As
filed with the U.S. Securities and Exchange Commission on November 17, 2023.
Registration
No. [●]
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
F-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
U
Power Limited
(Exact
name of registrant as specified in its charter)
Cayman
Islands |
|
5500 |
|
Not
Applicable |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(I.R.S.
Employer
Identification
Number) |
2F,
Zuoan 88 A, Lujiazui,
Shanghai,
People’s Republic of China
0086-21-6859-3598
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Cogency
Global Inc.
122
East 42nd Street, 18th Floor
New
York, NY 10168
212-947-7200
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
With
a Copy to:
Ying
Li, Esq.
Lisa
Forcht, Esq.
Hunter
Taubman Fischer & Li LLC
950
Third Avenue, 19th Floor
New
York, NY 10022
212-530-2206 |
William
S. Rosenstadt, Esq.
Mengyi
“Jason” Ye, Esq.
Yarona
L. Yieh, Esq.
Ortoli
Rosenstadt LLP
366
Madison Avenue, 3rd FL
New
York, NY 10017
212-588-0022
|
Approximate
date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering ☐
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933
Emerging
growth company ☒
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 7(a)(2)(B) of the Securities Act. ☐
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell the securities until the registration statement filed
with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting any offer to buy these securities in any jurisdiction where such offer or sale is not permitted.
PRELIMINARY
PROSPECTUS |
SUBJECT
TO COMPLETION |
DATED
November 17, 2023 |
U
Power Limited
Up
to 10,000,000 Units (each Unit contains one Ordinary Share, one
Series
A Warrant to Purchase one Ordinary Share, and one Series B Warrant to Purchase one Ordinary Share)
Up
to 10,000,000 Ordinary Shares Underlying Series A Warrants, and Up to 10,000,000 Ordinary Shares Underlying Series B Warrants
We are offering on a best-efforts basis up to 10,000,000 units
(the “Units”), with each Unit consisting of one ordinary share of U Power Limited, par value US$0.0000001 per share (the “Ordinary
Share”), one warrant to purchase one Ordinary Share (each, a “Series A Warrant” and collectively, the “Series
A Warrants”), and one warrant to purchase one Ordinary Share (each, a “Series B Warrant”, and collectively, the “Series
B Warrants; and together with the Series A Warrants, the “Warrants”), at an assumed public offering price of $2.42 per Unit.
Each share exercisable pursuant to the Series A Warrants will have an exercise price per share of $2.54, equal to 105% of the public offering
price per Unit in this offering, and each share exercisable pursuant to the Series B Warrants will have an exercise price per share of
$2.42, equal to 100% of the public offering price per Unit in this offering. The Series A Warrants will be immediately exercisable and
will expire on the fifth anniversary of the original issuance date, and the Series B Warrants will be immediately exercisable and will
expire on the fifth anniversary of the original issuance date. The Ordinary Shares available for exercise by each purchaser under the
Series B Warrants shall be reduced by that amount of Ordinary Shares that have been exercised under the Series A Warrants. The Units have
no stand-alone rights and will not be certificated or issued as stand-alone securities. The Ordinary Shares, the Series A Warrants, and
the Series B Warrants are immediately separable and will be issued separately in this offering, but must be purchased together in this
offering.
Our Ordinary Shares are listed on the Nasdaq Capital Market under
the symbol “UCAR.” On November 15, 2023, the closing trading price of our Ordinary Shares, as reported on the Nasdaq Capital
Market, was $2.42 per Ordinary Share. There is no established public trading market for the Warrants, and we do not expect a market to
develop. We do not intend to apply to list the Units or the Warrants on any securities exchange or other nationally recognized trading
system. Without an active trading market, the liquidity of the Warrants will be limited.
The number of Units offered in this prospectus and all other applicable
information has been determined based on an assumed public offering price of $2.42 per Unit. The public offering price per Unit is an
assumed price only. The actual number of Units sold in the offering and actual public offering price per Unit will be determined between
us, the placement agent and purchasers based on market conditions at the time of pricing and may be at a discount to the current market
price of our Ordinary Shares. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the
actual public offering price. The assumed public offering price is used so that we can provide certain disclosures, which require a calculation
based on the public offering price.
Because there is no minimum offering amount required as a condition
to closing this offering, we may sell fewer than all of the Units offered hereby, which may significantly reduce the amount of proceeds
received by us, and investors in this offering will not receive a refund in the event that we do not sell an amount of Units sufficient
to pursue the business goals outlined in this prospectus. Because there is no minimum offering amount, investors could be in a position
where they have invested in our company, but we are unable to fulfill our objectives due to a lack of interest in this offering. Also,
any proceeds from the sale of Units offered by us will be available for our immediate use, despite uncertainty about whether we would
be able to use such funds to effectively implement our business plan. See “Risk Factors” beginning on page 10 of this prospectus
and “Item 3. Key Information — D. Risk Factors” in our annual report on Form 20-F for the year ended December 31, 2022
(the “2022 Annual Report”) for more information. We may undertake one or more closings for the sale of the Units to the investors.
We expect to hold an initial closing on [●], 2023, but the offering will be terminated by December 31, 2023, provided that the closing(s)
of the offering for all of the Units have not occurred by such date; however, the offering may be extended by written agreement of the
Company and the placement agent. Each purchaser has the right to elect to purchase up to 100% of the number of Units each purchaser purchased
at the initial closing on the final closing date. Any extensions or material changes to the terms of the offering will be contained in
an amendment to this prospectus.
Investing
in our securities involves a high degree of risk. See “Risk Factors” and “Item 3. Key Information — D. Risk Factors”
in the 2022 Annual Report for a discussion of information that should be considered in connection with an investment in our securities.
We
are not a Chinese operating company, but rather a holding company incorporated in the Cayman Islands. As a holding company with no material
operations of our own, we conduct our operations through our operating entities established in the People’s Republic of China (the
“PRC”). As such, our corporate structure involves unique risks to investors. The Ordinary Shares offered in this prospectus
are shares of the Cayman Islands holding company. Investors of our Ordinary Shares do not directly own any equity interests in our Chinese
operating subsidiaries, but will instead own shares of a Cayman Islands holding company. The Chinese regulatory authorities could intervene
or influence the operations of our Chinese operating subsidiaries at any time, including disallowing our corporate structure, which would
likely result in a material change in our operations and/or a material change in the value of our Ordinary Shares. Additionally, the
Chinese government may exert more oversight and control over any offering of securities conducted overseas and/or foreign investment
in China-based issuers, and any such action could significantly limit or completely hinder our ability to offer or continue to offer
securities to investors, and may cause the value of such securities to significantly decline or be worthless. See “Item 3. Key
Information — D. Risk Factors — Risks Relating to Doing Business in China — Any actions by the Chinese government,
including any decision to intervene or influence the operations of the operating entities or to exert control over any offering of securities
conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of the PRC
operating entities, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the
value of such securities to significantly decline or be worthless” in the 2022 Annual Report. Unless otherwise stated, as used
in this prospectus and in the context of describing our operations and consolidated financial information, “we,” “us,”
“Company,” “our company”, or “our,” refers to U Power Limited, a Cayman Island holding company. For
a description of our corporate structure, see “Corporate History and Structure.”
Our
issued and outstanding share capital consists of 52,500,000 Ordinary Shares. Mr. Jia Li, our founder and chairman of the board of directors,
beneficially owns approximately 70% and will continue to beneficially own approximately [ ]% of our total issued and outstanding Ordinary
Shares and total voting power after the completion of this offering, assuming the Series A Warrants and Series B Warrants are not exercised.
As a result, we are, and will continue to be, a “controlled company” as defined under the Nasdaq Stock Market Rules. As a
“controlled company,” we are permitted to elect not to comply with certain corporate governance requirements. See “Risk
Factors — Risks Relating to Our Ordinary Shares and this Offering — We will continue to be a “controlled company”
under the rules of Nasdaq upon the completion of this offering and, as a result, may rely on exemptions from certain corporate governance
requirements that provide protection to shareholders of other companies”
We
are an “emerging growth company” as defined under applicable U.S. securities laws and are eligible for reduced public company
reporting requirements. Please read the disclosures beginning on page 6 of this prospectus for more information.
We
are subject to legal and operational risks associated with being based in and having the majority of our operations in China. These risks
may result in a material change in our operations, or a complete hindrance of our ability to offer or continue to offer our securities
to investors, and could cause the value of such securities to significantly decline or become worthless. Recently, the PRC government
initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal
activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity
structure, and adopting new measures to extend the scope of cybersecurity reviews. On July 6, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal
activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires
the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision
over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities
laws. On November 14, 2021, the Cyberspace Administration of China (the “CAC”) published the Security Administration Draft,
which provides that data processing operators engaging in data processing activities that affect or may affect national security must
be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Security Administration
Draft, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national
security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The deadline for public
comments on the Security Administration Draft was December 13, 2021. The Security Administration Draft has not been fully implemented
as of the date of this prospectus. On December 28, 2021, the CAC, together with 12 other governmental departments of the PRC, jointly
promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures require
that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity
review by the CAC if it intends to be listed in foreign countries. As confirmed by our PRC counsel, Guantao Law Firm, since we are not
an online platform operator that possesses over one million users’ personal information, we are not subject to the cybersecurity
review with the CAC under the Cybersecurity Review Measures, and for the same reason, we will not be subject to the network data security
review by the CAC if the Draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security Administration
Draft”) are enacted as proposed. There remains uncertainty, however, as to how the Cybersecurity Review Measures will be interpreted
or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation
and interpretation related to the Cybersecurity Review Measures. For further details, see “Item 3. Key Information — D. Risk
Factors — Risks Relating to Doing Business in China — We may become subject to a variety of laws and regulations in the PRC
regarding privacy, data security, cybersecurity, and data protection” in the 2022 Annual Report.
(Prospectus
cover continued from next page.)
| |
Per Unit | | |
Total (assuming maximum offering) | |
Public offering price | |
$ | 2.42 | | |
$ | 24,200,000 | |
Placement agent fees (1) | |
$ | 0.19 | | |
$ | 1,936,000 | |
Proceeds, before expenses, to us (2) | |
$ | 2.23 | | |
$ | 22,264,000 | |
(1) |
We have agreed to pay
Univest Securities, LLC (the “Placement Agent”) a cash fee of 7% of the aggregate gross proceeds raised in this offering
We have also agreed to (i) reimburse the Placement Agent for certain expenses; and (ii) provide a non-accountable expense allowance
equal to 1% of the gross proceeds of this offering payable to the Placement Agent. For a description of compensation payable to the
Placement Agent, see “Plan of Distribution.” |
|
|
(2) |
We estimate the total expenses
of this offering payable by us, excluding the Placement Agent’s fees, will be approximately $0.35 million. |
We
have engaged Univest Securities, LLC as our exclusive Placement Agent to use its reasonable best efforts to solicit offers to purchase
the securities offered by this prospectus (the “Securities”). The Placement Agent has no obligation to buy any of the Units
from us or to arrange for the purchase or sale of any specific number or dollar amount of the Units. Because there is no minimum offering
amount required as a condition to closing in this offering the actual public offering amount, the Placement Agent’s fee, and proceeds
to us, if any, are not presently determinable and may be substantially less than the total maximum offering amounts set forth above and
throughout this prospectus. We have agreed to pay the Placement Agent the Placement Agent’s fees set forth in the table above and
to provide certain other compensation to the Placement Agent. See “Plan of Distribution” of this prospectus for more information
regarding these arrangements.
Neither
the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Placement
Agent
Prospectus
dated [●], 2023
(Prospectus
cover continued from preceding page.)
In
addition, since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (1) establishing
the National Anti-Monopoly Bureau; (2) revising and promulgating anti-monopoly laws and regulations, including:
the Anti-Monopoly Law (draft Amendment published on October 23, 2021 for public opinion; the newly revised Anti-Monopoly Law
was promulgated on June 24, 2022, and became effective on August 1, 2022), the anti-monopoly guidelines for various
industries, and the detailed Rules for the Implementation of the Fair Competition Review System; and (3) expanding the anti-monopoly law
enforcement targeting Internet companies and large enterprises. As of the date of this prospectus, the Chinese government’s recent
statements and regulatory actions related to anti-monopoly concerns have not impacted our ability to conduct business, accept
foreign investments, or list on a U.S. or other foreign exchange because neither the Company nor its PRC operating entities engage
in monopolistic behaviors that are subject to these statements or regulatory actions.
Our
Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter in the United States, if the
Public Company Accounting Oversight Board of the United States (the “PCAOB”) determines that it cannot inspect
or fully investigate our auditor for two consecutive years. As a result, Nasdaq may determine to delist our securities. On December 29,
2022, the Accelerating Holding Foreign Companies Accountable Act was signed into law as part of the “Consolidated Appropriations
Act, 2023” (the “Consolidated Appropriations Act”), which amended the Holding Foreign Companies Accountable ACT (“HFCAA”)
by reducing the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years
to two. Our auditor is Onestop Assurance PAC. As an auditor of companies that are traded publicly in the United States and a firm
registered with the PCAOB, it is subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections
to assess our auditor’s compliance with the applicable professional standards. Our auditor is headquartered in 10 Anson Road, #13-09
International Plaza, Singapore 079903 and has been inspected by the PCAOB on a regular basis, with the last inspection in 2022. As such,
as of the date of this prospectus, our offering is not affected by the HFCAA and related regulations. However. there is a risk that our
auditor cannot be inspected by the PCAOB in the future. The lack of inspection could cause trading in our securities to be prohibited,
and, as a result, Nasdaq may determine to delist our securities, which may cause the value of our securities to decline or become worthless.
See “Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — The Holding Foreign
Companies Accountable Act and the Accelerating Holding Foreign Companies Accountable Act call for additional and more stringent criteria
to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are
not inspected by the PCAOB. These developments could add uncertainties to our offering and listing on the Nasdaq Capital Market, and
Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor”
in the 2022 Annual Report.
Cash
dividends, if any, on our Ordinary Shares will be paid in U.S. dollars. As of the date of this prospectus, (1) no cash transfers
nor transfers of other assets have occurred among the Company and its subsidiaries, (2) no dividends nor distributions have been
made by the Company or its subsidiaries, and (3) the Company has not paid any dividends nor made any distributions to U.S. investors.
We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will
be paid or any funds will be transferred from one entity to another in the foreseeable future. As such, as of the date of this prospectus,
we have not installed any cash management policies that dictate how funds are transferred among the Company, its subsidiaries, or investors.
Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or its share premium amount,
provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they become
due in the ordinary course of business. Under our current corporate structure, to fund any cash and financing requirements we may have,
the Company may rely on dividend payments from its PRC operating subsidiaries, subject to certain restrictions and limitations imposed
by the PRC government.
Under
existing PRC foreign exchange regulations, payment of current account items, such as profit distributions and trade and service-related foreign
exchange transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange, or
the SAFE, by complying with certain procedural requirements. Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies
to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with
certain procedures under PRC foreign exchange regulations, such as the overseas investment registrations by our shareholders or the ultimate
shareholders of our corporate shareholders who are PRC residents. Approval from, or registration with, appropriate government authorities
is, however, required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as
the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future
to foreign currencies for current account transactions. Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company
only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. As of the
date of this prospectus, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital
within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for the transfer of funds involving money
laundering and criminal activities. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business
in China — To the extent cash or assets of our business, or of our PRC or Hong Kong subsidiaries, is in mainland China or Hong
Kong, such cash or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong, due to interventions
in or the imposition of restrictions and limitations by the PRC government to the transfer of cash or assets” in the 2022 Annual
Report.
TABLE
OF CONTENTS
About
this Prospectus
Neither
we nor the Placement Agent have authorized anyone to provide any information or to make any representations other than those contained
in or incorporated by reference into this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which
we have referred 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 an offer to sell the Units offered hereby, but only under circumstances and in jurisdictions
where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted
or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer
or sale. For the avoidance of doubt, no offer or invitation to subscribe for the Units is made to the public in the Cayman Islands. The
information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial
condition, results of operations, and prospects may have changed since that date.
Neither
we nor the Placement Agent have taken any action to permit this offering of the Units outside the United States or to permit the possession
or distribution of this prospectus or any filed free-writing prospectus outside the United States. Persons outside of the United States
who come into possession of this prospectus or any filed free writing prospectus must inform themselves about, and observe any restrictions
relating to, the offering of the Units and the distribution of this prospectus or any filed free-writing prospectus outside the United
States.
Conventions
that Apply to this Prospectus
Unless otherwise
indicated or the context requires otherwise, references in this prospectus to:
| ● | “AHYS”
are to Anhui Yousheng New Energy Co., Ltd., a limited liability company established pursuant
to PRC laws on May 16, 2013, which is controlled by WFOE (as defined below) with 100% equity
ownership; |
| ● | “BVI”
are to the British Virgin Islands; |
| ● | “China”
and the “PRC” are to the People’s Republic of China; |
| ● | “CD
Youyineng” are to Chengdu Youyineng Automobile Service Co., Ltd., a limited liability
company established pursuant to PRC laws on October 29, 2020, and is wholly owned by AHYS
(defined below); |
| ● | “EV”
are to electric vehicle; |
| ● | “Hong
Kong” or “HK” are to the Hong Kong Special Administrative Region of the
PRC; |
| ● | “ISO”
are to a series of quality management and quality assurance standards published by International
Organization for standardization, a non-government organization based in Geneva, Switzerland,
for assessing the quality systems of business organizations; |
| ● | “mainland
China” are to the mainland China of the PRC, excluding Taiwan, the special administrative
regions of Hong Kong and Macau for the purposes of this prospectus only; |
| ● | “our
PRC subsidiaries”, or “operating subsidiaries,” are to AHYS and its subsidiaries,
including CD Youyineng, SH Youteng (defined below), SH Youxu (defined below), Youpin (defined
below), Youpin SD (defined below), ZJ Youguan (defined blow), and their respective subsidiaries; |
| ● | “RMB”
and “Renminbi” are to the legal currency of China; |
| ● | “shares,”
“Shares,” or “Ordinary Shares” are to the ordinary shares of the
Company, par value US$ 0.0000001 per share; |
| ● | “SH
Youteng” are to Shanghai Youteng Automobile Service Co., Ltd., a limited liability
company established pursuant to PRC laws on November 3, 2020, and AHYS holds 70% of its equity
interest; |
| ● | “SH
Youxu” are to Shanghai Youxu New Energy Technology Co., Ltd., a limited liability company
established pursuant to PRC laws on March 22, 2021, and AHYS holds 70% of its equity interest; |
| ● | “SME
dealers” are to small and medium sized vehicle dealers; |
| ● | “UK”
are to the United Kingdom, made up of England, Scotland, Wales and Northern Ireland; |
| ● | “U.S.”,
“US” or “United States” are to United States of America, its territories,
its possessions and all areas subject to its jurisdiction; |
| ● | “US$,”
“$” and “U.S. dollars” are to the legal currency of the United States; |
| ● | “we,”
“us,” “Company,” “our”, and “Upincar” are
to U Power Limited, the Cayman Islands holding company, and its predecessor entity and its
subsidiaries, as the context requires; |
| ● | “WFOE”
are to our wholly owned Chinese subsidiary, Shandong Yousheng New Energy Technology Development
Co., Ltd., a limited liability company established pursuant to PRC laws on January 27, 2022; |
| ● | “Youpin”
are to Youpin Automobile Service Group Co., Ltd., a limited liability company established
pursuant to PRC laws on July 18, 2013, and AHYS holds 53.1072% of its equity interest; |
| ● | “Youpin
SD” are to Youpin Automobile Service (Shandong) Co., Ltd., a limited liability company
established pursuant to PRC laws on June 30, 2020, and AHYS holds 87% of its equity interest;
and |
| ● | “ZJ
Youguan” are to Zhejiang Youguan Automobile Service Co., Ltd., a limited liability
company established pursuant to PRC laws on May 21, 2020, and AHYS holds 80% of its equity
interest. |
In
this prospectus, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in U.S. dollars.
These dollar references are based on the exchange rate of RMB to U.S. dollars, determined as of a specific date or for a specific period.
Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may
result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets, including accounts
receivable (expressed in dollars). We have made rounding adjustments to reach some of the figures included in this prospectus. Consequently,
numerical figures shown as totals in some tables may not be arithmetic aggregations of the figures that precede them.
This
prospectus contains information derived from various public sources and certain information from an industry report commissioned by us
and prepared by Frost & Sullivan Limited, a third-party industry research firm, to provide information regarding our industry and
market position. Such information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to
these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications
and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to variety of factors, including
those described in the “Risk Factors” section. These and other factors could cause results to differ materially from those
expressed in these publications and reports.
PROSPECTUS
SUMMARY
The
following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial
statements incorporated by reference into this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully,
especially the risks of investing in our Ordinary Shares, discussed under “Risk Factors” and “Item 3. Key Information
— D. Risk Factors,” in the 2022 Annual Report before deciding whether to buy our Ordinary Shares.
Overview
We
are not a Chinese operating company, but rather a holding company incorporated in the Cayman Islands. As a holding company with no material
operations of our own, we conduct our operations through our operating entities established in the PRC. As such, our corporate structure
involves unique risks to investors. Investors of our Ordinary Shares do not directly own any equity interests in our Chinese operating
subsidiaries, but will instead own shares of a Cayman Islands holding company. The Chinese regulatory authorities could intervene or
influence the operations of our Chinese operating subsidiaries at any time, including disallowing our corporate structure, which would
likely result in a material change in our operations and/or a material change in the value of our Ordinary Shares. Additionally, the
Chinese government may exert more oversight and control over any offering of securities conducted overseas and/or foreign investment
in China-based issuers, and any such action could significantly limit or completely hinder our ability to offer or continue to offer
securities to investors, and may cause the value of such securities to significantly decline or be worthless. See “Item 3. Key
Information — D. Risk Factors — Risks Relating to Doing Business in China — Any actions by the Chinese government,
including any decision to intervene or influence the operations of the operating entities or to exert control over any offering of securities
conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of the PRC
operating entities, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the
value of such securities to significantly decline or be worthless” in the 2022 Annual Report.
We
are subject to legal and operational risks associated with being based in and having the majority of our operations in China. These risks
may result in a material change in our operations, or a complete hindrance of our ability to offer or continue to offer our securities
to investors, and could cause the value of such securities to significantly decline or become worthless. Recently, the PRC government
initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal
activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity
structure, and adopting new measures to extend the scope of cybersecurity reviews. On July 6, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal
activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires
the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision
over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities
laws. On November 14, 2021, the Cyberspace Administration of China (the “CAC”) published the Security Administration Draft,
which provides that data processing operators engaging in data processing activities that affect or may affect national security must
be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Security Administration
Draft, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national
security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The deadline for public
comments on the Security Administration Draft was December 13, 2021. The Security Administration Draft has not been fully implemented
as of the date of this prospectus. On December 28, 2021, the CAC, together with 12 other governmental departments of the PRC, jointly
promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures require
that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity
review by the CAC if it intends to be listed in foreign countries. As confirmed by our PRC counsel, Guantao Law Firm, since we are not
an online platform operator that possesses over one million users’ personal information, we are not subject to the cybersecurity
review with the CAC under the Cybersecurity Review Measures, and for the same reason, we will not be subject to the network data security
review by the CAC if the Draft Regulations on the Network Data Security Administration (Draft for Comments) are enacted as proposed.
There remains uncertainty, however, as to how the Cybersecurity Review Measures will be interpreted or implemented and whether the PRC
regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related
to the Cybersecurity Review Measures. For further details, see “Item 3. Key Information — D. Risk Factors — Risks Relating
to Doing Business in China — We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security,
cybersecurity, and data protection” in the 2022 Annual Report.
In
addition, since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (1) establishing
the National Anti-Monopoly Bureau; (2) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law
(draft Amendment published on October 23, 2021 for public opinion; the newly revised Anti-Monopoly Law was promulgated on June 24, 2022,
and became effective on August 1, 2022), the anti-monopoly guidelines for various industries, and the detailed Rules for the Implementation
of the Fair Competition Review System; and (3) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises.
As of the date of this prospectus, the Chinese government’s recent statements and regulatory actions related to anti-monopoly concerns
have not impacted our ability to conduct business, accept foreign investments, or list on a U.S. or other foreign exchange, because neither
the Company nor its PRC operating entities engage in monopolistic behaviors that are subject to these statements or regulatory actions.
On
February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) released the Trial Administrative Measures of
Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five supporting guidelines,
which came into effect on March 31, 2023. The Overseas Listing Trial Measures regulate both direct and indirect overseas offering and
listing by PRC domestic companies by adopting a filing-based regulatory regime. Pursuant to the Overseas Listing Trial Measures, domestic
companies that seek to offer or list securities overseas, whether directly or indirectly, should fulfill the filing procedures and report
relevant information to the CSRC within three working days after submitting listing applications and subsequent amendments. According
to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies
from the CSRC, or the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Overseas
Listing Trial Measures (i.e. March 31, 2023) shall be deemed to be existing issuers (the “Existing Issuers”). Existing Issuers
are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings.
Further, according to the CSRC Notice, domestic companies that have obtained approval from overseas regulatory authorities or securities
exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been obtained) for their
overseas offering and listing prior March 31, 2023 but have not yet completed their overseas issuance and listing, are granted a six-month
transition period from March 31, 2023 to September 30, 2023. Those that complete their overseas offering and listing within such six-month
period are deemed to be Existing Issuers and are not required to file with the CSRC for their overseas offerings and listings. Within
such six-month transition period, however, if such domestic companies fail to complete their overseas issuance and listing, they shall
complete the filing procedures with the CSRC. Our PRC counsel, Guantao Law Firm, has advised us that, since we obtained approval from
both the SEC and The Nasdaq Capital Market (“Nasdaq”) to issue and list our ordinary share on the Nasdaq prior to March 31,
2023, and closed our offering on April 24, 2023, we were not required to make the filing with the CSRC regarding our initial public offering
pursuant to the Overseas Listing Trial Measures. We shall be required, however, to file with the CSRC for this offering. Given the current
PRC regulatory environment, it is uncertain whether we or our PRC subsidiaries would be able to receive clearance of such filing requirements
in a timely manner, or at all. Any failure of us to fully comply with new regulatory requirements may subject us to fines and penalties,
significantly limit or completely hinder our ability to offer or continue to offer our ordinary shares, cause significant disruption
to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations,
and cause our ordinary shares to significantly decline in value or become worthless. See “Risk Factors —
Risks Relating to Doing Business in China — The approval of the China Securities Regulatory Commission may be
required in connection with this offering under PRC law.”
See
“Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business
in China — The PRC government exerts substantial influence over the manner in which we and our PRC subsidiaries must
conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S. exchanges,
however, if we or our PRC subsidiaries are required to obtain approval in the future and are denied permission from Chinese authorities
to list on U.S. exchanges, we will not be able to continue listing on U.S. exchanges, which would materially affect the interest
of the investors” in the 2022 Annual Report.
Approvals
from the PRC Authorities to Issue Our Ordinary Shares to Foreign Investors
The
General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the
“Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the “Opinions”, which
were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal
securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies.
On
November 14, 2021, the CAC published the Security Administration Draft, which provides that data processing operators engaging in
data processing activities that affect or may affect national security must be subject to network data security review by the relevant
Cyberspace Administration of the PRC. According to the Security Administration Draft, data processing operators who possess personal
data of at least one million users or collect data that affects or may affect national security must be subject to network data security
review by the relevant Cyberspace Administration of the PRC. The deadline for public comments on the Security Administration Draft
was December 13, 2021. The Security Administration Draft has not been fully implemented.
The
Cybersecurity Review Measures, which became effective on February 15, 2022, provide that, in addition to critical information infrastructure
operators (“CIIOs”) that intend to purchase Internet products and services, data processing operators engaging in data processing
activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of
the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that
may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures further requires that
CIIOs and data processing operators that possess personal data of at least one million users must apply for a review by the Cybersecurity
Review Office of the PRC before conducting listings in foreign countries. As of the date of this prospectus, we have not received any
notice from any authorities identifying any of our PRC subsidiaries as a CIIOs or requiring us to go through cybersecurity review or
network data security review by the CAC. We believe our PRC operations will not be subject to cybersecurity review by the CAC for
this offering, because our PRC subsidiaries are not CIIOs or data processing operators with personal information of more than 1 million
users. There remains uncertainty, however, as to how the Cybersecurity Review Measures will be interpreted or implemented and whether
the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation
related to the Cybersecurity Review Measures. For further details, see “Item 3. Key Information — D. Risk Factors —
Risks Relating to Doing Business in China — We may become subject to a variety of laws and regulations in the PRC regarding privacy,
data security, cybersecurity, and data protection” in the 2022 Annual Report.
On
February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Overseas Listing Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. The Overseas Listing
Trial Measures regulate both direct and indirect overseas offering and listing by PRC domestic companies by adopting a filing-based regulatory
regime. Pursuant to the Overseas Listing Trial Measures, domestic companies that seek to offer or list securities overseas, whether directly
or indirectly, should fulfill the filing procedures and report relevant information to the CSRC within three working days after submitting
listing applications and subsequent amendments. According to the Notice on the Administrative Arrangements for the Filing of the Overseas
Securities Offering and Listing by Domestic Companies from the CSRC, or the CSRC Notice, the domestic companies that have already been
listed overseas before the effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as existing
issuers (the “Existing Issuers”). Existing Issuers are not required to complete the filing procedures immediately, and they
shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic companies that
have obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration
statement for offering and listing in the U.S. has been obtained) for their overseas offering and listing prior March 31, 2023 but have
not yet completed their overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30,
2023. Those that complete their overseas offering and listing within such six-month period are deemed as Existing Issuers and are not
required to file with the CSRC for their overseas offerings and listings. Within such six-month transition period, however, if such domestic
companies fail to complete their overseas issuance and listing, they shall complete the filing procedures with the CSRC.
Our
PRC counsel, Guantao Law Firm, has advised us that, since we obtained approval from both the SEC and The Nasdaq Capital Market (“Nasdaq”)
to issue and list our ordinary share on the Nasdaq prior to March 31, 2023, and closed our offering on April 24, 2023, we are not required
to make the filing regarding our initial public offering with the CSRC pursuant to the Overseas Listing Trial Measures. We shall be required,
however, to file with the CSRC for this offering within 3 working days after completing the closing (or the initial closing, if one or
more of additional closings will be undertaken) of this offering. Given the current PRC regulatory environment, it is uncertain whether
we or our PRC subsidiaries would be able to receive clearance of such filing requirements in a timely manner, or at all. Any failure
of us to fully comply with new regulatory requirements may subject us to fines and penalties, significantly limit or completely hinder
our ability to offer or continue to offer our ordinary shares, cause significant disruption to our business operations, severely damage
our reputation, materially and adversely affect our financial condition and results of operations, and cause our ordinary shares to significantly
decline in value or become worthless. See “Risk Factors — Risks Relating to Doing Business in China — The approval
of the China Securities Regulatory Commission may be required in connection with this offering under PRC law.”
See
“Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — The PRC government exerts
substantial influence over the manner in which we and our PRC subsidiaries must conduct our business activities. We are currently not
required to obtain approval from Chinese authorities to list on U.S. exchanges, however, if we or our PRC subsidiaries are required to
obtain approval in the future and are denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue
listing on U.S. exchanges, which would materially affect the interest of the investors” in the 2022 Annual Report.
Approvals
from the PRC Authorities to Conduct Our Operations
As
of the date of this prospectus, we and our PRC subsidiaries have received from the PRC authorities all requisite licenses, permissions,
or approvals that are required and material for conducting our operations in China, such as business licenses and auto dealer filings.
However, it is uncertain whether we or our PRC subsidiaries will be required to obtain additional approvals, licenses, or permits in
connection with our business operations pursuant to evolving PRC laws and regulations, and whether we would be able to obtain and renew
such approvals on a timely basis or at all. Failing to do so could result in a material change in our operations, and the value of our
Ordinary Shares could depreciate significantly or become worthless.
Dividends
and Distributions
Under
Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or its share premium amount, provided
that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary
course of business. As of the date of this prospectus, (1) no cash transfer or transfer of other assets have occurred among the
Company and its subsidiaries, (2) no dividends or distributions have been made by a subsidiary, and (3) the Company has not
made any dividends or distributions to U.S. investors. We intend to keep any future earnings to finance the expansion of our business,
and we do not anticipate that any cash dividends will be paid in the foreseeable future, or any funds will be transferred from one entity
to another. As such, as of the date of this prospectus, we have not installed any cash management policies that dictate how funds are
transferred among the Company, its subsidiaries, or investors.
