arrangement or proposal affecting any other body corporate in which he is interested, directly or indirectly and whether as an officer,
shareholder, creditor or otherwise howsoever, provided that he (together with persons connected with him) does not to his knowledge
hold an interest representing one percent or more of any class of the equity share capital of such body corporate (or of any third
body corporate through which his interest is derived) or of the voting rights available to shareholders of the relevant body corporate; |
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(d) |
any act or thing done or
to be done in respect of any arrangement for the benefit of the employees of us or any of our subsidiaries under which he is not
accorded as a director any privilege or advantage not generally accorded to the employees to whom such arrangement relates; or |
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(e) |
any matter connected with
the purchase or maintenance for any director of insurance against any liability or (to the extent permitted by the Companies Act)
indemnities in favor of directors, the funding of expenditure by one or more directors in defending proceedings against him or them
or the doing of anything to enable such director or directors to avoid incurring such expenditure. |
A
director may, as a director, vote (and be counted in the quorum) in respect of any contract, transaction, arrangement or proposal in
which he has an interest which is not a material interest or as described above.
Inspection
of Books and Records
Holders
of our ordinary shares will have no general right under the Cayman Companies Act to inspect or obtain copies of our register of members
or our corporate records (other than the register of mortgages or charges).
Liquidation
If
we are wound up, the shareholders may, subject to the articles and any other sanction required by the Cayman Companies Act, pass a special
resolution allowing the liquidator to do either or both of the following:
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(a) |
to divide in specie among
the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine how the division
shall be carried out as between the shareholders or different classes of shareholders; and |
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(b) |
to vest the whole or any
part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up. |
The
directors have the authority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf without
the sanction of a resolution passed at a general meeting.
Preferred
Shares
The
directors are empowered to designate and issue from time to time one or more classes or series of preference shares and to fix and determine
the relative rights, preferences, designations, qualifications, privileges, options, conversion rights, limitations and other special
or relative rights of each such class or series so authorized. Such action could adversely affect the voting power and other rights of
the holders of our ordinary shares or could have the effect of discouraging any attempt by a person or group to obtain control of us.
As
of the date of this prospectus, no preferred shares are issued and outstanding.
Differences
in Corporate Law
The
Cayman Companies Act is derived, to a large extent, from the older Companies Acts of England and Wales but does not follow recent United
Kingdom statutory enactments, and accordingly there are significant differences between the Cayman Companies Act and the current Companies
Act of the UK. In addition, the Cayman Companies Act differs from laws applicable to United States corporations and their shareholders.
Set forth below is a summary of certain significant differences between the provisions of the Cayman Companies Act applicable to us and
the comparable laws applicable to companies incorporated in the State of Delaware in the United States.
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Delaware |
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Cayman
Islands |
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| Title of Organizational Documents |
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Certificate of Incorporation
and Bylaws |
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Certificate of Incorporation
and Memorandum and Articles of Association |
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| Duties of Directors |
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Under Delaware law, the
business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their powers,
directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to
act in the best interests of its shareholders. The duty of care requires that directors act in an informed and deliberative manner
and inform themselves, prior to making a business decision, of all material information reasonably available to them. The duty of
care also requires that directors exercise care in overseeing and investigating the conduct of the corporation’s employees.
The duty of loyalty may be summarized as the duty to act in good faith, not out of self-interest, and in a manner which the director
reasonably believes to be in the best interests of the shareholders. |
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As a matter of Cayman Islands
law, a director owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties.
The Cayman Companies Act imposes a number of statutory duties on a director. A Cayman Islands director’s fiduciary duties are
not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to
act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for
the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts
of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably
be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also,
to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which
enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors
must ensure compliance with our amended articles of association, as amended and restated from time to time. We have the right to
seek damages if a duty owed by any of our directors is breached. |
| Limitations on Personal Liability
of Directors |
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Subject to
the limitations described below, a certificate of incorporation may provide for the elimination or limitation of the personal liability
of a director to the corporation or its shareholders for monetary damages for a breach of fiduciary duty as a director. Such provision
cannot limit liability for breach of loyalty, bad faith, intentional misconduct, unlawful payment of dividends or unlawful share
purchase or redemption. In addition, the certificate of incorporation cannot limit liability for any act or omission occurring prior
to the date when such provision becomes effective. |
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Cayman Islands
law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and
directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such
as to provide indemnification against civil fraud or the consequences of committing a crime. |
| Indemnification of Directors,
Officers, Agents, and Others |
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A corporation
has the power to indemnify any director, officer, employee, or agent of corporation who was, is, or is threatened to be made a party
who acted in good faith and in a manner he believed to be in the best interests of the corporation, and if with respect to a criminal
proceeding, had no reasonable cause to believe his conduct would be unlawful, against amounts actually and reasonably incurred. |
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Cayman
Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public
policy, such as to provide indemnification against the consequences of committing a crime, or against the indemnified person’s
own fraud or dishonesty.
Our
articles provide to the extent permitted by law, we shall indemnify each existing or former secretary, director (including alternate
director), and any of our other officers (including an investment adviser or an administrator or liquidator) and their personal representatives
against: (a) all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by the existing
or former director (including alternate director), secretary or officer in or about the conduct of our business or affairs or in
the execution or discharge of the existing or former director (including alternate director), secretary’s or officer’s
duties, powers, authorities or discretions; and (b) without limitation to paragraph (a) above, all costs, expenses, losses or liabilities
incurred by the existing or former director (including alternate director), secretary or officer in defending (whether successfully
or otherwise) any civil, criminal, administrative or investigative proceedings (whether threatened, pending or completed) concerning
us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere. |
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No
such existing or former director (including alternate director), secretary or officer, however, shall be indemnified in respect of
any matter arising out of his own dishonesty.
To
the extent permitted by law, we may make a payment, or agree to make a payment, whether by way of advance, loan or otherwise, for
any legal costs incurred by an existing or former director (including alternate director), secretary or any of our officers in respect
of any matter identified in above on condition that the director (including alternate director), secretary or officer must repay
the amount paid by us to the extent that it is ultimately found not liable to indemnify the director (including alternate director),
the secretary or that officer for those legal costs. |
| Interested Directors |
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Under Delaware
law, a transaction in which a director who has an interest in such transaction would not be voidable if (i) the material facts as
to such interested director’s relationship or interests are disclosed or are known to the board of directors and the board
in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested
directors are less than a quorum, (ii) such material facts are disclosed or are known to the shareholders entitled to vote on such
transaction and the transaction is specifically approved in good faith by vote of the shareholders, or (iii) the transaction is fair
as to the corporation as of the time it is authorized, approved or ratified. Under Delaware law, a director could be held liable
for any transaction in which such director derived an improper personal benefit. |
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Interested
director transactions are governed by the terms of a company’s memorandum and articles of association. |
| Voting Requirements |
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The
certificate of incorporation may include a provision requiring supermajority approval by the directors or shareholders for any corporate
action.
