We have filed a registration statement on
Form F-3 with the SEC under the Securities Act of 1933, as amended, with respect to the shares of our Ordinary Shares and Warrants
offered by this prospectus. This prospectus supplement and the accompanying prospectus are only part of a registration statement
on Form F-3 that we filed with the SEC under the Securities Act of 1933, as amended, and therefore omits certain information contained
in the registration statement. We have also filed exhibits and schedules with the registration statement that are excluded from
this prospectus supplement and the accompanying prospectus, and you should refer to the applicable exhibit or schedule for a complete
description of any statement referring to any contract or other document. For further information with respect to our Ordinary
Shares, our Warrants and us, you should refer to the registration statement, its exhibits and the material incorporated by reference
therein as well as annual, quarterly and periodic reports, proxy statements and other information we file with the SEC.
The registration statement and any other
materials we file with the SEC may be obtained from the web site that the Securities and Exchange Commission maintains at http://www.sec.gov.
The Securities and Exchange Commission allows
us to incorporate by reference the information we file with them under certain conditions, which means that we can disclose important
information to you by referring you to those documents. The information incorporated by reference is considered to be a part of
this prospectus and any information that we file subsequent to this prospectus with the Securities and Exchange Commission will
automatically update and supersede this information. The documents we are incorporating by reference are as follows:
In addition, all documents
subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the initial filing date of
this prospectus, through the earlier of the date declared effective or until the termination of the offering of securities
contemplated by this prospectus shall be deemed to be incorporated by reference into this prospectus. These documents that we
file later with the Securities and Exchange Commission and that are incorporated by reference in this prospectus will
automatically update information contained in this prospectus or that was previously incorporated by reference into this
prospectus. You will be deemed to have notice of all information incorporated by reference in this prospectus as if that
information was included in this prospectus.
We will provide to any person, including
any beneficial owner, to whom this prospectus is delivered, a copy of any or all of the information that has been incorporated
by reference in this prospectus but not delivered with this prospectus (excluding exhibits, unless the exhibits are specifically
incorporated), at no cost to the requesting party, upon request to us in writing or by telephone using the following information:
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 Securities Act of 1933 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 Ordinary Shares 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 Securities Act of 1933
and will be governed by the final adjudication of such issue.
Amendment No. 1 to Prospectus Supplement
dated January 27, 2020
We may offer, issue and sell from time to
time up to $290,000,000, or its equivalent in any other currency, currency units, or composite currency or currencies, of our ordinary
shares, including in the form of preferred shares, warrants to purchase ordinary shares or preferred shares, subscription rights,
debt securities and a combination of such securities, separately or as units, in one or more offerings. This prospectus provides
a general description of offerings of these securities that we may undertake.
We refer to our ordinary shares, preferred
shares, warrants, subscription rights, debt securities, and units collectively as “securities” in this prospectus.
Each time we sell our securities pursuant
to this prospectus, we will provide the specific terms of such offering in a supplement to this prospectus. The prospectus supplement
may also add, update, or change information contained in this prospectus. You should read this prospectus, the accompanying prospectus
supplement, together with the additional information described under the heading “Where You Can More Find Information,”
before you make your investment decision.
We may, from time to time, offer to sell
the securities, through public or private transactions, directly or through underwriters, agents or dealers, on or off The NASDAQ
Capital Market, at prevailing market prices or at privately negotiated prices. If any underwriters, agents or dealers are involved
in the sale of any of these securities, the applicable prospectus supplement will set forth the names of the underwriter, agent
or dealer and any applicable fees, commissions or discounts.
Our Ordinary Shares are listed on The NASDAQ
Capital Market under the symbol “LKCO”. On August 6, 2019, the last reported price of our Ordinary Shares on The NASDAQ
Capital Market was $9.22 per ordinary share.
The date of this prospectus is August 7,
2019
TABLE OF CONTENTS
You should rely only on the information
contained or incorporated by reference in this prospectus or any supplement. We have not authorized any other person to provide
you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We
are not, and any underwriter or agent is not, making an offer to sell these securities in any jurisdiction where the offer or sale
is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front
cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process.
Under this shelf registration process, we may sell our securities described in this prospectus in one or more offerings up to a
total dollar amount of $290,000,000. Each time we offer our securities, we will provide you with a supplement to this prospectus
that will describe the specific amounts, prices and terms of the securities we offer. The prospectus supplement may also add, update
or change information contained in this prospectus. This prospectus, together with applicable prospectus supplements and the documents
incorporated by reference in this prospectus and any prospectus supplements, includes all material information relating to this
offering. Please read carefully both this prospectus and any prospectus supplement together with additional information described
below under “Where You Can Find More Information” and “Incorporation of Certain Information by Reference.”
You should rely only on the information
contained in or incorporated by reference in this prospectus and any applicable prospectus supplement. We have not authorized anyone
to provide you with different or additional information. If anyone provides you with different or inconsistent information, you
should not rely on it. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or any sale of securities described in this prospectus. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale
is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as
information we have previously filed with the SEC and incorporated by reference, is accurate as of the date on the front of those
documents only. Our business, financial condition, results of operations and prospects may have changed since those dates. This
prospectus may not be used to consummate a sale of our securities unless it is accompanied by a prospectus supplement.
In this prospectus, unless we indicate otherwise,
“we”, “us”, “our”, “the Company” and “Luokung” refere to Luokung Technology
Corp., as consolidated with its various subsidiaries. References to “ordinary shares”, “preference shares”,
“warrants” and “share capital” refer to the ordinary shares, preference shares, warrants and share capital,
respectively, of Luokung.
Certain figures included in this prospectus
have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation
of the figures that precede them.
We have not authorized anyone to provide
you with information that is different from that contained in this prospectus, any amendment or supplement to this prospectus,
or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and
can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is not an offer
to sell securities, and it is not soliciting an offer to buy securities, in any jurisdiction where the offer or sale is not permitted.
The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the
time of delivery of this prospectus or any sale of the securities. For investors outside of the United States: We have not taken
any action to permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that
purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions
relating to this offering and the distribution of this prospectus.
In this prospectus, we have used industry
and market data obtained from our own internal estimates and research as well as from industry publications and research, surveys
and studies conducted by third parties. We have compiled, extracted and reproduced industry and market data from external sources
that we believe to be reliable. We caution prospective investors not to place undue reliance on the above mentioned data. Unless
otherwise indicated in the prospectus, the basis for any statements regarding our competitive position is based on our own assessment
and knowledge of the market in which we operate. The industry in which we operate is subject to a high degree of uncertainty and
risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors
could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
Solely for convenience, the trademarks and
trade names in this prospectus are referred to without the ® and ™ symbols, but such references should not be construed
as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
The trademarks, trade names and service marks in this prospectus are the property of other respective owners.