Our
PRC operating entities receive substantially all of our revenue in RMB. Under our current corporate structure, to fund any cash
and financing requirements we may have, we may rely on dividend payments from its PRC operating subsidiaries. Under existing PRC foreign
exchange regulations, payment of current account items, such as profit distributions and trade and service-related foreign exchange
transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore,
our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition
that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulations, such
as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents.
Approval from or registration with appropriate government authorities is, however, required where the RMB is to be converted into foreign
currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC
government may also at its discretion restrict access in the future to foreign currencies for current account transactions.
Current
PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined
in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside
at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered
capital. Each such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare
fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory
reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings
of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.
Cash
dividends, if any, on our Ordinary Shares, will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes,
any dividends we pay to our overseas shareholders may be regarded as China-sourced income and, as a result, may be subject to PRC withholding
tax at a rate of up to 10.0%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for
the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may
be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. The 5% withholding tax rate, however, does
not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong project must
be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than 25% share ownership
in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong project
must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong
Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain
the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the
Double Taxation Arrangement with respect to any dividends paid by WFOE, Shandong Yousheng New Energy Technology Development Co., Ltd,
to its two direct Hong Kong holding companies. As of the date of this prospectus, we have not applied for the tax resident certificate
from the relevant Hong Kong tax authority. Our Hong Kong subsidiaries intend to apply for the tax resident certificate if and when our
PRC subsidiaries plan to declare and pay dividends to our Hong Kong subsidiaries.
PCAOB’s
Determinations on Public Accounting Firms Headquartered in Mainland China and in Hong Kong
Our
Ordinary Shares may be delisted under the HFCAA if the PCAOB is unable to inspect our auditors for two consecutive years. On December 29,
2022, the Consolidated Appropriations Act was signed into law and amended the HFCAA by reducing the number of consecutive non-inspection years
required for triggering the prohibitions under the HFCAA from three years to two.
On
December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public
accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the PRC, because of positions
taken by PRC authorities in those jurisdictions (the “Determination”). On August 26, 2022, the CSRC, the MOF, and the
PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong, taking the first step
toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and
Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion
to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15,
2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered
in mainland China and Hong Kong and vacated its previous determinations to the contrary. Our auditor is Onestop Assurance PAC. As an
auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, it is subject to laws in the
United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional
standards. Our auditor is headquartered in 10 Anson Road, #13-09 International Plaza, Singapore 079903 and has been inspected by the
PCAOB on a regular basis, with the last inspection in 2022. As such, as of the date of this prospectus, our offering is not affected
by the HFCAA and related regulations. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access
in the future, the PCAOB may consider the need to issue a new determination. Furthermore, there is a risk that our auditor cannot be
inspected by the PCAOB in the future, and if the PCAOB determines that it cannot inspect or fully investigate our auditor for two consecutive years,
our securities will be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable
Act, and, as a result, Nasdaq may determine to delist our securities, which may cause the value of our securities to decline or become
worthless. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — The Holding
Foreign Companies Accountable Act and the Accelerating Holding Foreign Companies Accountable Act call for additional and more stringent
criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors
who are not inspected by the PCAOB. These developments could add uncertainties to our offering and listing on the Nasdaq Capital Market,
and Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor”
in the 2022 Annual Report.
Our
Competitive Strengths
We
believe that the following competitive strengths differentiate us from our competitors:
| ● | a
vehicle sourcing network in lower-tiered cities in China; |
| ● | UOTTA
battery-swapping technology; |
| ● | strong
cooperation with key partners, including major automakers and battery developers in China;
and |
| ● | visionary
and experienced management team with strong commitment. |
Our
Growth Strategies
The
following are our primary growth strategies:
| ● | jointly
develop UOTTA-powered EVs with major auto manufacturers in China; |
| ● | develop
and manufacture battery-swapping stations for UOTTA-powered EVs; |
| ● | enhance
our research and development capabilities; and |
Our
Corporate Structure
We
are a Cayman Islands exempted company incorporated on June 17, 2021. Exempted companies are Cayman Island companies conducting business
mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act (As Revised).
Mr.
Jia Li, our founder and chairman of the board of directors beneficially owns approximately 70% of our total issued and outstanding Ordinary
Shares and total voting power. As a result, we are a “controlled company” as defined under the Nasdaq Stock Market Rules.
As a “controlled company,” we are permitted to elect not to comply with certain corporate governance requirements. See “Risk
Factors — Risks Relating to Our Ordinary Shares and this Offering — We will continue to be a “controlled company”
under the rules of Nasdaq upon the completion of this offering and, as a result, may rely on exemptions from certain corporate governance
requirements that provide protection to shareholders of other companies”.
On
April 24, 2023, the Company completed its initial public offering of 2,416,667 Ordinary Shares at $6.00 per share on a firm commitment
basis (the “IPO”). On April 25, 2023, WestPark Capital, Inc, as the representative of the underwriters of the IPO, partially
exercised the over-allotment option to purchase an additional 83,333 ordinary shares at the IPO price of $6.00 per share for gross proceeds
of approximately US$0.5 million. The aggregate gross proceeds of such sales totaled approximately $14,900,000, before deducting underwriting
discounts and other related expenses.
The
following diagram illustrates our corporate structure as of the date of this prospectus.
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/image_001.jpg)
Corporate
Information
Our
principal executive offices are located at 18/F, building 3, science and Technology Industrial Park, Yijiang District, Wuhu City,
Anhui Province (安徽省芜湖市弋江区科技产业园3号楼18层),
People’s Republic of China. Our telephone number at this address is 00852-6859-3598. Our registered office in the Cayman Islands
is located at McGrath Tonner Corporate Services Limited Genesis Building, 5th Floor, Genesis Close, PO Box 446, Cayman
Islands, KY1-1106 and the phone number of our registered office is (345) 623-2740.
Investors
should submit any inquiries to the address and telephone number of our principal executive offices. Our corporate website is http://www.upincar.com/.
The information contained on our websites is not a part of this prospectus. Our agent for service of process in the United States
is located at 122 East 42nd St 18th Floor, New York, NY 10168.
Implications
of Being an Emerging Growth Company
As
a company with less than US$1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”
as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. As long as we remain an emerging growth company,
we may rely on exemptions from some of the reporting requirements applicable to public companies that are not emerging growth companies.
In particular, as an emerging growth company, we:
| ● | may
present only two years of audited financial statements and only two years of related Management’s
Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A;” |
| ● | are
not required to provide a detailed narrative disclosure discussing our compensation principles,
objectives and elements and analyzing how those elements fit with our principles and objectives,
which is commonly referred to as “compensation discussion and analysis”; |
| ● | are
not required to obtain an attestation and report from our auditors on our management’s
assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley
Act of 2002; |
| ● | are
not required to obtain a non-binding advisory vote from our shareholders on executive compensation
or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on
frequency” and “say-on-golden-parachute” votes); |
| ● | are
exempt from certain executive compensation disclosure provisions requiring a pay-for-performance
graph and chief executive officer pay ratio disclosure; |
| ● | are
eligible to claim longer phase-in periods for the adoption of new or revised financial accounting
standards under §107 of the JOBS Act; and |
| ● | will
not be required to conduct an evaluation of our internal control over financial reporting
until our second annual report on Form 20-F following the effectiveness of our initial public
offering. |
We
intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the
adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may
make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that
have opted out of the phase-in periods under §107 of the JOBS Act.
Under
the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the
definition of an emerging growth company. We will remain an emerging growth company until the earliest of (a) the last day of the fiscal
year during which we have total annual gross revenues of at least US$1.235 billion; (b) the last day of our fiscal year following the
fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act
occurred; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt;
or (d) the date on which we are deemed to be a “large accelerated filer” under the United States Securities Exchange Act
of 1934, as amended, or the Exchange Act, which would occur if the market value of our Ordinary Shares that are held by non-affiliates
exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging
growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
Foreign
Private Issuer Status
We
are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended. As
such, we are exempt from certain provisions applicable to United States domestic public companies. For example:
| ● | we
are not required to provide as many Exchange Act reports, or as frequently, as a domestic
public company; |
| ● | for
interim reporting, we are permitted to comply solely with our home country requirements,
which are less rigorous than the rules that apply to domestic public companies; |
| ● | we
are not required to provide the same level of disclosure on certain issues, such as executive
compensation; |
| ● | we
are exempt from provisions of Regulation FD aimed at preventing issuers from making
selective disclosures of material information; |
| ● | we
are not required to comply with the sections of the Exchange Act regulating the solicitation
of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;
and |
| ● | we
are not required to comply with Section 16 of the Exchange Act requiring insiders
to file public reports of their share ownership and trading activities and establishing insider
liability for profits realized from any “short-swing” trading transaction. |
Implications
of Being a Controlled Company
Mr. Jia
Li, our founder and chairman of the board of directors will continue to beneficially own [●]% of our total issued and outstanding
Ordinary Shares and voting power, assuming no exercise of the Series A Warrants and Series B Warrants included in the Units. As
a result, we will be a “controlled company” as defined under the Nasdaq Stock Market Rules because Mr. Jia Li will
hold more than 50% of the voting power for the election of directors. As a “controlled company,” we are permitted to elect
not to comply with certain corporate governance requirements. If we rely on these exemptions, you will not have the same protection afforded
to shareholders of companies that are subject to these corporate governance requirements.
THE
OFFERING
Securities
offered by us |
|
Up to 10,000,000 Units at an assumed public offering price of $2.42
per Unit, with each Unit consisting of one Ordinary Share, one Series A Warrant to purchase one Ordinary Share at an exercise price of
$2.54 (or 105% of the public offering price of each Unit sold in the offering), which will be immediately exercisable and will expire
on the fifth anniversary of the original issuance date, and one Series B Warrant to purchase one Ordinary Share at an exercise price of
$2.42 (or 100% of the public offering price of each Unit sold in the offering), which will be immediately exercisable and will expire
on the fifth anniversary of the original issuance date. Each purchaser has the right to elect to purchase up to 100% of the number of
Units each purchaser purchased at the initial closing on the final closing date. The Units will not be certificated, and the Ordinary
Shares, the Series A Warrants, and the Series B Warrants are immediately separable and will be issued separately in this offering. |
|
|
|
Assumed public offering
price per Unit |
|
$2.42. |
|
|
|
Ordinary Shares included
in the Units offered by us |
|
Up to 10,000,000 Ordinary
Shares. |
|
|
|
Series A Warrants included in the
Units offered by us |
|
Up to 10,000,000 Series A Warrants to purchase Ordinary Shares. The
exercise price per share pursuant to the Series A Warrants will equal to $2.54 (or 105% of the public offering price per Unit sold in
this offering). The Series A Warrants are immediately separable and will be issued separately in this offering, but must initially be
purchased together in this offering. The Series A Warrants will be immediately exercisable and will expire on the fifth anniversary of
the original issuance date. The Series A Warrants may be exercised only for a whole number of shares. No fractional shares will be issued
upon exercise of the Series A Warrants. This prospectus also relates to the offering of the Ordinary Shares issuable upon exercise of
the Series A Warrants. |
|
|
|
Series
B Warrants included in the Units offered by us |
|
Up to 10,000,000 Series B Warrants to purchase Ordinary Shares. The
exercise price per share pursuant to the Series B Warrants will equal to $2.42 (or 100% of the public offering price per Unit sold in
this offering). The Series B Warrants are immediately separable and will be issued separately in this offering, but must initially be
purchased together in this offering. The Series B Warrants will be immediately exercisable and will expire on the fifth anniversary of
the original issuance date. The Series B Warrants may be exercised only for a whole number of shares. No fractional shares will be issued
upon exercise of the Series B Warrants. The Ordinary Shares available for exercise by each purchaser under the Series B Warrants shall
be reduced by that amount of Ordinary Shares that have been exercised under the Series A Warrants. This prospectus also relates to the
offering of the Ordinary Shares issuable upon exercise of the Series B Warrants.
|
Cashless
Exercise of Warrants |
|
If,
at the time a holder exercises its Warrants, a registration statement registering the issuance or resale of the Ordinary Shares
underlying the Warrants under the Securities Act is not then effective or available for the issuance of such Ordinary Shares,
then in lieu of making the cash payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise
the net number of Ordinary Shares determined according to the formula set forth in the Warrants.
In
addition to the rights with respect to cashless exercise set forth above, a Series B
Warrant holder may, at any time and in its sole discretion, exercise its Series B Warrants in whole by means of a one-time only “alternative
cashless exercise” in which the holder shall be entitled to receive a number of Ordinary Shares equal to the quotient obtained
by dividing (the exercise price minus the lowest VWAP (as defined in the Series B Warrant) of the Ordinary Shares over the 10 trading
days immediately prior to the exercise date) by (50% of the lowest VWAP of the Ordinary Shares over the 10 trading days immediately
prior to the exercise date). |
|
|
|
Best-efforts
offering |
|
We
are offering the Units on a best-efforts basis. We have engaged Univest Securities, LLC as our exclusive Placement Agent to use its
reasonable best efforts to solicit offers to purchase the Units in this offering. The Placement Agent has no obligation to buy any
of the Units from us or to arrange for the purchase or sale of any specific number or dollar amount of the Units.
No
minimum offering amount is required as a condition to closing this offering. We may undertake one or more closings for the sale of the
Units. We expect to hold an initial closing of the offering on [●], 2023, but the offering will be terminated by December 31, 2023,
provided that closing of the offering for all of the Units have not occurred by such date, but may be extended by written agreement of
the Company and the Placement Agent.
We will
deliver the Ordinary Shares being issued to the investors electronically and will mail such investors physical warrant certificates for
the Series A Warrants and Series B Warrants sold in this offering, upon closing and receipt of investor funds for the purchase of the
Units offered pursuant to this prospectus, if any.
|
|
|
|
Ordinary Shares Outstanding
Immediately After This Offering (1) |
|
62,500,000 Ordinary Shares and assuming the sales of all the Units
we are offering at an assumed public offering price of $2.42 per Unit and no exercise of the Series A Warrants and Series B Warrants included
in the Units. |
|
|
|
Use of Proceeds |
|
We estimate that we will receive net proceeds of approximately $21,913,237
from this offering, assuming the sales of all of the Units we are offering and no exercise of the Series A Warrants and Series B Warrants
included in the Units, after deducting estimated Placement Agent’s fees and estimated offering expenses payable by us.
We anticipate
using the net proceeds of this offering primarily for: (i) merger and acquisition of battery swapping companies; and (ii) working capital
and other general corporate purposes. See “Use of Proceeds” on page 16 for more information.
|
Lock-Up
Agreements |
|
We
will not, without the prior written consent of the Placement Agent, issue, enter into any agreement to issue or announce the issuance
or proposed issuance of any Ordinary Shares or any securities of the Company or its subsidiaries which would entitle the holder thereof
to acquire at any time Ordinary Shares, during the 90-day period from the date of completion of this offering, subject to certain
exemptions.
We
will also not, without the prior written consent of the Placement Agent, during the 90-day period from the date of completion of
this offering, effectuate or enter into an agreement to effect any issuance of Ordinary Shares or any securities which would entitle
the holder thereof to acquire at any time Ordinary Shares (or a combination of units thereof) involving, among others, transactions
in which we (i) issue or sell any debt or equity securities that are convertible into, exchangeable or exercisable for, or include
the right to receive additional Ordinary Shares either (A) at a conversion price, exercise price or exchange rate or other price
that is based upon and/or varies with the trading prices of or quotations for the Ordinary Shares at any time after the initial issuance
of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future
date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly
or indirectly related to our business or the market for the Ordinary Shares (but not including antidilution protections related to
future share issuances) or (ii) enter into, or effect a transaction under, any agreement, including, but not limited to, an equity
line of credit, whereby we may issue securities at a future determined price, subject to certain exemptions.
Each
of our directors, executive officers, and principal shareholders (5% or more shareholders) will also enter into a similar lock-up
agreement for a period of 90 days from the date of completion of this offering, subject to certain exceptions, with respect to our
Ordinary Shares or any securities which would entitle the holder thereof to acquire at any time Ordinary Shares. |
|
|
|
Risk Factors |
|
Investing in our securities
involves a high degree of risk. See “Risk Factors” beginning on page 10 of this prospectus and in the other documents
incorporated by reference into this prospectus. |
|
|
|
Listing |
|
Our Ordinary Shares are listed on the
Nasdaq Capital Market under the symbol “UCAR.” There is no established public trading market for the Units, the Series
A Warrants, or the Series B Warrants, and we do not expect a market to develop. We do not intend to apply for listing of the Units,
the Series A Warrants, or the Series B Warrants on any securities exchange or other nationally recognized trading system. Without
an active trading market, the liquidity of the Units, the Series A Warrants, or the Series B Warrants will be limited. |
|
|
|
Transfer Agent |
|
Transhare Corporation |
|
|
|
Payment and Settlement |
|
We expect that the delivery of the Ordinary
Shares and the related Series A Warrants and Series B Warrants for the initial closing against payment therefor will occur on or
about [●], 2023. |
RISK
FACTORS
An
investment in our Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should
carefully consider the risk factors set forth in our 2022 Annual Report on file with the SEC, which is incorporated by reference into
this prospectus, as well as the following risk factors, which augment the risk factors set forth in our most recent Annual Report. Before
making an investment decision, you should carefully consider these risks as well as other information we include or incorporate by reference
in this prospectus. The risks and uncertainties not presently known to us or that we currently deem immaterial may also materially harm
our business, operating results and financial condition and could result in a complete loss of your investment.
Risks
Relating to Doing Business in China
The
Chinese regulatory authorities could intervene or influence the operations of our Chinese operating subsidiaries at any time, including
disallowing our corporate structure, which would likely result in a material change in our operations and/or a material change in the
value of our Ordinary Shares. Additionally, the Chinese government may exert more oversight and control over any offering of securities
conducted overseas and/or foreign investment in China-based issuers, and any such action could significantly limit or completely hinder
our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline
or be worthless.
The
Chinese government may intervene or influence our operations at any time, which could result in a material change in our operations and/or
the value of the securities we are registering. Please see “Item 3. Key Information — D. Risk Factors — Risks Relating
to Doing Business in China — Any actions by the Chinese government, including any decision to intervene or influence the operations
of the operating entities or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based
issuers, may cause us to make material changes to the operations of the PRC operating entities, may limit or completely hinder our ability
to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless”
on page 10 in the 2022 Annual Report.
The
approval of the China Securities Regulatory Commission may be required in connection with this offering under PRC law.
The
M&A Rules, which were adopted in 2006 by six PRC regulatory agencies and amended in 2009, including the China Securities Regulatory
Commission, or the CSRC, purport to require offshore special purpose vehicles that are controlled by PRC companies or individuals and
that were formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies
or assets to obtain CSRC approval prior to publicly listing and trading of their securities on an overseas stock exchange. The interpretation
and application of the regulations remain unclear, and this offering may ultimately require approval from the CSRC. If CSRC approval
is required, it is uncertain how long it will take us to obtain the approval and whether we will obtain the approval.
Our
PRC counsel, Guantao Law Firm, has advised us that, based on its understanding of the current PRC laws and regulations, we will not be
required to obtain the aforesaid approval of the listing and trading of our ordinary shares on Nasdaq in the context of this offering
under the M&A Rules, because we did not establish our PRC subsidiaries by merger with or acquisition of PRC domestic companies using
equities as consideration as defined in the M&A Rules.
However,
there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering
and the opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations
in any form relating to the M&A Rules. We cannot assure you that relevant PRC government agencies, including the CSRC, would reach
the same conclusion as our PRC counsel does, and hence we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory
agencies.
Furthermore,
on July 6, 2021, relevant PRC governmental authorities promulgated the Opinions on Strictly Scrutinizing Illegal Securities Activities,
which states that the administration and supervision of overseas-listed China-based companies will be strengthened, and the supervision
of overseas issuance and listing of shares by China-based companies will be strengthened. It also clarifies the respective responsibilities
of domestic industry competent authorities and regulatory authorities.
On
February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Overseas Listing Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. The Overseas Listing
Trial Measures aim to lay out the filing regulation arrangement for both direct and indirect overseas listing and clarify the determination
criteria for indirect overseas listing in overseas markets. The Overseas Listing Trial Measure, among other things, stipulate that, after
making initial applications with overseas stock markets for initial public offerings or listings, a domestic company issuer shall file
with the CSRC within three working days. The required filing materials with the CSRC include (without limitation): (i) record-filing
reports and related undertakings, (ii) compliance certificates, filing or approval documents from the primary regulator of the applicants’
businesses (if applicable), (iii) security assessment opinions issued by related departments (if applicable), (iv) PRC legal opinions,
and (v) prospectus. In addition, overseas offerings and listings may be prohibited for such China-based companies when certain conditions
were met. See “Regulations — Regulations Related to M&A Rules and Overseas Listing.” Our PRC counsel, Guantao Law
Firm, has advised us that, since we obtained approval from both the SEC and Nasdaq to issue and list our ordinary share on the Nasdaq
prior to March 31, 2023, and closed our offering on April 24, 2023, we were not required to make the filing with the CSRC regarding our
initial public offering pursuant to the Overseas Listing Trial Measures. We shall be required, however, to file with the CSRC for this
offering within three working days after completing the closing (or the initial closing, if one or more of additional closings will be
undertaken) of this offering. We may be subject to additional compliance requirements in the future, and we cannot assure you that we
will be able to receive clearance of such filing requirements in a timely manner, or at all. Any failure of us to fully comply with new
regulatory requirements may subject us to fines and penalties, significantly limit or completely hinder our ability to offer or continue
to offer our ordinary shares, cause significant disruption to our business operations, severely damage our reputation, materially and
adversely affect our financial condition and results of operations, and cause our ordinary shares to significantly decline in value or
become worthless.
The
CSRC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt this offering anytime.
In addition, if the CSRC or other regulatory agencies later promulgate new rules requiring that we obtain their approvals for this offering,
we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any
uncertainties and/or negative publicity regarding such approval requirement could have a material adverse effect on the trading price
of the ordinary shares.
Risks
Relating to Our Business and Industry
Significant
decline in the number of cars we source, and significant decline in the number of our vehicle sourcing customers, may materially and
adversely impact our business, financial condition, and results of operations.
We
have experienced significant decline in the number of cars we source, as well as the number of vehicle sourcing customers, since we gradually
shifted our focus from the vehicle sourcing business to the development of our EV business in 2020. For the six months ended June 30,
2023, and fiscal years ended December 31, 2022 and 2021, we sourced and delivered 22, 411 and 1,252 cars to 2, 12 and 165 vehicle sourcing
customers, respectively. As we plan to continue to focus on our EV business, we cannot assure you that such declining trend will be reversed
in the future. Furthermore, other various factors, such as market forces, potential operational disruptions, and customer preferences
may also contribute to such declining trend. If the declining trend persists, our business, financial condition, and results of operations
could be materially and adversely impacted.
High
customer concentration exposes us to significant risks.
For
the six months ended June 30, 2023, we had only two vehicle sourcing customers, and Tianjin Chedao Network Technology Co., Ltd., one
of the two vehicle sourcing customers, accounted for 92.21% of our total sourcing revenues, and 69.72% of our total revenues. There are
significant risks as a result of our dependence on one or few major customers. Specifically, any one of the following events, among others,
may cause material fluctuations or a decline in our revenue and have a material and adverse effect on our business, financial condition,
and results of operations:
| ● | an
overall decline in the businesses of major customers; |
| ● | should
a major customer switch to our competitors and we fail to obtain business from other customers; |
| ● | the
reduction in the prices of our services or products agreed by major customers; or |
| ● | the
failure or inability of major customers to make timely payments for our products or services. |
If
we fail to diversify our customer base and reduce our dependence on one or few major customers, then our business, financial condition,
and results of operations may be materially and adversely affected.
We may not be successful in our future acquisitions,
and we may face difficulties in integrating acquired businesses with our existing business.
We intend to evaluate opportunities to acquire
battery swapping companies and integrate their operations into our business. However, there can be no assurance that we will be able
to identify suitable opportunities. Even if we are able to identify suitable opportunities, we may encounter difficulties in completing
such acquisitions, due to financial constraints, negotiating acceptable terms to us, and delays in completion. The inability to identify
suitable acquisition targets or complete the acquisition could materially and adversely affect our competitiveness and growth prospects.
After an acquisition is completed, we also face certain uncertainties
and risks related to our acquisition, including:
| ● | unsuccessful
integration of business including an inability to apply our business model or business operation
flow on the acquisition target; |
| ● | wastage
of resources and diversion of management attention; |
| ● | failure
to retain relationships with key employees, customers and suppliers of the acquisition
target; |
| ● | potential
ongoing financial obligations and unforeseen or hidden liabilities; and |
| ● | failure
to achieve the intended objectives, benefits or revenue-enhancing opportunities. |
If we are unable to manage such difficulties as they arise, they could
disrupt our ongoing business, or increase our costs, any of which circumstances could materially and adversely affect our business, financial
position and results of operations.
Risks
Relating to Our Ordinary Shares and this Offering
We
incur increased costs as a result of being a public company.
As
a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley
Act of 2002, as well as rules subsequently implemented by the SEC and the Nasdaq, impose various requirements on the corporate
governance practices of public companies. These rules and regulations increase our legal and financial compliance costs and make some
corporate activities more time-consuming and costlier. For example, that operating as a public company make it more difficult and more
expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage
or incur substantially higher costs to obtain the same or similar coverage. In addition, we incur additional costs associated with our
public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors
or as executive officers.
A
significant percentage of our outstanding Ordinary Shares is beneficially owned by Mr. Jia Li, our founder and chairman, and, as
a result, he has substantial influence over our company and his interests may not be aligned with the interests of our other shareholders.
As
of the date of this prospectus, our founder, Mr. Jia Li, beneficially owns 37,854,400
Ordinary Shares of the Company, or approximately 70% of the aggregate voting power of our issued and outstanding share capital, and will
beneficially own [●] Ordinary Shares of the Company, or approximately [●]% of the aggregate voting power of our issued and
outstanding share capital upon the completion of this offering (assuming no exercise of the Series A Warrants and Series B Warrants included
in the Units issued in this offering). As a result of the ownership concentration, he has the ability to control or exert significant
influence over important corporate matters, investors may be prevented from affecting important corporate matters involving our company
that require approval of shareholders, including:
| ● | the
composition of our board of directors and, through it, any determinations with respect to
our operations, business direction and policies, including the appointment and removal of
officers; |
| ● | any
determinations with respect to mergers or other business combinations; |
| ● | our
disposition of substantially all of our assets; and |
These
actions may be taken even if they are opposed by our other shareholders, including the holders of the Ordinary Shares. Furthermore, this
concentration of ownership may also discourage, delay or prevent a change in control of our company, which could have the dual effect
of depriving our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and reducing the
price of the Ordinary Shares. As a result of the foregoing, the value of your investment could be materially reduced.
We
will continue to be a “controlled company” under the rules of Nasdaq upon the completion of this offering and, as a result,
may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
We
will continue to be a “controlled company” as defined under the listing rules of Nasdaq upon the completion of this offering.
Our founder and Chief Executive Officer (“CEO”), Mr. Jia Li, will continue to hold more than 50% of the aggregate voting
power of our company upon the completion of this offering. For so long as we remain a controlled company under that definition, we are
permitted to elect to rely, and may choose to rely, on certain exemptions from corporate governance rules, including an exemption from
the rule that a majority of our board of directors must be independent directors. As a result, you will not have the same protection
afforded to shareholders of companies that are subject to these corporate governance requirements.
This
is a best efforts offering, no minimum number or dollar amount of securities is required to be sold, and we may not raise the amount
of capital we believe is required for our business plans.
The
Placement Agent has agreed to use its reasonable best efforts to solicit offers to purchase the Units in this offering. The Placement
Agent has no obligation to buy any of the Units from us or to arrange for the purchase or sale of any specific number or dollar amount
of the Units. There is no required minimum number of Units that must be sold as a condition to completion of this offering. Because there
is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, Placement Agent’s
fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth above. We may
sell fewer than all of the Units offered hereby, which may significantly reduce the amount of proceeds received by us, and investors
in this offering will not receive a refund in the event that we do not sell an amount of Units sufficient to fund our business plan.
Thus, we may not raise the amount of capital we believe is required for our operations in the short-term and may need to raise additional
funds, which may not be available or available on terms acceptable to us.
Because
there is no minimum required for the offering to close, investors in this offering will not receive a refund in the event that we do
not sell an amount of Units sufficient to pursue the business goals outlined in this prospectus.
We
have not specified a minimum offering amount in connection with this offering. Because there is no minimum offering amount, investors
could be in a position where they have invested in our company, but we are unable to fulfill our objectives due to a lack of interest
in this offering. Further, any proceeds from the sale of the Units offered by us will be available for our immediate use, despite uncertainty
about whether we would be able to use such funds to effectively implement our business plan. Upon closing of this offering, investor
funds will not be returned under any circumstances whether during or after this offering.
The
Warrants in this offering are speculative in nature.
The
Warrants in this offering do not confer any rights of Ordinary Share ownership on their holders, but rather merely represent the right
to acquire Ordinary Shares at a fixed price. In addition, following this offering, the market value of the Warrants, if any, is uncertain
and there can be no assurance that the market value of the Warrants will equal or exceed their imputed offering price. The Warrants will
not be listed or quoted for trading on any market or exchange.
Holders
of the Warrants will not have rights of holders of our Ordinary Shares until such Warrants are exercised.
Until
holders of the Warrants acquire Ordinary Shares upon exercise of the Warrants, holders of the Warrants will have no rights with respect
to the Ordinary Shares underlying such Warrants.
There
is no public market for the Units or the Warrants.
There
is no established public trading market for the Units or the Warrants, and we do not expect a market to develop. In addition, we do not
intend to apply to list the Warrants on any national securities exchange or other nationally recognized trading system, including Nasdaq.
Without an active market, the liquidity of the Warrants will be limited.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and our SEC filings that are incorporated by reference into this prospectus contain or incorporate by reference forward-looking
statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Many of the forward- looking
statements contained in this prospectus can be identified by the use of forward-looking words such as “anticipate,” “believe,”
“could,” “expect,” “should,” “plan,” “intend,” “estimate,” and
“potential,” among others.
Forward-looking
statements appear in a number of places in this prospectus and our SEC filings that are incorporated by reference into this prospectus.
These forward-looking statements include, but are not limited to, statements regarding our intent, belief, or current expectations. Forward-looking
statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such
statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking
statements due to various factors, including, but not limited to, those identified under the section entitled “Item 3. Key Information
— D. Risk Factors” in our 2022 Annual Report, and the section entitled “Risk Factors” of this prospectus. These
risks and uncertainties include factors relating to:
|
● |
assumptions about our future
financial and operating results, including revenue, income, expenditures, cash balances, and other financial items; |
|
|
|
|
● |
our ability to execute
our growth, and expansion, including our ability to meet our goals; |
|
|
|
|
● |
current and future economic
and political conditions; |
|
|
|
|
● |
our capital requirements
and our ability to raise any additional financing which we may require; |
|
|
|
|
● |
our ability to attract
clients and further enhance our brand recognition; |
|
|
|
|
● |
our ability to hire and
retain qualified management personnel and key employees in order to enable us to develop our business; |
|
|
|
|
● |
the COVID-19 pandemic; |
|
|
|
|
● |
trends and competition
in the contract logistics industry; and |
|
|
|
|
● |
other assumptions described
in this prospectus underlying or relating to any forward-looking statements. |
We
describe certain material risks, uncertainties and assumptions that could affect our business, including our financial condition and
results of operations, under “Risk Factors” and “Item 3. Key Information — D. Risk Factors” in our 2022
Annual Report. In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it may have on the Company’s
operations, the demand for the Company’s services and economic activities in general. We base our forward-looking statements on
our management’s beliefs and assumptions based on information available to our management at the time the statements are made.
We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast
by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required
under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after
the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.