In
addition, under Delaware law, certain business combinations involving interested shareholders require approval by a supermajority
of the non-interested shareholders. |
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For
the protection of shareholders, certain matters must be approved by special resolution of the shareholders as a matter of Cayman
Islands law, including alteration of the memorandum or articles of association, appointment of inspectors to examine company affairs,
reduction of share capital (subject, in relevant circumstances, to court approval), change of name, authorization of a plan of merger
or transfer by way of continuation to another jurisdiction or consolidation or voluntary winding up of the company.
The
Cayman Companies Act requires that a special resolution be passed by a majority of at least two-thirds or such higher percentage
as set forth in the memorandum and articles of association, of shareholders being entitled to vote and do vote in person or by proxy
at a general meeting, or by unanimous written consent of shareholders entitled to vote at a general meeting. |
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| Voting for Directors |
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Under Delaware law, unless
otherwise specified in the certificate of incorporation or bylaws of the corporation, directors shall be elected by a plurality of
the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. |
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The Cayman Companies Act
defines “special resolutions” only. A company’s memorandum and articles of association can therefore tailor the
definition of “ordinary resolutions” as a whole, or with respect to specific provisions. |
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| Cumulative Voting |
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No cumulative voting for
the election of directors unless so provided in the certificate of incorporation. |
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No cumulative voting for
the election of directors unless so provided in the memorandum and articles of association. |
| Directors’ Powers Regarding
Bylaws |
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The certificate
of incorporation may grant the directors the power to adopt, amend or repeal bylaws. |
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The memorandum
and articles of association may only be amended by a special resolution of the shareholders. |
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| Nomination and Removal of Directors and Filling
Vacancies on Board |
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Shareholders may generally
nominate directors if they comply with advance notice provisions and other procedural requirements in company bylaws. Holders of
a majority of the shares may remove a director with or without cause, except in certain cases involving a classified board or if
the company uses cumulative voting. Unless otherwise provided for in the certificate of incorporation, directorship vacancies are
filled by a majority of the directors elected or then in office. |
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Nomination and removal
of directors and filling of board vacancies are governed by the terms of the memorandum and articles of association. |
| Mergers and Similar Arrangements |
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Under
Delaware law, with certain exceptions, a merger, consolidation, exchange or sale of all or substantially all the assets of a corporation
must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. Under Delaware law,
a shareholder of a corporation participating in certain major corporate transactions may, under certain circumstances, be entitled
to appraisal rights pursuant to which such shareholder may receive cash in the amount of the fair value of the shares held by such
shareholder (as determined by a court) in lieu of the consideration such shareholder would otherwise receive in the transaction.
Delaware
law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it
owns at least 90% of each class of capital stock without a vote by shareholders of such subsidiary. Upon any such merger, dissenting
shareholders of the subsidiary would have appraisal rights. |
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The
Cayman Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and
non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more constituent companies
and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (b) a “consolidation”
means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property
and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of
each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution
of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent
company’s articles of association. The plan must be filed with the Registrar of Companies together with a declaration as to
the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking
that a copy of the certificate of merger or consolidation will be given to the shareholders and creditors of each constituent company
and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required
for a merger or consolidation which is effected in compliance with these statutory procedures.
A
merger between a Cayman Islands parent company and its Cayman Islands subsidiary or subsidiaries does not require authorization by
a resolution of shareholders. For this purpose a subsidiary is a company of which at least 90% of the issued shares entitled to vote
are owned by the parent company.
The
consent of each holder of a fixed or floating security interest of a constituent company is required unless this requirement is waived
by a court in the Cayman Islands.
Except
in certain limited circumstances, a dissenting shareholder of a Cayman Islands constituent company is entitled to payment of the
fair value of his or her shares upon dissenting from a merger or consolidation. The exercise of such dissenter rights will preclude
the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding
shares, except for the right to seek relief on the grounds that the merger or consolidation is void or unlawful. |
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In
addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement
is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who
must, in addition, represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are
present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings
and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has
the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the
arrangement if it determines that: (a) the statutory provisions as to the required majority vote have been met; (b) the shareholders
have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority
to promote interests adverse to those of the class; (c) the arrangement is such that may be reasonably approved by an intelligent
and honest man of that class acting in respect of his interest; and (d) the arrangement is not one that would more properly be sanctioned
under some other provision of the Cayman Companies Act.
When
a takeover offer is made and accepted by holders of 90% of the shares affected within four months the offeror may, within a two-month
period commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares
on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the
case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.
If
an arrangement and reconstruction is thus approved, or if a takeover offer is made and accepted, a dissenting shareholder would have
no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations,
providing rights to receive payment in cash for the judicially determined value of the shares. |
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| Shareholder Suits |
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Class actions and derivative
actions generally are available to shareholders under Delaware law for, among other things, breach of fiduciary duty, corporate waste
and actions not taken in accordance with applicable law. In such actions, the court generally has discretion to permit the winning
party to recover attorneys’ fees incurred in connection with such action. |
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In
principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minority shareholder.
However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman
Islands courts can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions
thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name
of the company to challenge: (a) an act which is illegal or ultra vires with respect to the company and is therefore incapable of
ratification by the shareholders; (b) an act which, although not ultra vires, requires authorization by a qualified (or special)
majority (that is, more than a simple majority) which has not been obtained; and (c) an act which constitutes a “fraud on the
minority” where the wrongdoers are themselves in control of the company. |
| Inspection of Corporate Records |
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Under Delaware
law, shareholders of a Delaware corporation have the right during normal business hours to inspect for any proper purpose, and to
obtain copies of list(s) of shareholders and other books and records of the corporation and its subsidiaries, if any, to the extent
the books and records of such subsidiaries are available to the corporation. |
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Shareholders
of a Cayman Islands exempted company have no general right under Cayman Islands law to inspect or obtain copies of a list of shareholders
or other corporate records (other than the register of mortgages or charges) of the company. However, these rights may be provided
in the company’s memorandum and articles of association. |
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| Shareholder Proposals |
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Unless provided in the
corporation’s certificate of incorporation or bylaws, Delaware law does not include a provision restricting the manner in which
shareholders may bring business before a meeting. |
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The
Cayman Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders
with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles
of association. Our articles provide that general meetings shall be convened on the written requisition of one or more of the shareholders
entitled to attend and vote at our general meetings who (together) hold not less than 10 percent of the rights to vote at such general
meeting in accordance with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the
shareholders making the requisition. If the directors do not convene such meeting for a date not later than twenty-one clear days’
after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting
themselves within three months after the end of such period of twenty-one clear days in which case reasonable expenses incurred by
them as a result of the directors failing to convene a meeting shall be reimbursed by us. Our articles provide no other right to
put any proposals before annual general meetings or extraordinary general meetings. As a Cayman Islands exempted company, we are
not obligated by law to call shareholders’ annual general meetings. However, our corporate governance guidelines require us
to call such meetings every year. |
| Approval of Corporate Matters
by Written Consent |
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Delaware law
permits shareholders to take action by written consent signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a meeting of shareholders. |
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The
Cayman Companies Act allows a special resolution to be passed in writing if signed by all the voting shareholders (if authorized
by the memorandum and articles of association). |
| Calling of Special Shareholders Meetings |
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Delaware law permits the
board of directors or any person who is authorized under a corporation’s certificate of incorporation or bylaws to call a special
meeting of shareholders. |
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The
Cayman Companies Act does not have provisions governing the proceedings of shareholders meetings which are usually provided in the
memorandum and articles of association. Please see above. |
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| Dissolution; Winding Up |
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Under the Delaware General
Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding
100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved
by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its
certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors. |
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Under
the Cayman Companies Act and our articles, the Company may be wound up by a special resolution of our shareholders, or if the winding
up is initiated by our board of directors, by either a special resolution of our members or, if our company is unable to pay its
debts as they fall due, by an ordinary resolution of our members. In addition, a company may be wound up by an order of the courts
of the Cayman Islands. The court has authority to order winding up in a number of specified circumstances including where it is,
in the opinion of the court, just and equitable to do so. |
Anti-money
Laundering—Cayman Islands
In
order to comply with legislation or regulations aimed at the prevention of money laundering, we are required to adopt and maintain anti-money
laundering procedures and may require subscribers to provide evidence to verify their identity and source of funds. Where permitted,
and subject to certain conditions, we may also delegate the maintenance of our anti-money laundering procedures (including the acquisition
of due diligence information) to a suitable person.