We are a “foreign private issuer”
as defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, our proxy
solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act and transactions
in our equity securities by our officers and directors are exempt from Section 16 of the Exchange Act. In addition, we are
not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies
whose securities are registered under the Exchange Act.
BUSINESS DESCRIPTION
LUOKUNG TECHNOLOGY CORP.
We are a holding company and conduct our
operations through our wholly-owned subsidiary named LK Technology Ltd., a company incorporated under the laws of the British Virgin
Islands (“LK Technology”), and its wholly-owned subsidiaries, MMB Limited and its respective subsidiaries, which possess
two core brands “Luokuang” and “SuperEngine”. “Luokuang” is a mobile application to provide
Business to Customer (B2C) location-based services and “SuperEngine” provides Business to Business (B2B) and Business
to Government (B2G) services in connection with spatial-temporal big data processing.
We are a China-based provider of location-based
services and mobile application products for long distance travelers in China. Our primary mobile application, the Luokung platform,
consists of the Luokung mobile applications, a series of supporting software at the server end, and rail-Wi-Fi hardware and equipment
on the trains that we serve. The LuoKung platform incorporates technologies covered by 22 patents and about 34 software copyrights,
and serves as a content and service distribution platform that is tailored for particular travel stages featuring geographic location
and social interactions. The content and services distributed by Luokung contain information, entertainment, travel, e-commerce,
online to offline (“O2O”), advertisement and other marketing features.
Luokung mainly provides personalized and
targeted services to long distance travelers in two locations: on the train and at the destination. Based on the travel environment,
the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations
upon arrival. The main services contain entertainment services (videos and audio, digital readings, games specific and tailored
to the travel stage) and social services (satisfying the demand for value discovery of unfamiliar destinations through social
interaction among strangers based on locations). As of December 31, 2018, the Luokung platform featured about 51 million users.
We use the most valuable Wi-Fi location—the
train Wi-Fi setting—as the entrance of our Luokuang platform and mobile applications. Passengers typically ride trains for
long-distance and inter-provincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic
fees enable the combination of entertainment content service needs and Wi-Fi access needs. Our rail-Wi-Fi becomes a valuable and
sophisticated Wi-Fi service in this setting—not just Wi-Fi connection service, but a provider of sophisticated services through
a Wi-Fi connection. We do not define ourselves as a train Wi-Fi communication service operator but as a long-distance travel mobile
service and location-based service provider. The rail Wi-Fi is our access point to a significant pool of users and the entrance
to acquiring additional users.
The recommender services focus on providing
targeted push services to users while travelling in unfamiliar cities. Local information and guidance service are precisely pushed
according to individual user’s interest and taste, including restaurants, entertainment, living styles, local snacks, local
products, scenic spots, cultural history and stories. The guidance service is User Generated Content which is shared and distributed
by individual users including travelers, local residents and local businesses.
In June 2018, China Railway Gecent Technology
Co., Ltd. (or “Gecent”) (established jointly by China Railway Investment Co., Ltd., Geely Holding Group and Tencent
Holdings Ltd.) obtained the exclusive right to build and operate on train Wi-Fi for all the High-speed trains in China. It provides
a full-travelling service including on train Wi-Fi, entertainments, news, online meals order, online specialty retailer and connecting
travel. As the pathfinder in on-train Wi-Fi market in China, we have accumulated great experiences and resources in construction
and operation on train Wi-Fi on express trains in China, which enable us to cooperate with Gecent to provide location-based services
through the provision of our map SDKs (Software Development Kit) and APIs (Application-programming Interface), including services
at train stations covering navigation and OTO services, and to provide movie content SDK, movie copyrights and operating services
to the users of Gecent’s mobile application. Through the cooperation with Gecent, we are able to expand our services to more
valuable high-speed train passengers, while the high-speed train Wi-Fi in China will cover about 3 billion passenger trips till
the year of 2020.
Through the acquisition of Superengine
Holding Limited (“Superengine”), we obtained patented technologies in spatial-temporal big data indexing, storage,
transmission and visualization that can support the full vector maps without tile, which can be effectively applied to HD maps,
location-based services, smart cities, intelligent transportation systems, mapping and surveying, remote sensing and monitoring.
We possess fifteen patents and nine patent application rights in U.S., Europe, Japan and China. Our graphics processing system
is a thousand times more efficient than competing technologies in querying, retrieving, transmitting and rendering graphical information,
and allowing TB (Terabyte) sized data to be released in seconds, which enable our customers to obtain real-time operational intelligence
by harnessing the value of their database.
Other Recent Events
We are a holding company and conduct our
operations through our wholly-owned subsidiary named LK Technology Ltd., a company incorporated under the laws of the British Virgin
Islands (“LK Technology”), and its wholly-owned subsidiaries, MMB Limited and its respective subsidiaries, which possess
two core brands “Luokung” and “SuperEngine”. “Luokung” is a mobile application to provide Business
to Customer (B2C) location-based services and “SuperEngine” provides Business to Business (B2B) and Business to Government
(B2G) services in connection with spatial-temporal big data processing. In May 2010, we consummated an initial public offering
of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed on the NASDAQ Capital Market
under the ticker symbol “KONE”. On August 17, 2018, we completed the transactions contemplated by the Asset Exchange
Agreement (“AEA”) with C Media Limited (“C Media”) entered into on January 25, 2018. On August 20, 2018,
we changed our name to Luokung Technology Corp., our American Depository Shares (“ADSs”) were voluntarily delisted
from the NASDAQ Capital Market on September 19, 2018 and on January 3, 2019 our ordinary shares started trading on NASDAQ under
the ticker symbol “LKCO”.
On August 17, 2018, we consummated an asset
exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in Topsky Info-Tech Holdings Pte
Ltd., the parent of Xi’an Softech Co., Ltd, for the issued and outstanding capital stock of LK Technology (the “Asset
Exchange”). In connection with the Asset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued
to the shareholders of C Media Limited, the former parent of LK Technology, (i) 185,412,599 of our ordinary shares, par value $0.01
per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the Asset Exchange, we ceased our previous business
operations and became a company focused on the provision of location-based service and mobile application products for long distance
rail travelers in China.
On August 25, 2018, LK Technology entered
into a Stock Purchase Agreement (the “Agreement”) with the shareholders of Superengine, a limited liability company
organized under the laws of the British Virgin Islands, pursuant to which LK Technology acquired all of the issued and outstanding
capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid
by the issuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average
of the closing prices of the Ordinary Shares on the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We
are a party to the Agreement in connection with the issuance of the Ordinary Shares and certain other limited purposes.
Corporate Information
Our principal executive offices are located
at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Our website
is www.luokung.com. We routinely post important information on our website. The information contained
on our website is not a part of this annual report.
Our agent for service of process in the
United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address of One University
Plaza, Suite 505, Hackensack, New Jersey 07601.