Industry
Data and Forecasts
This
prospectus contains data related to the electric vehicles industry in China. This industry data includes projections that are based on
a number of assumptions which have been derived from industry and government sources which we believe to be reasonable. The electric
vehicles industry may not grow at the rate projected by industry data, or at all. The failure of the industry to grow as anticipated
is likely to have a material adverse effect on our business and the market price of our Ordinary Shares. In addition, the rapidly changing
nature of the contract logistics industry subjects any projections or estimates relating to the growth prospects or future condition
of our industry to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out
to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions.
ENFORCEABILITY
OF CIVIL LIABILITIES
We
are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman
Islands in order to enjoy the following benefits:
| ● | political
and economic stability; |
| ● | an
effective judicial system; |
| ● | the
absence of exchange control or currency restrictions; and |
| ● | the
availability of professional and support services. |
However,
certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include:
| ● | the
Cayman Islands has a less exhaustive body of securities laws than the United States and these
securities laws provide significantly less protection to investors; and |
| ● | Cayman
Islands companies may not have standing to sue before the federal courts of the United States. |
Our
memorandum and articles of association do not contain provisions requiring that disputes,
including those arising under the securities laws of the United States, among us, our officers,
directors and shareholders, be arbitrated.
We
conduct a substantial amount of our operations in China, and a substantial amount of our assets are located in China. A majority our
officers are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets are located
outside the United States. As a result, it may be difficult or impossible for a shareholder to effect service of process within the United
States upon us or these 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. It may also be difficult
for shareholder to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws
against us and our executive officers and directors.
We
have appointed Cogency Global Inc. located at 122 East 42nd St 18th Floor, New York, New York 10168, as our agent upon whom process may
be served in any action brought against us under the securities laws of the United States.
Maples
and Calder (Hong Kong) LLP, our counsel as to Cayman Islands law, has advised us that the courts in the Cayman Islands are unlikely (i)
to recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil
liability provisions of the securities laws of the United States or any state in the United States; and (ii) in original actions brought
in the Cayman Islands, to impose liabilities against us or our directors or officers predicated upon the securities laws of the United
States or any state in the United States, so far as the liabilities imposed by those provisions are penal in nature.
Maples
and Calder (Hong Kong) LLP has informed us that although there is no statutory enforcement in the Cayman Islands of judgments obtained
in the federal or state courts of the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgement
of a foreign court of competent jurisdiction without any retrial on the merits based on the principal that a judgement of a competent
foreign court imposes upon the judgement debtor an obligation to pay the sum for which such judgment has been given, provided such judgment
(a) is final and conclusive and for a liquidated sum; (b) is not in respect of taxes, a fine or a penalty; (c) is not inconsistent with
a Cayman Islands judgment in respect of the same matter, (d) is not impeachable on the grounds of fraud, or (e) was not obtained in a
manner and is not of a kind the enforcement of which is contrary to the natural justice or the public policy of the Cayman Islands (awards
of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
Guantao
Law Firm, our counsel as to PRC law, has advised us that there is uncertainty as to whether PRC courts would (i) recognize or enforce
judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of
the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in each respective
jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United
States.
Guantao
Law Firm has further advised us that the PRC Civil Procedures Law governs the recognition and enforcement of foreign judgments. PRC courts
may recognize and enforce foreign judgments in accordance with the PRC Civil Procedures Law based either on treaties between China and
the country where the judgment is made or on principles of reciprocity between jurisdictions.
The
PRC does not have any treaties or other agreements with the United States or the Cayman Islands that provide for the reciprocal
recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not
enforce a foreign judgment against us or our directors and officers if they determine that the judgment violates the basic principles
of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether a PRC court would enforce a judgment
rendered by a court in the United States or the Cayman Islands. Under the PRC Civil Procedures Law, foreign shareholders may originate
actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction,
and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must
be a concrete claim, a factual basis and a cause for the suit.
In
addition, it will be difficult for U.S. shareholders to originate actions against us in China in accordance with PRC laws because
we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding
our Ordinary Shares, to establish a connection to China for a PRC court to have jurisdiction as required under the PRC Civil Procedures
Law.
USE
OF PROCEEDS
We estimate that we will receive net proceeds from this offering of
approximately $21,913,237, assuming the sales of all of the Units we are offering and no exercise of the Series A Warrants and Series
B Warrants included in the Units, after deducting the Placement Agent’s fees and non-accountable expense allowance and estimated
offering expenses payable by us. However, because this is a best-efforts offering and there is no minimum offering amount required as
a condition to the closing of this offering, the actual offering amount, Placement Agent fees and net proceeds to us are not presently
determinable and may be substantially less than the maximum amounts set forth on the cover page of this prospectus.
The primary
purposes of this offering are to obtain additional capital to further expand our operations. We plan to use the net proceeds of this
offering as follows:
|
● |
*approximately 20% for
merger and acquisition of battery swapping companies; and |
|
● |
approximately 80% for working
capital and other general corporate purposes. |
* |
As of the date of this prospectus, there is no target for proposed merger
or acquisition and the Company has not entered into any agreement or arrangement in that regard. |
The
amounts and timing of any expenditures will vary depending on the amount of cash generated by our operations, and the rate of growth,
if any, of our business, and our plans and business conditions. The foregoing represents our intentions as of the date of this prospectus
based upon our current plans and business conditions to use and allocate the net proceeds of this offering. However, our management will
have significant flexibility and discretion in applying the net proceeds of this offering. Unforeseen events or changed business conditions
may result in application of the proceeds of this offering in a manner other than as described in this prospectus.
As
an offshore holding company, under PRC laws and regulations, we are only permitted to use the net proceeds of this offering to provide
loans or make capital contributions to our PRC subsidiaries. Provided that we make the necessary registrations with government authorities
and obtain the required governmental approvals, we may extend inter-company loans or make additional capital contributions to our PRC
subsidiaries to fund their capital expenditures or working capital requirements.
Any
capital contributions we make to our PRC subsidiaries shall be registered with the PRC State Administration for Market Regulation or
its local counterparts, and filed with the MOFCOM or its local counterparts. We are then required to complete a foreign exchange registration
change at qualified banks. There is no upper limit as to the registered capital of our PRC subsidiaries under PRC laws and regulations,
and we may contribute to our PRC subsidiaries through capital contributions as long as the amount contributed stays within the capital
registered.
Any
loans to our PRC subsidiaries, which are foreign-invested enterprises, cannot exceed a statutory limit, and shall be filed with the SAFE
or its local counterparts. Such statutory limit for our Company is two times the net assets of our PRC subsidiaries, or approximately
RMB281,854,000 (US$40,864,000).
We
may not be able to make such registrations or obtain such approvals in a timely manner, or at all. See “Risk Factors — Risks
Relating to Doing Business in China” of this prospectus and “Item 3. Key Information — D. Risk Factors — Risks
Relating to Doing Business in China” in the 2022 Annual Report.
DIVIDEND
POLICY
Our
board of directors has complete discretion as to whether to distribute dividends. In addition, our shareholders may by ordinary resolution
declare a dividend, but no dividend may exceed the amount recommended by our board of directors. In either case, all dividends are subject
to certain restrictions under Cayman Islands law, namely that we may only pay dividends out of profits or share premium, and provided
that in no circumstances may a dividend be paid if it would result in us being unable to pay our debts as they fall due in the ordinary
course of business. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future
operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that
our board of directors may deem relevant.
We
do not have any plan to declare or pay any cash dividends on our Ordinary Shares in the foreseeable future. We intend to retain most,
if not all, of our available funds and future earnings to operate and expand our business.
We
are an exempted company with limited liability incorporated in the Cayman Islands. We rely principally on dividends distributed by our
PRC subsidiaries and payments from PRC subsidiaries for our cash requirements, including distribution of dividends to our shareholders.
Dividends distributed by our PRC subsidiaries are subject to PRC taxes.
In
addition, PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us and only allow a PRC company to pay
dividends out of its accumulated distributable after-tax profits as determined in accordance with its articles of association and the
PRC accounting standards and regulations. See “Risk Factors — Risks Relating to Doing Business in China” of this prospectus
and “Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China” in the 2022 Annual
Report.
CAPITALIZATION
The following
table sets forth our capitalization:
|
● |
on
an actual basis as of June 30, 2023; and |
|
|
|
|
● |
on
a pro forma basis to give effect to the IPO of 2,416,667 Ordinary Shares at $6.00 per share on a
firm commitment basis, for net proceeds of approximately $13,002,001.86, after deducting underwriting
discounts and other related expenses, which IPO was completed on April 24, 2023, and net proceeds
of approximately $464,998.14 from sales of 83,333 Ordinary Shares at $6.00 per share, pursuant to
the partial exercise of the over-allotment option by the underwriters on April 25, 2023. |
|
|
|
|
● |
on a pro forma basis as adjusted to give effect to (i) the transactions
described above; (ii) the issuance and sale of 10,000,000 Units offered hereby, based on an assumed offering price of $2.42 per Unit,
each Unit consisting of one Ordinary Share, one Series A Warrant, and one Series B Warrant, assuming the sale of all of the Units we are
offering, no exercise of the Series A Warrants and Series B Warrants included in the Units, and no other change to the number of Units
sold by us as set forth on the front cover of this prospectus; and (iii) the application of the net proceeds after deducting the estimated
7% Placement Agent fees of $1,694,000, the Placement Agent’s 1% non-accountable expense allowance of $242,000, and approximately
$350,763 of estimated other offering expenses payable by us. |
You
should read this capitalization table together with our consolidated financial statements and the related notes appearing elsewhere in
this prospectus, and “Item 5. Operating and Financial Review and Prospects” in our 2022 Annual Report, and other financial
information included elsewhere in this prospectus.
| |
As of June 30, 2023 | |
| |
Actual (1) | | |
Pro Forma (2) (unaudited) | | |
Pro Forma As adjusted (3) (unaudited) | |
| |
$ in thousands | | |
$ in thousands | | |
$ in thousands | |
Shareholders’ Equity: | |
| | |
| | |
| |
Ordinary Shares, $0.0000001 par value, 500,000,000,000 Ordinary Shares authorized, 50,000,000, 52,500,000, and 62,500,000 Ordinary Shares issued and outstanding - actual, pro forma and pro forma as adjusted basis, respectively | |
$ | - | | |
$ | - | | |
$ | - | |
Additional paid-in capital | |
| 44,099 | | |
| 57,566 | | |
| 79,479 | |
Statutory reserves | |
| - | | |
| - | | |
| - | |
Retained earnings | |
| (21,693 | ) | |
| (21,693 | ) | |
| (21,693 | ) |
Accumulated other comprehensive loss | |
| - | | |
| - | | |
| - | |
Non-controlling interest | |
| 5,567 | | |
| 5,567 | | |
| 5,567 | |
Total Shareholders’ Equity | |
| 27,973 | | |
| 41,440 | | |
| 63,353 | |
Total Capitalization | |
$ | 27,973 | | |
$ | 41,440 | | |
| 63,353 | |
(1) |
The capitalization of actual basis does not include IPO capitalization numbers. |
(2) |
On
April 24, 2023, we completed our IPO of 2,416,667 Ordinary Shares at $6.00 per share on a firm commitment
basis. The net proceeds for the sale totaled approximately $13.00 million, after deducting underwriting
discounts and other related expenses. On April 25, 2023, we sold 83,333 Ordinary Shares at $6.00
per share, pursuant to the partial exercise of the over-allotment option by the underwriters. The
net proceeds totaled approximately $0.50 million, after deducting underwriting discounts. |
(3) |
The pro forma as adjusted
information discussed above is illustrative only. Our additional paid-in capital, total shareholders’ equity and total capitalization
following the completion of this offering are subject to adjustment based on the actual public offering price and other terms of
this offering determined at pricing. |
Each
$1.00 increase (decrease) in the assumed public offering price of $2.42 per Unit, would increase (decrease) each of cash and cash
equivalents, additional paid-in capital, total shareholders’ equity, and total capitalization by approximately $9.20 million,
assuming the number of Units offered by us, as set forth on the front cover of this prospectus, remains the same, and after deducting
the Placement Agent fees, non-accountable expense allowance, and estimated offering expenses payable by us.
Because
there is no minimum offering amount required as a condition to closing this offering, we may sell fewer than all or any of the Units
offered hereby.
DILUTION
If
you invest in our Ordinary Shares, your interest will be diluted for each Ordinary Share you purchase to the extent of the difference
between the public offering price per ordinary share and our net tangible book value per Ordinary Share after this offering. Dilution
results from the fact that the public offering price per Ordinary Share is substantially in excess of the net tangible book value per
Ordinary Share attributable to the existing shareholders for our presently outstanding Ordinary Share.
Our net tangible book value as of June 30, 2023,
was $33,520,884, or $0.64 per Ordinary Share. Net tangible book value represents the amount of our total consolidated tangible assets,
less the amount of our total consolidated liabilities. Dilution is determined by subtracting the net tangible book value per ordinary
share (as adjusted for the offering) from the initial public offering price per Ordinary Share and after deducting the estimated discounts
to the Placement Agent, non-accountable expense allowance and the estimated offering expenses payable by us.
After giving effect to our sale of 10,000,000
Units offered in this offering, based on the offering price of $2.42 per Unit, after deduction of the estimated commission to the Placement
Agent and the estimated offering expenses payable by us, our as adjusted net tangible book value as of June, 30, 2023, would have been
$55,784,884, or $0.89 per outstanding Ordinary Share. This represents an immediate increase in net tangible book value of $0.25 per Ordinary
Share to the existing shareholders, and an immediate dilution in net tangible book value of $1.53 per ordinary share to investors purchasing
Ordinary Shares in this offering. The as adjusted information discussed above is illustrative only.
The
following table illustrates such dilution:
| |
Post- Offering(1) | |
Assumed public offering price per Unit | |
$ | 2.42 | |
Net tangible book value per ordinary share as of June 30, 2023 | |
$ | 0.64 | |
Increase in pro forma as adjusted net tangible book value per ordinary share attributable to this offering | |
$ | 0.25 | |
Pro forma net tangible book value per ordinary share immediately after this offering | |
$ | 0.89 | |
Amount of dilution in net tangible book value per ordinary share to new investors in the offering | |
$ | 1.53 | |
(1) |
Assumes net proceeds of $21,913,237 from this offering of 10,000,000
Units at an assumed public offering price of $2.42 per Unit, calculated as follows: $24,200,000 offering proceeds, less a Placement Agent
fee of $1,694,000 and non-accountable expense allowance of $242,000 and offering expenses of approximately $350,763. |
A $1.00 increase in the assumed public offering
price of $2.42 per Unit would increase our pro forma as adjusted net tangible book value as of June, 30, 2023 after this offering, assuming
the sale of all of the Units we are offering and no exercise of the Series A Warrants and Series B Warrants included in the Units, by
approximately $0.15 per Ordinary Share, and would increase dilution to new investors by $0.85 per Ordinary Share, assuming that the number
of Units offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated Placement
Agent fees and non-accountable expense allowance, and offering expenses payable by us.
A $1.00 decrease in the assumed public offering price of $2.42 per
Unit would decrease our pro forma as adjusted net tangible book value as of June, 30, 2023 after this offering, assuming the sale of all
of the Units we are offering and no exercise of the Series A Warrants and Series B Warrants included in the Units, by approximately $0.15
per Ordinary Share, and would decrease dilution to new investors by $0.85 per Ordinary Share, assuming that the number of Units offered
by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated Placement Agent fees and
non-accountable expense allowance, and offering expenses payable by us.
The
pro forma as adjusted information as discussed above is illustrative only. Our net tangible book value following the completion of this
offering is subject to adjustment based on the actual initial public offering price of our Units and other terms of this offering determined
at the pricing.
Because
there is no minimum offering amount required as a condition to closing this offering, we may sell fewer than all or any of the Units
offered hereby.
CORPORATE
HISTORY AND STRUCTURE
Our
Corporate History
Our
subsidiary, AHYS, a limited liability company established pursuant to PRC laws on May 16, 2013, operates through the following subsidiaries:
| (1). | Youpin,
which was established on July 18, 2013 and AHYS holds 53.1072% of its equity interest.
Youpin has the following subsidiaries: |
| a. | Chengdu
Youyipin Trading Co., Ltd. (“CD Youyipin”), which was established on June 21,
2019, and is wholly owned by Youpin. CD Youyipin has one wholly-owned subsidiary: |
| i. | Zibo
Youyipin Trading Co., Ltd., which was established on March 18, 2021. |
| b. | Liaoning
Youguan New Energy Technology Co., Ltd. (“LY New Energy”), which was established
on November 8, 2019, and is wholly owned by Youpin. LY New Energy has one subsidiary: |
| i. | Youxu
New Energy (Dalian) Co., Ltd., which was established on June 8, 2022, and LY New Energy holds
51% of its equity interest while SH Youxu holds the other 49%. |
| c. | Shanghai
Youchuangneng Digital Technology Co., Ltd. (“SY Digital Tech”), which was established
on November 13, 2015. SY Digital Tech has one wholly-owned subsidiary: |
| i. | Nanning
Youguan Digital Technology Co., Ltd., which was established on July 12, 2022. |
| d. | Youguan
Financial Leasing (China) Co., Ltd., which was established on February 27, 2017, and
is wholly owned by Youpin; |
| e. | Shanghai
Youqiao International Trade Co., Ltd., which was established on May 29, 2014, and is
wholly owned by Youpin; and |
| f. | Beijing
Youpinshuowei New Energy Technology Co., Ltd., which was established on March 23, 2022, and
Youpin holds 51% of its equity interest. |
| (2). | ZJ
Youguan, which was established on May 21, 2020, and AHYS holds 80% of its equity interest.
ZJ Youguan has one wholly-owned subsidiary: |
| a. | Dalian
Youshengchi Automobile Trading Service Co., Ltd., which was established on March 23,
2021; |
| (3). | CD
Youyineng, which was established on October 29, 2020, and is wholly owned by AHYS; |
| (4). | SH
Youteng, which was established on November 3, 2020, and AHYS holds 70% of its equity
interest; |
| (5). | SH
Youxu, which was established on March 22, 2021, and AHYS holds 70% of its equity interest. SH
Youxu has the following subsidiaries: |
| a. | Quanzhou
Youyi Power Exchange Network Technology Co., Ltd., which was established on June 29,
2021, and is wholly owned by SH Youxu; |
| b. | Youxu
(Xiamen) Power Exchange Network Technology Co., Ltd., which was established on August 10,
2021, and is wholly owned by SH Youxu; |
| c. | Xinjiang
Youxu Supply Chain Management Co., Ltd., which was established on October 12, 2021,
and is wholly owned by SH Youxu; |
| d. | Beijing
Youxu New Energy Technology Co., Ltd., which was established on December 21, 2021, and
is wholly owned by SH Youxu; |
| e. | Wuhu
Youxu New Energy Technology Co., Ltd., which was established on November 12, 2021, and
is wholly owned by SH Youxu; |
| f. | Tai’an
Youxu New Energy Technology Co., Ltd., which was established on August 22, 2022, and is wholly
owned by SH Youxu; |
| g. | Shandong
Youxu New Energy Co., Ltd., which was established on August 26, 2022, and is wholly owned
by SH Youxu; |
| h. | Henan
Youxu New Energy Technology Co., Ltd., which was established on December 1, 2022, and SH
Youxu owns 80% of its equity interest; |
| i. | Chengdu
Zhibo Premium Technology Co., Ltd., which was established on September 22, 2022, and SH Youxu
holds 40% of its equity interest; |
| j. | Youxu
New Energy Technology (Nanyang) Co., Ltd., which was established on March 14, 2023, and SH
Youxu holds 70% of its equity interest; |
| k. | Liaoning
Youxu New Energy Technology Co., Ltd., which was established on March 9, 2023, and SH Youxu
holds 51% of its equity interest; and |
| l. | Zhuhai
Youxu New Energy Technology Co., Ltd., which was established on August 9, 2023, and SH Youxu
holds 100% of its equity interest; |
| (6). | Youpin
SD, which was established on June 30, 2020, AHYS holds 86.96% of its equity interest.
Youpin SD has the following subsidiaries: |
| a. | Youxu
New Energy Technology (Zibo) Co., Ltd., which was established on July 29, 2021, and
Youpin SD holds 98.04% of its equity interest; and |
| b. | Zibo
Hengxin Investment Partnership (limited partnership), which was formed on November 2,
2020, and Youpin SD holds 99% of its equity interest. |
Since
2013, AHYS and its subsidiaries have principally engaged in the provision of vehicle sourcing services. Beginning in 2020, AHYS and its
subsidiaries gradually shifted focus from the vehicle sourcing business to the development of their proprietary battery-swapping technology,
or UOTTA technology.
In
connection with our initial public offering, we undertook a reorganization (the “Reorganization”) in the following steps:
On
June 17, 2021, Upincar was established under the laws of the Cayman Islands. Upincar owns 100% of Youcang Limited, a British Virgin
Islands company incorporated on June 30, 2021. Youcang Limited owns 100% of Energy U Limited, a Hong Kong company incorporated
on July 19, 2021.
On
January 27, 2022, WFOE was incorporated pursuant to the PRC laws as a wholly foreign owned enterprise. Energy U Limited holds 100%
of the equity interest in WFOE. On May 16, 2013, AHYS was incorporated pursuant to the PRC laws as a limited company. On July 8,
2022, WFOE acquired 99% equity interest in AHYS. On December 12, 2022, WFOE acquired the remaining 1% equity interest in AHYS from U
Robur Limited (HK), a Hong Kong company.
Our
Corporate Structure
We
are a Cayman Islands exempted company incorporated on June 17, 2021. Exempted companies are Cayman Island companies conducting business
mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act (As Revised).
Mr.
Jia Li, our founder and chairman of the board of directors beneficially owns approximately 70% of our total issued and outstanding Ordinary
Shares and total voting power. As a result, we are a “controlled company” as defined under the Nasdaq Stock Market Rules.
As a “controlled company,” we are permitted to elect not to comply with certain corporate governance requirements. See “Risk
Factors — Risks Relating to Our Ordinary Shares and this Offering — We will continue to be a “controlled company”
under the rules of Nasdaq upon the completion of this offering and, as a result, may rely on exemptions from certain corporate governance
requirements that provide protection to shareholders of other companies” and “Item 3. Key Information — D. Risk Factors
— Risks Relating to Our Ordinary Shares and the Trading Market — We are a “controlled company” under the rules
of Nasdaq and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders
of other companies” in the 2022 Annual Report.
The
following diagram illustrates our corporate structure as of the date of this prospectus.
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/image_002.jpg)
BUSINESS
Overview
We
are a vehicle sourcing service provider in China, with a vision to becoming an EV market player primarily focused on our proprietary
battery-swapping technology, or UOTTA technology, which is an intelligent modular battery-swapping technology designed to provide a comprehensive
battery power solution for EVs.
Since
our commencement of operations in 2013, we have principally engaged in the provision of vehicle sourcing services. We broker sales of
vehicles between automobile wholesalers and buyers, including SME dealers and individual customers primarily located in the lower-tier
cities in China, which are smaller and less developed than the tier-1 or tier-2 cities. To that end, we have focused on building business
relationships with our sourcing partners and have developed a vehicle sourcing network. As of the date of this prospectus, our vehicle
sourcing network consisted of approximately 100 wholesalers and 30 SME dealers located in lower-tier cities in China. For the six months
ended June 30, 2023 and the fiscal years ended December 31, 2021 and 2022, our revenues from the sourcing business were RMB1.4 million,
RMB1.4 million, and RMB4.4 million, which constituted 75.7%, 17.4%, and 56.8%, respectively, of our total revenue. The increase of the
sourcing revenue in fiscal year 2022 was mainly because we sourced and sold batteries to one customer and generated RMB3.3 million, which
accounted for 42.8% of our total revenues for the year ended December 31, 2022.
Beginning
in 2020, we gradually shifted our focus from the vehicle sourcing business to the development of our proprietary battery-swapping technology,
or UOTTA technology. According to Frost & Sullivan, the PRC government will focus on promoting the electrification of commercial
vehicles in the next few years, and it is expected that the sales volume of electric commercial vehicles will grow from 218.9 thousand
units in 2022 to 431.0 thousand units in 2026 at a CAGR of 18.5% in China, and with the increasing penetration rates of electric commercial
vehicles and the expanding battery-swapping infrastructure network, the market size by revenue of battery swapping solutions for electric
commercial vehicles is expected to increase from approximately RMB22,097.6 million in 2022 to RMB176,615.1 million in 2026,
representing a CAGR of 68.1%. In order to capture the opportunities arising from such growth, our plan is to develop a comprehensive
EV battery power solution based on UOTTA technology, which mainly consists of: (i) vehicle-mounted supervisory control units that
monitor the real-time status of an EV’s battery packs; (ii) customized vehicle control units (“VCUs”), which upload
real-time data of the electric vehicle, such as its battery status, real-time location and safety status, to our data platform, using
Bluetooth and/or Wi-Fi technologies; and (iii) our data management platform, which collects and synchronizes real-time information
of the EVs uploaded by their respective VCUs, as well as information on the availability and locations of compatible UOTTA battery-swapping
stations that assist drivers in locating the nearest compatible UOTTA battery-swapping station(s) available when the EV’s
battery is determined to be lower than a certain level; and (iv) UOTTA battery-swapping stations designed for precise positioning,
rapid disassembly, compact integration and flexible deployment of battery swapping for compatible EVs.
We
have established in-house capabilities in the innovation of EV battery-swapping technology. Through our research and development efforts,
we are developing an intellectual property portfolio. As of the date of this prospectus, we had 31 issued patents and 7 pending patent
applications in China. Our research and development team is committed to technology innovation. As of the date of this prospectus, our
research and development team consisted of 34 personnel and is led by Mr. Rui Wang and Mr. Zhanduo Hao, each of whom has experience
of over 20 years in the electric power sector.
In
2021, leveraging years of automobile industry experience, we started cooperating with major automobile manufactures to jointly develop
UOTTA-powered EVs, by adapting selected EV models with our UOTTA technology. According to Frost & Sullivan, compared with passenger
EV drivers, drivers of commercial-use EVs experience more range anxiety and are more motivated to shorten, or even eliminate, time spent
on recharging EVs, therefore, we intend to primarily focus on developing commercial-use UOTTA-powered EVs, such as ride-hailing passenger
EVs, small logistics EVs, light electric trucks, and heavy electric trucks, and their compatible UOTTA battery-swapping stations. As
of the date of this prospectus, we have entered into cooperating agreements with two major Chinese automobile manufacturers, FAW Jiefang
Qingdao Automotive Co., Ltd, and HUBEI TRI-RING Motor Co., Ltd, to jointly develop UOTTA-powered electric trucks. We also have engaged
with one battery-swapping station manufacture to jointly develop and manufacture UOTTA battery-swapping stations that are compatible
with UOTTA-powered EVs. Our UOTTA battery-swapping stations are designed for precise positioning, rapid disassembly, compact integration
and flexible deployment, allowing battery replacement within several minutes. As of the date of this prospectus, we realized sales of
five battery-swapping stations. In August 2021, we completed the construction of our own battery-swapping station factory in Zibo
City, Shandong Province (the “Zibo Factory”), which commenced manufacturing UOTTA battery-swapping stations in January 2022.
In January 2022, we started operating a battery-swapping station, pursuant to our station cooperation agreement with Quanzhou Xinao in
Quanzhou City, Fujian Province. In order to provide a comprehensive battery power solution based on UOTTA technology, we are in the process
of developing a data management platform that connects UOTTA-powered EVs and stations, and assists the UOTTA-powered EV drivers in locating
the closest compatible UOTTA swapping-stations on their routes. We believe we have made significant progress in entering into the EV
market as of the date of this prospectus, however, there is no assurance that we will be able to execute our business plan to expand
into the EV market as we have planned. For the six months ended June 30, 2023 and the fiscal years ended December 31 2021 and 2022, our
revenues from the EV business were RMB0.5 million, RMB6.6 million, and RMB3.4 million, which constituted 24.3%, 82.6%, and 43.2%, respectively,
of our total revenue. The decrease in the revenue in fiscal year 2022 was mainly due to decreased sales of our battery-swapping stations.
Our
Competitive Strengths
A
vehicle sourcing network in lower-tier cities in China
We
have established a vehicle sourcing network primarily in the lower-tier cities in China, which allows us to distribute vehicles to our
customers. We have a deep understanding of the vehicle dealership market and are able to provide services tailored to the changing needs
of our consumers. We have built long-term relationships with our suppliers and SME dealer customers, who have a strong presence in the
lower-tier cities. Through working directly with our suppliers and customers, we are able to better understand and timely address their
needs, as well as provide targeted services to them. We have also established strong working relationships with a number of vehicle wholesalers.
UOTTA
Battery-swapping technology
Our
UOTTA technology is an intelligent modular battery swapping technology designed to provide a comprehensive battery power solution for
EVs. Through our cooperation with major automobile manufactures, we are in the process of adapting UOTTA technology to electric trucks.
We believe our UOTTA technology has the potential of greatly alleviating range-anxiety, which, according to Frost & Sullivan,
has been one of the most critical challenges to EV adoption, particularly in the commercial-use EV market. Our UOTTA technology is designed
to provide a comprehensive battery power solution that includes UOTTA-powered EVs and battery-swapping stations, as well as a data management
platform that synchronizes real-time data.
Strong
cooperation with key partners, including major automakers and battery developers in China
We
have partnered with major automotive manufacturers to jointly develop the UOTTA-powered EV models. As of the date of this prospectus,
key partners of our UOTTA battery power solution include major automobile manufacturers (FAW Jiefang Qingdao Automotive Co., Ltd and
HUBEI TRI-RING Motor Co., Ltd), and battery developers and manufacturer (Ruipu Energy Co., Ltd). We expect that their expertise and industry
know-how will guide us in our efforts to enter the EV market. We believe we are one of the few companies that are able to develop such
relationships with these major manufacturers, due to our industry experience, research and development capabilities, and industry reputation.
Visionary
and experienced management team with strong commitment
We
are led by a visionary management team with a unique “bottom up” strategy. Our founders and senior management team have in-depth
expertise in the automotive and technology industries. The key members of our management team have an average of approximately 20 years
of industry experience. Our founder and chairman, Mr. Jia Li, is a well-recognized leader in the Chinese automotive industry. He
served as vice president of the finance group in SAIC Motor, one of the largest automobile manufacturers in China, before he founded
our Company. Mr. Jia Li’s proven track record and extensive experience in the automobile industry provide strong leadership
to our mission. Mr. Rui Wang, our senior vice president, has approximately 20-years of industry experience in automobile engineering
and design, working at several leading automobile manufacturers, such as FAW Group, Isuzu Auto, Toyota and IAT Auto. Mr. Zhanduo
Hao, our senior engineer, is committed to the research of key electric vehicle charging and battery-swapping technologies and has substantial
industry experience, having previously participated in the formulation of national and industry standards related to power swapping projects.
Our
Strategies
Jointly
Develop UOTTA-powered EVs with major auto manufacturers in China
As
of the date of this prospectus, our UOTTA technology is in the process of being adapted to electric vehicles by cooperating with two
auto manufacturers in China. We intend to further explore collaboration opportunities with additional auto manufacturers who have leading
technologies and sufficient capacities.
Develop
and manufacture battery-swapping stations for UOTTA-powered EVs
As
of the date of this prospectus, we have launched two models of UOTTA battery-swapping stations, Titan and Chipbox, by cooperating with
battery-swapping station manufacturers in China. In August 2021, we completed the construction of our Zibo Factory, which commenced
manufacturing UOTTA battery-swapping stations in January 2022. The Zibo Factory is located in Zibo City, Shandong Province, with
approximately 15,430 square meters of production area. In May 2023, we cancelled our plan to build another factory in the Wuhu City because
our current production demand can be well served by our Zibo Factory.
Enhance
our research and development capabilities
Technology
drives our business. We plan to focus on technology innovations to continue developing and upgrading our proprietary UOTTA technology.
We expect to further strengthen the collaboration between our research and development team and marketing team to accumulate and transform
insights gained from practical experience into research and development capabilities. In addition, we are determined to strengthen our
research and development capabilities by proactively recruiting and retaining engineering talents, in order to expand our talent pool
and help us drive technological innovation.
Expand
sales channels
In
order to promote and market our UOTTA-powered EVs and battery-swapping stations, we plan to (i) leverage our existing sourcing networks
to market our new products; and (ii) explore new sales channels by cooperating with new strategic partners who possess their own
sales networks, as well as enhancing the capabilities of our in-house sales team by recruiting qualified sales professionals.