We
reserve the right to request such information as is necessary to verify the identity of a subscriber. In some cases the directors may
be satisfied that no further information is required since an exemption applies under the Anti-Money Laundering Regulations (Revised)
of the Cayman Islands, as amended and revised from time to time (the “Regulations”). Depending on the circumstances of each
application, a detailed verification of identity might not be required where:
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(a) |
the subscriber makes the
payment for their investment from an account held in the subscriber’s name at a recognized financial institution; or |
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(b) |
the subscriber is regulated
by a recognized regulatory authority and is based or incorporated in, or formed under the law of, a recognized jurisdiction; or |
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(c) |
the application is made
through an intermediary which is regulated by a recognized regulatory authority and is based in or incorporated in, or formed under
the law of a recognized jurisdiction and an assurance is provided in relation to the procedures undertaken on the underlying investors. |
For
the purposes of these exceptions, recognition of a financial institution, regulatory authority, or jurisdiction will be determined in
accordance with the Regulations by reference to those jurisdictions recognized by the Cayman Islands Monetary Authority as having equivalent
anti-money laundering regulations.
In
the event of delay or failure on the part of the subscriber in producing any information required for verification purposes, we may refuse
to accept the application, in which case any funds received will be returned without interest to the account from which they were originally
debited.
We
also reserve the right to refuse to make any redemption payment to a shareholder if our directors or officers suspect or are advised
that the payment of redemption proceeds to such shareholder might result in a breach of applicable anti-money laundering or other laws
or regulations by any person in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure our compliance
with any such laws or regulations in any applicable jurisdiction.
If
any person resident in the Cayman Islands knows or suspects or has reason for knowing or suspecting that another person is engaged in
criminal conduct or is involved with terrorism or terrorist property and the information for that knowledge or suspicion came to their
attention in the course of their business in the regulated sector, or other trade, profession, business or employment, the person will
be required to report such knowledge or suspicion to (i) a nominated officer (appointed in accordance with the Proceeds of Crime Act
(Revised) of the Cayman Islands) or the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (Revised),
if the disclosure relates to criminal conduct or money laundering or (ii) to a police constable or a nominated officer (pursuant to the
Terrorism Act (Revised) of the Cayman Islands) or the Financial Reporting Authority, pursuant to the Terrorism Act (Revised), if the
disclosure relates to involvement with terrorism or terrorist financing and terrorist property. Such a report shall not be treated as
a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Data
Protection in the Cayman Islands – Privacy Notice
This
privacy notice explains the manner in which we collect, process, and maintain personal data about our investors pursuant to the Data
Protection Act (Revised) of the Cayman Islands, as amended from time to time and any regulations, codes of practice, or orders promulgated
pursuant thereto (the “DPA”).
We
are committed to processing personal data in accordance with the DPA. In our use of personal data, we will be characterized under the
DPA as a “data controller,” whilst certain of our service providers, affiliates, and delegates may act as “data processors”
under the DPA. These service providers may process personal information for their own lawful purposes in connection with services
provided to us.
By
virtue of your investment in our Company, we and certain of our service providers may collect, record, store, transfer, and otherwise
process personal data by which individuals may be directly or indirectly identified.
Your
personal data will be processed fairly and for lawful purposes, including (a) where the processing is necessary for us to perform a contract
to which you are a party or for taking pre-contractual steps at your request, (b) where the processing is necessary for compliance with
any legal, tax, or regulatory obligation to which we are subject, or (c) where the processing is for the purposes of legitimate interests
pursued by us or by a service provider to whom the data are disclosed. As a data controller, we will only use your personal data
for the purposes for which we collected it. If we need to use your personal data for an unrelated purpose, we will contact you.
We
anticipate that we will share your personal data with our service providers for the purposes set out in this privacy notice. We
may also share relevant personal data where it is lawful to do so and necessary to comply with our contractual obligations or your instructions
or where it is necessary or desirable to do so in connection with any regulatory reporting obligations. In exceptional circumstances,
we will share your personal data with regulatory, prosecuting, and other governmental agencies or departments, and parties to litigation
(whether pending or threatened), in any country or territory including to any other person where we have a public or legal duty to do
so (e.g. to assist with detecting and preventing fraud, tax evasion, and financial crime or compliance with a court order).
Your
personal data shall not be held by our Company for longer than necessary with regard to the purposes of the data processing.
We
will not sell your personal data. Any transfer of personal data outside of the Cayman Islands shall be in accordance with the requirements
of the DPA. Where necessary, we will ensure that separate and appropriate legal agreements are put in place with the recipient of
that data.
We
will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational
information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental
loss, destruction, or damage to the personal data.
If
you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements
such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in
relation to your investment into our Company, this will be relevant for those individuals and you should inform such individuals of the
content.
You
have certain rights under the DPA, including (a) the right to be informed as to how we collect and use your personal data (and this privacy
notice fulfils our obligation in this respect), (b) the right to obtain a copy of your personal data, (c) the right to require us to
stop direct marketing, (d) the right to have inaccurate or incomplete personal data corrected, (e) the right to withdraw your consent
and require us to stop processing or restrict the processing, or not begin the processing of your personal data, (f) the right to be
notified of a data breach (unless the breach is unlikely to be prejudicial), (g) the right to obtain information as to any countries
or territories outside the Cayman Islands to which we, whether directly or indirectly, transfer, intend to transfer, or wish to transfer
your personal data, general measures we take to ensure the security of personal data, and any information available to us as to the source
of your personal data, (h) the right to complain to the Office of the Ombudsman of the Cayman Islands, and (i) the right to require us
to delete your personal data in some limited circumstances.