RISK FACTORS
An investment in our ordinary shares involves
risk. Before you invest in ordinary shares issued by us, you should carefully consider the risks involved. Accordingly, you should
carefully consider:
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the information contained in or incorporated by reference into this prospectus;
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the risks described in page 3 to page 19 of our Annual Report on Form 20-F, filed on April 24, 2019, for our most recent fiscal year, which are incorporated by reference into this prospectus; and
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other risks and other information that may be contained in, or incorporated by reference from, other filings we make with the SEC.
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The risk factors related to our business
contained in or incorporated by reference into this prospectus comprise the material risks of which we are aware. If any of the
events or developments described actually occurs, our business, financial condition or results of operations would likely suffer.
Going Concern Note
The Company’s consolidated financial
statements that are incorporated by reference have been prepared on a going concern basis, which contemplates the realization
of assets and liquidation of liabilities during the normal course of operations. The Company incurred losses from operations of
$10,819,852, $6,871,542 and $12,283,219 for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31,
2018, the Company had cash of $1,192,218 and a working capital deficit of $2,195,377. These conditions indicate the existence
of substantial doubt over the Company’s ability to continue as a going concern. In order to alleviate the substantial doubt,
the Company intend to meet the cash requirements for the next 12 months from the issuance date of this report through a combination
of debt and equity financing such as by way of private placements.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains forward-looking
statements that are based on our current expectations, assumptions, estimates and projections about our Company and industry and
involve risks and uncertainties. All statements other than statements of historical fact in this prospectus are forward-looking
statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These
statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigations Reform Act of 1995.
You can identify these forward-looking statements
by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,”
“estimate,” “intend,” “plan,” “believe,” “likely to” or other similar
expressions. We have based these forward-looking statements largely on our current expectations and projections about future events
and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial
needs. These forward-looking statements include, but are not limited to, statements about:
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our future business development, results of operations and financial condition;
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expected changes in our net revenues and certain cost or expense items;
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our ability to attract and retain customers; and
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trends and competition in the spatial-temporal big-data processing and interactive location-based services market.
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You should read this prospectus and the
documents that we refer to in this prospectus and have filed as exhibits to this prospectus completely and with the understanding
that our actual future results may be materially different from what we expect. Other sections of this annual report discuss factors
which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk
factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact
of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary
statements.
You should not rely upon forward-looking
statements as predictions of future events. The forward-looking statements made in this prospectus relate only to events or information
as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update
or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the
date on which the statements are made or to reflect the occurrence of unanticipated events.
USE OF PROCEEDS
Except as otherwise provided in the applicable
prospectus supplement, we intend to use the net proceeds from the sale of the securities offered by this prospectus for general
corporate purposes, which may include working capital, capital expenditures, research and development expenditures and the acquisitions
of new technologies and investments.
CAPITALIZATION
The following table sets forth our capitalization
as of December 31, 2018. You should read this table in conjunction with our consolidated financial statements and the related notes
included in our annual report on Form 20-F for the year ended December 31, 2018, which are incorporated by reference
herein.
The capitalization table does not include
pro-forma adjustments for the number of shares which are being registered on the registration statement of which this prospectus
is a part and may be sold under the prospectus, because the full number of shares that may be sold cannot be specifically determined
as it will be based on the market price of an ordinary share from time to time when puts are made by the Company.
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As of December 31,
2018
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USD$
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Long term borrowings
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244,755
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Shareholders’ equity:
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Preferred Shares ($0.01 par value; 1,000,000 shares authorized, issued and outstanding)
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10,000
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Ordinary Shares ($0.01 par value; 250,000,000 shares authorized; 199,317,558 shares issued and outstanding)
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1,993,176
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Additional paid in capital
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102,125,814
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Accumulated deficit
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(41,863,694
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Accumulated other comprehensive loss
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835,463
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Total Luokung Technology Corp. shareholders’ equity
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63,100,759
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Total equity
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63,100,759
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Total capitalization
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63,345,514
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Plan of Distribution
The Securities being offered by this prospectus
may be sold:
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to or through one or more underwriters on a firm commitment or agency basis;
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through put or call option transactions relating to the securities;
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to or through dealers, who may act as agents or principals, including a block trade (which may involve crosses) in which a broker or dealer so engaged will attempt to sell as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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through privately negotiated transactions;
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purchases by a broker or dealer as principal and resale by such broker or dealer for its own account pursuant to this prospectus;
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directly to purchasers, including our affiliates, through a specific bidding or auction process, on a negotiated basis or otherwise; to or through one or more underwriters on a firm commitment or best efforts basis;
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exchange distributions and/or secondary distributions;
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ordinary brokerage transactions and transactions in which the broker solicits purchasers;
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in “at-the-market” offerings, within the meaning of Rule 415(a)(4) of the Securities Act to or through a market maker or into an existing trading market, on an exchange or otherwise;
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transactions not involving market makers or established trading markets, including direct sales or privately negotiated transactions;
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transactions in options, swaps or other derivatives that may or may not be listed on an exchange or
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through any other method permitted pursuant to applicable law; or
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through a combination of any such methods of sale.
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At any time a particular offer of the securities
covered by this prospectus is made, a revised prospectus or prospectus supplement, if required, will be distributed which will
set forth the aggregate amount of securities covered by this prospectus being offered and the terms of the offering, including
the name or names of any underwriters, dealers, brokers or agents, any discounts, commissions, concessions and other items constituting
compensation from us and any discounts, commissions or concessions allowed or re-allowed or paid to dealers. Such prospectus supplement,
and, if necessary, a post-effective amendment to the registration statement of which this prospectus is a part, will be filed with
the SEC to reflect the disclosure of additional information with respect to the distribution of the securities covered by this
prospectus. In order to comply with the securities laws of certain states, if applicable, the securities sold under this prospectus
may only be sold through registered or licensed broker-dealers. In addition, in some states the securities may not be sold unless
they have been registered or qualified for sale in the applicable state or an exemption from registration or qualification requirements
is available and is complied with.
The distribution of securities may be effected
from time to time in one or more transactions, including block transactions and transactions on The NASDAQ Capital Market or any
other organized market where the securities may be traded. 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 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. Any 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. If any such dealers or agents were deemed to be underwriters, they may be subject to statutory liabilities
under the Securities Act.
Agents may from time to time solicit offers
to purchase the securities. If required, we will name in the applicable prospectus supplement any agent involved in the offer or
sale of the securities and set forth any compensation payable to the agent. Unless otherwise indicated in the prospectus supplement,
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, as that term is defined in the Securities Act, of the securities.