Our
Business Model
For
the six months ended June 30, 2023 and the fiscal years ended December 31, 2022 and 2021, we generated revenues of RMB1.4 million, RMB4.4
million, and RMB1.4 million, constituting 75.7%, 56.8%, and 17.4% of our total revenue, respectively, from the sourcing business.
Since
our inception, we have primarily engaged in the provision of vehicle sourcing services and developed a sourcing network in the lower-tier
cities in China, by building relationships with our sourcing partners, including automobile wholesalers on the supply side and SME dealers
and individual customers on the demand side. We charge a commission that is calculated based on the purchase price of each purchase order
and the commission is recognized upon delivery of vehicles to customers. For the six months ended June 30, 2023 and the fiscal years
ended December 31, 2022 and 2021, revenues generated from provision of vehicle sourcing services were RMB1.4 million, RMB1.1 million,
and RMB1.4 million, constituting 75.7%, 14.0%, and 17.4% of our total revenue, respectively. We aim to continue expanding our sourcing
network, in an effort to provide our customers with a means by which they may acquire vehicles at a reasonable price point. As of the
date of this prospectus, our sourcing network was comprised of approximately 30 SME dealers and 100 wholesalers.
In
fiscal year 2022, we generated revenue of RMB3.3 million from one transaction of battery sourcing, which accounted for 42.8% of the total
revenues for the year ended December 31, 2022. While we customarily source whole vehicles that are completed with vehicle bodies and
batteries, some of our vehicle sourcing customers demanded to purchase certain EV model vehicle bodies without batteries. The automobile
wholesaler who sells this certain EV model, however, only sells the whole EV, including both body and battery. In order to address the
needs of these customers, we purchased these EVs from the wholesaler, delivered the EV bodies to the vehicle sourcing customers, and
entered into a battery sales agreement with another buyer to sell these batteries separately. We did not generate any revenues from battery
sourcing for the six months ended June 30, 2023. As of the date of this prospectus, we only made one transaction of battery sales and
plan to provide the service on a case by case basis.
For
the six months ended June 30, 2023 and the fiscal years ended December 31, 2022 and 2021, we generated revenues of RMB0.5 million, RMB3.4
million, and RMB6.6 million, constituting 24.3%, 43.2%, and 82.6% of our total revenue, respectively, from our EV business, as the following:
UOTTA-powered
EVs: The UOTTA-powered EVs are being jointly developed in cooperation with major automobile manufacturers in China, utilizing our proprietary
UOTTA technology that enables efficient battery-swapping for EVs. We intend to primarily focus on commercial-use EVs in the near future.
As of the date of the prospectus, we have entered into cooperating agreements with two major auto manufactures to jointly develop UOTTA-powered
EVs by adapting commercial-use electric vehicles with UOTTA technology. For the six months ended June 30, 2023 and the fiscal years ended
December 31, 2022 and 2021, we did not generate any revenue from sales of UOTTA-powered EVs.
UOTTA
Battery-swapping Stations: Our UOTTA battery-swapping station currently has two models: (i) the Titan model, which is intended for electric
heavy trucks; and (ii) the Chipbox model, which is intended for ride-hailing passenger EVs, light electric trucks, and small logistics
vehicles. Both models are developed based on our UOTTA technology. In August 2021, we completed the construction of our battery-swapping
station factory, the Zibo Factory, which commenced production in January 2022. We have engaged one battery-swapping station manufacturer
to jointly develop and manufacture our UOTTA battery-swapping stations. In fiscal year 2022, we realized sales of one station in Huzhou
City, Zhejiang Province and one station in Xuchang City, Henan Province, totally generated 3.1 million in revenue. In fiscal year 2021,
we realized sales of two stations in Quanzhou City, Fujian Province, and one station in Xuzhou City, Jiangsu Province, and generated
RMB6.6 million in revenue. For the six months ended June 30, 2023 and the fiscal years ended December 31, 2022 and 2021, we generated
revenues of nil, RMB3.1 million, and RMB6.6 million, constituting nil, 39.3% and 82.6% of our total revenue, respectively, from sales
of UOTTA Battery-Swapping Stations.
Battery-swapping
Station Operations: In January 2022, we started operating a battery-swapping station in Quanzhou City, Fujian Province, pursuant to our
station cooperation agreement with Quanzhou Xinao, a local gas station operator. In February 2023, we started generating revenue from
the second battery-swapping station in Quanzhou City, Fujian Province, pursuant to our station cooperation agreement with Quanzhou Xinao.
For the six months ended June 30, 2023 and the fiscal year ended December 31, 2022, we generated revenue from battery-swapping services
in the amount of RMB0.5 million and RMB0.3 million, respectively, which included battery swapping services fee and the station control
system upgrading service, constituting 24.3% and 3.9% of our total revenue, respectively.
Our
Vehicle Sourcing Business
We
typically source vehicles from wholesalers to fulfill demands for vehicles of our customers, including SME dealers and individual customers
primarily located in lower-tier cities in China. We charge a commission that is calculated based on the purchase price of each purchase
order and such agent commission is recognized upon delivery of vehicles to customers. Customers are required to make full payment for
the total selling price before we deliver the purchased vehicles to them.
We
intend to further expand our sourcing network through marketing efforts by our sales team, such as targeted promotions via social media
platforms and in-person meetings. We plan to leverage our existing sourcing network to market and promote our UOTTA-powered EVs and battery-swapping
stations.
The
following table sets forth the gross merchandise volume (“GMV”) and car units sourced and delivered to our customers by customer
type for the six months ended June 30, 2023 and the fiscal years ended December 31, 2022 and 2021. We have experienced significant decline
in the number of cars we sourced, as well as the number of vehicle sourcing customers, since we gradually shifted our focus from the
vehicle sourcing business to the development of our EV business in 2020. For the six months ended June 30, 2023, sales were primarily
driven by mid-to-high-end cars, which had relatively limited supply channel and more room for premium pricing, resulting in an increase
in the GMV despite a large decrease in the car units sourced and delivered to the customers.
|
|
For the six months ended June 30 |
|
|
For the year ended
December 31 |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
|
GMV |
|
|
Units |
|
|
GMV |
|
|
Units |
|
|
GMV |
|
|
Units |
|
|
|
(RMB) |
|
|
|
|
|
(RMB) |
|
|
|
|
|
(RMB) |
|
|
|
|
SME dealer customers |
|
|
1,434,596 |
|
|
|
22 |
|
|
|
1,121,947 |
|
|
|
409 |
|
|
|
714,894 |
|
|
|
1,148 |
|
Individual customers |
|
|
0 |
|
|
|
0 |
|
|
|
52,009 |
|
|
|
2 |
|
|
|
547,523 |
|
|
|
104 |
|
Total |
|
|
1,434,596 |
|
|
|
22 |
|
|
|
1,173,956 |
|
|
|
411 |
|
|
|
1,262,417 |
|
|
|
1,252 |
|
While
we customarily source whole vehicles completed with vehicle bodies and batteries, some of our vehicle sourcing customers demanded to
only purchase certain EV’s vehicle bodies without their batteries. The automobile wholesaler, Wuhan Dongjun Automobile Sales Service
Co., Ltd., which sells this EV, however, only sells the whole EV, including both the body and battery. In order to address the needs
of our vehicle sourcing customers, on May 17, 2022, we entered into a purchase agreement with Wuhan Dongjun Automobile Sales Service
Co., Ltd., to purchase a certain number of the whole EVs, but delivered and charged for only the vehicle bodies (without the batteries)
to our vehicle sourcing customers. Subsequently, on June 27, 2022, we entered into a sales agreement with Quanzhou Shengyue New Energy
Technology Co., Ltd., to sell the batteries separately. The revenue from the sales of these batteries was RMB3.3 million, and accounted
for 42.8% of our total revenues for the year ended December 31, 2022. We did not generate any revenue from sale of batteries for the
six months ended June 30, 2023.
Vehicle
Sourcing Customers
We
provide sourcing services to SME dealers and individual customers primarily located in lower-tier cities in the PRC. Our relationships
with our customers are mainly established through prior business dealings and referrals of our existing customers. For the six months
ended June 30, 2023, we had two SME customers and no individual customers. One customer accounted for 92.21% and the other customer accounted
for 7.79% of our total sourcing revenues for the six months ended June 30, 2023. For fiscal year 2022, we had 12 customers, among which,
10 were SME dealers and 2 were individual customers. Four customers accounted for more than 10% of our total sourcing revenues in the
fiscal year 2022. For fiscal year 2021, we had 165 customers, among which, 61 were SME dealers and 104 were individual customers.
For fiscal year 2020, we had 22 customers, among which, 3 were SME dealers and 19 were individual customers. One customer accounted for
more than 10% of our total sourcing revenues for each of fiscal years 2021 and 2020.
Vehicle
Sourcing Suppliers
We
typically source cars from vehicle wholesalers; occasionally we also source cars directly from auto manufacturers. For the six months
ended June 30, 2023 and the fiscal years ended December 31, 2022, 2021, and 2020, we sourced cars from 2, 10, 102 and 11 suppliers, respectively.
Two suppliers accounted for more than 10% of our total sourcing amount for the six months ended June 30, 2023 and the fiscal years ended
December 31, 2022, 2021, and 2020.
We
do not enter into long-term supplier agreements with our sourcing suppliers. The relationships with our suppliers are established through
our history of long-term cooperation. The members of our core management team have years of experience in the automotive industry
and have established extensive and in-depth contacts with our suppliers.
Our
EV Business
UOTTA-powered
EVs
We
are dedicated to the research and development, and promotion and sales of our UOTTA-powered EVs. As of the date of this prospectus, we
have entered into cooperating agreements to jointly develop UOTTA-powered EVs with two major automobile manufactures by adapting selected
EV models with our UOTTA technology. Depending on the manufacturer, the terms of these agreements are either three or five years.
Each UOTTA-powered EV model is designed to meet all safety and technical requirements specified by the safety and operational standards
mandated by the Ministry of Industry and Information Technology of the PRC (“MIIT”). Prior to sale to the public, each UOTTA-powered
EV model must have been certified by authorities designated by the Accreditation Administration Committee as qualified products and granted
certification marks, as well as pass inspections conducted by a state-recognized testing institution, and obtain approvals from the MITT. As
of the date of this prospectus, HUBEI TRI-RING Motor Co., Ltd. has received approvals from the MITT on two UOTTA-powered electric truck
models adapted with our UOTTA technology.
Salient
terms of the agreements with our cooperating automobile manufacturers in relation to the development, manufacturing and sales of the
UOTTA-powered EVs are as follows:
|
● |
The automobile manufacturer
will select, from its existing product pipeline, car model(s) that are suitable to be transformed into UOTTA-powered EV(s).
The automobile manufacturer shall also manufacture, promote and distribute the UOTTA-powered EVs. |
|
● |
We will provide battery-swapping
technology solutions that transform the selected EV model into a UOTTA-powered EV that allows battery-swapping at our UOTTA battery-swapping
stations. We shall also promote and distribute the UOTTA-powered EVs. |
|
● |
We will develop, manufacture,
and construct compatible battery-swapping stations for the jointly-developed UOTTA-powered EVs, and provide customer services for
users of the UOTTA battery-swapping services at the stations. |
|
● |
In some cases, we will
provide financing plans and solutions to support the joint development, promotion, and sales of the UOTTA-powered EVs and battery-swapping
stations. |
|
● |
We will assist the manufacturer
in obtaining MIIT approvals for UOTTA-powered EV models. |
UOTTA
Battery-Swapping Stations
Drivers
of UOTTA-powered EVs can replace depleted batteries for ones that are fully charged at compatible UOTTA battery-swapping stations. Currently,
due to the yet to be resolved issue of battery standardization, UOTTA battery-swapping stations can only service certain compatible EV
models. The Titan model of UOTTA battery-swapping station is designed to service electric heavy trucks, while the Chipbox model is designed
to service electric light trucks, logistics vehicles, ride-hailing passenger cars and taxis. For further details, see “Item 3.
Key Information — D. Risk Factors —Risk Factors — Risks Relating to the Development and Sales of UOTTA-powered
EVs and Battery-Swapping Stations — We may encounter difficulty promoting and marketing UOTTA-powered EVs and battery-swapping
stations because of the lack of unified industry standards on EV batteries” in the 2022 Annual Report.
The
typical size of a Titan station is approximately 6 to 8 parking spaces, or 60 square meters. The typical size of a Chipbox station is
approximately 8-10 parking spaces, or 90 square meters. UOTTA battery-swapping stations are capable of automated operations. Once
a vehicle is parked in the station and the driver activates the swap function, battery-swapping will take place automatically. Our UOTTA
battery-swapping stations are jointly-developed with our cooperating battery-swapping station manufacturers using advanced modular replacement
technology, capable of battery-swapping services of compatible EVs within a few minutes.
The
base prices of the Titan model range from RMB2,500,000 to 3,500,000 per unit, and the base price of the Chipbox model ranges from RMB2,200,000
to 3,000,000 per unit. The prices include assembling and installing of the stations, but exclude the construction or infrastructure costs
of the physical battery-swapping station. The expected useful-life of the stations is approximately 10 to 15 years. To purchase
a UOTTA battery-swapping station, a customer is required to make a non-refundable deposit in the amount of approximately 40% of the full
price. The prospective buyers/operators of our battery-swapping stations are the existing oil/gas station owners/operators and transportation
business owners such as ride-hailing service providers and logistics companies. In an effort to promote the adoption of our battery-swapping
stations, we have generally adopted the following forms of agreement:
|
● |
Battery-swapping
station operation agreement (“Station Operation Agreement”). Pursuant to the Station Operation
Agreement, the prospective station owners shall purchase one or more battery-swapping stations and install the stations at premises
owned or leased by them. For those prospective station owners who operate stations by themselves, we will provide training and supervision
on the operation of the stations for a period of not more than two months; for those who choose to entrust us to operate their
stations, we will operate the stations for a pre-determined monthly fee for a term of 5 years. |
|
● |
Battery-swapping
station operation agreement (“Station Cooperation Agreement”). Pursuant to the Station
Cooperation Agreements, we shall invest in, build and operate a pre-determined number of battery-swapping stations at locations as
selected and prepared by our customers for a pre-determined length of time, generally for 8 years. The customer may elect to purchase
the battery-swapping stations at pre-determined prices during this period. In the event that the customer does not exercise its right
to purchase the battery-swapping stations, we will continue to own and operate the battery swapping stations, and shall lease the
premises of the battery-swapping stations from the customer at pre-determined rates after 180 days of operation. |
|
● |
Battery-swapping
station sales agreement (“Station Sales Agreement”). Pursuant to the Station Sales Agreement, we are responsible
for supply and delivery of battery-swapping stations to the prospective buyers, who will be responsible for the construction and
operation of the battery-swapping stations. |
In
fiscal year 2021, we sold three stations to three customers pursuant to Station Operation Agreements and our customers are in the process
of selecting and finalizing the locations for the construction and installation of these stations. In fiscal year 2022, we sold and delivered
two stations to two customers pursuant to the Station Sales Agreements.
On
June 22, 2021, we entered into a Station Cooperation Agreement with one customer, Quanzhou Xinao, to invest in, build and operate four
battery-swapping stations in Quanzhou City, Fujian Province. In January 2022, we completed the construction of one station and started
operating the station. After 180 days of operation, Quanzhou Xinao chose not to purchase the station from us, and subsequently we entered
into a lease agreement with Quanzhou Xinao to lease the premises of the battery-swapping station for a period of eight years, from July
16, 2022 to July 15, 2030, during which time we will continue to own and operate this station unless Quanzhou Xinao exercises its right
to purchase the station from us. We completed the construction of a second station pursuant to our agreement with Quanzhou Xinao in December
2022. On January 15, 2023, we entered into a lease agreement with Quanzhou Xinao for a period of eight years, from January 16, 2023 to
January 15, 2031, for the premises of the second swapping station. We commenced the operation of the station in February 2023.
UOTTA
Data Management Platform
As
part of a comprehensive battery power solution, our self-developed UOTTA data management platform collects and synchronizes real-time
information, including battery power voltage and remaining cruising range of the UOTTA-powered EVs, uploaded by their respective VCUs,
as well as information on the availability and locations of compatible UOTTA battery-swapping stations. The UOTTA data management platform
then provides information to assist a driver in locating the nearest compatible UOTTA battery-swapping station(s) available when
the EV’s battery is determined to be lower than a certain level. As of the date of this prospectus, we have substantially completed
the development of the main functionalities of the data management platform, and are in the process of developing ancillary programs
and applications that assist with the day-to-day operations of the UOTTA battery-swapping stations and user management.
Research
and Development (R&D)
Our
engineering research and development headquarters is in Shanghai, where we have a team of 34 research and development personnel, as of
the date of this prospectus. For the six months ended June 30, 2023 and the fiscal years ended December 31, 2022, 2021, and 2020, our
R&D expenses accounted for 102.4%, 120.0%, 67.1%, and 7.6% of our revenues, respectively.
Vehicle
Engineering. We have in-house vehicle engineering capabilities which cover all areas of vehicle engineering, starting from concept
to completion. Our vehicle engineering group consists of three personnel. Our vehicle engineering team is located at our Shanghai headquarters,
which location was selected due to its status as a global automotive hub, providing us with valuable exposure to a significant talent
pool.
Battery-swapping
Stations. We have in-house battery-swapping station design and engineering capabilities, which cover all areas of battery-swapping
station design and engineering starting from layout design to operational platform design. Our battery-swapping station engineering group
consists of 10 personnel.
Data
management platform. We have in-house data management platform design and development capabilities, which cover all areas of
online vehicle and user management system and power exchange service order management system. Our data management platform development
group consists of 21 personnel.
Servicing
and Warranty Terms
Servicing.
We provide servicing in relation to the UOTTA-powered battery-swapping stations primarily through our in-house after-sales team,
which provides training, repair and maintenance services. We plan to form a service management team, which will be responsible for supervising
and management of our after-sales team. Our team will select the location of our service centers primary based on the following criteria:
(i) UOTTA-powered EVs and battery-swapping stations density (ii) the number of authorized dealers or service providers of our
cooperating auto manufacturers; (iii) labor and operational costs. We expect to establish UOTTA authorized service centers in 8
cities in 6 provinces by the end of 2024. Servicing in relation to the UOTTA-powered EVs will be primarily provided by our cooperating
auto manufacturers through certain authorized dealers or service providers, which provide repair and maintenance services.
Limited
Warranty Policy. For UOTTA battery-swapping stations, we provide a limited one-year warranty, subject to certain conditions.
Warranties for parts and components are provided by our suppliers. In addition, after our one-year warranty expires, we will provide
life-time maintenance service for UOTTA battery-swapping stations and only charge the owners costs for replacement parts and components.
For UOTTA-powered EVs, our cooperation automobile manufactures will provide a limited warranty, subject to certain conditions and requirements
of the relevant PRC laws and regulations.
Manufacturing,
Supply Chain and Quality Control
We
view the manufacturers and suppliers we work with as key partners through our vehicle and battery-swapping station development process.
We aim to leverage our partners’ industry expertise to ensure that our products meet strict quality standards.
Manufacturing
of Battery-swapping Stations
We
entered into cooperation agreements with one battery-swapping station manufacturers for the joint development and manufacturing of UOTTA
battery-swapping stations. The manufacturing process in our own factory is mainly assembly of parts and components procured from our
cooperating battery-swapping station manufacturers.
Zibo
Battery-swapping Station Factory (“Zibo Factory”). We completed the construction of our Zibo Factory in August 2021
and commenced production of UOTTA battery-swapping stations in January 2022. The Zibo Factory is located in Zibo City, Shandong
Province, with approximately 15,430 square meters of production. The lease for the Zibo Factory is 5 years from April 2022.
We also lease the equipment at the Zibo Factory. The full production capacity of the Zibo Factory ranges from 180 to 250 units per
year. In May 2023, we cancelled our plan to construct another factory in the Wuhu City, because our current production demand can
be adequately served by our Zibo Factory.
Our
Battery-swapping Station Suppliers
Our
supply base is located in China, which we believe is beneficial, as it enables us to acquire supplies more quickly and reduces the risk
of delays related to shipping and importing of parts and components required for the manufacturing of UOTTA battery-swapping stations.
We expect that as our scale increases, such access to our supply base will enable us to take advantage of economies of scale with respect
to pricing. We obtain components, parts, manufacturing equipment and other supplies and services from suppliers which we believe to be
reputable and reliable. We follow our internal process to source suppliers, taking into account quality, cost and timing.
Our
method for sourcing suppliers depends on the nature of the supplies needed. For general parts which are widely available, we seek proposals
from multiple suppliers and choose those mainly based on quality and price competitiveness. For parts requiring special designs, we solicit
design proposals and choose suppliers largely based on design-related factors. However, in certain cases we have limited choices, given
our scale. In such circumstances, we typically partner with suppliers that we believe to be well-positioned to meet our needs.
We
do not directly procure raw materials used in the manufacturing of our UOTTA battery-swapping stations; we only procure parts and components
from our suppliers. We enter into purchase agreements with key suppliers. The agreements with our suppliers allow us to purchase parts
and components on a per purchase order basis. The main parts and components include containers, charging cabinets, station control software
and hardware. Furthermore, prices for the parts and components fluctuate, depending on various market conditions and price of the raw
materials, such as steel, aluminum, copper, rubber, that are used by our suppliers to manufacture such parts and components. The prices
for raw materials are subject to market forces largely beyond our control, including energy costs, market demand, economy trend, and
freight costs. See “Item 3. Key Information — D. Risk Factors — Risk Factors — Risks Relating to the
Development and Sales of UOTTA-powered EVs and Battery-Swapping Stations — We could experience cost increases or disruptions
in supply of raw materials or other components used in the manufacturing of battery-swapping stations” in the 2022 Annual Report.
Quality
Assurance.
We
aim to deliver high-quality products and services to our customers in line with our core values and commitments. We believe that our
quality assurance systems are the key to ensuring the delivery of high-quality products and services. We also seek to minimize waste
and to maximize efficiency of our manufacturing process. We emphasize quality management across all business functions, including product
development, manufacturing, supplier selection, procurement, servicing and logistics. Our quality management team consists of five members
who are responsible for our overall quality strategy, quality systems and processes, and general quality management implementation.
Competition
We
compete in both the vehicle sourcing and EV battery swapping markets in the PRC, and competition in both markets is intense and fast
evolving. According to Frost & Sullivan, China’s current vehicle sales market is highly concentrated and consists of traditional
car companies, internet technology companies, and new energy car companies. Battery-swapping operators can be categorized into EV manufacturers
and independent battery-swapping operators. The EV manufacturers mainly serve their own battery-swapping electric vehicle models, while
the independent battery-swapping operators offer services to various cooperated EV manufacturers. With the development of battery-swapping
technology and the growing battery-swapping infrastructure and supportive government policies, it is expected that more market players
will enter the battery-swapping market in the near future.
Intellectual
Property
We
have invested heavily in the areas of battery-swapping solution R&D and developed our proprietary UOTTA technology. As a result,
our success depends, in part, on our ability to protect our technology and intellectual property. To accomplish this, we rely on a combination
of patents, patent applications, trade secrets, including employee and third-party nondisclosure agreements, copyright laws, trademarks,
and other contractual rights to establish and protect our proprietary rights in our intellectual property. As of the date of this prospectus,
we had 31 issued patents and 7 pending patent applications, 14 registered trademarks and 6 pending trademark applications in China, and
we also held or otherwise had the legal right to use 4 registered software copyrights and 4 registered artwork copyrights. Set forth
below is a detailed description of our registered patents:
Country |
|
Patent
No. |
|
Patent
Name |
|
Patent
Publication
Date |
|
Patent
Type |
|
Patent
Validity
Period |
|
Patent
Status |
PRC |
|
CN202122540404.8 |
|
Floating Lock Nut Device
for Electric Vehicle Swappable Battery Pack |
|
2022-04-12 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121845193.2 |
|
Battery Pack Self-Locking
Device for Electric Vehicles |
|
2022-04-12 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121781707.2 |
|
Rooting Device for Electric
Vehicle Battery Pack |
|
2022-01-28 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121731681.0 |
|
Electric Vehicle Battery
Pack Capable of Voltage Switching |
|
2022-01-28 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121147208.8 |
|
A New Energy Heavy Truck
Battery-Swapping Unit |
|
2022-01-18 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN201921036843.1 |
|
A Temporary Storefront
with Diverse Application Scenarios |
|
2020-06-09 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121688515.7 |
|
Locking and Unlocking
Device of Swappable Battery Pack for Electric Vehicles |
|
2022-01-11 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121686004.1 |
|
Swappable Battery Pack
Locking Device |
|
2022-01-28 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121686020.0 |
|
Battery Pack Locking
Device for Electric Vehicles |
|
2022-01-11 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC
|
|
CN202121096648.5 |
|
An Unmanned Vehicle
Battery-Swapping Unit |
|
2022-08-30 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC
|
|
CN202220774766.5 |
|
Battery Pack Swapping
Connector |
|
2022-07-26 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC
|
|
CN202220697269.X |
|
Double Spring-Limited
Battery Pack Locking Mechanism for Electric Vehicles |
|
2022-07-26 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC
|
|
CN202220591673.9 |
|
Battery Pack Rooting
Mechanism with Fault Tolerance |
|
2022-07-26 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202121147209.2 |
|
A Spreader for Battery-Swapping
of New Energy Vehicles |
|
2022-01-18 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202320055606.X |
|
Battery Box Compartment
Rack Assembly for Charging Stations |
|
2023-04-25 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202320136496.X |
|
Battery Box Locking
Device for Electric Vehicles |
|
2023-06-13 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202110907285.7 |
|
Flexible Battery Enclosure
for Electric Vehicles |
|
2022-09-30 |
|
Invention Patent |
|
20 years |
|
Registered |
PRC
|
|
CN202111349980.2 |
|
System for Information
Exchange and Battery Swapping between Vehicles and Swap Stations |
|
2023-06-20 |
|
Invention Patent |
|
20 years |
|
Registered |
PRC |
|
CN202222076850.2 |
|
An Unmanned
Electric Vehicle Swapping Drone |
|
2022-11-15 |
|
Utility
Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202222101377.9 |
|
An Accurately Positioned
Heavy-Duty Electric Vehicle Swapping Station Lifting Device |
|
2023-04-07 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202222130650.0 |
|
A Vehicle-Mounted Battery
Pack Base Suitable for Heavy-Duty Trucks |
|
2022-12-13 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202222227148.1 |
|
A New Energy Vehicle
Battery Swapping System Powered by Clean Energy Sources |
|
2023-03-24 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202222519831.2 |
|
A Rotatable Heavy-Duty
Vehicle Battery Swapping Station Hoist |
|
2023-01-17 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202222650534.1 |
|
An Electric Vehicle
Battery Swapping Lock |
|
2023-01-31 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202223083482.0 |
|
Suspension-Type Battery
Box Mounting Mechanism |
|
2023-04-18 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202223131182.5 |
|
Quick-Release DC Output
Charging Device |
|
2023-03-28 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202223315209.6 |
|
An Exchangeable Battery
Pack Exchange Structure |
|
2023-05-09 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202230617507.7 |
|
Quick-Change Battery
Pack |
|
2023-01-10 |
|
Design Patent |
|
15 years |
|
Registered |
PRC |
|
CN202320057020.7 |
|
Battery Box Transport
Device for Swapping Stations |
|
2023-05-26 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202320125070.4 |
|
Battery Pack Maintenance
and Storage Cabinet |
|
2023-06-23 |
|
Utility Model Patent |
|
10 years |
|
Registered |
PRC |
|
CN202222163173.8 |
|
A Mobile Device for
Heavy-Duty Battery Swapping Stations |
|
2022-11-22 |
|
Utility Model Patent |
|
10 years |
|
Registered |
Employees
We
had 105, 141, and 46 full-time employees for the fiscal years ended December 31, 2022, 2021 and 2020, respectively. The following
table sets forth the numbers of our employees categorized by function as of September 30, 2023.
Function | |
As
of
September, 30 2023 | |
Executives | |
| 4 | |
Research and Development | |
| 34 | |
Sales and marketing | |
| 21 | |
Operation and Administrative | |
| 46 | |
Manufacturing | |
| 22 | |
Total number of employees | |
| 127 | |
We
enter into employment contracts with our full-time employees. As required by regulations in China, our Chinese subsidiaries participate
in various employee social security plans that are organized by municipal and provincial governments for our PRC-based full-time employees,
including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance.
Our PRC subsidiaries are required under PRC law to make contributions from time to time to employee benefit plans for full-time employees
at specified percentages of the salaries, bonuses and certain allowances of such employees, up to a maximum amount specified by the local
governments in China. For more details, please see “Item 4. Information On The Company — Regulations — Regulation
Related to Employment, Social Insurance and Housing Fund.”
Our
employees are not covered by any collective bargaining agreements. We believe that we maintain a good working relationship with our employees,
and we have not experienced any significant labor disputes.
Facilities
As
of the date of this prospectus, we lease all of our facilities. The following table sets forth the location, approximate size, primary
use and lease term of our major leased facilities:
Location | |
Approximate
Gross Floor Area in Square Meters | | |
Primary
Use | |
Lease
or Own | |
Lease
Expiration
Date |
Anhui,
China | |
| 1,292 | | |
Global headquarters | |
Lease | |
12/31/2023 |
Shanghai,
China | |
| 752 | | |
Office | |
Lease | |
11/15/2023 |
Liaoning,
China | |
| 500 | | |
Office | |
Lease | |
11/17/2023 |
Anhui,
China | |
| 15,300 | | |
Factory | |
Lease | |
7/31/2024 |
Henan,
China | |
| 385 | | |
Office | |
Lease | |
3/31/2024 |
Zibo,
China | |
| 3,284 | | |
Office | |
Lease | |
10/31/2023 |
Zibo,
China | |
| 15,430 | | |
Factory | |
Lease | |
3/31/2027 |
Fujian,
China | |
| 180 | | |
Battery Swapping Station | |
Lease | |
7/15/2030 |
Fujian,
China | |
| 150 | | |
Battery Swapping Station | |
Lease | |
1/15/2031 |
In
December 2021, Youpin SD., Youxu New Energy Technology (Zibo) Co., Ltd. (a wholly owned subsidiary of Youpin SD.), Mr. Jia
Li, and Shandong Qiying Industrial Investment Development Co., Ltd. (“Shandong Qiying”) entered into a Capital Increase Agreement.
Pursuant to the Capital Increase Agreement, in exchange for the total rental fees in the amount of RMB15,670,840, for both the factory
and equipment of the Zibo Factory, Shandong Qiying shall receive 15% of the equity shares of Youxu New Energy Technology (Zibo) Co.,
Ltd. Furthermore, Youxu New Energy Technology (Zibo) Co., Ltd. and Shandong Qiying entered into a lease agreement on December 28, 2021,
pursuant to the Capital Increase Agreement.
Insurance
We
maintain certain types of insurance to safeguard against risks and unexpected events. For example, we provide social security insurance,
including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for employees. We also maintain
employer liability insurance. We are not required to maintain business interruption insurance or product liability insurance in China
under PRC laws and do not maintain key person insurance, insurance policies covering damages to network infrastructures or information
technology systems, nor any insurance policies for properties. For the six months ended June 30, 2023 and the fiscal years ended December
31, 2022, 2021, and 2020, we did not file any material insurance claims in relation to our businesses.
Seasonality
The
automobile industry in China is subject to seasonal variations in revenues. Demand for automobiles is generally higher before or during
certain major Chinese holidays, such as the Lunar New Year in January/February, the Labor Day holidays in May and the National Day holidays
in October. Accordingly, we expect our revenues and operating results generally to be higher in these periods than in other months of
the year.
Legal
Proceedings
From
time to time, we may be involved in legal proceedings in the ordinary course of our business. Litigation or any other legal or administrative
proceeding, regardless of the outcome, is likely to result in substantial costs and diversion of our resources, including our management’s
time and attention.
Youpin was a party to a lawsuit commenced by Anhui Juhu Menchuang Technologies
Company Limited (“Anhui Juhu”), in which Youpin was requested to pay the rent for an office of RMB2.0 million and a penalty
for breach of contract of RMB0.9 million, resulting from Youpin’s early termination of the lease contract. Youpin lost the first
trial on April 20, 2023. On October 30, 2023, the appellate court upheld the decision of the first trial. As of the date of this prospectus,
Youpin has not paid the rent and penalty.