If
you consider that your personal data has not been handled correctly, or you are not satisfied with our responses to any requests you
have made regarding the use of your personal data, you have the right to complain to the Cayman Islands’ Ombudsman. The Ombudsman
can be contacted by email at info@ombudsman.ky.
History
of Share Capital
We
were incorporated in the Cayman Islands as an exempted company with limited liability on December 11, 2019. We issued the following ordinary
shares to certain founding shareholders.
| Purchaser | |
Date of Issuance | |
Number of
Ordinary Shares
(Note) | |
| Sununion Holding Group Limited | |
December 11, 2019 | |
| 12,480,000 | |
| Greatest Group (China) Financial Management Limited | |
December 11, 2019 | |
| 1,392,000 | |
| True Ample Holdings Limited | |
December 11, 2019 | |
| 768,000 | |
| Xingrui Investment Company Limited | |
December 11, 2019 | |
| 800,000 | |
| Bliss International Investment Company Limited | |
December 11, 2019 | |
| 560,000 | |
Note:
Represents the number of shares after share split, as discussed below.
On
August 7, 2020, our shareholders approved (i) a forward split of our outstanding ordinary shares at a ratio of 320-for-1 share, and (ii)
an increase in our authorized shares to 100 million ordinary shares. Unless otherwise indicated, all references to ordinary shares, options
to purchase ordinary shares, share data, per share data, and related information have been retroactively adjusted, where applicable,
in this prospectus to reflect the forward split of our ordinary shares as if it had occurred at the beginning of the earlier period presented.
On
March 25, 2021, we closed our initial public offering of 5,000,000 ordinary shares, par value $0.003125 per share, at a public offering
price of $5.00 per share. On March 29, 2021, the underwriter exercised in full its over-allotment option to purchase an additional 750,000
ordinary shares. The closing for the sale of the over-allotment shares took place on March 31, 2021. Gross proceeds of our initial
public offering, including the proceeds from the sale of the over-allotment shares, totaled $28.75 million, before deducting underwriting
discounts and other related expenses. Net proceeds of our initial public offering, including over-allotment shares, were approximately
$25.6 million. In connection with the initial public offering, our ordinary shares began trading on the Nasdaq Global Market under
the symbol “UPC” on March 23, 2021.
As
of the date of this prospectus, our authorized share capital consists of $312,500 divided into 90,000,000 ordinary shares, par value
$0.003125 per share and 10,000,000 preferred shares, par value $0.003125 per share. Holders of ordinary shares are entitled to one vote
per share.
As
of the date of this prospectus, none of our outstanding ordinary shares are held by record holders in the United States.
We
are not aware of any arrangement that may, at a subsequent date, result in a change of control of the Company.
DESCRIPTION
OF DEBT SECURITIES
General
As
used in this prospectus, the term “debt securities” means the debentures, notes, bonds, and other evidences of indebtedness
that we may issue from time to time. The debt securities will either be senior debt securities or subordinated debt securities. Debt
securities will be issued under an indenture between us and a trustee to be named therein. We have filed the forms of indentures as exhibits
to the registration statement of which this prospectus is a part. We may issue debt securities which may or may not be converted into
our ordinary shares or preferred shares. It is likely that convertible debt securities will not be issued under an indenture. We may
issue the debt securities independently or together with any underlying securities, and debt securities may be attached or separate from
the underlying securities.
The
following description is a summary of selected provisions relating to the debt securities that we may issue. The summary is not complete.
When debt securities are offered in the future, a prospectus supplement, information incorporated by reference, or a free writing prospectus,
as applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The
specific terms of the debt securities as described in a prospectus supplement, information incorporated by reference, or free writing
prospectus will supplement and, if applicable, may modify or replace the general terms described in this section.
This
summary and any description of debt securities in the applicable prospectus supplement, information incorporated by reference, or free
writing prospectus is subject to and is qualified in its entirety by reference to all the provisions of any specific debt securities
document or agreement. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit
to the registration statement of which this prospectus is a part on or before the time we issue a series of debt securities. See “Where
You Can Find Additional Information” and “Incorporation of Documents by Reference” below for information on how to
obtain a copy of a debt securities document when it is filed.
When
we refer to a series of debt securities, we mean all debt securities issued as part of the same series under the applicable indenture.
Terms
The
applicable prospectus supplement, information incorporated by reference, or free writing prospectus, may describe the terms of any debt
securities that we may offer, including, but not limited to, the following:
| |
● |
the title of the debt securities; |
| |
|
|
| |
● |
the total amount of the
debt securities; |
| |
|
|
| |
● |
the amount or amounts of
the debt securities will be issued and interest rate; |
| |
|
|
| |
● |
the conversion price at
which the debt securities may be converted; |
| |
● |
the date on which the right
to convert the debt securities will commence and the date on which the right will expire; |
| |
|
|
| |
● |
if applicable, the minimum
or maximum amount of debt securities that may be converted at any one time; |
| |
|
|
| |
● |
if applicable, a discussion
of material federal income tax consideration; |
| |
|
|
| |
● |
if applicable, the terms
of the payoff of the debt securities; |
| |
|
|
| |
● |
the identity of the indenture
agent, if any; |
| |
|
|
| |
● |
the procedures and conditions
relating to the conversion of the debt securities; and |
| |
|
|
| |
● |
any other terms of the
debt securities, including terms, procedure and limitation relating to the exchange or conversion of the debt securities. |
Form,
Exchange, and Transfer
We
may issue the debt securities in registered form or bearer form. Debt securities issued in registered form, i.e., book-entry form, will
be represented by a global security registered in the name of a depository, which will be the holder of all the debt securities represented
by the global security. Those investors who own beneficial interests in global debt securities will do so through participants in the
depository’s system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depository
and its participants. In addition, we may issue debt securities in non-global form, i.e., bearer form. If any debt securities are issued
in non-global form, debt securities certificates may be exchanged for new debt securities certificates of different denominations, and
holders may exchange, transfer, or convert their debt securities at the debt securities agent’s office or any other office indicated
in the applicable prospectus supplement, information incorporated by reference or free writing prospectus.
Prior
to the conversion of their debt securities, holders of debt securities convertible for ordinary shares or preferred shares will not have
any rights of holders of ordinary shares or preferred shares, and will not be entitled to dividend payments, if any, or voting rights
of the ordinary shares or preferred shares.
Conversion
of Debt Securities
A
debt security may entitle the holder to purchase, in exchange for the extinguishment of debt, an amount of securities at a conversion
price that will be stated in the debt security. Debt securities may be converted at any time up to the close of business on the expiration
date set forth in the terms of such debt security. After the close of business on the expiration date, debt securities not exercised
will be paid in accordance with their terms.