To the extent that we make sales to or through
one or more underwriters or agents in at-the-market offerings, we will do so pursuant to the terms of a distribution agreement
between us and the underwriters or agents. If we engage in at-the-market sales pursuant to a distribution agreement, we will sell
any of our listed securities to or through one or more underwriters or agents, which may act on an agency basis or on a principal
basis. During the term of any such agreement, we may sell any of our listed securities on a daily basis in exchange transactions
or otherwise as we agree with the underwriters or agents. The distribution agreement will provide that any of our listed securities
which are sold will be sold at prices related to the then prevailing market prices for our listed securities. Therefore, exact
figures regarding proceeds that will be raised or commissions to be paid cannot be determined at this time and will be described
in a prospectus supplement. Pursuant to the terms of the distribution agreement, we also may agree to sell, and the relevant underwriters
or agents may agree to solicit offers to purchase, blocks of our listed securities. The terms of each such distribution agreement
will be set forth in more detail in a prospectus supplement to this prospectus.
If underwriters are used in a sale, 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,
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. The prospectus and prospectus supplement 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 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 within the meaning of the Securities Act with respect to any resale of the securities. To the extent required, the
prospectus supplement 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 will describe the terms and conditions of the 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.
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 Securities Exchange Act of 1934, as amended, or 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 that 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, penalty bids and other transactions that stabilize,
maintain or otherwise affect the price of the offered securities. These activities may maintain the price of the offered securities
at levels above those that might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate
covering transactions or imposing penalty bids, each of which is described below:
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a stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of a security.
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a syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering.
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a penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with the offering when offered securities originally sold by the syndicate member are purchased in syndicate covering transactions.
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These transactions may be effected on an
exchange or automated quotation system, if the securities are listed on that exchange or admitted for trading on that automated
quotation system, or in the over-the-counter market or otherwise.
If so indicated in the applicable prospectus
supplement, we will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase
offered securities from us at the public offering price set forth in such prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set
forth in the prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such
contracts.
In addition, the securities may be issued
upon conversion of or in exchange for debt securities or other securities.
Any underwriters to whom offered securities
are sold for public offering and sale may make a market in such offered securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. The offered securities may or may not be listed on a
national securities exchange. No assurance can be given that there will be a market for the offered securities.
Any securities that qualify for sale pursuant
to Rule 144 or Regulation S under the Securities Act, may be sold under Rule 144 or Regulation S rather than
pursuant to this prospectus.
In connection with offerings made through
underwriters or agents, we may enter into agreements with such underwriters or agents pursuant to which we receive our outstanding
securities in consideration for the securities being offered to the public for cash. In connection with these arrangements, the
underwriters or agents may also sell securities covered by this prospectus to hedge their positions in these outstanding securities,
including in short sale transactions. If so, the underwriters or agents may use the securities received from us under these arrangements
to close out any related open borrowings of securities.
We may enter into derivative transactions
with third parties or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If
the applicable prospectus supplement indicates, in connection with those derivatives, such third parties (or affiliates of such
third parties) may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, such third parties (or affiliates of such third parties) may use securities pledged by us or borrowed from
us or others to settle those sales or to close out any related open borrowings of shares, and may use securities received from
us in settlement of those derivatives to close out any related open borrowings of shares. The third parties (or affiliates of such
third parties) in such sale transactions will be underwriters and will be identified in the applicable prospectus supplement (or
a post-effective amendment).
We may loan or pledge securities to a financial
institution or other third party that in turn may sell the securities using this prospectus. Such financial institution or third
party may transfer its short position to investors in our securities or in connection with a simultaneous offering of other securities
offered by this prospectus or in connection with a simultaneous offering of other securities offered by this prospectus.
DESCRIPTION OF SHARE CAPITAL
As of the date of this prospectus, our memorandum
and articles of association authorize the issuance of up to a maximum of 251,000,000 shares, which are designated as (i) 250,000,000
of ordinary shares of which 200,317,558 ordinary shares are issued and outstanding, and (ii) 1,000,000 preferred shares of which
1,000,000 preferred shares are issued and outstanding, in each case with the rights, preferences and privileges as set out in the
memorandum and articles of association of the Company.
The following is a
summary of the material provisions of our ordinary shares and our memorandum and articles of association.
Ordinary Shares
All of our issued and
outstanding ordinary shares are fully paid and non-assessable. Holders of our ordinary shares who are non-residents of the British
Virgin Islands may freely hold and vote their shares.
Subject to the memorandum
and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders
of any other shares), an ordinary share of the Company confers on the holder:
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(a)
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the right to one vote at a meeting of the members or on any resolution of members;
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(b)
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the right to an equal share in any distribution paid by the Company; and
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(c)
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the right to an equal share in the distribution of the surplus assets of the Company on a winding up.
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Subject to the memorandum
and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders
of any other shares), a preferred share of the Company confers on the holder:
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(a)
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the right to 399 votes at a meeting of the members or on any resolution of members;
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(b)
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the right to an equal share in any distribution paid by the Company;
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(c)
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the right to an equal share in the distribution of the surplus assets of the Company on a winding up;
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(d)
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be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more private transactions, subject to applicable law; and
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(e)
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be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more public transactions, subject to applicable law and automatic conversion of such preferred share(s) into ordinary share(s).
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Each Preferred Share shall be automatically
converted at any time after issue and without the payment of any additional sum into an equal number of fully paid Ordinary Shares
upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
The following includes
a description of securities we may offer pursuant to the registration statement of which this prospectus, as the same may be supplemented,
forms a part, does not purport to be complete and is subject to and qualified in its entirety by our memorandum of association
and articles of association and by the applicable provisions of British Virgin Islands law.
We, directly or through
agents, dealers or underwriters designated from time to time, may offer, issue and sell, together or separately, up to $290,000,000
in the aggregate of:
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secured or unsecured debt securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities, senior subordinated debt securities or subordinated debt securities, each of which may be convertible into equity securities;
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warrants to purchase our securities;
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rights to purchase our securities; or
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units comprised of, or other combinations of, the foregoing securities.
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We may issue the debt
securities as exchangeable for or convertible into ordinary shares, preferred shares or other securities. The preferred shares
may also be exchangeable for and/or convertible into ordinary shares of, another series of preferred shares or other securities.
The debt securities, the preferred shares, the ordinary shares and the warrants are collectively referred to in this prospectus
as the “Securities.” When a particular series of securities is offered, a supplement to this prospectus will be delivered
with this prospectus, which will set forth the terms of the offering and sale of the offered securities.
Ordinary Shares
As of the date of this prospectus, our memorandum
and articles of association authorize the issuance of up to a maximum of 251,000,000 shares, which are designated as (i) 250,000,000
of ordinary shares of which 200,317,558 ordinary shares are issued and outstanding, and (ii) 1,000,000 preferred shares of which
1,000,000 preferred shares are issued and outstanding, in each case with the rights, preferences and privileges as set out in the
memorandum and articles of association of the Company.
The following is a
summary of the material provisions of our ordinary shares and our memorandum and articles of association.
All of our issued and
outstanding ordinary shares are fully paid and non-assessable. Holders of our ordinary shares who are non-residents of the British
Virgin Islands may freely hold and vote their shares.