AHYS
was sued by Ningbo Meishan Bonded Port Zone Chenhui Investment Partnership Enterprise (Limited Partnership) (“Chenhui”) in
relation to an equity transfer transaction between AHYS and Chenhui. On May 30, 2023, AHYS and Chenhui entered into a settlement agreement,
pursuant to which AHYS agreed to pay the attorney fee, equity transfer fee and arbitration fee with a total of RMB1.3 million. As of
the date of this prospectus, AHYS has paid RMB30,000.
ZJ
Youguan was sued by WuYi Transportation Construction Investment Group Company Limited (“WuYi Transportation Construction”)
for its failure to repay loan payables. ZJ Youguan lost the first trial on March 20, 2023. On June 13, 2023, ZJ Youguan and WuYi Transportation
Construction entered into a settlement agreement, pursuant to which ZJ Youguan agreed to pay the remaining loan payables of RMB6.5 million
by December 15, 2023.
Youpin
SD sued one of its vehicle sourcing service providers, Inner Mongolia Zhonglutong Trading Co., Ltd., for its failure to deliver vehicles
as scheduled to Youpin SD’s customer. Youpin SD won the case on September 8, 2022. On March 23, 2023, both parties entered into
a settlement agreement, and Inner Mongolia Zhonglutong Trading Co., Ltd. agreed to return the deposit and pay liquidated damages with
a total of RMB2.7 million. As of the date of this prospectus, Youpin SD has not received any payment from Inner Mongolia Zhonglutong
Trading Co., Ltd.
Youpin was sued by Beijing Hengyuan Xinye Information
Technology Co., Ltd. (“Hengyuan Xinye”) who is the creditor of Nanmu (Shanghai) Finance Leasing Co., Ltd., a business partner
of Youpin, for providing joint and several liability guarantee for Nanmu (Shanghai) Financial Leasing Co., Ltd. On December 30, 2021,
Youpin won the first trial. On July 31, 2023, the appellate court upheld the decision of the first trial.
Youpin initiated a lawsuit against Hainan Gaozhan New Energy Vehicle
Co., Ltd (“Hainan Gaozhan”) and claimed that Hainan Gaozhan shall refund the exhibition deposit in the amount of RMB170,000
and related interest, and shall pay the liquidated damages in the amount of RMB20,000. The court accepted the case on September 11, 2023.
REGULATIONS
This
section sets forth a summary of the principal laws and regulations relevant to our business and operations in the PRC and the U.S.
Regulations
Related to Foreign Investment
The
establishment, operation and management of companies in the PRC are mainly governed by the Company Law, which was issued by the Standing
Committee of the National People’s Congress and was last amended in October 2018. The Company Law applies to both PRC domestic
companies and foreign-invested companies. The investment activities in China of foreign investors are also governed by the Foreign Investment
Law, which was approved by the National People’s Congress of China in March 2019 and took effect on January 1, 2020.
Along with the Foreign Investment Law, the Implementing Rules of Foreign Investment Law promulgated by the State Council and the Interpretation
of the Supreme People’s Court on Several Issues Concerning the Application of the Foreign Investment Law promulgated by the Supreme
People’s Court became effective on January 1, 2020. Pursuant to the Foreign Investment Law, the term “foreign investments”
refers to any direct or indirect investment activities conducted by any foreign investor in the PRC, including foreign individuals, enterprises
or organizations; such investment includes any of the following circumstances: (i)foreign investors establishing foreign-invested enterprises
in the PRC solely or jointly with other investors, (ii)foreign investors acquiring shares, equity interests, property portions or other
similar rights and interests thereof within the PRC, (iii)foreign investors investing in new projects in the PRC solely or jointly with
other investors, and (iv)other forms of investments as defined by laws, regulations, or as otherwise stipulated by the State Council.
Pursuant
to the Foreign Investment Law, the State Council shall promulgate or approve a list of special administrative measures for access of
foreign investments. We refer to this as the negative list. The Foreign Investment Law grants treatment to foreign investors and their
investments at the market access stage which is no less favorable than that given to domestic investors and their investments, except
for the investments of foreign investors in industries deemed to be either “restricted” or “prohibited” on the
negative list. The Foreign Investment Law provides that foreign investors shall not invest in the “prohibited” industries
on the negative list, and shall meet such requirements as stipulated under the Negative List for making investment in “restricted”
industries on the negative list. Accordingly, the National Development and Reform Commission, or the NDRC, and the Ministry of Commerce
promulgated the Special Entry Management Measures (Negative List) for the Access of Foreign Investment (2021 version), or the 2021 Negative
List, which took effect on January 1, 2022, and the NDRC and the Ministry of Commerce promulgated the Encouraged Industry Catalogue for
Foreign Investment (2022 version), or the 2022 Encouraged Industry Catalogue, which took effect on January 1, 2023. Industries not listed
in the 2021 Negative List and 2022 Encouraged Industry Catalogue are generally open for foreign investments unless specifically restricted
by other PRC laws.
The
Foreign Investment Law and its implementing rules also provide several protective rules and principles for foreign investors and their
investments in the PRC, including, among others, local governments shall abide by their commitments to the foreign investors; foreign-invested
enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall
be followed and fair and reasonable compensation shall be made in a timely manner; expropriation or requisition of the investment of
foreign investors is prohibited; mandatory technology transfer is prohibited; and the capital contributions, profits, capital gains,
proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or proceeds
received upon settlement by foreign investors within China, may be freely remitted inward and outward in RMB or a foreign currency. Also,
foreign investors or the foreign investment enterprise will have legal liabilities imposed for failing to report investment information
in accordance with the requirements. Furthermore, the Foreign Investment Law provides that foreign-invested enterprises established prior
to the effectiveness of the Foreign Investment Law may maintain their legal form and structure of corporate governance within five years
after January 1, 2020.
Regulation Related
to Automobile Sales
Pursuant
to the Administrative Measures on Automobile Sales promulgated by the Ministry of Commerce, which became effective on July 1, 2017,
automobile suppliers and dealers are required to file with the relevant authorities through the national automobile circulation information
system operated by the competent commerce department within 90 days after the receipt of a business license. Where there is any
change to the information filed, automobile suppliers and dealers must update such information within 30 days after such change.
Favorable
Government Policies Relating to New Energy Vehicles (“NEV”) in China
Government
Subsidies for NEV Purchasers
On
April 22, 2015, the Ministry of Finance, or the MOF, the Ministry of Science and Technology, or the MOST, the MIIT and the NDRC
jointly issued the Circular on the Financial Support Policies on the Promotion and Application of New Energy Vehicles in 2016 – 2020,
or the Financial Support Circular, which took effect on the same day. The Financial Support Circular provides that those who purchase
NEVs specified in the Catalogue of Recommended New Energy Vehicle Models for Promotion and Application by the MIIT may obtain subsidies
from the PRC national government. Pursuant to the Financial Support Circular, a purchaser may purchase a new energy vehicle from a seller
by paying the original price minus the subsidy amount, and the seller may obtain the subsidy amount from the government after such new
energy vehicle is sold to the purchaser.
On
December 29, 2016, the MOF, the MOST, the MIIT and the NDRC jointly issued the Circular on Adjusting the Subsidy Policy for the
Promotion and Application of New Energy Vehicles, or the Circular on Adjusting the Subsidy Policy, which took effect on January 1,
2017, to adjust the existing subsidy standards for purchasers of NEVs. The Circular on Adjusting the Subsidy Policy capped the local
subsidies at 50% of the national subsidy amount, and further specified that national subsidies for purchasers purchasing certain NEVs
(except for fuel cell vehicles) from 2019 to 2020 was reduced by 20% as compared to 2017 subsidy standards.
The
Circular on Adjusting and Improving the Subsidy Policies for the Promotion the Application of New Energy Vehicles, which was jointly
promulgated by the MOF, the MOST, the MIIT and the NDRC on February 12, 2018 and became effective on the same day further adjusted
and improved the existing national subsidy standards for purchasers of NEVs.
Following
the issuance of the foregoing circulars and other relevant regulations, a number of local governments, including, among others, Shanghai,
Beijing, Guangzhou, Shenzhen, Chengdu, Nanjing, Hangzhou and Wuhan, have issued policies on local subsidies for purchasers of NEVs, and
have adjusted the local subsidy standards annually according to the national subsidy standard. For example, on January 31, 2018,
the Development and Reform Commission of Shanghai together with other six local authorities jointly issued the Implementation Rules on
Encouraging the Purchase and Use of New Energy Vehicles in Shanghai, pursuant to which local governments may provide local subsidies
equal to 50% of the national subsidy amount to the purchaser of qualified pure electric passenger vehicles.
According
to the 2018 regulations, the pure electric vehicle subsidy amount is divided into “four gears” with a cruising range of 150
to 200 kilometers, 200 to 250 kilometers, 250 to 300 kilometers, 300 to 400 kilometers and above, except for vehicles under 150 kilometers.
The subsidy amounts are respectively RMB 15,000, RMB 24,000, RMB 34,000, RMB 45,000 and RMB 50,000.
In
2019, the threshold for pure electric vehicles has been raised to 250 kilometers. Pure electric new energy vehicles with a cruising range
between 250 and 400 kilometers can enjoy a subsidy of RMB 18,000; pure electric new energy vehicles with a cruising range of more than
400 kilometers can enjoy a subsidy of RMB 25,000. At the same time, the subsidy amount for plug-in hybrid models with a mileage of more
than 50 kilometers in pure electric state has also been reduced from RMB 22,000 in 2018 to RMB 10,000.
On
April 23, 2020, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology,
and the Development and Reform Commission jointly issued the “Notice on Improving the Financial Subsidy Policy for the Promotion
and Application of New Energy Vehicles,” extending the implementation period of the financial subsidy policy for the promotion
and application of new energy vehicles to the end of 2022. In principle, the subsidy standard for 2020 – 2022 was
reduced by 10%, 20%, and 30% on the basis of the previous year and the threshold for pure electric vehicles has been raised to 300 kilometers.
For example, in 2020, pure electric new energy vehicles with a cruising range between 300 and 400 kilometers can enjoy a subsidy of RMB
16,200; pure electric new energy vehicles with a cruising range of more than 400 kilometers can enjoy a subsidy of RMB 22,500. At the
same time, the subsidy amount for plug-in hybrid models with a mileage of more than 50 kilometers in pure electric state can enjoy a
subsidy of RMB 8,500. In addition, the annual subsidy limit is about 2 million vehicles.
On
July 15, 2020, the MIIT, the Ministry of Agriculture and Rural Affairs, and the Ministry of Commerce jointly issued the Notice
of the General Office of the Ministry of Industry and Information Technology of the General Office of the Ministry of Agriculture and
Rural Affairs on the Development of New Energy Vehicles to the Countryside, which jointly promote the adoption of new energy vehicles
in rural areas, guide rural residents to upgrade their travel modes, and assist in the construction of beautiful villages and rural revitalization
strategies.
Exemption
of Vehicle Purchase Tax
On
December 26, 2017, the Ministry of Finance, the SAT, the MIIT, and the Ministry of Science and Technology jointly issued the Announcement
on Exemption of Vehicle Purchase Tax for New Energy Vehicle, pursuant to which, from January 1, 2018 to December 31, 2020,
the vehicle purchase tax applicable to ICE vehicles is not imposed on purchases of qualified NEVs listed in the Catalogue of New Energy
Vehicle Models Exempt from Vehicle Purchase Tax issued by the MIIT, including NEVs listed before December 31, 2017.
On
April 16, 2020, the Ministry of Finance, the SAT, and the MIIT jointly issued the Announcement on Exemption Policy of Vehicle Purchase
Tax for New Energy Vehicle, which was effective on January 1, 2021, pursuant to which the exemption of vehicle purchase tax for
the NEVs was extended to 2022.
On
September 18, 2022,the Ministry of Finance, the SAT, and the MIIT jointly issued the Announcement on the Continuation of the Vehicle
Purchase Tax Exemption Policy for New Energy Vehicles, which became effective on September 18, 2022, pursuant to which the exemption
of vehicle purchase tax for the NEVs will be extended to December 31, 2023.
On
June 19, 2023, the Ministry of Finance, the SAT, and the MIIT jointly issued the Announcement on the Continuation and Optimization of
Vehicle Purchase Tax Relief Policies for New Energy Vehicle, which took effect on June 19, 2023, pursuant to which the exemption of vehicle
purchase tax was extended and optimized.
Non-Imposition
of Vehicle and Vessel Tax
Pursuant
to the Preferential Vehicle and Vessel Tax Policies for Energy-Saving and New Energy Vehicles and Vessels jointly promulgated by the
Ministry of Finance, the Ministry of Transport, the SAT, and the MIIT, on July 10, 2018, NEVs, including battery electric commercial
vehicles, plug-in (including extended-range) hybrid electric vehicles, fuel cell commercial vehicles are exempt from vehicle and vessel
tax, whereas BEVs and fuel cell passenger vehicles are not subject to vehicle and vessel tax. The qualified vehicles are listed in the
Catalogue of New Energy Vehicle Models Exempt from Vehicle and Vessel Tax issued by the MIIT and SAT from time to time.
NEV
License Plates
In
recent years, in order to control the number of motor vehicles on the road, certain local governments in China, such as Shanghai,
Tianjin, Shenzhen, Guangzhou, and Hangzhou, have issued restrictions on the issuance of vehicle license plates. These restrictions generally
do not apply to the issuance of license plates for NEVs (including EREVs, or extended-range electric passenger vehicles), which makes
it easier for NEV purchasers to obtain license plates. For example, in Shanghai, local authorities will issue new license plates to qualified
NEV purchasers pursuant to the Implementation Measures on Encouraging Purchase and Use of New Energy Vehicles in Shanghai, without requiring
such qualified purchasers to go through certain license-plate bidding processes and to pay license-plate purchase fees as compared with
ICE vehicle purchasers. However, in Beijing, EREVs are treated as ICE vehicles for the purposes of obtaining license plates under the
Administration Rules on Encouraging Implementation of New Energy Vehicles in Beijing. Potential EREV purchasers in Beijing must participate
in a lottery for a purchase permit, instead of applying for the NEV license plates based on the quota determined by the local authorities
in Beijing.
Policies
Relating to Incentives for Electric Vehicle Charging Infrastructure
Pursuant
to the Guiding Opinions of the General Office of the State Council on Accelerating the Promotion and Application of the New Energy Vehicles
which took effect on July 14, 2014, the Guiding Opinions of the General Office of the State Council on Accelerating the Construction
of Charging Infrastructure of the Electric Vehicle which took effect on September 29, 2015 and the Guidance on the Development of
Electric Vehicle Charging Infrastructure (2015 – 2020) which took effect on October 9, 2015, the PRC government
encourages the construction and development of charging infrastructure for electric vehicles, such as charging stations and battery swap
stations, and requires relevant local authorities to adopt simplified construction approval procedures and expedite the approval process.
In particular, only newly-built centralized charging and battery replacement power stations with independent land occupation are required
to obtain the construction approvals and permits from the relevant authorities. Government guidance price should be implemented in managing
the rate of the charging service fees before the year 2020.
On
January 11, 2016, the Ministry of Finance, the Ministry of Science and Technology, the MIIT, the NDRC, and the National Energy Administration
jointly promulgated the Circular on Incentive Policies on the Charging Infrastructures of New Energy Vehicles and Strengthening the Promotion
and Application of New Energy Vehicles During the 13th Five-year Plan Period, which became effective on January 11, 2016.
On
January 1, 2022, the Implementation Opinions on Further Improving the Service Support Capability of Electric Vehicle Charging Infrastructure
(“Implementation Opinions”) was issued jointly by the NDRC, the National Energy Administration, the Ministry of Industry
and Information Technology, the Ministry of Finance, the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development,
the Ministry of Transport, the Ministry of Agriculture and Rural Affairs, the Ministry of Emergency Management, and the State Administration
for Market Regulation. The Implementation Opinions require that, by the end of 2025, China’s capacity of charging and supporting
facilities for electric vehicles to be further improved to support more than 20 million electric vehicles, and encourage local governments
to: (i) establish subsidy standards based on service quality to further incentivize the development of high-quality facilities;
(ii) expand subsidies for developmental and demonstrative facilities such as high-power charging and vehicle-network interaction
facilities, to promote industry transformation and upgrading. On October 20, 2020, the General Office of the State Council issued
the Notice on Development Plan of New Energy Vehicles Industry (2021 – 2035). Pursuant to the notice, new energy vehicles
industry in China has entered a new stage for accelerated development, in which the state plans to promote the construction of charging
and swapping networks, encourage the application of power exchange mode, strengthen the research and development of new charging technologies,
and improve charging convenience and product reliability.
Regulation Related
to Compulsory Product Certification
According
to the Administrative Regulations on Compulsory Product Certification as promulgated by the General Administration of Quality Supervision,
Inspection and Quarantine, or the QSIQ, which was merged into the SAMR afterwards, on July 3, 2009 and became effective on September 1,
2009 and the List of the First Batch of Products Subject to Compulsory Product Certification as promulgated by the QSIQ in association
with the State Certification and Accreditation Administration Committee, or the CAA on December 3, 2001, and became effective on
the same day, QSIQ are responsible for the quality certification of automobiles. Automobiles and the relevant accessories must not
be sold, exported or used in operating activities until they are certified by certification authorities designated by CAA as qualified
products and granted certification marks.
Regulation Related
to Manufacturing New Energy Passenger Vehicles
The
MIIT is responsible for the national-wide administration of new energy vehicles and their manufacturers. On July 24, 2020, the MIIT
revised and promulgated the Administrative Measures for the Entry of Manufacturers of New Energy Passenger Vehicles and the Products,
which took effect on September 1, 2020, or Circular 39. Pursuant to Circular 39, the manufacturers shall apply to the MIIT for the
entry approval to become a qualified manufacturer in China and shall further apply to the MIIT for the entry approval for new energy
passenger vehicles before commencing the manufacturing and sale of such new energy passenger vehicles in China. In order to obtain the
entry approvals from the MIIT, the manufacturers shall meet certain requirements, including, among others, (1) having obtained the
approvals or completed the filings with the NDRC in relation to manufacturing of electric vehicles, (2) having capabilities in the
design, development and manufacture of automotive products, ensuring product consistency, providing after-sales service and product safety
assurance, and (3) the new energy vehicles shall meet the technical criteria specified in Circular 39 and other safety and technical
requirements specified by the MIIT and pass the inspections conducted by the relevant state-recognized testing institutions.
MIIT
publishes the approved new energy passenger vehicles and their respective manufacturers in the Announcement of the Vehicle Manufacturers
and Products, or the Manufacturers and Products Announcement, from time to time. Any manufacturer who manufactures or sells new energy
vehicles without obtaining the entry approvals or prior to MITT publishing the new energy vehicles in the Manufacturers and Products
Announcement may be subject to penalties, including fines, forfeiture of illegally manufactured and sold vehicles and spare parts and
revocation of its business licenses.
Regulations
Related to Internet Information Security and Privacy Protection
Regulations
on Internet Information Security
In
November 2016, the Standing Committee of the National People’s Congress promulgated the PRC Cyber Security Law, which became
effective on June 1, 2017. The Cyber Security Law requires that network operators, including internet information services providers,
take technical measures and other necessary measures in accordance with applicable laws and regulations and the compulsory requirements
of the national and industrial standards to safeguard the safe and stable operation of its networks. We are subject to such requirements
as we are operating a website and mobile application and providing certain internet services mainly through our mobile application. The
Cyber Security Law further requires internet information services providers to formulate contingency plans for network security incidents,
report to the competent departments immediately upon the occurrence of any incident endangering cyber security, and take corresponding
remedial measures.
Internet
information services providers are also required to maintain the integrity, confidentiality, and availability of network data. The Cyber
Security Law reaffirms the basic principles and requirements specified in other existing laws and regulations on personal data protection,
such as the requirements on the collection, use, processing, storage, and disclosure of personal data, and internet information services
providers being required to take technical and other necessary measures to ensure the security of the personal information they have
collected and prevent the personal information from being divulged, damaged, or lost. Any violation of the Cyber Security Law may subject
an internet information services provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of
filings, shutdown of websites, or criminal liabilities.
On
June 10, 2021, the Data Security Law was promulgated by the SCNPC, which became effective on September1, 2021. The Data Security
Law mainly sets forth specific provisions regarding establishing basic systems for data security management, including hierarchical data
classification management system, risk assessment system, monitoring and early warning system, and emergency disposal system. In addition,
it clarifies the data security protection obligations of organizations and individuals carrying out data activities and implementing
Data security protection responsibility.
On
August 16, 2021, the NDRC, the MIIT, the Ministry of Public Security and the Ministry of Transport jointly promulgated the Several
Provisions on Automotive Data Security Management (for Trial Implementation), or the Automobile Data Security Provisions, to regulate
the processing of automobile data, which became effective on October 1, 2021. Pursuant to the Automobile Data Security Provisions,
for the important data that processed during the use, operation or maintenance of automobile, such as personal information of more than
100,000 people, or the Important Data, the automotive data processor of such Important Data needs to submit a risk assessment report
to the competent cyberspace administration regarding the important data processing activities to be carried out by it, and to annually
report and submit the safety management status of the important data. The Automobile Data Security Provisions also dictated that when
Important Data need to be provided to overseas parties due to business needs, a security assessment organized by the CAC in concert with
the relevant departments of the State Council is required, and an automotive data processor shall not provide overseas parties with any
Important Data for any reason beyond the purpose, scope and method, as well as the type and scale of the data, etc. specified for risk
assessment of cross-border transfer of data. If we are deemed as automotive data processor, we may need to comply with the regulatory
requirements for automobile data processors and in terms of important data.
On
November 14, 2021, the CAC published the Regulations on Network Data Security Management (Draft for Comments) (the “Draft
Regulations on Cyber Data Security Management”), which specified that data processor who processes personal information of more
than one million people, shall apply for cybersecurity review. In addition, the Draft Regulations on Cyber Data Security Management also
regulate other specific requirements in respect of the data processing activities conducted by data processors through the internet in
view of personal data protection, important data safety, cross-broader data safety management and obligations of network platform operators.
For example, in one of the following situations, data processors shall delete or anonymize personal information within 15 business
days: (i) the purpose of processing personal information has been achieved or the purpose of processing is no longer needed; (ii) the
storage term agreed with the users or specified in the personal information processing rules has expired; (iii) the service has
been terminated or the account has been cancelled by the individual; or (iv) unnecessary personal information or personal information
unavoidably collected due to the use of automatic data collection technology but without the consent of the individual. For the processing
of important data, specific requirements shall be complied with. For example, processors of important data shall specify the responsible
person of data safety, establish a data safety management department and make filing to the cyberspace administration at the districted
city level within 15 business days after the identification of their important data.
Data
processors dealing with important data or listing overseas (including Hong Kong) should carry out an annual data security assessment
by themselves or by entrusting data security service agencies, and each year before January 31, data security assessment report
for the previous year shall be submitted to the districted city level cyberspace administration department. When data collected and generated
within the PRC are provided to the data processors overseas, if such data includes important data, or if the relevant data processor
is a critical information infrastructure operator or processes personal information of more than one million people, the data processor
shall go through the security assessment of cross-border data transfer organized by the national Cyberspace Administration. As of the
Latest Practicable Date, the Regulations on Network Data Security Management (Draft for Comments) has not been formally adopted.
On
December 28, 2021, the CAC and other twelve PRC regulatory authorities jointly revised and promulgated the Measures for Cybersecurity
Review, or the Cybersecurity Review Measures, which came into effect on February 15, 2022, and the Measures for Cybersecurity Review,
which took effect on June 1, 2020, was abolished at the same time. The Cybersecurity Review Measures provides that, among others,
(i) the purchase of cyber products and services by critical information infrastructure operators (the “CIIOs”) and the
network platform operators (the “Network Platform Operators”) which engage in data processing activities that affects or
may affect national security shall be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is
responsible for the implementation of cybersecurity review under the CAC; and (ii) the Network Platform Operators with personal
information data of more than one million users that seek for listing in a foreign country are obliged to apply for a cybersecurity review
by the Cybersecurity Review Office.
On
December 8, 2022, the MIIT published the Notice on Promulgation of the Administrative Measures on Data Security in the Field of Industry
and Information Technology (for Trial Implementation), which came into effect on January 1, 2023. The Notice sets forth provisions regarding
data handling activities in the field of industry and information technology and the safety supervision.
Regulations
on Privacy Protection
On
May 28, 2020, the National People’s Congress of the PRC approved the Civil Code of the PRC (the “Civil Code”),
which has come into effect on January 1, 2021. Pursuant to the Civil Code, the personal information of a natural person shall be
protected by the law. Any organization or individual that need to obtain personal information of others shall obtain such information
legally and ensure the security of such information, and shall not illegally collect, use, process or transmit personal information of
others, or illegally purchase, sell, provide or make public personal information of others.
In
addition to the Civil Code, the PRC government authorities have enacted other laws and regulations with respect to Internet information
security and protection of personal information from any abuse or unauthorized disclosure, which includes the Decision of the SCNPC on
Maintaining Internet Security promulgated by the SCNPC on December 28, 2000 and amended on August 27, 2009, the Provisions
on the Technical Measures for Internet Security Protection promulgated by the Ministry of Public Security on December 13, 2005 and
becoming effective on March 1, 2006, and the Decision of the SCNPC on Strengthening Network Information Protection promulgated by
the SCNPC on December 28, 2012.
On
February 4, 2015, the CAC promulgated the Provisions on the Administrative of Account Names of Internet Users, which became effective
as of March 1, 2015, setting forth the authentication requirement for the real identity of internet users by requiring users to
provide their real names during the registration process. In addition, these provisions specify that internet information service providers
are required by these provisions to accept public supervision, and promptly remove illegal and malicious information in account names,
photos, self-introductions and other registration-related information reported by the public in a timely manner.
On
August 20, 2021, the SCNPC promulgated the Law of Personal Information Protection of PRC, or the Personal Information Protection
Law, which became effective on November 1, 2021. Pursuant to the Personal Information Protection Law, the processing of personal
information includes the collection, storage, use, processing, transmission, provision, disclosure, deletion, etc. of personal information,
and before processing personal information, personal information processors should truthfully, accurately and completely inform individuals
of the following matters in a conspicuous manner and in clear and easy-to-understand language: (i) the name and contact information
of the personal information processor; (ii) purpose of processing personal information, processing method, type of personal information
processed, and retention period; (iii) methods and procedures for individuals to exercise their rights under this law; and (iv) other
matters that should be notified as required by laws and administrative regulations. Personal information processors should also take
the following measures to ensure that personal information processing activities comply with laws and administrative regulations based
on the processing purpose, processing methods, types of personal information, impact on personal rights and interests, and possible security
risks, etc., and to prevent unauthorized access and personal information leakage, tampering, and loss: (i) formulate internal management
systems and operating procedures; (ii) implement classified management of personal information; (iii) adopt corresponding security
technical measures such as encryption and de-identification; (iv) reasonably determine the operating authority for personal information
processing, and regularly conduct safety education and training for practitioners; (v) formulate and organize the implementation
of emergency plans for personal information security incidents; and (vi) other measures stipulated by laws and administrative regulations.
Where
personal information is processed in violation of the provisions of the Personal Information Protection Law, or the processing of personal
information fails to fulfil the personal information protection obligations hereunder, the department performing personal information
protection duties shall order corrections, give warnings, confiscate illegal gains, and apply programs for illegal processing of personal
information, order to suspend or terminate the provision of services; if the personal information processor refuses to make corrections,
a fine of not more than RMB1 million shall be imposed; the directly responsible person in charge and other directly responsible
personnel shall be fined not less than RMB10,000 but not more than RMB100,000. If the aforesaid illegal act and the circumstances are
serious, the department performing personal information protection duties at or above the provincial level shall order the personal information
processor to make corrections, confiscate the illegal gains, and impose a fine of less than 50 million RMB or less than 5% of the
previous year’s turnover. It can also order the suspension of relevant business or suspend business for rectification, notify the
relevant competent authority to revoke the relevant permits or the business license; impose a fine of RMB100,000 up to RMB1 million
on the directly responsible person in charge and other directly responsible personnel, and may decide to prohibit he serves as a director,
supervisor, senior manager and person in charge of personal information protection of related companies within a certain period of time.
Regulation Related
to Intellectual Property
Patent
Patents
in the PRC are principally protected under the PRC Patent Law, which was initially promulgated by the SCNPC in 1984 and was most recently
amended in 2020. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models
and designs.
Copyright
Copyrights
in the PRC, including software copyrights, is principally protected under the PRC Copyright Law, which took effect in 1991 and was most
recently amended in 2020 and other related rules and regulations. Under the PRC Copyright Law, the term of protection for software copyrights
is 50 years. The Regulation on the Protection of the Right to Communicate Works to the Public over Information Networks, as most
recently amended on January 30, 2013, provides specific rules on fair use, statutory license, and a safe harbor for use of copyrights
and copyright management technology and specifies the liabilities of various entities for violations, including copyright holders, libraries
and Internet service providers.
Trademark
Registered
trademarks are protected under the PRC Trademark Law, which was adopted by the SCNPC in 1982 and most recently amended in 2019, as well
as the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and most recently amended in 2014 and
other related rules and regulations. The State Intellectual Property Office, formerly known as the Trademark Office of the State Administration
for Industry and Commerce, handles trademark registrations and grants a protection term of ten years to registered trademarks and
the term may be renewed for another ten-year period upon request by the trademark owner.
Domain
Name
Domain
names are protected under the Administrative Measures on Internet Domain Names promulgated by the MIIT on August 24, 2017, and effective
since November 1, 2017. Domain name registrations are handled through domain name service agencies established under the relevant
regulations, and applicants become domain name holders upon successful registration.
Regulations
Relating to Environmental Protection
Environmental
Protection Law
The
Environmental Protection Law of the PRC, or the Environmental Protection Law, was promulgated and effective on December 26, 1989,
and most recently amended on April 24, 2014. This Environmental Protection Law has been formulated for the purpose of protecting
and improving both the living environment and the ecological environment, preventing and controlling pollution, other public hazards
and safeguarding people’s health.
According
to the provisions of the Environmental Protection Law, in addition to other relevant laws and regulations of the PRC, the Ministry of
Environmental Protection and its local counterparts take charge of administering and supervising said environmental protection matters.
Pursuant to the Environmental Protection Law, the environmental impact statement on any construction project must assess the pollution
that the project is likely to produce and its impact on the environment, and stipulate preventive and curative measures; the statement
shall be submitted to the competent administrative department of environmental protection for approval. Installations for the prevention
and control of pollution in construction projects must be designed, built and commissioned together with the principal part of the project.
Permission
to commence production at or utilize any construction project shall not be granted until its installations for the prevention and control
of pollution have been examined and confirmed to meet applicable standards by the appropriate administrative department of environmental
protection that examined and approved the environmental impact statement. Installations for the prevention and control of pollution shall
not be dismantled or left idle without authorization. Where it is absolutely necessary to dismantle any such installation or leave it
idle, prior approval shall be obtained from the competent local administrative department of environmental protection.
The
Environmental Protection Law makes it clear that the legal liabilities of any violation of said law include warning, fine, rectification
within a time limit, compulsory cease operation, compulsory reinstallation of dismantled installations of the prevention and control
of pollution or compulsory reinstallation of those left idle, compulsory shutout or closedown, or even criminal punishment.
As
of the date of this prospectus, we are not aware of any warning, investigations, prosecutions, disputes, claims or other proceedings
in respect of environmental protection, nor have we been punished or can foresee any punishment to be made by any government authorities
of the PRC.
Regulations
on Disposal of Hazardous Waste
Pursuant
to the Law on the Prevention and Control of Environmental Pollution Caused by Solid Waste, which was promulgated by the SCNPC in 1995
and was latest amended on April 29, 2020, entities generating hazardous waste shall store, utilize and dispose hazardous waste according
to the relevant requirements of the state and environmental protection standards, and shall not dump or pile up hazardous waste without
authorization. Furthermore, it is forbidden to entrust hazardous waste to entities without a permit for disposal, or else the competent
ecological and environmental authorities shall order it to make rectification, impose fines, confiscate illegal gains, and in serious
circumstance, order it to suspend business or close down upon the approval of the government authorities.