Debt
securities may be converted as set forth in the applicable offering material. Upon receipt of a notice of conversion properly completed
and duly executed at the corporate trust office of the indenture agent, if any, or to us, we will forward, as soon as practicable, the
securities purchasable upon such exercise. If less than all of the debt security represented by such security is converted, a new debt
security will be issued for the remaining debt security.
DESCRIPTION
OF WARRANTS
General
We
may issue warrants to purchase our securities. We may issue the warrants independently or together with any underlying securities, and
the warrants may be attached or separate from the underlying securities. We may also issue a series of warrants under a separate warrant
agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent in connection with the warrants
of such series and will not assume any obligation or relationship of agency for or with holders or beneficial owners of warrants.
The
following description is a summary of selected provisions relating to the warrants that we may issue. The summary is not complete. When
warrants are offered in the future, a prospectus supplement, information incorporated by reference, or a free writing prospectus, as
applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific
terms of the warrants as described in a prospectus supplement, information incorporated by reference, or free writing prospectus will
supplement and, if applicable, may modify or replace the general terms described in this section.
This
summary and any description of warrants in the applicable prospectus supplement, information incorporated by reference, or free writing
prospectus is subject to and is qualified in its entirety by reference to all the provisions of any specific warrant document or agreement,
if applicable. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the
registration statement of which this prospectus is a part on or before the time we issue a series of warrants. See “Where You Can
Find Additional Information” and “Incorporation of Documents by Reference” below for information on how to obtain a
copy of a warrant document when it is filed.
When
we refer to a series of warrants, we mean all warrants issued as part of the same series under the applicable warrant agreement.
Terms
The
applicable prospectus supplement, information incorporated by reference, or free writing prospectus, may describe the terms of any warrants
that we may offer, including, but not limited to, the following:
| |
● |
the title of the warrants; |
| |
|
|
| |
● |
the total number of warrants; |
| |
|
|
| |
● |
the price or prices at
which the warrants will be issued; |
| |
|
|
| |
● |
the price or prices at
which the warrants may be exercised; |
| |
|
|
| |
● |
the currency or currencies
that investors may use to pay for the warrants; |
| |
|
|
| |
● |
the date on which the right
to exercise the warrants will commence and the date on which the right will expire; |
| |
|
|
| |
● |
whether the warrants will
be issued in registered form or bearer form; |
| |
|
|
| |
● |
information with respect
to book-entry procedures, if any; |
| |
|
|
| |
● |
if applicable, the minimum
or maximum amount of warrants that may be exercised at any one time; |
| |
● |
if applicable, the designation
and terms of the underlying securities with which the warrants are issued and the number of warrants issued with each underlying
security; |
| |
|
|
| |
● |
if applicable, the date
on and after which the warrants and the related underlying securities will be separately transferable; |
| |
|
|
| |
● |
if applicable, a discussion
of material federal income tax considerations; |
| |
|
|
| |
● |
if applicable, the terms
of redemption of the warrants; |
| |
|
|
| |
● |
the identity of the warrant
agent, if any; |
| |
|
|
| |
● |
the procedures and conditions
relating to the exercise of the warrants; and |
| |
|
|
| |
● |
any other terms of the
warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants. |
Warrant
Agreement
We
may issue the warrants in one or more series under one or more warrant agreements, each to be entered into between us and a bank, trust
company, or other financial institution as warrant agent. We may add, replace, or terminate warrant agents from time to time. We may
also choose to act as our own warrant agent or may choose one of our subsidiaries to do so.
The
warrant agent under a warrant agreement will act solely as our agent in connection with the warrants issued under that agreement. Any
holder of warrants may, without the consent of any other person, enforce by appropriate legal action, on its own behalf, its right to
exercise those warrants in accordance with their terms.
Form,
Exchange, and Transfer
We
may issue the warrants in registered form or bearer form. Warrants issued in registered form, i.e., book-entry form, will be represented
by a global security registered in the name of a depository, which will be the holder of all the warrants represented by the global security.
Those investors who own beneficial interests in a global warrant will do so through participants in the depository’s system, and
the rights of these indirect owners will be governed solely by the applicable procedures of the depository and its participants. In addition,
we may issue warrants in non-global form, i.e., bearer form. If any warrants are issued in non-global form, warrant certificates may
be exchanged for new warrant certificates of different denominations, and holders may exchange, transfer, or exercise their warrants
at the warrant agent’s office or any other office indicated in the applicable prospectus supplement, information incorporated by
reference, or free writing prospectus.
Prior
to the exercise of their warrants, holders of warrants exercisable for ordinary shares or preferred shares will not have any rights of
holders of ordinary shares or preferred shares and will not be entitled to dividend payments, if any, or voting rights of the ordinary
shares or preferred shares.
Exercise
of Warrants
A
warrant will entitle the holder to purchase for cash an amount of securities at an exercise price that will be stated in, or that will
be determinable as described in, the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
Warrants may be exercised at any time up to the close of business on the expiration date set forth in the applicable offering material.
After the close of business on the expiration date, unexercised warrants will become void. Warrants may be redeemed as set forth in the
applicable offering material.
Warrants
may be exercised as set forth in the applicable offering material. Upon receipt of payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable offering material,
we will forward, as soon as practicable, the securities purchasable upon such exercise. If less than all of the warrants represented
by such warrant certificate are exercised, a new warrant certificate will be issued for the remaining warrants.
DESCRIPTION
OF RIGHTS
We
may issue rights to purchase our securities. The rights may or may not be transferable by the persons purchasing or receiving the rights.
In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or
other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after
such rights offering. Each series of rights will be issued under a separate rights agent agreement to be entered into between us and
one or more banks, trust companies, or other financial institutions, as rights agent, that we will name in the applicable prospectus
supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship
of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other
matters:
| |
● |
the date of determining
the security holders entitled to the rights distribution; |
| |
|
|
| |
● |
the aggregate number of
rights issued and the aggregate amount of securities purchasable upon exercise of the rights; |
| |
|
|
| |
● |
the exercise price; |
| |
|
|
| |
● |
the conditions to completion
of the rights offering; |
| |
|
|
| |
● |
the date on which the right
to exercise the rights will commence and the date on which the rights will expire; and |
| |
|
|
| |
● |
any applicable federal
income tax considerations. |
Each
right would entitle the holder of the rights to purchase for cash the principal amount of securities at the exercise price set forth
in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the
rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will
become void.
If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons
other than our security holders, to or through agents, underwriters, or dealers, or through a combination of such methods, including
pursuant to standby arrangements, as described in the applicable prospectus supplement.
DESCRIPTION
OF UNITS
We
may issue units composed of any combination of our securities. We will issue each unit so that the holder of the unit is also the holder
of each security included in the unit. As a result, the holder of a unit will have the rights and obligations of a holder of each included
security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred
separately, at any time or at any time before a specified date.
The
following description is a summary of selected provisions relating to units that we may offer. The summary is not complete. When units
are offered in the future, a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable,
will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific terms
of the units as described in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement
and, if applicable, may modify or replace the general terms described in this section.