Subject to the memorandum
and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders
of any other shares), an ordinary share of the Company confers on the holder:
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(a)
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the right to one vote at a meeting of the members or on any resolution of members;
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(b)
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the right to an equal share in any distribution paid by the Company; and
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(c)
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the right to an equal share in the distribution of the surplus assets of the Company on a winding up.
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Preferred Shares
As of the date of this
prospectus, our memorandum and articles of association authorize the issuance of up to a maximum of 1,000,000 preferred shares
of which 1,000,000 preferred shares are issued and outstanding, in each case with the rights, preferences and privileges as set
out in the memorandum and articles of association of the Company. As of the date of this prospectus, no preferred shares were authorized
and not issued and outstanding.
Subject to the memorandum
and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders
of any other shares), a preferred share which is currently issued and outstanding confers on the holder:
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(a)
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the right to 399 votes at a meeting of the members or on any resolution of members;
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(b)
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the right to an equal share in any distribution paid by the Company;
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(c)
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the right to an equal share in the distribution of the surplus assets of the Company on a winding up;
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(d)
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be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more private transactions, subject to applicable law; and
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(e)
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be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more public transactions, subject to applicable law and automatic conversion of such preferred share(s) into Ordinary Share(s).
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Each Preferred Share shall be automatically
converted at any time after issue and without the payment of any additional sum into an equal number of fully paid Ordinary Shares
upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.
Our board may fix the
rights, preferences, privileges and restrictions of authorized but undesignated preferred shares, including:
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dividend rights and preferences over dividends on our ordinary shares or any series of preferred shares;
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the dividend rate (and whether dividends are cumulative);
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conversion rights, if any;
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rights and terms of redemption (including sinking fund provisions, if any);
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redemption price and liquidation preferences of any wholly unissued series of any preferred shares and the designation thereof of any of them; and
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to increase or decrease the number of shares of any series subsequent to the issue of shares of that series but not below the number of shares then outstanding.
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You should refer to
the prospectus supplement relating to the series of preferred shares being offered for the specific terms of that series, including:
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title of the series and the number of shares in the series;
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the price at which the preferred shares will be offered;
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the dividend rate or rates or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends on the preferred shares being offered will cumulate;
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the voting rights, if any, of the holders of the preferred shares being offered;
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the provisions for a sinking fund, if any, and the provisions for redemption, if applicable, of the preferred shares being offered, including any restrictions on the foregoing as a result of arrearage in the payment of dividends or sinking fund installments;
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the liquidation preferred per share;
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the terms and conditions, if applicable, upon which the preferred shares being offered will be convertible into our ordinary shares, including the conversion price, or the manner of calculating the conversion price, and the conversion period;
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any listing of preferred shares being offered on any securities exchange;
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a discussion of any material federal income tax considerations applicable to the preferred shares being offered;
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the relative ranking and preferences of the preferred shares being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs;
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any limitations on the issuance of any class or series of preferred shares ranking senior or equal to the series of preferred shares being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs; and
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any additional rights, preferences, qualifications, limitations and restrictions of the series.
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Upon issuance, the preferred
shares will be fully paid and nonassessable, which means that its holders will have paid their purchase price in full and we may
not require them to pay additional funds.
Any preferred shares terms
selected by our board of directors could decrease the amount of earnings and assets available for distribution to holders of our
ordinary shares or adversely affect the rights and power, including voting rights, of the holders of our ordinary shares without
any further vote or action by the shareholders. The rights of holders of our ordinary shares will be subject to, and may be adversely
affected by, the rights of the holders of any preferred shares that may be issued by us in the future. The issuance of preferred
shares could also have the effect of delaying or preventing a change in control of our company or make removal of management more
difficult.
DESCRIPTION OF WARRANTS
We may issue and offer warrants under the
material terms and conditions described in this prospectus and any accompanying prospectus supplement. The accompanying prospectus
supplement may add, update or change the terms and conditions of the warrants as described in this prospectus.
We may issue warrants to purchase our ordinary
shares, preferred shares and/or debt securities. Warrants may be issued independently or together with any securities and may be
attached to or separate from those securities. The warrants may be issued under warrant or subscription agreements to be entered
into between us and a bank or trust company, as warrant agent, all of which will be described in the prospectus supplement relating
to the warrants we are offering. The warrant agent will act solely as our agent in connection with the warrants and will not have
any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.
The particular terms of the warrants, the
warrant or subscription agreements relating to the warrants and the warrant certificates representing the warrants will be described
in the applicable prospectus supplement, including, as applicable:
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the title of such warrants;
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the aggregate number of such warrants;
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the price or prices at which such warrants will be issued and exercised;
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the currency or currencies in which the price of such warrants will be payable;
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the securities purchasable upon exercise of such warrants;
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the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;
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if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;
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if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;
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if applicable, the date on and after which such warrants and the related securities will be separately transferable;
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if applicable, any provisions for cashless exercise of the warrants;
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if applicable; any exercise limitations with respect to the ownership limitations by the holder exercising the warrant;
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information with respect to book-entry procedures, if any;
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any material United States federal income tax consequences;
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the anti-dilution provisions of the warrants, if any; and
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any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.
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Holders of warrants will not be entitled,
solely by virtue of being holders, to vote, to consent, to receive dividends, to receive notice as shareholders with respect to
any meeting of shareholders for the election of directors or any other matters, or to exercise any rights whatsoever as a holder
of the equity securities purchasable upon exercise of the warrants.
The description in the applicable prospectus
supplement of any warrants we offer will not necessarily be complete and will be qualified in its entirety by reference to the
applicable warrant agreement and warrant certificate, which will be filed with the SEC if we offer warrants. For more information
on how you can obtain copies of the applicable warrant agreement if we offer warrants, see “Where You Can Find More Information”
and “Incorporation of Certain Information by Reference.” We urge you to read any applicable prospectus supplement and
the applicable warrant agreement and form of warrant certificate in their entirety.
DESCRIPTION OF SUBSCRIPTION RIGHTS
We may issue subscription rights to purchase
our ordinary shares and/or preferred shares. These subscription rights may be issued independently or together with any other security
offered hereby and may or may not be transferable by the shareholder receiving the subscription rights in such offering. In connection
with any offering of subscription rights, we may enter into a standby arrangement with one or more underwriters or other purchasers
pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after
such offering.
The prospectus supplement relating to any
subscription rights we offer, if any, will, to the extent applicable, include specific terms relating to the offering, including
some or all of the following:
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the price, if any, for the subscription rights;
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the exercise price payable for each ordinary share and/or preferred share upon the exercise of the subscription rights;
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the number of subscription rights to be issued to each shareholder;
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the number and terms of the ordinary shares and/or preferred shares which may be purchased per each subscription right;
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the extent to which the subscription rights are transferable;
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any other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;
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the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;
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the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities; and
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if applicable, the material terms of any standby underwriting or purchase arrangement which may be entered into by us in connection with the offering of subscription rights.