Regulations
on Urban Drainage and Sewage Treatment
According
to the Regulation on Urban Drainage and Sewage Treatment, which was promulgated by the State Council in 2013, and the Measures for the
Administration of Permits for Discharging Urban Sewage into the Drainage Pipeline, which was promulgated by the Ministry of Housing and
Urban-Rural Development in 2015, enterprises, institutions and individually-owned businesses engaging in industry, construction, food
and beverage, medical service and other activities which discharge sewage into urban drainage facilities shall apply to the competent
urban drainage authorities for a permit for sewage discharge into the drainage pipe network, or the Drainage Permit. Discharging sewage
into urban drainage facilities without obtaining a Drainage Permit shall be ordered by the relevant urban drainage authority to suspend
illegal activities, take remedial measures within a time limit, re-apply the Drainage Permit, and may impose a fine of less than RMB500,000.
Regulations
on Consumer Rights Protection
The
Consumer Rights and Interests Protection Law, as promulgated on October 31, 1993, and most recently amended in 2013 by the Standing
Committee of the National People’s Congress of China, or the SCNPC, imposes stringent requirements and obligations on business
operators. Failure to comply with the consumer protection requirements could subject the business operators to administrative penalties
including warning, confiscation of illegal income, imposition of fines, an order to cease business operations, revocation of business
licenses, as well as potential civil or criminal liabilities.
Regulation Related
to Foreign Exchange and Dividend Distribution
Regulation
on Foreign Currency Exchange
The
principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, as most recently
amended in 2008. Under PRC foreign exchange regulations, payments of current account items, such as profit distributions, interest payments
and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State
Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. By contrast, approval from or registration
with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay
capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments and investments
in securities outside of China.
In
2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment,
or Circular 59, which substantially amends and simplifies the previous foreign exchange procedure. Pursuant to Circular 59, the opening
and deposit of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital
accounts and guarantee accounts, the reinvestment of RMB proceeds derived by foreign investors in the PRC, and remittance of foreign
exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification
of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In
2013, SAFE promulgated the Notice on Promulgation of the Provisions on Foreign Exchange Control on Direct Investments in China by Foreign
Investors and Supporting Documents, which specified that the administration by SAFE or its local branches over direct investment by foreign
investors in the PRC must be conducted by way of registration and banks must process foreign exchange business relating to the direct
investment in the PRC based on the registration information provided by SAFE and its branches. In February 2015, SAFE promulgated
the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Notice
13. Instead of applying for approvals regarding foreign exchange registrations of foreign direct investment and overseas direct investment
from SAFE, entities and individuals may apply for such foreign exchange registrations from qualified banks. The qualified banks, under
the supervision of SAFE, may directly review the applications, conduct the registration and perform statistical monitoring and reporting
responsibilities.
In
March 2015, SAFE promulgated the Circular of the SAFE on Reforming the Management Approach regarding the Settlement of Foreign Capital
of Foreign-invested Enterprise, or Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange
capitals of foreign-invested enterprises nationwide. Circular 19 allows all foreign-invested enterprises established in the PRC to settle
their foreign exchange capital on a discretionary basis according to the actual needs of their business operation, provides the procedures
for foreign invested companies to use RMB converted from foreign currency-denominated capital for equity investments and removes certain
other restrictions under previous rules and regulations. However, Circular 19 continues to prohibit foreign-invested enterprises from,
among other things, using RMB funds converted from their foreign exchange capital for expenditure beyond their business scope and providing
entrusted loans or repaying loans between non-financial enterprises. SAFE promulgated the Notice of the State Administration of Foreign
Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or Circular 16, effective
in June 2016, which reiterates some of the rules set forth in Circular 19. Circular 16 provides that discretionary foreign exchange
settlement applies to foreign exchange capital, foreign debt offering proceeds and remitted foreign listing proceeds, and the corresponding
RMB capital converted from foreign exchange may be used to extend loans to related parties or repay inter-company loans (including advances
by third parties). However, there are substantial uncertainties with respect to Circular 16’s interpretation and implementation
in practice.
In
January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness
and Compliance Verification, or Circular 3, which stipulates several capital control measures with respect to the outbound remittance
of profits from domestic entities to offshore entities, including (i) banks must check whether the transaction is genuine by reviewing
board resolutions regarding profit distribution, original copies of tax filing records and audited financial statements and stamp with
the outward remittance sum and date on the original copies of tax filing records, and (ii) domestic entities must retain income
to account for previous years’ losses before remitting any profits. Moreover, pursuant to Circular 3, domestic entities must
explain in detail the sources of capital and how the capital will be used, and provide board resolutions, contracts and other proof as
a part of the registration procedure for outbound investment.
On
October 23, 2019, SAFE issued Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of
Cross-border Trade and Investment, or the Circular 28, which took effect on the same day. Circular 28 allows non-investment foreign-invested
enterprises to use their capital funds to make equity investments in China, with genuine investment projects and in compliance with effective
foreign investment restrictions and other applicable laws. However, as the Circular 28 was newly issued, there are still substantial
uncertainties as to its interpretation and implementations in practice.
Regulation
on Dividend Distribution
The
principal regulations governing dividends distributions by companies include the PRC Company Law, the Foreign Invested Enterprise Law
and its implementing rules. Under these laws and regulations, both domestic companies and foreign-invested companies in the PRC are required
to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount of their reserves reaches 50% of
their registered capital unless the laws and regulations regarding foreign investment provide otherwise. PRC companies are not permitted
to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years
may be distributed together with distributable profits from the current fiscal year.
Regulation Related
to Tax
Enterprise
Income Tax
On
March 16, 2007, the SCNPC promulgated the Enterprise Income Tax Law of the PRC which was amended on December 29, 2018, February 24,
2017 and on December 6, 2007, the State Council enacted the Regulations for the Implementation of the Enterprise Income Tax Law,
or collectively, the EIT Law. The EIT Law came into effect on January 1, 2008 and was amended on April 23, 2019. Under the
EIT Law, both resident enterprises and non-resident enterprises are subject to tax in the PRC. Resident enterprises are defined
as enterprises that are established in China in accordance with PRC laws, or that are established in accordance with the laws of foreign
countries but are actually or in effect controlled from within the PRC. Non-resident enterprises are defined as enterprises that
are organized under the laws of foreign countries and whose actual management is conducted outside the PRC, but have established institutions
or premises in the PRC, or have no such established institutions or premises but have income generated from inside the PRC. Under
the EIT Law and relevant implementing regulations, a uniform corporate income tax rate of 25% is applied. However, if non-resident enterprises
have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment or premises in the PRC
but there is no actual relationship between the relevant income derived in the PRC and the established institutions or premises set up
by them, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.
Value-added
Tax
The
Provisional Regulations of the PRC on Value-added Tax were promulgated by the State Council on December 13, 1993, and came into
effect on January 1, 1994, which were subsequently amended from time to time. The Detailed Rules for the Implementation of the Provisional
Regulations of the PRC on Value-added Tax (Revised in 2011) was promulgated by the MOF on December 25, 1993, and subsequently amended
on December 15, 2008 and October 28, 2011, or collectively, VAT Law. On November 19, 2017, the State Council promulgated
the Decisions on Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the Provisional Regulations of the PRC
on Value-added Tax, or the Order 691. According to the VAT Law and the Order 691, all enterprises and individuals engaged in the sale
of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation
of goods within the territory of the PRC are the taxpayers of VAT. The VAT tax rates generally applicable are simplified as 13%,
9%,6% and 0%, and the VAT tax rate applicable to the small-scale taxpayers is 3%.
Dividends
Withholding Tax
According
to the EIT Law and the EITIR, dividends paid by foreign-invested companies to their foreign investors that are non-resident enterprises
as defined under the law are subject to withholding tax at a rate of 10%, unless otherwise provided in the relevant tax agreements entered
into with the central government of the PRC. Pursuant to the Arrangement Between the Mainland of China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income promulgated
on 21 August 2006, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have
satisfied the relevant conditions and requirements under such tax arrangement, the withholding tax rate on the dividends the Hong Kong
resident enterprise receives from a PRC resident enterprise may be reduced to 5% from 10% applicable under the EIT Law and the EITIR. However,
based on the Notice of the State Administration of Taxation on Certain Issues with Respect to the Enforcement of Dividend Provisions
in Tax Treaties promulgated by the SAT and effective on 20 February 2009, if the relevant PRC tax authorities determine, in their
discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven,
such PRC tax authorities may adjust the preferential tax treatment. Furthermore, in October 2019, the SAT promulgated the Administrative
Measures for Non-Resident Taxpayers to Enjoy Treaty Treatments (the “Circular 35”), which became effective on 1 January 2020
and superseded the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties promulgated in 2015. The
Circular 35 abolished the record-filing procedure for justifying the tax treaty eligibility of taxpayers, and stipulates that non-resident
taxpayers can enjoy tax treaty benefits via the “self-assessment of eligibility, claiming treaty benefits, retaining documents
for inspection” mechanism.
Non-resident
taxpayers can claim tax treaty benefits after self-assessment provided that relevant supporting documents shall be collected and retained
for post-filing inspection by the tax authorities. Based on the Notice of the State Administration of Taxation on the Recognition of
Beneficial Owners in Tax Treaties, which was promulgated by SAT on 3 February 2018 and came into effect on 1 April 2018, a
comprehensive analysis will be used to determine beneficial ownership based on the actual situation of a specific case combined with
certain principles, and if an applicant was obliged to pay more than 50% of its income to a third country (region) resident within 12 months
of the receipt of the income, or the business activities undertaken by an applicant did not constitute substantive business activities
including substantive manufacturing, distribution, management and other activities, the applicant was unlikely to be recognized as an
beneficial owner to enjoy tax treaty benefits.
Enterprise
Income Tax on Indirect Transfer of Non-Resident Enterprises
On
10 December 2009, the SAT issued the Notice on Strengthening the Administration of Enterprise Income Tax on Equity Transfers of
Non-resident Enterprises (the “Circular 698”). By promulgating and implementing the Circular 698, the PRC tax authorities
have enhanced their scrutiny over the indirect transfer of equity interests in a PRC resident enterprise by a non-resident enterprise.
The SAT further issued the Public Announcement on Several Issues Concerning Enterprise Income Tax for Indirect Transfer of Assets by
Non-Resident Enterprises (the “Circular 7”) on 3 February 2015, which replaces certain provisions in the Circular
698. The Circular 7 introduces a new tax regime that is significantly different from that under the Circular 698. The Circular 7 extends
its tax jurisdiction to capture not only indirect transfer as set forth under the Circular 698 but also transactions involving transfer
of immovable property in China and assets held under the establishment and place, in China of a foreign company through the offshore
transfer of a foreign intermediate holding company. The Circular 7 also provides clearer criteria than the Circular 698 on how to assess
reasonable commercial purposes and introduces safe harbor scenarios applicable to internal group restructurings. Where a non-resident
enterprise indirectly transfers equity interests or other assets of a PRC resident enterprise by implementing arrangements that are not
for reasonable commercial purposes to avoid its obligation to pay enterprise income tax, such an indirect transfer shall, in accordance
with the EIT Law, be recognized by the competent PRC tax authorities as a direct transfer of equity interests or other assets of the
PRC resident enterprise.
On
17 October 2017, the SAT promulgated the Announcement on Matters Concerning Withholding and Payment of Income Tax of Non-resident
Enterprises from Source (the “SAT Circular 37”), which came into force and replace the Circular 698 and certain provisions
in the Circular 7 on 1 December 2017 and was partly amended on 15 June 2018. The SAT Circular 37, among other things, simplifies
the procedures of withholding and payment of income tax levied on non-resident enterprises. Pursuant to SAT Circular 37, where the party
responsible for withholding such income tax did not, or was unable to, withhold the taxes that should have been withheld to the relevant
tax authority, the party may be subject to penalties. Where the non-resident enterprise receiving such income failed to declare and pay
taxes that should have been withheld to the relevant tax authority, the party may be ordered to rectify within a specific time limit.
Regulation Related
to Employment, Social Insurance and Housing Fund
Pursuant
to the PRC Labor Law, which was promulgated in 1994 and most recently amended in 2018, and the PRC Labor Contract Law, which was promulgated
on June 29, 2007 and amended on December 28, 2012, employers must execute written labor contracts with full-time employees.
All employers must comply with local minimum wage standards. Violations of the PRC Labor Contract Law and the PRC Labor Law may result
in the imposition of fines and other administrative and criminal liability in the case of serious violations. In addition, according
to the PRC Social Insurance Law implemented on July 1, 2011 and most recently amended on December 29, 2018 and the Regulations
on the Administration of Housing Funds, which was promulgated by the State Council in 1999 and most recently amended in 2019, employers
in China must provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related
injury insurance, and medical insurance and housing funds.
Regulation Related
to M&A Rules and Overseas Listing
On
August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State-owned Assets Supervision and Administration Commission
of the State Council, the SAT, the SAIC, China Securities Regulatory Commission (the “CSRC”) and the SAFE, issued the Regulations
on Merger with and Acquisition of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which took into effect
on September 8, 2006 and was amended by the MOFCOM on June 22, 2009. The M&A Rules, among other things, require that if
an overseas company established or controlled by PRC companies or individuals intends to acquire equity interests or assets of any other
PRC domestic company affiliated with such PRC companies or individuals, such acquisition must be submitted to MOFCOM for approval. The
M&A Rules also require offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic
companies and controlled by PRC companies or individuals, to obtain the approval of CSRC prior to publicly listing their securities on
an overseas stock exchange.
Since
the FIL and its implementation regulations became effective on January 1, 2020, the provisions of the M&A Rules remain effective
to the extent they are not inconsistent with the FIL and its implementation regulations. According to the Anti-Monopoly Law which took
effect as at August 1, 2008, where the concentration of business operators reaches the filing thresholds stipulated by the State
Council, business operators shall file a declaration with the SAMR, and no concentration shall be implemented until the SAMR clears the
anti-monopoly filing. Pursuant to the Notice of the General Office of the State Council on the Establishment of the Security Review System
for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors and the Security Review Rules issued by the General Office
of the State Council on February 3, 2011 and became effective on March 3, 2011, mergers and acquisitions by foreign investors
that raise “national defense and security” concerns, and mergers and acquisitions through which foreign investors may acquire
de facto control over domestic enterprises that raise “national security” concerns, are subject to strict review by the PRC
government authorities. On August 25, 2011, the MOFCOM issued the Provisions of the Ministry of Commerce for the Implementation
of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, which provides that if a foreign
investor’s merger or acquisition of a domestic enterprise falls within the scope of security review specified in the Notice of
the General Office of the State Council on the Establishment of the Security Review System for Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors, the foreign investor shall file an application with MOFCOM for security review. Whether a foreign investor’s
merger or acquisition of a domestic enterprise falls within the scope of security review or not shall be determined based on the substance
and actual influence of the merger or acquisition transaction. No foreign investor is allowed to substantially avoid the security review
in any way, including but not limited to, holding shares on behalf of others, trust arrangements, multi-level reinvestment, leasing,
loans, contractual control, or overseas transactions.
On
February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Overseas Listing Trial Measures, which came into effect on March 31, 2023. Pursuant to the Overseas Listing Trial Measures, domestic
companies that seek to offer or list securities overseas, either in directly or indirectly means, should fulfill the filing requirement
and submit relevant information to the CSRC within three working days after making initial applications with overseas stock markets for
initial public offerings or listings, or after the completion of issuance of overseas listed securities by the overseas listed issuer.
For the initial public offerings or listings applicants, the required filing materials with the CSRC include (without limitation): (i) record-filing
reports and related undertakings, (ii) compliance certificates, filing, or approval documents from the primary regulators of the
applicants’ businesses (if applicable), (iii) security assessment opinions issued by related departments (if applicable),
(iv) PRC legal opinions, and (v) the prospectus; while for overseas listed issuers who issue overseas listed securities, the
required filing materials with the CSRC include (without limitation): (i) record-filing reports and related undertakings and (ii) PRC
legal opinions.
In
addition, overseas offerings and listings may be prohibited for such China-based companies under any of the following circumstances (i) where
such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules;
(ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities
under the State Council in accordance with law; (iii) where the domestic company intending to make the securities offering and listing,
or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation
of property or undermining the order of the socialist market economy during the latest three years; (iv) where the securities offering
and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law,
and no conclusion has yet been made thereof; or (v) where there are material ownership disputes over equity held by the domestic
company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.
The Overseas Listing Trial Measures further stipulate that a fine between RMB1 million and RMB10 million may be imposed if
an applicant fails to fulfill the filing requirements with the CSRC or conducts an overseas offering or listing in violation of the Overseas
Listing Trial Measures.
According
to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies
from the CSRC, or the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Overseas
Listing Trial Measures (i.e. March 31, 2023) shall be deemed as existing issuers (the “Existing Issuers”). Existing Issuers
are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for subsequent offerings
within three business days from the completion of such subsequent offerings. Further, according to the CSRC Notice, domestic companies
that have obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration
statement for offering and listing in the U.S. has been obtained) for their overseas offerings and listings prior to March 31, 2023,
but have not yet completed their overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September
30, 2023. Those who complete their overseas offering and listing within such six-month period are deemed as Existing Issuers and are
not required to file with the CSRC for their overseas offering and listing. Within such six-month transition period, however, if such
domestic companies fail to complete their overseas offering and listing, they shall complete the filing procedures with the CSRC.
PRINCIPAL
SHAREHOLDERS
The
following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the
Exchange Act, of our Ordinary Shares as of the date of this prospectus, and as adjusted to reflect the sale of the Ordinary Shares
offered in this offering for:
| ● | each
of our directors and executive officers who beneficially own our Ordinary Shares; |
| ● | our
directors and executive officers as a group; and |
| ● | each
person known to us to own beneficially more than 5% of our Ordinary Shares. |
Beneficial ownership includes voting or investment power with respect
to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership
of each listed person prior to this offering is based on 52,500,000 Ordinary Shares outstanding as of the date of this prospectus. Percentage
of beneficial ownership of each listed person after this offering includes Ordinary Shares outstanding immediately after the completion
of this offering, after giving effect to the sale of all Units offered hereby (based on an assumed public offering price of $2.42 per
Unit), assuming the number of Units offered by us, as set forth on the cover of this prospectus, remains the same.
Information
with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Ordinary
Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting
or investment power with respect to securities. In computing the number of shares beneficially owned by a person listed below and the
percentage ownership of such person, shares underlying options, warrants, or convertible securities held by each such person that are
exercisable or convertible within 60 days of the date of this prospectus are deemed outstanding, but are not deemed outstanding
for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required
by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially
owned by them.
| |
Ordinary
Shares Beneficially Owned Prior to This Offering | | |
Ordinary
Shares
Beneficially Owned
After the Closing
of This Offering | |
| |
Number | | |
Percentage | | |
Number | | |
Percentage | |
Directors
and Executive Officers*: | |
| | |
| | |
| | |
| |
Jia
Li(1) | |
| 37,854,400 | | |
| 72.10 | % | |
| [●] | | |
| [●] | % |
Bingyi
Zhao(2) | |
| 1,224,500 | | |
| 2.33 | % | |
| [●] | | |
| [●] | % |
Xiaochun
Li | |
| 0 | | |
| 0 | % | |
| [●] | | |
| [●] | % |
Quanshi
Chen | |
| 0 | | |
| 0 | % | |
| [●] | | |
| [●] | % |
Bo
Lyu | |
| 0 | | |
| 0 | % | |
| [●] | | |
| [●] | % |
All
directors and executive officers as a group: | |
| 39,078,900 | | |
| 74.43 | % | |
| [●] | | |
| [●] | % |
| |
| | | |
| | | |
| | | |
| | |
5%
Shareholders**: | |
| | | |
| | | |
| | | |
| | |
U
Trend Limited(1) | |
| 15,785,900 | | |
| 30.07 | % | |
| [●] | | |
| [●] | % |
Upincar
Limited(1) | |
| 14,943,500 | | |
| 28.46 | % | |
| [●] | | |
| [●] | % |
U
Create Limited(1) | |
| 7,125,000 | | |
| 13.57 | % | |
| [●] | | |
| [●] | % |
Everpine
Delta Fund L.P | |
| 5,542,000 | | |
| 10.56 | % | |
| [●] | | |
| [●] | % |
* |
Unless
otherwise indicated, the business address of each of the individuals is 2F, Zuoan 88 A, Lujiazui, Shanghai, People’s Republic
of China. |
** |
The
principal office of each of the 5% beneficial owners, unless stated otherwise, are located at Intershore Chambers, Road Town, Tortola,
British Virgin Islands; the address of Everpine Delta Fund L.P is c/o International Corporation Services Ltd., Harbour Place, 2nd
floor, 103 South Church Street, P.O. Box 472, George Town, Grand Cayman KY1-1106, Cayman Islands. |
(1) |
Includes:
15,785,900 Ordinary Shares held by U Trend Limited, a British Virgin Islands company which is 100% owned by Jia Li; 14,943,500 Ordinary
Shares held by Upincar Limited, a British Virgin Islands company which is 100% owned by Jia Li; and 7,125,000 Ordinary Shares held
by U Create Limited, a British Virgin Islands company which is 100% owned by Jia Li. |
(2) |
Represents
1,224,500 Ordinary Shares held by U Battery Limited, a British Virgin Islands company which 100% is owned by Bingyi Zhao. |
We
are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
History
of Share Capital
The
Company was incorporated in the Cayman Islands as an exempted company with limited liability on June 17, 2021. On the date of our
incorporation, we issued 200,000,000 Ordinary Shares for US$0.0000001 per share to certain founding shareholders:
Purchaser | |
Number of
Ordinary Shares | |
Upincar
Limited | |
| 91,370,800 | |
U
Trend Limited | |
| 94,991,400 | |
U
Battery Limited | |
| 5,076,200 | |
U
Taste Car Limited | |
| 4,061,000 | |
Will
Hunting & U Holding Limited | |
| 3,612,000 | |
Union
Ahead Limited | |
| 888,600 | |
On
November 26, 2021, we issued 6,097,178 Ordinary Shares for US$0.0000001 per share to Jiuchuang Youpin Limited.
On
February 28, 2022, our board of directors approved the repurchase of 169,139,178 Ordinary Shares for US$0.0000001 per share from
the following shareholders:
Shareholder | |
Number of
Ordinary Shares | |
Upincar
Limited | |
| 74,442,300 | |
U
Trend Limited | |
| 78,955,500 | |
U
Battery Limited | |
| 3,851,700 | |
U
Taste Car Limited | |
| 3,561,000 | |
Will
Hunting & U Holding Limited | |
| 2,978,050 | |
Union
Ahead Limited | |
| 732,650 | |
Jiuchuang
Youpin Limited | |
| 4,617,978 | |
On
February 28, 2022, we issued 13,042,000 Ordinary Shares for US$0.0000001 per share to the following shareholders:
Purchaser | |
Number
of Ordinary Shares | |
U
Create Limited | |
| 7,500,000 | |
Everpine
Delta Fund L.P. | |
| 5,542,000 | |
On
April 21, 2023, the Company closed its IPO of 2,416,667 Ordinary Shares, par value $$0.0000001 per share, pursuant to a registration
statement on Form F-1 (File No.333-268949), which was declared effective by the SEC on March 31, 2023. The Ordinary Shares were priced
at $6.00 per share and the IPO was conducted on a firm commitment basis. On April 25, 2023, WestPark Capital, Inc, as the representative
of the underwriters of the IPO of the Company, partially exercised the over-allotment option to purchase an additional 83,333 Ordinary
Shares at the IPO price of $6.00 per share. As a result, the Company raised gross proceeds of approximately US$0.5 million, in addition
to the previously announced IPO gross proceeds of approximately US$14.50 million, before deducting underwriting discounts and offering
expenses.
As
of the date of this prospectus, our authorized share capital consists of US$50,000 divided into 500,000,000,000 Ordinary Shares, par
value US$0.0000001 per share. Holders of Ordinary Shares are entitled to one vote per share.
We
are not aware of any arrangement that may, at a subsequent date, result in a change of control of the Company.
RELATED
PARTY TRANSACTIONS
For
the six months ended June 30, 2023 and fiscal years 2020, 2021, and 2022, and as of the date of this prospectus, the related parties
that transacted with the Company and their respective relationship to the Company are listed below:
Names
of the related parties |
|
Relationship
with the Group |
Hangzhou
Youyue Travel Technology Co., Ltd. (“Hangzhou Youyue”) |
|
An
affiliate of Bingyi Zhao |
Shanghai
Youzhuan Commerical Information Consulting Partnership (Limited Partnership) (“Shanghai Youzhuan”) |
|
An
affiliate of Jia Li |
Ningbo
Youheng Automobile Service Co., Ltd. (“Ningbo Youheng Automobile”) |
|
An
affiliate of Jia Li |
Zhejiang
Youxiaodian Automobile Service Co., Ltd. (“Zhejiang Youxiaodian”) |
|
An
affiliate of Jia Li |
Qingshan
Wei |
|
Controlling
shareholder of U Power Limited |
Youjia
Technology (Shanghai) Co., Ltd. (“Youjia Technology”) |
|
An
affiliate of Jia Li |
Shanghai
Youpinsuoer New Energy Technology Co., Ltd. (“Shanghai Youpinsuoer”) |
|
An
affiliate of Jia Li |
Jia
Li |
|
Controlling
shareholder, Director and CEO of U Power Limited |
Bingyi
Zhao |
|
Director
and Chief Financial Officer of U Power Limited |
Shandong
Youyidian Automobile Technology Co., Ltd. (“Shandong Youyidian”) |
|
An
affiliate of Jia Li |
Youche
Jingpin E-commerce (Shanghai) Co., Ltd. (“Youche Jingpin”) |
|
An
affiliate of Jia Li |
Shanghai
Youcang Business Consulting Partnership (Limited Partnership) (“Shanghai Youcang”) |
|
An
affiliate of Jia Li |
Nanmu
(Shanghai) Finance Leasing Co., Ltd. (“Nanmu”) |
|
An
affiliate of Jia Li |
|
(a) |
Amounts
due from related parties |
| |
As
of December 31, | | |
As
of June 30, | |
| |
2020 | | |
2021 | | |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
Youche Jingpi(1) | |
| 20,190 | | |
| 20,200 | | |
| 20,200 | | |
| 20,200 | | |
| 2,786 | |
Shanghai Youcang(2) | |
| 14,869 | | |
| 14,869 | | |
| 100,000 | | |
| 155,000 | | |
| 21,375 | |
Hangzhou Youyue(3) | |
| 60,480 | | |
| 60,480 | | |
| - | | |
| - | | |
| - | |
Shanghai Youzhuan(4) | |
| 785 | | |
| 785 | | |
| - | | |
| - | | |
| - | |
Ningbo Youheng Automobile(5) | |
| 8,950 | | |
| 8,950 | | |
| - | | |
| - | | |
| - | |
Zhejiang Youxiaodian(6) | |
| 55,493 | | |
| 55,952 | | |
| - | | |
| - | | |
| - | |
Qingshan Wei(7) | |
| - | | |
| 36,599 | | |
| - | | |
| - | | |
| - | |
Youjia Technology(8) | |
| - | | |
| 1,110 | | |
| - | | |
| - | | |
| - | |
Shanghai Youpinsuoer(9) | |
| - | | |
| 5,000 | | |
| - | | |
| - | | |
| - | |
| |
| 160,767 | | |
| 203,945 | | |
| 120,200 | | |
| 175,200 | | |
| 24,161 | |
(1) |
Amounts
due from Youche Jingpin represent the receivables of Youpin for Youche Jingpin’s rent and corporate service fees in November
2017 and February 2018. As of the date of this prospectus, the outstanding balance has not been collected. |
(2) |
Amounts
due from Shanghai Youcang as of December 31, 2020 and 2021 represent a three-year interest-free loan provided to Shanghai Youcang
by SY Digital Tech in December 2019 for its operation purposes, with an original principal amount of RMB0.01 million (US$0.001 million).
Shanghai Youcang fully repaid the balance in 2022. |
Amounts
due from Shanghai Youcang as of 2022 represent the advances paid by AHYS to Shanghai Youcang regarding to the equity transfer of 24.11%
of Youpin remitted in May 2022. The rest of the amounts represent a three-year interest-free loan provided to Shanghai Youcang by Youpin
in January 2023 for its operation purposes, with an original principal amount of RMB0.06 million (US$0.008 million). As of the date of
this prospectus, the outstanding balance has not been collected.
(3) |
Amounts
due from Hangzhou Youyue as of December 31, 2020 and 2021 represent a two-year interest-free loan provided to Hangzhou Youyue by
Youguan Financial Leasing in April 2020 for its operation purposes, with an original principal amount of RMB0.06 million (US$0.008
million). The balance was fully collected in 2022. As the rights and obligations were from different contracts, the amount due from
Hangzhou Youyue wasn’t intended to be set off with amounts due to Hangzhou Youyue. |
(4) |
Amounts
due from Shanghai Youzhuan as of December 31, 2020 and 2021 represent the advances paid by Youguan Financial Leasing to Shanghai
Youzhuan for office supplies in June 2019. The balance was fully settled in 2022. |
(5) |
Amounts
due from Ningbo Youheng Automobile as of December 31, 2020 and 2021 represent the advances paid by Youguan Financial Leasing to Ningbo
Youheng Automobile for its operation purposes. The balance was fully collected in 2022. |
(6) |
Amounts
due from Zhejiang Youxiaodian as of December 31, 2020 and 2021 represent the loan provided by Youguan Financial Leasing to Zhejiang
Youxiaodian for its operation purposes. As the rights and obligations were from different contracts, the amount due from Zhejiang
Youxiaodian wasn’t intended to be set off with amounts due to Zhejiang Youxiaodian. The balance was fully collected in 2022. |
(7) |
Amounts
due from Qingshan Wei as of December 31, 2021 represent the advances paid to employees. The balance was fully settled in 2022. |
(8) |
Amounts
due from Youjia Technology as of December 31, 2021 represent the advances paid by SY Digital Tech to Youjia Technology for its operation
purposes. The balance was fully settled in 2022. |
(9) |
Amounts
due from Shanghai Youpinsuoer as of December 31, 2021 represent the advances paid by SH Youxu to Shanghai Youpinsuoe for its operation
purposes. The balance was fully settled in 2022. |
|
(b) |
Amounts
due to related parties |
| |
As
of December 31, | | |
As
of June 30, | |
| |
2020 | | |
2021 | | |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
Jia Li(1) | |
| - | | |
| - | | |
| 228,420 | | |
| 2,701,260 | | |
| 372,521 | |
Bingyi Zhao(2) | |
| - | | |
| - | | |
| 22,602 | | |
| 21,518 | | |
| 2,967 | |
Zhejiang Youxiaodian(3) | |
| 139,205 | | |
| 70,500 | | |
| - | | |
| | | |
| - | |
Hangzhou Youyue(4) | |
| 5,502 | | |
| 5,502 | | |
| - | | |
| 5,502 | | |
| 759 | |
Nanmu(5) | |
| | | |
| | | |
| | | |
| 8,534,350 | | |
| 1,176,941 | |
Shandong Youyidian(6) | |
| - | | |
| 35,000 | | |
| - | | |
| - | | |
| - | |
| |
| 144,707 | | |
| 111,002 | | |
| 251,022 | | |
| 11,262,630 | | |
| 1,553,188 | |
(1) |
Amounts
due to Jia Li as of December 31, 2022 and June 30, 2023 represent the interest-free loan provided by Jia Li to SY Digital Tech
for its operation purposes, with an original principal amount of RMB0.2 million (US$0.07 million) and a maturity date of December
31, 2024. As of the date of this prospectus, the outstanding balance of this loan was RMB0.2 million (US$0.07 million).
The
rest of the amounts were related to the interest-free loan provided by Jia Li to Youpin for its operation purposes, with an original
principal amount of RMB2.5 million (US$0.3 million) and a maturity date of January 31, 2026. As of the date of this prospectus, the
total outstanding balance of this loan was RMB2.7 million (US$0.4 million). |
(2) |
Amounts
due to Bingyi Zhao as of December 31, 2022 represent the interest-free loan provided by Bingyi Zhao to SY Digital Tech and Youpin
SD for their operation purposes, with an original principal amount of RMB0.02 million (US$0.007 million). The balance has been
paid in 2023.