This
summary and any description of units in the applicable prospectus supplement, information incorporated by reference, or free writing
prospectus is subject to and is qualified in its entirety by reference to the unit agreement, collateral arrangements, and depositary
arrangements, if applicable. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an
exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of units. See “Where
You Can Find Additional Information” and “Incorporation of Documents by Reference” below for information on how to
obtain a copy of a document when it is filed.
The
applicable prospectus supplement, information incorporated by reference, or free writing prospectus may describe:
| |
● |
The designation and terms
of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held
or transferred separately; |
| |
|
|
| |
● |
Any provisions for the
issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units; |
| |
|
|
| |
● |
Whether the units will
be issued in fully registered or global form; and |
| |
|
|
| |
● |
Any other terms of the
units. |
The
applicable provisions described in this section, as well as those described under “Description of Share Capital,” “Description
of Debt Securities,” “Description of Warrants,” and “Description of Rights” above, will apply to each unit
and to each security included in each unit, respectively.
PLAN
OF DISTRIBUTION
We
may sell the securities offered by this prospectus from time to time in one or more transactions, including, without limitation:
| |
● |
through agents; |
| |
|
|
| |
● |
to or through underwriters; |
| |
|
|
| |
● |
through broker-dealers
(acting as agent or principal); |
| |
|
|
| |
● |
directly by us to purchasers
(including our affiliates and shareholders), through a specific bidding or auction process, a rights offering, or other method; |
| |
|
|
| |
● |
through a combination of
any such methods of sale; or |
| |
|
|
| |
● |
through any other methods
described in a prospectus supplement. |
The
distribution of securities may be effected, from time to time, in one or more transactions, including:
| |
● |
block transactions (which
may involve crosses) and transactions on Nasdaq or any other organized market where the securities may be traded; |
| |
● |
purchases by a broker-dealer
as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement; |
| |
|
|
| |
● |
ordinary brokerage transactions
and transactions in which a broker-dealer solicits purchasers; |
| |
|
|
| |
● |
sales “at the market”
to or through a market maker or into an existing trading market, on an exchange or otherwise; and |
| |
|
|
| |
● |
sales in other ways not
involving market makers or established trading markets, including direct sales to purchasers. |
The
securities may be sold at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices
relating to the prevailing market prices or at negotiated prices. The consideration may be cash, extinguishment of debt, or another form
negotiated by the parties. Agents, underwriters, or broker-dealers may be paid compensation for offering and selling the securities.
That compensation may be in the form of discounts, concessions, or commissions to be received from us or from the purchasers of the securities.
Dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation received by
them on resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act. If such dealers
or agents were deemed to be underwriters, they may be subject to statutory liabilities under the Securities Act.
We
may also make direct sales through subscription rights distributed to our existing shareholders on a pro rata basis, which may or may
not be transferable. In any distribution of subscription rights to our shareholders, if all of the underlying securities are not subscribed
for, we may then sell the unsubscribed securities directly to third parties or may engage the services of one or more underwriters, dealers,
or agents, including standby underwriters, to sell the unsubscribed securities to third parties.
Some
or all of the securities that we offer through this prospectus may be new issues of securities with no established trading market. Any
underwriters to whom we sell our securities for public offering and sale may make a market in those securities, but they will not be
obligated to do so and they may discontinue any market making at any time without notice. Accordingly, we cannot assure you of the liquidity
of, or continued trading markets for, any securities that we offer.
Agents
may, from time to time, solicit offers to purchase the securities. If required, we will name in the applicable prospectus supplement,
document incorporated by reference, or free writing prospectus, as applicable, any agent involved in the offer or sale of the securities
and set forth any compensation payable to the agent. Unless otherwise indicated, any agent will be acting on a best efforts basis for
the period of its appointment. Any agent selling the securities covered by this prospectus may be deemed to be an underwriter of the
securities.
If
underwriters are used in an offering, securities will be acquired by the underwriters for their own account and may be resold, from time
to time, in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined
at the time of sale, or under delayed delivery contracts or other contractual commitments. Securities may be offered to the public either
through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters.
If an underwriter or underwriters are used in the sale of securities, an underwriting agreement will be executed with the underwriter
or underwriters at the time an agreement for the sale is reached. The applicable prospectus supplement will set forth the managing underwriter
or underwriters, as well as any other underwriter or underwriters, with respect to a particular underwritten offering of securities,
and will set forth the terms of the transactions, including compensation of the underwriters and dealers and the public offering price,
if applicable. This prospectus, the applicable prospectus supplement, and any applicable free writing prospectus will be used by the
underwriters to resell the securities.
If
a dealer is used in the sale of the securities, we, or an underwriter, will sell the securities to the dealer, as principal. The dealer
may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale. To the extent required,
we will set forth in the prospectus supplement, document incorporated by reference, or free writing prospectus, as applicable, the name
of the dealer and the terms of the transactions.
We
may directly solicit offers to purchase the securities and may make sales of securities directly to institutional investors or others.
These persons may be deemed to be underwriters with respect to any resale of the securities. To the extent required, the prospectus supplement,
document incorporated by reference, or free writing prospectus, as applicable, will describe the terms of any such sales, including the
terms of any bidding or auction process, if used.
Agents,
underwriters, and dealers may be entitled under agreements which may be entered into with us to indemnification by us against specified
liabilities, including liabilities incurred under the Securities Act, or to contribution by us to payments they may be required to make
in respect of such liabilities. If required, the prospectus supplement, document incorporated by reference, or free writing prospectus,
as applicable, will describe the terms and conditions of such indemnification or contribution. Some of the agents, underwriters, or dealers,
or their affiliates may be customers of, engage in transactions with or perform services for us or our subsidiaries or affiliates in
the ordinary course of business.
Under
the securities laws of some states, the securities offered by this prospectus may be sold in those states only through registered or
licensed brokers or dealers.
Any
person participating in the distribution of securities registered under the registration statement that includes this prospectus will
be subject to applicable provisions of the Exchange Act, and the applicable SEC rules and regulations, including, among others,
Regulation M, which may limit the timing of purchases and sales of any of our securities by any such person. Furthermore, Regulation
M may restrict the ability of any person engaged in the distribution of our securities to engage in market-making activities with respect
to our securities.
These
restrictions may affect the marketability of our securities and the ability of any person or entity to engage in market-making activities
with respect to our securities.
Certain
persons participating in an offering may engage in over-allotment, stabilizing transactions, short-covering transactions, and penalty
bids in accordance with Regulation M under the Exchange Act that stabilize, maintain, or otherwise affect the price of the offered securities.
If any such activities will occur, they will be described in the applicable prospectus supplement.
To
the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution.
TAXATION
Material
income tax consequences relating to the purchase, ownership, and disposition of the securities offered by this prospectus are set forth
in “Item 10. Additional Information—E. Taxation” in the 2021 Annual Report, which is incorporated herein by reference,
as updated by our subsequent filings under the Exchange Act that are incorporated by reference and, if applicable, in any accompanying
prospectus supplement or relevant free writing prospectus.