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The description in the applicable prospectus
supplement of any subscription rights we offer will not necessarily be complete and will be qualified in its entirety by reference
to the applicable subscription right agreement, which will be filed with the SEC if we offer subscription rights. For more information
on how you can obtain copies of the applicable subscription right agreement if we offer subscription rights, see “Where You
Can Find More Information” and “Incorporation of Certain Information by Reference.” We urge you to read the applicable
subscription right agreement and any applicable prospectus supplement in their entirety.
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities from time to
time, in one or more series, as senior, subordinated debt and/or convertible debt. While the terms we have summarized below will
apply generally to any debt securities that we may offer under this prospectus, we will describe the particular terms of any debt
securities that we may offer in more detail in the applicable prospectus supplement. The terms of any debt securities offered under
a prospectus supplement may differ from the terms described below. Unless the context requires otherwise, whenever we refer to
the indenture, we also are referring to any supplemental indentures that specify the terms of a particular series of debt securities.
We will issue the debt securities under
the indenture that we will enter into with the trustee named in the indenture. The indenture will be qualified under the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act”). We have filed the form of indenture as an exhibit to
the registration statement of which this prospectus is a part, and supplemental indentures and forms of debt securities containing
the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus
is a part or will be incorporated by reference from reports that we file with the SEC.
The following summary of material provisions
of the debt securities and the indenture is subject to, and qualified in its entirety by reference to, all of the provisions of
the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements and
any related free writing prospectuses related to the debt securities that we may offer under this prospectus, as well as the complete
indenture that contains the terms of the debt securities.
General
The indenture does not limit the amount
of debt securities that we may issue. It provides that we may issue debt securities up to the principal amount that we may authorize
and may be in any currency or currency unit that we may designate. Except for the limitations on consolidation, merger and sale
of all or substantially all of our assets contained in the indenture, the terms of the indenture do not contain any covenants or
other provisions designed to give holders of any debt securities protection against changes in our operations, financial condition
or transactions involving us.
We may issue the debt securities issued
under the indenture as “discount securities,” which means they may be sold at a discount below their stated principal
amount. These debt securities, as well as other debt securities that are not issued at a discount, may be issued with “original
issue discount,” or OID, for U.S. federal income tax purposes because of interest payment and other characteristics or terms
of the debt securities. Material U.S. federal income tax considerations applicable to debt securities issued with OID will be described
in more detail in any applicable prospectus supplement.
We will describe in the applicable prospectus
supplement the terms of the series of debt securities being offered, including:
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the title of the series of debt securities;
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any limit upon the aggregate principal amount that may be issued;
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the maturity date or dates;
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the form of the debt securities of the series;
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whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;
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whether the debt securities rank as senior debt, senior subordinated debt, subordinated debt or any combination thereof, and the terms of any subordination;
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if the price (expressed as a percentage of the aggregate principal amount thereof) at which such debt securities will be issued is a price other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof, or if applicable, the portion of the principal amount of such debt securities that is convertible into another security or the method by which any such portion shall be determined;
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the interest rate or rates, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;
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our right, if any, to defer payment of interest and the maximum length of any such deferral period;
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if applicable, the date or dates after which, or the period or periods during which, and the price or prices at which, we may, at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those redemption provisions;
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the date or dates, if any, on which, and the price or prices at which we are obligated, pursuant to any mandatory sinking fund or analogous fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities and the currency or currency unit in which the debt securities are payable;
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the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof;
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any and all terms, if applicable, relating to any auction or remarketing of the debt securities of that series and any security for our obligations with respect to such debt securities and any other terms which may be advisable in connection with the marketing of debt securities of that series;
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whether the debt securities of the series shall be issued in whole or in part in the form of a global security or securities;
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the terms and conditions, if any, upon which such global security or securities may be exchanged in whole or in part for other individual securities, and the depositary for such global security or securities;
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if applicable, the provisions relating to conversion or exchange of any debt securities of the series and the terms and conditions upon which such debt securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or optional (at our option or the holders’ option) conversion or exchange features, the applicable conversion or exchange period and the manner of settlement for any conversion or exchange;
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if other than the full principal amount thereof, the portion of the principal amount of debt securities of the series which shall be payable upon declaration of acceleration of the maturity thereof;
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additions to or changes in the covenants applicable to the particular debt securities being issued, including, among others, the consolidation, merger or sale covenant;
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additions to or changes in the events of default with respect to the securities and any change in the right of the trustee or the holders to declare the principal, premium, if any, and interest, if any, with respect to such securities to be due and payable;
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additions to or changes in or deletions of the provisions relating to covenant defeasance and legal defeasance;
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additions to or changes in the provisions relating to satisfaction and discharge of the indenture;
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additions to or changes in the provisions relating to the modification of the indenture both with and without the consent of holders of debt securities issued under the indenture;
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the currency of payment of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars;
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whether interest will be payable in cash or additional debt securities at our or the holders’ option and the terms and conditions upon which the election may be made;
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the terms and conditions, if any, upon which we will pay amounts in addition to the stated interest, premium, if any and principal amounts of the debt securities of the series to any holder that is not a “United States person” for federal tax purposes;
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any restrictions on transfer, sale or assignment of the debt securities of the series; and
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any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, any other additions or changes in the provisions of the indenture, and any terms that may be required by us or advisable under applicable laws or regulations.
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Conversion or Exchange Rights
We will set forth in the applicable prospectus
supplement the terms on which a series of debt securities may be convertible into or exchangeable for our ordinary shares or our
other securities. We will include provisions as to settlement upon conversion or exchange and whether conversion or exchange is
mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our
ordinary shares or our other securities that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus
supplement applicable to a particular series of debt securities, the indenture will not contain any covenant that restricts our
ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of our assets as an entirety or substantially as
an entirety. However, any successor to or acquirer of such assets (other than a subsidiary of ours) must assume all of our obligations
under the indenture or the debt securities, as appropriate.
Events of Default under the Indenture
Unless we provide otherwise in the prospectus
supplement applicable to a particular series of debt securities, the following are events of default under the indenture with respect
to any series of debt securities that we may issue:
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if we fail to pay any installment of interest on any series of debt securities, as and when the same shall become due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by us in accordance with the terms of any indenture supplemental thereto shall not constitute a default in the payment of interest for this purpose;
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if we fail to pay the principal of, or premium, if any, on any series of debt securities as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to such series; provided, however, that a valid extension of the maturity of such debt securities in accordance with the terms of any indenture supplemental thereto shall not constitute a default in the payment of principal or premium, if any;
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if we fail to observe or perform any other covenant or agreement contained in the debt securities or the indenture, other than a covenant specifically relating to another series of debt securities, and our failure continues for 90 days after we receive written notice of such failure, requiring the same to be remedied and stating that such is a notice of default thereunder, from the trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and
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if specified events of bankruptcy, insolvency or reorganization occur.