Amounts
due to Bingyi Zhao as of June 30, 2023 represent the interest-free loan provided by Bingyi Zhao to SY Digital Tech for its operation
purposes, with an original principal amount of RMB0.01 million (US$0.001 million). The rest of the amounts were related to the interest-free
loan provided by Bingyi Zhao to Youpin SD for its operation purposes, with an original principal amount of RMB0.01 million (US$0.002
million). As of the date of this prospectus, the total outstanding balance of these loans were RMB0.02 million (US$0.003 million). |
(3) |
Amounts
due to Zhejiang Youxiaodian as of December 31, 2020 and 2021 represent a two-year interest-free loan provided by Zhejiang Youxiaodian
to SY ZJ Youguan for operation purposes, with an original principal amount of RMB0.1 million (US$0.01 million). As the rights and
obligations were from different contracts, the amount due to Zhejiang Youxiaodian wasn’t intended to be set off with amounts
due from Zhejiang Youxiaodian. The balance was fully repaid in 2022. |
(4) |
Amounts
due to Hangzhou Youyue as of December 31, 2020 and 2021 represent the labor costs paid by Hangzhou Youyu on behalf of LY New
Energy. As the rights and obligations were from different contracts, the amount due from Hangzhou Youyu wasn’t intended
to be set off with amounts due from Hangzhou Youyu. The balance was fully repaid in 2022.
Amounts
due to Hangzhou Youyue as of June 30, 2023 represent the consulting service fees paid by Hangzhou Youyue on behalf of LY New Energy
on January 31, 2023. As of the date of this prospectus, the outstanding balance was RMB0.006 million (US$0.001 million). |
(5) |
Amounts
due to Nanmu as of June 30, 2023 represent the interest-free loan provided by Nanmu to SH Youxu for its operation purposes, with
an original principal amount of RMB8.5 million (US$1.2 million) and a maturity date of June 30, 2026. As of the date of this prospectus,
the outstanding balance was RMB8.5 million (US$1.2 million). |
(6) |
Amounts
due to Shandong Youyidian as of December 31, 2021 represent the renovation costs paid by Shandong Youyidian on behalf of SH Youxu.
The balance was fully repaid in 2022. |
DESCRIPTION
OF SHARE CAPITAL
We
are a Cayman Islands exempted company with limited liability and our affairs are governed by our memorandum and articles of association,
as amended and restated from time to time, and the Companies Act (Revised) of the Cayman Islands, or Companies Act, and the common law
of the Cayman Islands.
As
of the date of this prospectus, our authorized share capital is US$50,000 divided into 500,000,000,000 Ordinary Shares of par value US$0.0000001
each.
We
have adopted an amended and restated memorandum and articles of association on December 20, 2022, which became effective immediately
prior to the completion of our initial public offering.
The
following are summaries of material provisions of our amended and restated memorandum and articles of association and the Companies Act
insofar as they relate to the material terms of our Ordinary Shares.
The
following description of our share capital and provisions of our amended and restated memorandum and articles of association are summaries
and are qualified by reference to the amended and restated memorandum and articles of association. Copies of these documents have been
filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part.
The
following discussion primarily concerns Ordinary Shares and the rights of holders of Ordinary Shares.
Ordinary
Shares
General
Our
authorized share capital is US$50,000 divided into 500,000,000,000 Ordinary Shares of nominal or par value of US$0.0000001 each. All
of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Certificates representing the Ordinary Shares are issued
in registered form. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their Ordinary Shares.
Dividends
The
holders of our Ordinary Shares are entitled to such dividends as may be declared by our board of directors. In addition, our shareholders
may declare dividends by ordinary resolution, but no dividend shall exceed the amount recommended by our directors. Our amended and restated
memorandum and articles of association provide that dividends may be declared and paid out of the funds of our company lawfully available
therefor. Under the laws of the Cayman Islands, our company may pay a dividend out of either profit or a share premium amount, provided
that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in
the ordinary course of business.
Voting
Rights
Holders
of Ordinary Shares shall, at all times, vote on all matters submitted to a vote by the shareholders at any general meeting of our company.
Voting at any meeting of shareholders is by show of hands unless a poll (on or before the declaration of the result of the show of hands)
is demanded. A poll may be demanded by the chairperson of such meeting or any one shareholder holding not less than 10% of the votes
attaching to the shares present in person or by proxy.
An
ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of votes attached to the Ordinary
Shares cast in a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of votes cast
attached to the Ordinary Shares. A resolution in writing signed by all the shareholders for the time being entitled to receive notice
of and to attend and vote at general meetings of our company (or being corporations by their duly authorized representatives) shall be
as valid and effective as if the same had been passed at a general meeting of our company duly convened and held. A special resolution
will be required for important matters such as a change of name or making changes to our memorandum and articles of association.
Transfer
of Ordinary Shares
Subject
to the restrictions contained in our articles of association, as applicable, any of our shareholders may transfer all or any of his,
her or its Ordinary Shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors.
Our
board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up
or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:
| ● | the
instrument of transfer is lodged with us, accompanied by the certificate for the Ordinary
Shares to which it relates and such other evidence as our board of directors may reasonably
require to show the right of the transferor to make the transfer; |
| ● | the
instrument of transfer is in respect of only one class of shares; |
| ● | the
instrument of transfer is properly stamped, if required; |
| ● | in
the case of a transfer to joint holders, the number of joint holders to whom the share is
to be transferred does not exceed four; and |
| ● | a
fee of such maximum sum as Nasdaq may determine to be payable, or such less sum as the board
of directors may from time to time require, is paid to us in respect thereof. |
If
our directors refuse to register a transfer they shall, within three calendar months after the date on which the instrument of transfer
was lodged, send to each of the transferor and the transferee notice of such refusal.
The
registration of transfers may, on ten calendar days’ notice being given by advertisement in one or more newspapers, by electronic
means or by any other means in accordance with the rules of Nasdaq, be suspended and the register closed at such times and for such periods
as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended
nor the register closed for more than 30 calendar days in any calendar year as our board of directors may determine.
Liquidation
On
the winding up of our company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay
the whole of the share capital at the commencement of the winding up, the surplus shall be distributed among the holders of the Ordinary
Shares in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those
shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available
for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne
by our shareholders in proportion to the par value of the shares held by them.
Calls
on Ordinary Shares and Forfeiture of Ordinary Shares
Our
board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Ordinary Shares in a notice served
to such shareholders at least 14 calendar days prior to the specified time and place of payment. The Ordinary Shares that have been
called upon and remain unpaid are subject to forfeiture.
Redemption,
Repurchase and Surrender of Ordinary Shares
Subject
to the provisions of the Companies Act and provisions of our memorandum and articles of association, we may issue shares on terms that
are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner, as may be
determined, before the issue of such shares, by the board of directors or by our shareholders by special resolution. Our company may
also repurchase any of our shares (including any redeemable shares) on such terms and in such manner as have been approved by our board
of directors or by an ordinary resolution of our shareholders. Under the Companies Act, the redemption or repurchase of any share may
be paid out of our company’s profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or
repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following
such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may
be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being
no shares outstanding or (c) if the company has commenced liquidation. In addition, our company may accept the surrender of any
fully paid share for no consideration.
Variations
of Rights of Shares
If
at any time, our share capital is divided into different classes of shares, all or any of the rights attached to any class of shares
may be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or
with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. The rights
conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided
by the terms of issue of the shares of that class, be deemed to be materially adversely varied by the creation, allotment or issue of
further shares ranking pari passu with or subsequent to them or the redemption or purchase of any shares of any class
by our company. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of
shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.
General
Meetings of Shareholders
As
a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders’ annual general meetings. Our amended
and restated memorandum and articles of association provide that we may (but are not obliged to) in each year hold a general meeting
as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting
shall be held at such time and place as may be determined by our directors.
Shareholders’
meetings may be convened by a majority of our board of directors or our chairperson. Advance notice of at least ten calendar days
is required for the convening of our annual general shareholders’ meeting (if any) and any other general meeting of our shareholders.
A quorum required for a meeting of shareholders consists of one or more shareholders present or by proxy, representing not less than
one-third of all votes attached to all issued voting shares in our company.
The
Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with
any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association.
Our amended and restated memorandum and articles of association provide that upon the requisition of shareholders holding shares which
carry in aggregate not less than one-third of all votes attaching to all issued and outstanding shares of our company entitled to
vote at general meetings, our board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote
at such meeting. However, our amended and restated memorandum and articles of association do not provide our shareholders with any right
to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.
Inspection
of Books and Records
Holders
of our Ordinary Shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or
our corporate records (save for our memorandum and articles of association, register of mortgages and charges and special resolutions
of our shareholders). However, we will provide our shareholders with annual audited financial statements. See “Where You
Can Find Additional Information.”
Changes
in Capital
We
may from time to time by ordinary resolution:
| ● | increase
the share capital by new shares of such amount as we may think expedient; |
| ● | consolidate
and divide all or any of our share capital into shares of a larger amount than our existing
shares; |
| ● | sub-divide our
existing shares, or any of them into shares of a smaller amount than that fixed by our memorandum
of association, provided that in the subdivision the proportion between the amount paid and
the amount, if any, unpaid on each reduced share shall be the same as it was in case of the
share from which the reduced share is derived; or |
| ● | cancel
any shares which, at the date of the passing of the resolution, have not been taken or agreed
to be taken by any person and diminish the amount of our share capital by the amount of the
shares so cancelled. |
We
may by special resolution reduce our share capital or any capital redemption reserve in any manner authorized by law.
Exempted
Company
We
are an exempted company with limited liability under the Companies Act of the Cayman Islands. The Companies Act in the Cayman
Islands distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands
but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an
exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
| ● | an
exempted company does not have to file an annual return of its shareholders with the Registrar
of Companies; |
| ● | an
exempted company’s register of members is not open to inspection; |
| ● | an
exempted company does not have to hold an annual general meeting; |
| ● | an
exempted company may obtain an undertaking against the imposition of any future taxation
(such undertakings are usually given for 30 years in the first instance); |
| ● | an
exempted company may register by way of continuation in another jurisdiction and be deregistered
in the Cayman Islands; |
| ● | an
exempted company may register as a limited duration company; and |
| ● | an
exempted company may register as a segregated portfolio company. |
“Limited
liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the
company. Upon the closing of this offering, we will be subject to reporting and other informational requirements of the Exchange Act,
as applicable to foreign private issuers. We currently intend to comply with the Nasdaq Rules in lieu of following home country practice
after the closing of this offering. The Nasdaq Rules require that every company listed on the Nasdaq hold an annual general meeting of
shareholders.
Differences
in Corporate Law
The
Companies Act is modeled after that of England and Wales but does not follow recent statutory enactments in England. In addition, the
Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of
the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated
in the State of Delaware.
Mergers
and Similar Arrangements
The
Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands
companies. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of
their undertaking, property and liabilities in one of such companies as the surviving company, and (b) a “consolidation”
means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and
liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent
company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the
shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s
articles of association. The plan must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as
to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking
that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and
that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for
a merger or consolidation which is effected in compliance with these statutory procedures.
A
merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders
of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that
member agrees otherwise. For this purpose, a company is a “parent” of a subsidiary if it holds issued shares that together
represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.
The
consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived
by a court in the Cayman Islands.
Save
in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled
to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court)
upon dissenting to the merger or consolidation, provide the dissenting shareholder complies strictly with the procedures set out in the
Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which
he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or
consolidation is void or unlawful.
Separate
from the statutory provisions relating to mergers and consolidations,, the Companies Act also contains statutory provisions that facilitate
the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (a) 75%
in value of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the
creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and
voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently
the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express
to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines
that:
| ● | the
statutory provisions as to the required majority vote have been met; |
| ● | the
shareholders have been fairly represented at the meeting in question and the statutory majority
are acting bona fide without coercion of the minority to promote interests adverse to those
of the class; |
| ● | the
arrangement is such that may be reasonably approved by an intelligent and honest man of that
acting in respect of his interest; and |
| ● | the
arrangement is not one that would more properly be sanctioned under some other provision
of the Companies Act. |
The
Companies Act also contains a statutory power of compulsory acquisition which may facilitate the “squeeze out” of dissentient
minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares affected within four months,
the offeror may, within a two-month period commencing on the expiration of such four month period, require the holders of the
remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the
Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud,
bad faith or collusion.
If
an arrangement and reconstruction by way of scheme of arrangement is thus approved, or if a tender offer is made and accepted, in accordance
with the foregoing statutory procedures, a dissenting shareholder would have no rights comparable to appraisal rights, save that objectors
to a takeover offer may apply to the Grand Court of the Cayman Islands for various orders that the Grand Court of the Cayman Islands
has a broad discretion to make, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing
rights to receive payment in cash for the judicially determined value of the shares.
Shareholders’
Suits
In
principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company and as a general rule a derivative action
may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority
in the Cayman Islands, the Cayman Islands courts can be expected (and have had occasion) to follow and apply the common law principles
(namely the rule in Foss v. Harbottle and the exceptions thereto) which permit a minority shareholder to commence a
class action against, or derivative actions in the name of, our company to challenge:
| ● | an
act which is ultra vires or illegal and is therefore incapable of ratification
by the shareholders; |
| ● | an
act which constitutes a fraud against the minority where the wrongdoer are themselves in
control of the company; and |
| ● | an
act which requires a resolution with a qualified (or special) majority (i.e. more than a
simple majority) which has not been obtained. |
Indemnification
of Directors and Executive Officers and Limitation of Liability
Cayman
Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public
policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our memorandum and articles
of association provide that that we shall indemnify our directors and officers, and their personal representatives, against all actions,
proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such persons, other than by reason of
such person’s dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including
as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including
without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer
in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in
the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law
for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and senior executive officers
that will provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
us under the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
Directors’
Fiduciary Duties
Under
Delaware General Corporation Law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders.
This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith,
with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself
of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty
requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must
not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates
that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or
controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made
on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However,
this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning
a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value
to the corporation.
As
a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company
and therefore it is considered that he owes the following duties to the company — a duty to act bona fide in
the best interests of the company, a duty not to make a personal profit based on his or her position as director (unless the company
permits him to do so) and a duty not to put himself in a position where the interests of the company conflict with his or her personal
interest or his or her duty to a third party and a duty to exercise powers for the purpose for which such powers were intended. A director
of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need
not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or
her knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required
skill and care and these authorities are likely to be followed in the Cayman Islands.
Shareholder
Action by Written Consent
Under
the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to
its certificate of incorporation. Cayman Islands law and our memorandum and articles of association provide that shareholders may
approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled
to vote on such matter at a general meeting without a meeting being held.
Shareholder
Proposals
Under
the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided
it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other
person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The
Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with
any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association.
Our amended and restated memorandum and articles of association allow our shareholders holding shares which carry in aggregate not
less than one-third of all votes attaching to the issued and outstanding shares of our company entitled to vote at general
meetings to requisition an extraordinary general meeting of our shareholders, in which case our board is obliged to convene an extraordinary
general meeting and to put the resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders’
meeting, our amended and restated memorandum and articles of association do not provide our shareholders with any other right to put
proposals before annual general meetings or extraordinary general meetings. As an exempted Cayman Islands company, we are not obliged
by law to call shareholders’ annual general meetings.
Cumulative
Voting
Under
the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate
of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders
on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single
director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation
to cumulative voting under the laws of the Cayman Islands but our amended and restated memorandum and articles of association do not
provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders
of a Delaware corporation.
Removal
of Directors
Under
the Delaware General Corporation Law, a director of a corporation with a classified board
may be removed only for cause with the approval of a majority of the outstanding shares entitled
to vote, unless the certificate of incorporation provides otherwise. Under our amended and
restated memorandum and articles of association, subject to certain restrictions as contained
therein, directors may be removed with or without cause, by an ordinary resolution of our
shareholders. An appointment of a director may be on terms that the director shall automatically
retire from office (unless he has sooner vacated office) at the next or a subsequent annual
general meeting or upon any specified event or after any specified period in a written agreement
between the company and the director, if any; but no such term shall be implied in the absence
of express provision. In addition, a director’s office shall be vacated if the director
(i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) is
found to be or becomes of unsound mind or dies; (iii) resigns his office by notice in
writing to the company; (iv) without special leave of absence from our board of directors,
is absent from three consecutive meetings of the board and the board resolves that his office
be vacated or; (v) is removed from office pursuant to any other provisions of our amended
and restated memorandum and articles of association.
Transactions
with Interested Shareholders
The
Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation
has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging
in certain business combinations with an “interested shareholder” for three years following the date that such person
becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more
of the target’s outstanding voting share within the past three years. This has the effect of limiting the ability of a potential
acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply
if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves
either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any
potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman
Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business
combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders,
it does provide that such transactions must be entered into bona fide in the best interests of the company and for a
proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.
Dissolution;
Winding Up
Under
the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by
shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors
may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to
include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution
of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has
authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable
to do so.
Variation
of Rights of Shares
Under
the Delaware General Corporation Law, a corporation may vary the rights of a class of shares
with the approval of a majority of the outstanding shares of such class, unless the certificate
of incorporation provides otherwise. Under Cayman Islands law and our memorandum and articles
of association, if our share capital is divided into more than one class of shares, the rights
attached to any class may be materially adversely varied with the consent in writing of the
holders of two-thirds of the issued shares of that class or with the sanction of a special
resolution passed at a separate meeting of the holders of the shares of that class.
Amendment
of Governing Documents
Under
the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the
outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under Cayman Islands law, our memorandum
and articles of association may only be amended with a special resolution of our shareholders.
Rights
of Non-Resident or Foreign Shareholders
There
are no limitations imposed by our memorandum and articles of association on the rights of
non-resident or foreign shareholders to hold or exercise voting rights on our shares.
In addition, there are no provisions in our memorandum and articles of association that require
our company to disclose shareholder ownership above any particular ownership threshold.
SHARES
ELIGIBLE FOR FUTURE SALE
Lock-Up
Agreements
We
have agreed not to, for a period of 90 days from the date of completion of this offering, offer, issue, sell, contract to sell, encumber,
grant any option for the sale of, or otherwise dispose of, except in this offering, any of our Ordinary Shares or securities that are
substantially similar to our Ordinary Shares, including but not limited to any options or warrants to purchase our Ordinary Shares, or
any securities that are convertible into or exchangeable for, or that represent the right to receive, our Ordinary Shares or any such
substantially similar securities (other than pursuant to employee stock or option plans duly adopted for such purpose, by a majority
of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established
for such purpose for services rendered to the Company, or upon the conversion or exchange of convertible or exchangeable securities outstanding
as of, the date such lock-up agreement was executed, or pursuant to acquisitions or strategic transactions approved by a majority
of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the prohibition period set forth in Section 4.11(a) of the Purchase Agreement, and provided that any such issuance shall only
be to a person which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with
the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities), without the prior written consent of the Placement Agent.
We
have agreed not to, for a period of 90 days from the date of completion of this offering, without the prior written consent of the Placement
Agent, effect or enter into an agreement to effect any issuance by the Company or any of its subsidiaries of Ordinary Shares or any securities
that are convertible into or exchangeable for, or that represent the right to receive, our Ordinary Shares or any such substantially
similar securities involving a transaction in which the Company (x) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive, additional Ordinary Shares either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the Ordinary
Shares at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Ordinary Shares
or (y) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the
Company may issue securities at a future determined price. The Placement Agent shall be entitled to obtain injunctive relief against
the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
Furthermore,
each of our directors, executive officers, and existing shareholders holding 5% or more of the Company’s Ordinary Shares will enter
into a similar lock-up agreement for a period of 90 days from the date of this prospectus, subject to certain exceptions, with
respect to our Ordinary Shares and securities that are substantially similar to our Ordinary Shares. These restrictions also apply to
any Ordinary Shares acquired by our directors and executive officers in the offering pursuant to the directed share program, if any.
We
cannot predict what effect, if any, future sales of our Ordinary Shares, or the availability of Ordinary Shares for future sale, will
have on the trading price of our Ordinary Shares from time to time. Sales of substantial amounts of our Ordinary Shares in the public
market, or the perception that these sales could occur, could adversely affect the trading price of our Ordinary Shares.
Rule
144
All
of our Ordinary Shares that will be outstanding upon the completion of this offering, other than those sold in this offering, are “restricted
securities” as that term is defined in Rule 144 under the Securities Act and may be sold publicly in the United States
only if they are subject to an effective registration statement under the Securities Act or pursuant to an exemption from the registration
requirement such as those provided by Rule 144 and Rule 701 promulgated under the Securities Act.
In
general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person (or persons whose
shares are aggregated) who at the time of a sale is not, and has not been during the three months preceding the sale, an affiliate
of ours and has beneficially owned our restricted securities for at least six months is entitled to sell the restricted securities
without registration under the Securities Act, subject to the availability of current public information about us, and will be entitled
to sell restricted securities beneficially owned for at least one year without restriction. Persons who are our affiliates (including
persons beneficially owning 10% or more of our outstanding shares) and have beneficially owned our restricted securities for at least
six months may sell within any three-month period a number of restricted securities that does not exceed the greater of the
following:
| ● | 1%
of the number of Ordinary Shares then outstanding, which will equal approximately
shares immediately after this offering (or Ordinary
Shares if the Series A Warrants and Series B Warrants are exercised); or |
| ● | the
average weekly trading volume of the Ordinary Shares on the Nasdaq Stock Market during the
four calendar weeks preceding the date on which notice of the sale on Form 144
is filed with the SEC. |
Such
sales are also subject to manner-of-sale provisions, notice requirements and the availability of current public information about
us.
Rule
701
Beginning
90 days after the date of this prospectus, persons other than affiliates who purchased Ordinary Shares under a written compensatory
plan or other written agreement executed prior to the completion of this offering may be entitled to sell such shares in the United States
in reliance on Rule 701 under the Securities Act, or Rule 701. Rule 701 permits affiliates to sell their Rule 701 shares
under Rule 144 without complying with the holding period requirements of Rule 144.
Rule 701
further provides that non-affiliates may sell these shares in reliance on Rule 144 subject only to its manner-of-sale requirements.
However, the Rule 701 shares would remain subject to any applicable lock-up arrangements and would only become eligible
for sale when the lock-up period expires.
Regulation
S
Regulation
S provides generally that sales made in offshore transactions are not subject to the registration or prospectus-delivery requirements
of the Securities Act.
PLAN
OF DISTRIBUTION
Pursuant
to a placement agency agreement, dated [●], 2023, we have engaged Univest Securities, LLC to act as our Placement Agent in connection
with this offering. The Placement Agent is not purchasing or selling any such securities, nor is it required to arrange for the purchase
and sale of any specific number or dollar amount of such securities, other than to use their “reasonable best efforts,” to
arrange for the sale of such securities by us. The terms of this offering are subject to market conditions and negotiations between us,
the Placement Agent, and prospective investors. The placement agency agreement does not give rise to any commitment by the Placement
Agent to purchase any of our securities, and the Placement Agent will have no authority to bind us by virtue of the placement agency
agreement. Further, the Placement Agent does not guarantee that it will be able to raise new capital in any prospective offering. The
Placement Agent may engage sub-agents or selected dealers to assist with this offering.
We
will deliver to the investors the Ordinary Shares underlying the Units electronically and
will mail such investors physical warrant certificates for the Series A Warrants and Series
B Warrants underlying the Units, upon closing and receipt of investor funds for the purchase
of the Units offered pursuant to this prospectus. We may undertake one or more closings for
the sale of the Units to the investors. We expect to hold an initial closing on [●],
2023, but the offering will be terminated by December 31, 2023, provided that the closing(s)
of the offering for all of the Units have not occurred by such date, but may be extended
by written agreement of the Company and the Placement Agent. Any extensions or material changes
to the terms of the offering will be contained in an amendment to this prospectus. We expect
initial delivery of the Units being offered pursuant to this prospectus against payment in
U.S. dollars will be made on or about [●], 2023.
Fees
and Expenses
The
following table shows the total Placement Agent’s fees we will pay in connection with the sale of the Units in this offering, assuming
the purchase of all of the Units we are offering.
| |
Per Unit | | |
Total | |
Public Offering Price | |
$ | 2.42 | | |
$ | 24,200,000 | |
Placement Agent’s fees (7%) | |
$ | 0.17 | | |
$ | 1,694,000 | |
Placement Agent’s non-accountable expense allowance (1%) | |
$ | 0.02 | | |
$ | 242,000 | |
Total | |
$ | 2.23 | | |
$ | 22,264,000 | |
We
have agreed to pay to the Placement Agent a cash fee equal to 7% of the aggregate gross proceeds raised in this offering. We have agreed
to pay to the Placement Agent by deduction from the net proceeds of this offering a non-accountable expense allocation equal to 1% of
the aggregate gross proceeds raised in this offering.
We
have also agreed to pay or reimburse the Placement Agent up to $50,000 for its actual and accountable out-of-pocket expenses related
to the offering, including any fees and disbursements of the Placement Agent’s legal counsel and, if applicable, any electronic
road show service used in connection with the offering.
We estimate the total expenses payable by us for this offering to be
approximately $2,336,763, which amount includes (i) a Placement Agent’s fee of $1,694,000, assuming the purchase of all of the Units
we are offering; (ii) the Placement Agent’s non-accountable expense allowance in the amount of $242,000 in connection with this
offering; (iii) the Placement Agent’s accountable expenses in the amount of $50,000 in connection with this offering; and (iv) other
estimated expenses of approximately $350,763, which include legal, accounting, printing costs and various fees associated with the registration
of the Units and listing of our Ordinary Shares.
Right
of First Refusal
Pursuant
to the placement agency agreement, we have also granted to the Placement Agent a right of first refusal for six months from the completion
of this offering to provide investment banking services to us on an exclusive basis, exercisable in the Placement Agent’s discretion.
For these purposes, investment banking services shall mean (a) acting as lead manager for any underwritten public offering; and (b) acting
as exclusive placement agent, initial purchaser or financial advisor in connection with any private offering of securities of the Company.
Listing
Our
Ordinary Shares have been listed on the Nasdaq Capital Market since April 20, 2023. Our Ordinary
Shares trade under the symbol “UCAR.” There is no established public trading
market for the Units, the Series A Warrants, or the Series B Warrants and we do not plan
to list the Units or the Series A Warrants and Series B Warrants on the Nasdaq Capital Market
or any other securities exchange or trading market. Without an active trading market, the
liquidity of such securities will be limited.
Regulation
M
The
Placement Agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act and any fees received
by it and any profit realized on the sale of the securities by it while acting as principal might be deemed to be underwriting commissions
under the Securities Act. The Placement Agent will be required to comply with the requirements of the Securities Act and the Exchange
Act including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing
of purchases and sales of the Units by the Placement Agent. Under these rules and regulations, the Placement Agent may not (i) engage
in any stabilization activity in connection with our securities; and (ii) bid for or purchase any of our securities or attempt to induce
any person to purchase any of our securities, other than as permitted under the Exchange Act, until they have completed their participation
in the distribution.
Other
Relationships
From
time to time, the Placement Agent may provide, various advisory, investment and commercial banking and other services to us in the ordinary
course of business, for which it may receive customary fees and commissions.
Except
as disclosed in this prospectus, we have no present arrangements with the Placement Agent for any services.
We
have agreed to indemnify the Placement Agent against certain liabilities, including liabilities under the Securities Act. If we are unable
to provide this indemnification, we will contribute to payments that the Placement Agent may be required to make for these liabilities.
Lock-Up
Agreements
We
have agreed not to, for a period of 90 days from the date of completion of this offering, offer, issue, sell, contract to sell, encumber,
grant any option for the sale of, or otherwise dispose of, except in this offering, any of our Ordinary Shares or securities that are
substantially similar to our Ordinary Shares, including but not limited to any options or warrants to purchase our Ordinary Shares, or
any securities that are convertible into or exchangeable for, or that represent the right to receive, our Ordinary Shares or any such
substantially similar securities (other than pursuant to employee stock or option plans duly adopted for such purpose, by a majority
of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established
for such purpose for services rendered to the Company, or upon the conversion or exchange of convertible or exchangeable securities outstanding
as of, the date such lock-up agreement was executed, or pursuant to acquisitions or strategic transactions approved by a majority
of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the prohibition period set forth in Section 4.11(a) of the Purchase Agreement, and provided that any such issuance shall only
be to a person which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with
the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities), without the prior written consent of the Placement Agent.
We
have agreed not to, for a period of 90 days from the date of completion of this offering,
without the prior written consent of the Placement Agent, effect or enter into an agreement
to effect any issuance by the Company or any of its subsidiaries of Ordinary Shares or any
securities that are convertible into or exchangeable for, or that represent the right to
receive, our Ordinary Shares or any such substantially similar securities involving a transaction
in which the Company (x) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive, additional Ordinary
Shares either (A) at a conversion price, exercise price or exchange rate or other price that
is based upon, and/or varies with, the trading prices of or quotations for the Ordinary Shares
at any time after the initial issuance of such debt or equity securities or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial
issuance of such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the
Ordinary Shares or (y) enters into, or effects a transaction under, any agreement, including,
but not limited to, an equity line of credit, whereby the Company may issue securities at
a future determined price. The Placement Agent shall be entitled to obtain injunctive relief
against the Company to preclude any such issuance, which remedy shall be in addition to any
right to collect damages.
Furthermore,
each of our directors, executive officers, and existing shareholders holding 5% or more of the Company’s Ordinary Shares will enter
into a similar lock-up agreement for a period of 90 days from the completion of this offering, subject to certain exceptions, with respect
to our Ordinary Shares and securities that are substantially similar to our Ordinary Shares. These restrictions also apply to any Ordinary
Shares acquired by our directors and executive officers in the offering pursuant to the directed share program, if any.
We
cannot predict what effect, if any, future sales of our Ordinary Shares, or the availability of Ordinary Shares for future sale, will
have on the trading price of our Ordinary Shares from time to time. Sales of substantial amounts of our Ordinary Shares in the public
market, or the perception that these sales could occur, could adversely affect the trading price of our Ordinary Shares.
Selling
Restrictions
No
action may be taken in any jurisdiction other than the United States that would permit a public offering of the Securities or the possession,
circulation or distribution of this prospectus in any jurisdiction where action for that purpose is required. Accordingly, the Securities
may not be offered or sold, directly or indirectly, and neither the prospectus nor any other offering material or advertisements in connection
with the Securities may be distributed or published in or from any country or jurisdiction except under circumstances that will result
in compliance with any applicable laws, rules and regulations of any such country or jurisdiction.
EXPENSES
RELATING TO THIS OFFERING
Set
forth below is an itemization of the total expenses, excluding Placement Agent’s fees, expected to be incurred in connection with
the offer and sale of the Units by us. Except for the SEC registration fee and the Financial Industry Regulatory Authority Inc. filing
fee, all amounts are estimates.
U.S. Securities and Exchange Commission Registration Fee | |
$ | 10,892.99 | |
FINRA Filing Fee | |
$ | 11,570 | |
Legal Fees and Other Expenses | |
$ | 280,000 | |
Accounting Fees and Expenses | |
$ | 11,300 | |
Printing and Engraving Expenses | |
$ | 12,000 | |
Miscellaneous Expenses | |
$ | 25,000 | |
Total Expenses | |
$ | 350,762.99 | |
We
will bear these expenses and the Placement Agent’s fees and expenses incurred in connection with the offer and sale of the securities
by us.
LEGAL
MATTERS
We are being represented by Hunter Taubman Fischer & Li LLC with
respect to certain legal matters as to United States federal securities and New York State law. The validity of the Units and the Ordinary
Shares and the Warrants included in the Units offered in this offering and certain other legal matters as to Cayman Islands law will be
passed upon for us by Maples and Calder (Hong Kong) LLP, our counsel as to Cayman Islands law. Legal matters as to PRC law will be passed
upon for us by Guantao Law Firm. Ortoli Rosenstadt LLP is acting as counsel to the Placement Agent in connection with this offering. Hunter
Taubman Fischer & Li LLC may rely upon Maples and Calder (Hong Kong) LLP with respect to matters governed by Cayman Islands law, and
Guantao Law Firm with respect to matters governed by PRC law.