EXPENSES
The
following table sets forth the aggregate expenses in connection with this offering, all of which will be paid by us. All amounts shown
are estimates, except for the SEC registration fee.
| SEC registration fee | |
$ | 22,040 | |
| FINRA fees | |
$ | 30,500 | |
| Legal fees and expenses | |
$ | * | |
| Accounting fees and expenses | |
$ | * | |
| Printing and postage expenses | |
$ | * | |
| Miscellaneous expenses | |
$ | * | |
| Total | |
$ | * | |
| * |
To be provided by a prospectus
supplement or as an exhibit to a report of foreign private issuer on Form 6-K that is incorporated by reference into this registration
statement. Estimated solely for this item. Actual expenses may vary. |
MATERIAL
CONTRACTS
Our
material contracts are described in the documents incorporated by reference into this prospectus. See “Incorporation of Documents
by Reference” below.
MATERIAL
CHANGES
Except
as otherwise described in the 2021 Annual Report, in our reports of foreign issuer on Form 6-K filed or submitted under the Exchange
Act and incorporated by reference herein, and as disclosed in this prospectus or the applicable prospectus supplement, no reportable
material changes have occurred since September 30, 2021.
LEGAL
MATTERS
We
are being represented by Hunter Taubman Fischer & Li LLC with respect to certain legal matters as to United States federal securities
and New York State law. The validity of the securities offered in this offering and certain other legal matters as to Cayman Islands
law will be passed upon for us by Ogier, our counsel as to Cayman Islands law. Legal matters as to PRC law will be passed upon for us
by AllBright Law Offices. If legal matters in connection with offerings made pursuant to this prospectus are passed upon by counsel to
underwriters, dealers, or agents, such counsel will be named in the applicable prospectus supplement relating to any such offering.
EXPERTS
The
consolidated financial statements as of September 30, 2021 and for the fiscal year ended September 30, 2021 included in this
prospectus have been so included in reliance on the report of YCM CPA INC., an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting. The office of YCM CPA INC. is located at 2400 Barranca Pkwy, Suite
300, Irvine, CA 92606.
The
consolidated financial statements as of September 30, 2020, and for the fiscal years ended September 30, 2020 and 2019 included
in this prospectus have been so included in reliance on the report of Friedman LLP, an independent registered public accounting firm,
given on the authority of said firm as experts in auditing and accounting. The office of Friedman LLP is located at One Liberty Plaza,
165 Broadway Floor 21, New York, NY 10006.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus certain information we file with the SEC. This means that
we can disclose important information to you by referring you to those documents. Any statement contained in a document incorporated
by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained herein, or in any subsequently filed document, which is incorporated by reference herein, modifies or supersedes such earlier
statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part
of this prospectus.
We
hereby incorporate by reference into this prospectus the following documents:
| |
1. |
our annual report on Form 20-F
for the fiscal year ended September 30, 2021 filed with the SEC on January 31, 2022; |
| |
|
|
| |
2. |
our reports of foreign private
issuer on Form 6-K filed with the SEC on January 31, 2022, July 19, 2022, August 16, 2022, August 29, 2022
and September 28, 2022; |
| |
|
|
| |
3. |
the description of our
ordinary shares contained in our registration statement on Form 8-A, filed with the SEC on March 17, , 2021, and any amendment
or report filed for the purpose of updating such description; |
| |
|
|
| |
4. |
any future annual reports
on Form 20-F filed with the SEC after the date of this prospectus and prior to the termination of the offering of the securities
offered by this prospectus; and |
| |
|
|
| |
5. |
any future reports of foreign
private issuer on Form 6-K that we furnish to the SEC after the date of this prospectus that are identified in such reports
as being incorporated by reference into the registration statement of which this prospectus forms a part. |
Our
annual report on Form 20-F for the fiscal year ended September 30, 2021 filed with the SEC on January 31, 2022 contains a description
of our business and audited consolidated financial statements with a report by our independent auditors. These financial statements were
prepared in accordance with U.S. GAAP.
Unless
expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to,
but not filed with, the SEC. Copies of all documents incorporated by reference in this prospectus, other than exhibits to those document
unless such exhibits are specially incorporated by reference in this prospectus, will be provided at no cost to each person, including
any beneficial owner, who receives a copy of this prospectus on the written or oral request of that person made to:
Universe
Pharmaceuticals INC
265
Jingjiu Avenue, Jinggangshan Economic and Technological Development Zone
Ji’an,
Jiangxi Province
People’s
Republic of China
+86-0796-8403309
You
should rely only on the information that we incorporate by reference or provide in this prospectus. We have not authorized anyone to
provide you with different information. We are not making any offer to sell these securities in any jurisdiction where the offer or sale
is not permitted. You should not assume that the information contained or incorporated in this prospectus by reference is accurate as
of any date other than the date of the document containing the information.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
As
permitted by SEC rules, this prospectus omits certain information and exhibits that are included in the registration statement of which
this prospectus forms a part. Since this prospectus may not contain all of the information that you may find important, you should review
the full text of these documents. If we have filed a contract, agreement, or other document as an exhibit to the registration statement
of which this prospectus forms a part, you should read the exhibit for a more complete understanding of the document or matter involved.
Each statement in this prospectus, including statements incorporated by reference as discussed above, regarding a contract, agreement,
or other document is qualified in its entirety by reference to the actual document.
We
are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information
electronically filed with the SEC can be inspected over the Internet at the SEC’s website at www.sec.gov.
As
a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and
content of proxy statements, and our executive officers, directors, and principal shareholders are exempt from the reporting and short-swing
profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange
Act to file periodic or current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities
are registered under the Exchange Act.
ENFORCEABILITY
OF CIVIL LIABILITIES
We
were incorporated under the laws of the Cayman Islands because there are certain benefits associated with being a Cayman Islands company,
such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control
or currency restrictions, and the availability of professional and support services. The Cayman Islands, however, has a less developed
body of securities laws than the United States and provides significantly less protection for investors than the United States.
All
of the operating entities’ operations are conducted in China and substantially all of our assets are located in the PRC. In addition,
almost all of our directors and officers are nationals or residents of the PRC, including our chief executive officer and chairman of
the board of directors, Mr. Gang Lai, our chief financial officer, Ms. Lin Yang, and our directors, Mr. Jiawen Pang and Mr. Ding Zheng,
and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors
to effect service of process within the United States upon us or these persons who are residents of a foreign country, such as our directors
and officers, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil
liability provisions of the securities laws of the United States or any state in the United States.
We
have appointed Cogency Global Inc. as our agent to receive service of process with respect to any action brought against us in the United
States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in
the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the
securities laws of the State of New York.