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If an event of default with respect to debt
securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the
trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice
to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal of, premium, if any,
and accrued interest, if any, due and payable immediately. If an event of default specified in the last bullet point above occurs
with respect to us, the principal amount of and accrued interest, if any, of each issue of debt securities then outstanding shall
be due and payable without any notice or other action on the part of the trustee or any holder.
The holders of a majority in principal amount
of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and
its consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we
have cured the default or event of default in accordance with the indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the indenture, if
an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of
its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities,
unless such holders have offered the trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding
debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt securities of that
series, provided that:
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the direction so given by the holder is not in conflict with any law or the applicable indenture; and
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subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding.
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A holder of the debt securities of any series
will have the right to institute a proceeding under the indenture or to appoint a receiver or trustee, or to seek other remedies
only if:
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the holder has given written notice to the trustee of a continuing event of default with respect to that series;
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the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request,
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such holders have offered to the trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred by the trustee in compliance with the request; and
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the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions within 90 days after the notice, request and offer.
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These limitations do not apply to a suit
instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt
securities.
We will periodically file statements with
the trustee regarding our compliance with specified covenants in the indenture.
Modification of Indenture; Waiver
We and the trustee may change an indenture
without the consent of any holders with respect to specific matters:
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to cure any ambiguity, defect or inconsistency in the indenture or in the debt securities of any series;
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to comply with the provisions described above under “Description of Debt Securities—Consolidation, Merger or Sale;”
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to provide for uncertificated debt securities in addition to or in place of certificated debt securities;
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to add to our covenants, restrictions, conditions or provisions such new covenants, restrictions, conditions or provisions for the benefit of the holders of all or any series of debt securities, to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred upon us in the indenture;
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to add to, delete from or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication and delivery of debt securities, as set forth in the indenture;
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to make any change that does not adversely affect the interests of any holder of debt securities of any series in any material respect;
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to provide for the issuance of and establish the form and terms and conditions of the debt securities of any series as provided above under “Description of Debt Securities—General” to establish the form of any certifications required to be furnished pursuant to the terms of the indenture or any series of debt securities, or to add to the rights of the holders of any series of debt securities;
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to evidence and provide for the acceptance of appointment under any indenture by a successor trustee; or
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to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act.
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In addition, under the indenture, the rights
of holders of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least
a majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, unless we
provide otherwise in the prospectus supplement applicable to a particular series of debt securities, we and the trustee may make
the following changes only with the consent of each holder of any outstanding debt securities affected:
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extending the fixed maturity of any debt securities of any series;
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reducing the principal amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the redemption of any series of any debt securities; or
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reducing the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver.
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Discharge
The indenture provides that we can elect
to be discharged from our obligations with respect to one or more series of debt securities, except for specified obligations,
including obligations to:
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register the transfer or exchange of debt securities of the series;
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replace stolen, lost or mutilated debt securities of the series;
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pay principal of and premium and interest on any debt securities of the series;
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maintain paying agencies;
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hold monies for payment in trust;
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recover excess money held by the trustee;
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compensate and indemnify the trustee; and
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appoint any successor trustee.
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In order to exercise our rights to be discharged,
we must deposit with the trustee money or government obligations sufficient to pay all the principal of, any premium, if any, and
interest on, the debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each
series only in fully registered form without coupons and, unless we provide otherwise in the applicable prospectus supplement,
in denominations of $1,000 and any integral multiple thereof. The indenture provides that we may issue debt securities of a series
in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, a depositary named
by us and identified in the applicable prospectus supplement with respect to that series. To the extent the debt securities of
a series are issued in global form and as book-entry, a description of terms relating to any book entry securities will be set
forth in the applicable prospectus supplement.
At the option of the holder, subject to
the terms of the indenture and the limitations applicable to global securities described in the applicable prospectus supplement,
the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series,
in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indenture and
the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities
may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office
of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents
for transfer or exchange, we will impose no service charge for any registration of transfer or exchange, but we may require payment
of any taxes or other governmental charges.
We will name in the applicable
prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially
designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any
transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to
maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities
of any series, we will not be required to:
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issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or
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register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part.
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Information Concerning the Trustee
The trustee, other than during the occurrence
and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth
in the applicable indenture. Upon an event of default under an indenture, the trustee must use the same degree of care as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the trustee is under no obligation
to exercise any of the powers given it by the indenture at the request of any holder of debt securities, unless it is offered reasonable
security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable
prospectus supplement, we will make payment of the interest on any debt securities on any interest payment date to the person in
whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record
date for the interest.
We will pay principal of and any premium
and interest on the debt securities of a particular series at the office of the paying agents designated by us, except that unless
we otherwise indicate in the applicable prospectus supplement, we will make interest payments by check that we will mail to the
holder or by wire transfer to certain holders. Unless we otherwise indicate in the applicable prospectus supplement, we will designate
the corporate trust office of the trustee as our sole paying agent for payments with respect to debt securities of each series.
We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt securities
of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the
trustee for the payment of the principal of or any premium or interest on any debt securities that remains unclaimed at the end
of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt
security thereafter may look only to us for payment thereof.
Governing Law
The indenture and the debt securities will
be governed by and construed in accordance with the internal laws of the State of New York, except to the extent that the Trust
Indenture Act is applicable.
DESCRIPTION OF UNITS
We may issue units comprised of one or more
of the other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit
is also the holder of each security included in the unit. Thus, 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 applicable prospectus supplement will
describe:
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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;
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any unit agreement under which the units will be issued;
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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whether the units will be issued in fully registered or global form.
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The applicable prospectus supplement will
describe the terms of any units. The preceding description and any description of units in the applicable prospectus supplement
does not purport to be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable,
collateral arrangements and depositary arrangements relating to such units. For more information on how you can obtain copies of
the applicable unit agreement if we offer units, see “Where You Can Find More Information” and “Incorporation
of Certain Information by Reference.” We urge you to read the applicable unit agreement and any applicable prospectus supplement
in their entirety.
TAXATION
The material U.S. federal income tax consequences
relating to the purchase, ownership and disposition of any of the securities offered by this prospectus will be set forth in the
prospectus supplement offering those securities.
EXPENSES
We are paying all of the expenses of the
registration of our ordinary shares under the Securities Act, including, to the extent applicable, registration and filing fees,
printing and duplication expenses, administrative expenses, accounting fees and the legal fees of our counsel. We estimate these
expenses to be approximately $136,360 which at the present time include the following categories of expenses:
SEC registration fee
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$
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35,148
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Legal fees and expenses
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$
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50,000
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Accounting fees and expenses
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$
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5,000
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Total
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$
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90,148
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In addition, we anticipate incurring additional
expenses in the future in connection with the offering of our ordinary shares pursuant to this prospectus. Any such additional
expenses will be disclosed in a prospectus supplement.