Our
counsel with respect to the laws of the Cayman Islands, Ogier, and our counsel with respect to PRC law, AllBright Law Offices, have advised
us that there is uncertainty as to whether the courts of the Cayman Islands or the PRC would (i) recognize or enforce judgments
of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States or (ii) in original actions brought in the Cayman Islands or the PRC,
to impose liabilities against us or our directors or officers predicated upon the securities laws of the United States or any state in
the United States, so far as the liabilities imposed by those provisions are penal in nature..
Our
Cayman Islands counsel, Ogier, has further advised us that in those circumstances, although there is no statutory enforcement in the
Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money
judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent
foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions
are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive, given by a court of
competent jurisdiction (the courts of the Cayman Islands will apply the rules of Cayman Islands private international law to determine
whether the foreign court is a court of competent jurisdiction), and must not be in respect of taxes or a fine or penalty, inconsistent
with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be
of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or
multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent
proceedings are being brought elsewhere. Ogier has informed us that there is uncertainty with regard to Cayman Islands law relating to
whether a judgment obtained from the U.S. courts under civil liability provisions of the securities laws will be determined by the courts
of the Cayman Islands as penal or punitive in nature.
Our
PRC counsel, AllBright Law Offices, has advised us that the recognition and enforcement of foreign judgments are provided for under the
PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil
Procedure Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions.
However, there are no treaties or other forms of reciprocity between China and the United States for the mutual recognition and enforcement
of court judgments. Further, pursuant to the PRC Civil Procedures Law, courts in the PRC will not
enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of
PRC law or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a PRC court would
enforce a judgment rendered by a court in the United States.
Our
PRC counsel, AllBright Law Offices, has further advised us that, under the PRC Civil Procedures
Law, foreign shareholders may originate actions based on PRC laws against us in the PRC, if they can establish sufficient nexus to the
PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a
direct interest in the case, and there must be a concrete claim, a factual basis, and a cause for the suit. However, it would be difficult
for foreign shareholders to establish sufficient nexus to the PRC by virtue only of holding our ordinary shares.
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
8. Indemnification of Directors and Officers
Cayman
Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers
and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such
as to provide indemnification against civil fraud or the consequences of committing a crime. Our articles of association provide that,
to the extent permitted by law, we shall indemnify each existing or former secretary, director (including alternate director), and any
of our other officers (including an investment adviser or an administrator or liquidator) and their personal representatives against:
(a)
all actions, proceedings, costs, charges, expenses, losses, damages, or liabilities incurred or sustained by the existing or former director
(including alternate director), secretary, or officer in or about the conduct of our business or affairs or in the execution or discharge
of the existing or former director (including alternate director)’s, secretary’s, or officer’s duties, powers, authorities
or discretions; and
(b)
without limitation to paragraph (a) above, all costs, expenses, losses, or liabilities incurred by the existing or former director (including
alternate director), secretary, or officer in defending (whether successfully or otherwise) any civil, criminal, administrative or investigative
proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands
or elsewhere.
No
such existing or former director (including alternate director), secretary, or officer, however, shall be indemnified in respect of any
matter arising out of his own dishonesty.
To
the extent permitted by law, we may make a payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any
legal costs incurred by an existing secretary, or any of our officers in respect of any matter identified in above on condition that
the secretary, or officer must repay the amount paid by us to the extent that it is ultimately found not liable to indemnify the secretary
or that officer for those legal costs.
Pursuant
to the indemnification agreements entered into with each of our directors and executive officers, we have agreed to indemnify our directors
and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being
such a director or officer.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
Item
9. Exhibits
| * |
To be filed,
if applicable, by amendment or as an exhibit to a report filed pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and incorporated herein by reference. |
| |
|
| ** |
Filed herewith. |
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|
| *** |
Previously filed. |
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|
| **** |
To be filed, if necessary,
on electronic Form 305b2 pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939. |
Item
10 Undertakings
| |
(a) |
The undersigned registrant
hereby undertakes: |
| |
(1) |
To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933; |
| |
(ii) |
To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
| |
(iii) |
To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement. |
provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) of this section do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b).
| |
(2) |
That, for the purpose of
determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. |
| |
(3) |
To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| |
(4) |
To file a post-effective
amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start
of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of
the Securities Act of 1933 need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, a
post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of
the Securities Act of 1933 or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic
reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration statement. |
| |
|
|
| |
(5) |
That, for the purpose of
determining liability under the Securities Act of 1933 to any purchaser: |
| |
(i) |
Each prospectus filed by
the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement; and |
| |
(ii) |
Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract
of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in
a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
| |
(6) |
That, for the purpose of
determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold
to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and
will be considered to offer or sell such securities to such purchaser: |
| |
(i) |
Any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| |
(ii) |
Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| |
(iii) |
The portion of any other
free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and |
| |
(iv) |
Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser. |
| |
(b) |
That, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s
annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof. |
| |
(c) |
Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication
of such issue. |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Ji’an, Jiangxi, People’s Republic of China, on October 27, 2022.
| |
Universe Pharmaceuticals INC |
| |
|
| |
By: |
/s/
Gang Lai |
| |
|
Name: |
Gang Lai |
| |
|
Title: |
Chief Executive Officer and
Chairman of the Board of Directors |
POWERS
OF ATTORNEY
Each
person whose signature appears below hereby constitutes and appoints Gang Lai and Lin Yang, and each of them, individually, his or her
true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, in his or her name, place and stead,
in any and all capacities (including his/her capacity as a director and/or officer of the registrant), to sign any and all amendments
and post-effective amendments and supplements to this registration statement, and including any registration statement for the same offering
that is to be effective upon filing pursuant to Rule 462(b) under the U.S. Securities Act of 1933, as amended, and to file
the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or his substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities
and on the dates indicated.
| Name |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Gang Lai |
|
Chairman of the Board of
Directors and Chief Executive Officer |
|
October 27,
2022 |
| Gang Lai |
|
(Principal Executive Officer) |
|
|
| |
|
|
|
|
| /s/
Lin Yang |
|
Chief Financial Officer
and Director |
|
October 27,
2022 |
| Lin Yang |
|
(Principal Accounting and Financial Officer) |
|
|
| |
|
|
|
|
| /s/
Jiawen Pang |
|
Independent Director |
|
October 27,
2022 |
| Jiawen Pang |
|
|
|
|
| |
|
|
|
|
| /s/
H. David Sherman |
|
Independent Director |
|
October 27,
2022 |
| H. David Sherman |
|
|
|
|
| |
|
|
|
|
| /s/
Ding Zheng |
|
Independent Director |
|
October 27,
2022 |
| Ding Zheng |
|
|
SIGNATURE
OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933, as amended,
the undersigned, the duly authorized representative in the United States of America of Universe Pharmaceuticals INC, has signed this registration
statement thereto in New York, NY on October 27, 2022.
| |
Authorized U.S. Representative |
| |
Cogency Global Inc. |
| |
|
|
|
| |
By: |
/s/ Colleen A. De Vries |
| |
|
Name: |
Colleen A. De Vries |
| |
|
Title: |
Senior Vice-President on
behalf of Cogency Global Inc. |
II-6
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