LEGAL MATTERS
The validity of the ordinary shares offered
by this prospectus will be passed upon for us by Conyers Dill & Pearman 29th Floor, One Exchange Square, 8 Connaught
Place, Central, Hong Kong.
EXPERTS
The consolidated financial statements as
of December 2018 and 2017 and for the fiscal years ended December 31, 2018, 2017 and 2016 incorporated by reference into this prospectus
have been audited by Moore Stephens CPA Limited, an independent registered public accounting firm, to the extent and for the periods
set forth in their report incorporated herein by reference, and are incorporated by reference in reliance upon such report given
upon the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
Federal securities laws require us to file
information with the SEC concerning our business and operations. Accordingly, we file annual, quarterly and current reports with
the SEC. You may read and copy any document we file at the SEC’s public reference rooms, including those located at 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on public reference rooms.
Our SEC filings are also available to the public from the SEC’s web site at http://www.sec.gov.
We have filed with the SEC a
registration statement on Form F-3 under the Securities Act with respect to the ordinary shares being offering under this
prospectus. This prospectus, which is a part of that registration statement, does not include all the information contained
in the registration statement and its exhibits. For further information with respect to our Company and the ordinary shares,
you should consult the registration statement and its exhibits. Statements contained in this prospectus concerning the
provisions of any documents are summaries of those documents, and we refer you to the document filed with the SEC for more
information. The registration statement and any of its amendments, including exhibits filed as a part of the registration
statement or an amendment to the registration statement are available for inspection and copying as described above.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to “incorporate
by reference” certain information we file with them in this prospectus. This means that we can disclose important information
to you by referring you to the other information we have filed with the SEC. The information that we incorporate by reference is
considered to be part of this prospectus. Information that we file later with the SEC will automatically update and supersede this
information. Further, all filings we make under the Exchange Act prior to the termination of the offering shall be deemed to be
incorporated by reference into this prospectus. The following documents filed by us with the SEC and any future filings under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act made prior to the termination of this offering are incorporated by reference:
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our Annual Report on Form 20-F for the fiscal year ended December 31, 2018, filed on April 24, 2019;
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the description of the ordinary shares contained in our Registration Statement on Form 8-A, filed on May 7, 2010 (SEC File No. 001-34738), and any other amendment or report filed for the purpose of updating such description.
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This prospectus may contain information
that updates, modifies or is contrary to information in one or more of the documents incorporated by reference in this prospectus.
Reports we file with the SEC after the date of this prospectus may also contain information that updates, modifies or is contrary
to information in this prospectus or in documents incorporated by reference in this prospectus. Investors should review these reports
as they may disclose a change in our business, prospectus, financial condition or other affairs after the date of this prospectus.
We will also provide paper copies of our
filings free of charge upon written or oral request. You can request a free copy of the above filings or any filings subsequently
incorporated by reference into this prospectus by writing or calling us at:
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Luokung Technology Corp.
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Attention: Investor Relations
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LAB 32, SOHO 3Q, No 9, Guanghua Road
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Chaoyang District, Beijing
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People’s Republic of China, 100020
(tel.) (86) 10-85866721
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ENFORCEMENT OF CIVIL LIABILITIES
We are incorporated in the British Virgin
Islands to take advantage of certain benefits associated with being a British Virgin Islands company, such as:
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political and economic stability;
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an effective judicial system;
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a favorable tax system;
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the absence of exchange control or currency restrictions; and
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the availability of professional and support services
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However, certain disadvantages accompany
incorporation in the British Virgin Islands. These disadvantages include:
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the British Virgin Islands has a less developed body of securities laws as compared to the United States and provides significantly less protection to investors; and
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British Virgin Islands companies may not have standing to sue before the federal courts of the United States.
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Article 157 of our articles of association
requires that differences arising between the Company and any member in respect of the true intent and construction or the incidence
or consequences of articles of association or the BVI Business Companies Act, touching anything done or executed, omitted or suffered
in pursuance of the BVI Business Companies Act or touching any breach or alleged breach or otherwise relating to the premises or
to articles of association or to the BVI Business Companies Act or other BVI law affecting the Company or to any of the affairs
of the Company, be referred to arbitration. Other than with respect to disputes of the type set out in Article 157,
arbitration is not stated to be the means for resolving matters with our shareholders. This provision does not apply to claims
made under the federal securities laws of the United States.
Substantially all of our current operations
are conducted in China, and substantially all of our assets are located in China. The majority of our directors and officers are
nationals or residents of jurisdictions other than the United States. As a result, it may be difficult for a shareholder to effect
service of process within the United States upon such persons, 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 been informed by Conyers Dill &
Pearman our counsel as to British Virgin Islands law, that the United States and the British Virgin Islands do not have a treaty
providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters and that a final
judgment for the payment of money rendered by any general or state court in the United States based on civil liability, whether
or not predicated solely upon the U.S. federal securities laws, would not be automatically enforceable in the British Virgin Islands.
We have also been advised by Conyers Dill & Pearman that a final and conclusive judgment obtained in U.S. federal or state
courts under which a sum of money is payable as compensatory damages (i.e., not being a sum claimed by a revenue authority for
taxes or other charges of a similar nature by a governmental authority, or in respect of a fine or penalty or multiple or punitive
damages) may be the subject of an action on a debt in the Supreme Court of the British Virgin Islands under the common law doctrine
of obligation. This type of action should be successful upon proof that the sum of money is due and payable, without having to
prove the facts supporting the underlying judgment, as long as:
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the foreign court issuing the judgment had jurisdiction in the matter and we either submitted to such jurisdiction or were resident or carrying on business within such jurisdiction and were duly served with process; and
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the judgment was not contrary to public policy in the British Virgin Islands, was not obtained by fraud or in proceedings contrary to the natural justice of the British Virgin Islands, and was not based on an in British Virgin Islands law.
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A British Virgin Islands court may impose
civil liability on us or our directors or officers in a suit brought in the Supreme Court of the British Virgin Islands against
us or these persons with respect to a violation of U.S. federal securities laws, provided that the facts surrounding any violation
constitute or give rise to a cause of action under British Virgin Islands law.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
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 Securities Act of 1933 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 ordinary shares 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 Securities Act of 1933
and will be governed by the final adjudication of such issue.
LUOKUNG TECHNOLOGY CORP.
Up to
$290,000,000
Ordinary Shares
Preferred Shares
Warrants
Subscription Rights
Debt Securities
Units
PROSPECTUS
August 7, 2019
WE HAVE NOT AUTHORIZED ANY DEALER, SALES PERSON OR OTHER
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS
NOT AN OFFER OF THESE ORDINARY SHARES IN ANY STATE WHERE AN OFFER IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS CURRENT
AS OF THE DATE OF THIS PROSPECTUS AND YOU SHOULD NOT ASSUME THAT THIS PROSPECTUS IS ACCURATE AS OF ANY OTHER DATE.
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