EXPERTS
The
consolidated financial statements for the fiscal years ended December 31, 2021 and 2020, incorporated by reference into this prospectus
from our annual report on Form 20-F for the year ended December 31, 2022, have been so incorporated in reliance on the report of WWC,
P.C., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The
office of WWC, P.C. is located at 2010 Pioneer Court, San Mateo, CA 94403.
The
consolidated financial statements for the six months ended June 30, 2023 and the fiscal year ended December 31, 2022, incorporated by
reference into this prospectus from our Form 6-K filed on October 10, 2023 and the annual report on Form 20-F for the year ended December
31, 2022, respectively, have been so incorporated in reliance on the report of Onestop Assurance PAC, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and accounting. The office of Onestop Assurance PAC is located
at 10 Anson Road, #13-09 International Plaza, Singapore 079903.
CHANGE
IN REGISTRANT’S CERTIFYING ACCOUNTANT
On
May 10, 2023, the Company appointed Onestop Assurance PAC as its independent registered public accounting firm, effective on the same
day. Onestop Assurance PAC replaces WWC, P.C., the former independent registered public accounting firm, which the Company dismissed
on May 10, 2023. The appointment of Onestop Assurance PAC was made after a careful consideration and evaluation process undertaken by
the Company and was approved by the audit committee of the board of directors of the Company. The Company’s decision to make this
change was not the result of any disagreement between the Company and WWC, P.C. on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
The
reports of WWC, P.C. on the consolidated financial statements of the Company for the fiscal years ended December 31, 2020 and 2021 did
not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty or scope of accounting principles.
In connection with the audits of the Company’s consolidated financial statements for the fiscal years ended December 31, 2020 and
2021, and in the subsequent period through May 10, 2023, there were no disagreements with WWC, P.C. on any matters of accounting principles
or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of WWC, P.C.,
would have caused WWC, P.C. to make reference to such matters in its reports. There were no reportable events (as that term is described
in Item 304(a)(1)(v) of Regulation S-K) during the two fiscal years ended December 31, 2020 and 2021, or in the subsequent period through
May 10, 2023.
The
Company provided WWC, P.C. with a copy of the forgoing disclosure and requested WWC, P.C. to furnish the Company with a letter addressed
to the SEC stating whether or not WWC, P.C. agrees with the above statements. A copy of WWC, P.C.’s letter, dated June 8, 2023,
is filed as Exhibit 99.1 to this Form 6-K.
During
the Company’s two most recent fiscal years and the subsequent interim period through May 10, 2023, the Company did not consult
Onestop Assurance PAC with respect to the application of accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that would have been rendered on the Company’s consolidated financial statements, or any other matters
set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
have filed with the SEC a registration statement on Form F-1, including relevant exhibits and schedules under the Securities Act with
respect to the Units to be sold in this offering. This prospectus, which constitutes a part of the registration statement, does not contain
all of the information contained in the registration statement. You should read the registration statement on Form F-1 and its exhibits
and schedules for further information with respect to us and the Units.
We
are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC.
As
a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content
of proxy statements to shareholders, and our executive officers, directors and principal shareholders are exempt from the reporting and
short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange
Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are
registered under the Exchange Act. All information filed with the SEC can be accessed over the Internet at the SEC’s website at
www.sec.gov.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
are allowed to incorporate by reference the information we file with the SEC, which means that we can disclose important information
to you by referring to those documents. The information incorporated by reference is considered to be part of this prospectus. We incorporate
by reference in this prospectus the documents listed below:
| ● | Our
Annual Report on Form
20-F for the year ended December 31, 2022 filed with the SEC on August 22, 2023; and |
| | |
| ● | Our
Current Reports on Form
6-K filed with the SEC on October 10, 2023. |
The
information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the information
contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.
As
you read the above documents, you may find inconsistencies in information from one document to another. If you find inconsistencies between
the documents and this prospectus, you should rely on the statements made in the most recent document. All information appearing in this
prospectus is qualified in its entirety by the information and financial statements, including the notes thereto, contained in the documents
incorporated by reference herein.
We
will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of these filings, at no cost,
upon written or oral request to us at the following address:
U
Power Limited
Address:
2F, Zuoan 88 A, Lujiazui, Shanghai, People’s Republic of China
Tel:
+0086-21-6859-3598
Attention:
rebecca.zhao@upincar.com, Company Contact Person
You
also may access the incorporated reports and other documents referenced above on our website at https://ir.upincar.com/sec.html. The
information contained on, or that can be accessed through, our website is not part of this prospectus.
You
should rely only on the information contained or incorporated by reference in this prospectus. 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 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, or such earlier
date, that is indicated in this prospectus. Our business, financial condition, results of operations and prospects may have changed since
that date.
Until
[●], 2023 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to
deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
U
POWER LIMITED
Up to 10,000,000 Units (each Unit contains
one Ordinary Share, one Series A Warrant to Purchase one Ordinary Share, and one Series B
Warrant
to Purchase one Ordinary Share)
Up to 10,000,000 Ordinary Shares Underlying
the Series A Warrants and Up to 10,000,000 Ordinary Shares Underlying the Series B Warrants
Prospectus
Placement
Agent
[●],
2023
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM 6.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Cayman
Islands law does not limit the extent to which a company’s articles of association may provide indemnification of officers and
directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to the public policy, such
as providing indemnification against civil fraud or the consequences of committing a crime.
Our
amended and restated memorandum and articles of association provide that each officer or director of our company (but not auditors) shall
be indemnified out of our assets against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred
or sustained by such director or officer, other than by reason of such person’s own dishonesty or fraud, in or about the conduct
of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his
or her duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses,
losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning
our company or its affairs in any court whether in the Cayman Islands or elsewhere.
Under
the form of indemnification agreement to be filed as Exhibit 10.1 to this registration statement, we will agree to indemnify our directors
and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of
their being such a director or executive officer.
The
form of placement agency agreement to be filed as Exhibit 1.1 to this registration statement will also provide for indemnification of
us and our officers and directors.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
under the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 7.
RECENT SALES OF UNREGISTERED SECURITIES.
During
the past three years, we have issued the following securities. We believe that each of the following issuances was exempted from
registration under the Securities Act in reliance on Regulation D under the Securities Act or pursuant to Section 4(a)(2) of
the Securities Act regarding transactions not involving a public offering, or in reliance on Regulation S under the Securities Act
regarding sales by an issuer in offshore transactions. The underwriter was not involved in these issuances of securities.
Purchaser | |
Date
of Issuance | | |
Number
of Securities | | |
Consideration
(US$) | |
Ordinary Shares | |
| | |
| | |
| |
Upincar Limited | |
| June
17, 2021 | | |
| 91,370,800 | | |
| 9.13708 | |
U Trend Limited | |
| June
17, 2021 | | |
| 94,991,400 | | |
| 9.49914 | |
U Battery Limited | |
| June
17, 2021 | | |
| 5,076,200 | | |
| 0.50762 | |
U Taste Car Limited | |
| June
17, 2021 | | |
| 4,061,000 | | |
| 0.4061 | |
Will Hunting & U Holding Limited | |
| June
17, 2021 | | |
| 3,612,000 | | |
| 0.3612 | |
Union Ahead Limited | |
| June
17, 2021 | | |
| 888,600 | | |
| 0.08886 | |
Jiuchuang Youpin Limited | |
| November
26, 2021 | | |
| 169,139,178 | | |
| 16.9139178 | |
U Created Limited | |
| February
28, 2022 | | |
| 7,500,000 | | |
| 0.75 | |
Everpine Delta Fund L.P. | |
| February
28, 2022 | | |
| 5,542,000 | | |
| 0.5542 | |
ITEM 8.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
See Exhibit
Index beginning on page II-5 of this registration statement.
(b) Financial
Statement Schedules
Schedules
have been omitted because the information required to be set forth therein is not applicable or is shown in the Consolidated Financial
Statements or the Notes thereto.
ITEM 9.
UNDERTAKINGS.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The
undersigned registrant hereby undertakes that:
| (1) | For
purposes of determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective. |
| (2) | For
the purpose of determining any liability under the Securities Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
The
undersigned registrant hereby undertakes to file a post-effective amendment to the registration statement to include any financial
statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering.
For
the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser:
| (1) | Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned registrant; |
| (2) | The
portion of any other free writing prospectus relating to the offering containing material
information about the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and |
| (3) | Any
other communication that is an offer in the offering made by the undersigned registrant to
the purchaser. |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Shanghai, People’s Republic of China, on November 17, 2023.
|
U Power Limited |
|
|
|
|
By: |
/s/ Jia
Li |
|
|
Jia Li |
|
|
Chief Executive Officer and Chairman of the Board of
Directors |
Power
of Attorney
KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jia Li as attorneys-in-fact with
full power of substitution for him or her in any and all capacities to do any and all acts and all things and to execute any and all
instruments which said attorney and agent may deem necessary or desirable to enable the registrant to comply with the Securities Act
of 1933, as amended, or the Securities Act, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission
thereunder, in connection with the registration under the Securities Act of Ordinary Shares of the registrant, or the Shares, including,
without limitation, the power and authority to sign the name of each of the undersigned in the capacities indicated below to the Registration
Statement on Form F-1, or the Registration Statement, to be filed with the U.S. Securities and Exchange Commission with respect to such
Shares, to any and all amendments or supplements to such Registration Statement, whether such amendments or supplements are filed before
or after the effective date of such Registration Statement, to any related Registration Statement filed pursuant to Rule 462(b) under
the Securities Act, and to any and all instruments or documents filed as part of or in connection with such Registration Statement or
any and all amendments thereto, whether such amendments are filed before or after the effective date of such Registration Statement;
and each of the undersigned hereby ratifies and confirms all that such attorney and agent shall do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and
on November 17, 2023.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/
Jia Li |
|
Chief Executive Officer,
Director, and Chairman of the Board of Directors |
|
November
17, 2023 |
Name: Jia Li |
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
/s/
Bingyi Zhao |
|
Chief Financial Officer and Director |
|
November 17, 2023 |
Name: Bingyi Zhao |
|
(Principal Financial and Accounting Officer) |
|
|
|
|
|
|
|
/s/
Xiaochun Li |
|
Independent Director |
|
November 17, 2023 |
Name: Xiaochun Li |
|
(Director) |
|
|
|
|
|
|
|
/s/
Quanshi Chen |
|
Independent Director |
|
November 17, 2023 |
Name: Quanshi Chen |
|
(Director) |
|
|
|
|
|
|
|
/s/
Bo Lyu |
|
Independent Director |
|
November 17, 2023 |
Name: Bo Lyu |
|
(Director) |
|
|
*By: |
/s/
Jia Li |
|
Name: |
Jia Li |
|
|
Attorney-in-fact |
|
SIGNATURE
OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant
to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of America of U Power
Limited, has signed this registration statement or amendment thereto in New York, NY on November 17, 2023.
|
Cogency Global Inc. |
|
Authorized U.S. Representative |
|
|
|
|
By: |
/s/ Colleen
A. De Vries |
|
Name: |
Colleen A. De Vries |
|
Title: |
Senior Vice President on behalf
of Cogency Global Inc. |
EXHIBIT
INDEX
|
|
Description |
1.1* |
|
Form of Placement Agency Agreement |
|
|
|
3.1 |
|
Amended
and Restated Memorandum of Association (incorporated by reference to Exhibit 3.1 of our Registration Statement on Form F-1 (File
No. 333-268949) initially filed with the Securities and Exchange Commission December 22, 2022) |
|
|
|
4.1 |
|
Specimen
Certificate for Ordinary Shares (incorporated by reference to Exhibit 4.1 of our Registration Statement on Form F-1 (File No. 333-268949)
initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
4.2* |
|
Form of Series A Warrant |
|
|
|
4.3* |
|
Form of Series B Warrant |
|
|
|
4.4* |
|
Form of Securities Purchase Agreement |
|
|
|
5.1* |
|
Opinion of Maples and Calder (Hong Kong) LLP regarding the validity of the Ordinary Shares and the Series A Warrants and Series B Warrants being registered |
|
|
|
5.2* |
|
Opinion of Hunter Taubman Fischer & Li LLC regarding the enforceability of the Series A Warrants and Series B Warrants being registered |
|
|
|
10.1 |
|
Form
of Employment Agreement by and between executive officers and the Registrant (incorporated by reference to Exhibit 10.1 of our Registration
Statement on Form F-1 (File No. 333-268949) initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
10.2 |
|
Form
of Indemnification Agreements between the Registrant and its directors and officers (incorporated by reference to Exhibit 10.2 of
our Registration Statement on Form F-1 (File No. 333-268949) initially filed with the Securities and Exchange Commission on December
22, 2022) |
|
|
|
10.3 |
|
English
translation of cooperation agreement by and between FAW Jiefang Qingdao Automobile Co., Ltd. and Shanghai Youxu New Energy Technology
Co., Ltd., dated September 28, 2021 (incorporated by reference to Exhibit 10.3 of our Registration Statement on Form F-1 (File No.
333-268949) initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
10.4 |
|
English
translation of cooperation agreement by and between Dongfeng Liuzhou Motor Co., Ltd. and Shanghai Youxu New Energy Technology Co.,
Ltd., dated August 28, 2021 (incorporated by reference to Exhibit 10.4 of our Registration Statement on Form F-1 (File No. 333-268949)
initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
10.5 |
|
English
translation of cooperation agreement by and between Dongfeng HUBEI TRI-RING MOTOR CO., LTD and Youpin Automotive Services (Shanghai)
Co., Ltd., dated July 22, 2021 (incorporated by reference to Exhibit 10.5 of our Registration Statement on Form F-1 (File No. 333-268949)
initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
10.6 |
|
English
translation of Capital Increase Agreement dated December 31, 2021 (incorporated by reference to Exhibit 10.6 of our Registration
Statement on Form F-1 (File No. 333-268949) initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
10.7 |
|
English
translation of Lease Agreement for Factory and Office Building by and between Anhui Juhu Door and Window Technology Co. and Upincar
Group Co., Ltd., dated June 16, 2021 (incorporated by reference to Exhibit 10.7 of our Registration Statement on Form F-1 (File No.
333-268949) initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
10.8 |
|
English
translation of Lease Agreement of the Zibo Factory dated December 28, 2021 (incorporated by reference to Exhibit 10.8 of our Registration
Statement on Form F-1 (File No. 333-268949) initially filed with the Securities and Exchange Commission on December 22, 2022) |
10.9 |
|
English
translation of Cooperation Agreement (dated June 6, 2021), Memorandum of Agreement (dated December 17, 2021), and Supplemental Agreement
(dated August 10, 2022), between Quanzhou Xinao Transportation Energy Development Co. and Shanghai Youxu New Energy Technology Youxu
Company (incorporated by reference to Exhibit 10.9 of our Registration Statement on Form F-1 (File No. 333-268949) initially filed
with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
10.10 |
|
English
translation of Lease Agreement of Swapping Station in Quanzhou City, Fujian Province dated July 10, 2022 (incorporated by reference
to Exhibit 10.10 of our Registration Statement on Form F-1 (File No. 333-268949) initially filed with the Securities and Exchange
Commission on December 22, 2022) |
|
|
|
10.11 |
|
English
translation of Sales Agreement of Battery by and between Youpin Automobile Service (Shandong) Co., Ltd. and Quanzhou Shengyue New
Energy Technology Co., Ltd., dated June 27, 2022 (File No. 001-41679) initially filed with the Securities and Exchange Commission
on August 22, 2023) |
|
|
|
10.12 |
|
English
translation of Investment Agreement on Joint Venture of Huzhou Zheyou New Energy Sales Co., Ltd. by and between Zhejiang Petroleum
Comprehensive Energy Sales Co., Ltd. and Youpin Automobile Service Group Co., Ltd., dated April 15, 2022 (File No. 001-41679) initially
filed with the Securities and Exchange Commission on August 22, 2023) |
|
|
|
10.13 |
|
English
translation of Corporate Bond Subscription Agreement by and between Zhejiang Youguan Automobile Service Co., Ltd. and Wuyi Transportation
Construction Investment Group Co., Ltd., dated September 17, 2020 (File No. 001-41679) initially filed with the Securities and Exchange
Commission on August 22, 2023) |
|
|
|
10.14 |
|
English
translation of Project Finance Loan Contract by and between Youxu New Energy Technology (Zibo) Co., Ltd. and Qishang Bank, dated
December 13, 2021 (File No. 001-41679) initially filed with the Securities and Exchange Commission on August 22, 2023) |
|
|
|
10.15 |
|
English
translation of Battery-Swapping Station Equipment Sales Agreement by and between Shanghai Youxu New Energy Technology Co., Ltd. and
Xuchang Dingsheng Power Equipment Installation Co., Ltd., dated December 22, 2022 (File No. 001-41679) initially filed with the Securities
and Exchange Commission on August 22, 2023) |
|
|
|
10.16 |
|
English
translation of Procurement Contract of Battery Swapping Station Equipment by and between Upincar Service Group Co., Ltd.
and Zhejiang Petroleum Integrated Energy Sales Co., Ltd., dated July 29, 2022 (File No. 001-41679) initially filed with the Securities
and Exchange Commission on August 22, 2023) |
|
|
|
10.17 |
|
English
translation of Settlement Agreement by and between Zhejiang Youguan Automotive Service Co., Ltd. and WuYi Transportation Construction
Investment Group Company Limited, dated June 13, 2023 (File No. 001-41679) initially filed with the Securities and Exchange Commission
on August 22, 2023) |
|
|
|
10.18** |
|
English Translation of
Lease Agreement by and between Shanghai Youxu New Energy Technology Co., Ltd. and Quanzhou Xinao Transportation Energy Development
Co., Ltd., dated January 15, 2023 |
|
|
|
10.19** |
|
English Translation of
Settlement Agreement by and between Zhejiang Youguan Automotive Service Co., Ltd. and WuYi Transportation Construction Investment
Group Company Limited, dated June 13, 2023 |
|
|
|
10.20* |
|
Form of Lock-Up Agreement |
|
|
|
21.1* |
|
Principal Subsidiaries |
|
|
|
23.1* |
|
Consent of WWC, P.C. |
|
|
|
23.2* |
|
Consent of Onestop Assurance PAC |
|
|
|
23.3* |
|
Consent of Maples and Calder (Hong Kong) LLP (included in Exhibit 5.1) |
|
|
|
23.4* |
|
Consent of Guantao Law Firm |
|
|
|
23.5* |
|
Consent of Hunter Taubman Fischer & Li LLC (included in Exhibit 5.2) |
|
|
|
24.1 |
|
Powers
of Attorney (included on signature page) |
|
|
|
99.1 |
|
Code
of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 14.1 of our Registration Statement on Form
F-1 (File No. 333-268949) initially filed with the Securities and Exchange Commission on December 22, 2022) |
|
|
|
107* |
|
Filing Fee Table |
II-6
Exhibit 1.1
PLACEMENT AGENCY AGREEMENT
[_], 2023
Univest Securities, LLC
75 Rockefeller Plaza , Suite 1838
New York, NY, 10019
Ladies and Gentlemen:
Subject to the terms and conditions
of this agreement (this “Agreement”) and the Transaction Documents (as defined below), U Power Limited, a Cayman Islands
exempted company (the “Company”), hereby agrees to sell an aggregate of [*] units (the “Units”)
comprised of one ordinary share (each a “Share” and collectively, the “Shares”), $0.0000001 par
value per share, of the Company (the “Ordinary Shares”), one warrant to purchase one Ordinary Share (each a “Series
A Warrant” and collectively, the “Series A Warrants”), and one additional warrant to purchase one Ordinary
Share (each a “Series B Warrant” and collectively, the “Series B Warrants”) directly to various
investors (each, an “Investor” and collectively, the “Investors”) through Univest Securities, LLC
(the “Placement Agent”), as placement agent. The Ordinary Shares underlying the Series A Warrants and the Series B
Warrants are referred to as the “Warrant Shares”. The Units, the Shares, the Series A Warrants, the Series B Warrants and
the Warrant Shares are referred to, collectively, as the “Securities”. The documents executed and delivered by the
Company and the Investors in connection with the Offering (as defined below), including, without limitation, a securities purchase agreement
(the “Purchase Agreement”), shall be collectively referred to herein as the “Transaction Documents.”
The purchase price to the Investors for each Unit is $[--],the exercise price to the Investors for each Ordinary Share issuable upon exercise
of a Series A Warrant is $[--], and the exercise price to the Investors for each Ordinary Share issuable upon exercise of a Series B Warrant
is $[--]. The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection
with the Offering.
Notwithstanding anything herein
to the contrary, in the event that the Placement Agent determines that any of the terms provided for hereunder do not comply with a Financial
Industry Regulatory Authority (“FINRA”) rule, including but not limited to FINRA Rule 5110, then the Company shall agree to
amend this Agreement in writing upon the request of the Placement Agent to comply with any such rules; provided that any such amendments
shall not provide for terms that are less favorable to the Company than the terms of this Agreement or that such terms are adverse to
the Company.
The Company hereby confirms
its agreement with the Placement Agent as follows:
Section 1. Agreement to
Act as Placement Agent.
(a) On
the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions
of this Agreement, the Placement Agent shall be the exclusive placement agent in connection with the offering and sale by the Company
of the Securities pursuant to the Company’s registration statement on Form F-1 (File No. 333-[*]) (the “Registration Statement”)
with the terms of such offering (the “Offering”) to be subject to market conditions and negotiations between the Company,
the Placement Agent and the prospective Investors. The Placement Agent will act on a reasonable best-efforts basis and the Company agrees
and acknowledges that there is no guarantee of the successful placement of the Securities, or any portion thereof, in the prospective
Offering. Under no circumstances will the Placement Agent or any of its “Affiliates” (as defined below) be obligated to underwrite
or purchase any of the Securities for its own account or otherwise provide any financing. The Placement Agent shall act solely as the
Company’s agent and not as principal. The Placement Agent shall have no authority to bind the Company with respect to any prospective
offer to purchase Securities and the Company shall have the sole right to accept offers to purchase Securities and may reject any such
offer, in whole or in part. The Placement Agent may employ other FINRA member firms as selected dealers at its discretion. Subject to
the terms and conditions hereof, payment of the purchase price for, and delivery of, the Securities shall be made at one or more closings
(each a “Closing” and the date on which each Closing occurs, a “Closing Date”). As compensation
for services rendered, on each Closing Date, the Company shall pay to the Placement Agent a cash fee equal to seven percent (7%) of the
aggregate gross proceeds received by the Company from the sale of the Securities (the “Cash Fee”). As used in this
agreement, “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or
is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities
Act.
(b) The
term of the Placement Agent’s exclusive engagement shall begin on the date hereof and continue until the earlier of (i) the Final
Closing Date of the Offering (the “Exclusive Term”), (ii) December 31, 2023, and (iii) the date the Placement Agent
or the Company terminates the engagement according to the terms of the next sentence (such date, the “Termination Date”
and the period of time during which this Agreement remains in effect is referred to herein as the “Term”). The engagement
may be terminated at any time by either party upon sixty (60) days written notice to the other party, effective upon receipt of written
notice to that effect by the other party. If the Company elects to terminate this Agreement for any reason even though the Placement Agent
was prepared to proceed with the Offering reasonably within the intent of this Agreement, and if within twelve (12) months following such
termination, the Company completes any financing of equity, equity-linked or debt or other capital raising activity of the Company (other
than the exercise by any person or entity of any options, warrants or other convertible securities) with any of Investors identified or
contacted by the Placement Agent during the term of this Agreement, then the Company will pay the Placement Agent upon the closing of
such financing the compensation set forth in Section 3 herein which is attributable to such eligible Investors. Unless otherwise
provided under this Agreement, the provisions concerning the Company’s obligation to pay any fees actually earned pursuant to Section
1(a) hereof and to pay or reimburse the Placement Agent for any expenses incurred in accordance with Section 6 hereof, the
Company’s obligations contained in the indemnification provisions, and the provisions concerning confidentiality, indemnification
and contribution contained herein will survive any expiration or termination of this Agreement for any reason. All fees and expense payments
or reimbursements due to the Placement Agent shall be paid by the Company to the Placement Agent on or before the Termination Date (in
the event such fees and expenses are earned or owed as of the Termination Date). Furthermore, the Company agrees that during the Placement
Agent’s engagement hereunder, all inquiries from prospective U.S. Investors and with respect to the Offering will be referred to
the Placement Agent. Additionally, except as set forth hereunder or otherwise disclosed to the Placement Agent in writing, the Company
represents, warrants and covenants that no brokerage or finder’s fees or commissions are or will be payable by the Company or any
subsidiary of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other third-party
with respect to the Offering. The Placement Agent agrees, not to use any confidential information concerning the Company provided to the
Placement Agent by the Company for any purposes other than those contemplated under this Agreement.
(c) Subject
to the consummation of the transactions contemplated under this Agreement, beginning on each Closing Date until the six (6)-month anniversary
following such Closing Date, the Company grants the Placement Agent the right to provide investment banking services to the Company on
an exclusive basis in all matters for which the following investment banking services are sought by the Company (such right, the “ROFR”),
which right is exercisable in the Placement Agent’s sole discretion. For these purposes, investment banking services shall mean
(a) acting as lead manager for any underwritten public offering; and (b) acting as exclusive placement agent, initial purchaser or financial
advisor in connection with any private offering of securities of the Company. Within five (5) days after the Company’s decision
to enter into any such transactions, the Company shall provide written notice to the Placement Agent, and the Placement Agent shall notify
the Company of its intention to exercise the ROFR within fifteen (15) business days following receipt of such written notice from the
Company. Any decision by the Placement Agent to act in any such capacity shall be contained in separate agreements, which agreements shall
contain, among other matters, provisions for customary fees for transactions of similar size and nature, as may be mutually agreed upon
by the parties thereto, and indemnification of the Placement Agent which are appropriate to such transactions and shall be subject to
general market conditions. If the Placement Agent declines to exercise the ROFR or in the event the terms proposed by the Placement Agent
are unsatisfactory to the Company, the Company shall have the right to retain any other person or persons to provide such services on
terms and conditions which are not more favorable to such other person or persons than the terms declined by the Placement Agent in the
first instance, or than the terms proposed by the Placement Agent in the second instance. The ROFR granted hereunder may be terminated
by the Company for “Cause”, which shall mean a material breach by the Placement Agent of this Agreement or a material failure
by the Placement Agent to provide the services as contemplated by this Agreement. The services provided by the Placement Agent hereunder
are solely for the benefit of the Company and are not intended to confer any rights upon any persons or entities not a party hereto (including,
without limitation, securityholders, employees or creditors of the Company) as against the Placement Agent or its directors, officers,
agents and employees.
Section 2. Representations,
Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants the Placement Agent as of the date
hereof, and as of each Closing Date, as follows:
(a) Securities
Law Filings. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”) the Registration
Statement under the Securities Act of 1933, as amended (the “Securities Act”), which was filed on [--], 2023 and declared
effective on [--], 2023 for the registration of the Securities under the Securities Act. Following the determination of pricing among
the Company and the prospective Investors introduced to the Company by the Placement Agent, the Company will file with the Commission
pursuant to Rules 430B and 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”)
of the Commission promulgated thereunder, a final prospectus relating to the placement of the Securities, their respective pricings and
the plan of distribution thereof and will advise the Placement Agent of all further information (financial and other) with respect to
the Company required to be set forth therein. Such registration statement, at any given time, including the exhibits thereto filed at
such time, as amended at such time, is hereinafter called the “Registration Statement”; such prospectus in the form
in which it appears in the Registration Statement at the time of effectiveness is hereinafter called the “Preliminary Prospectus”;
and the final prospectus, in the form in which it will be filed with the Commission pursuant to Rules 430A and/or 424(b) (including the
Preliminary Prospectus as it may be amended or supplemented) is hereinafter called the “Final Prospectus.” The Registration
Statement at the time it originally became effective is hereinafter called the “Original Registration Statement.” If
the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term
“Registration Statement” shall include such registration statement filed pursuant to Rule 462(b). Any reference in this Agreement
to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”), if any, which
were or are filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at any given time, as
the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date
of the Preliminary Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. All references
in this Agreement to financial statements and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration Statement, the
Preliminary Prospectus or the Final Prospectus (and all other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement,
the Preliminary Prospectus or the Final Prospectus, as the case may be. As used in this paragraph and elsewhere in this Agreement, “Time
of Sale Disclosure Package” means the Preliminary Prospectus, any subscription agreement between the Company and the Investors,
the final terms of the Offering provided to the Investors (orally or in writing) and any issuer free writing prospectus as defined in
Rule 433 of the Act (each, an “Issuer Free Writing Prospectus”), if any, that the parties hereto shall hereafter expressly
agree in writing to treat as part of the Time of Sale Disclosure Package. The term “any Prospectus” shall mean, as
the context requires, the Preliminary Prospectus, the Final Prospectus, and any supplement to either thereof. The Company has not received
any notice that the Commission has issued or intends to issue a stop order suspending the effectiveness of the Registration Statement
or the use of the Preliminary Prospectus or any prospectus supplement or intends to commence a proceeding for any such purpose.
(b) Assurances.
The Original Registration Statement, as amended, (and any further documents to be filed with the Commission) contains all exhibits and
schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the time
it became effective, complied in all material respects with the Securities Act and the applicable Rules and Regulations and did not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading. The Final Prospectus, as of its date, complied or will comply in all material respects with the Securities Act
and the applicable Rules and Regulations. The Final Prospectus, as amended or supplemented, did not and will not contain as of the date
thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations promulgated thereunder,
and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference in the
Final Prospectus), in light of the circumstances under which they were made not misleading. No post-effective amendment to the Registration
Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental
change in the information set forth therein is required to be filed with the Commission. Except for this Agreement and the Transaction
Documents, there are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that
(x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. Except for
this Agreement and the Transaction Documents, there are no contracts or other documents required to be described in the Final Prospectus,
or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required.
(c) Offering
Materials. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to each
Closing Date, any offering material in connection with the offering and sale of the Securities other than the Time of Sale Disclosure
Package.
(d) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement, the Transaction Documents and the Time of Sale Disclosure Package and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of each of this Agreement, the Transaction Documents and the Time of Sale Disclosure Package
by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the Company, the Company’s Board of Directors (the “Board
of Directors”) or the Company’s shareholders in connection therewith other than in connection with the Required Approvals
(as defined below). This Agreement and each Transaction Document has been duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with
its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law. “Required Approvals” shall mean such filings as are required to be made
under applicable state securities laws.
(e) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and each Transaction Document and the transactions
contemplated hereby, thereby and pursuant to the Time of Sale Disclosure Package, the issuance and sale of the Securities and the consummation
by it of the transactions contemplated hereby and thereby to which it is a party do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of association, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject
to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to in: (x) a material adverse effect on the legality,
validity or enforceability of this Agreement or any other agreement entered into between the Company and the Investors, (y) a material
adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (z) a material adverse effect on the Company’s ability to perform in any material respect on
a timely basis its obligations under this Agreement or the transactions contemplated under the Prospectus (any of (x), (y) or (z), a “Material
Adverse Effect”). As used in this Agreement, “Subsidiary” means each of the direct and indirect subsidiaries
of the Company as set forth in the Incorporated Documents, collectively, the “Subsidiaries”. As used in this Section 2(e),
“Lien” means liens, charges, security interests, encumbrances, rights of first refusal, preemptive rights or other
restrictions.
(f) Certificates.
Any certificate signed by an officer of the Company and delivered to the Placement Agent or to the Placement Agent’s Counsel shall
be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set forth therein.
(g) Reliance.
The Company acknowledges that the Placement Agent will rely upon the accuracy and truthfulness of the foregoing representations and warranties
and hereby consents to such reliance.
(h) Forward-Looking
Statements. No forward-looking statements (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Time of Sale Disclosure Package has been made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(i) FINRA
Affiliations. There are no affiliations with any firm that is a member of the FINRA participating in the Offering among the Company’s
officers, directors or, to the knowledge of the Company, any 5% or greater shareholder of the Company.
(j) Representations
and Warranties Incorporated by Reference. Each of the representations and warranties (together with any related disclosure schedules
thereto) made by the Company to the Investors in the Purchase Agreement is hereby incorporated herein by reference (as though fully restated
herein) and is hereby made to, and in favor of, the Placement Agent.
Section 3. Delivery and
Payment.
(a) Closing
for the Offering. Delivery of and payment for the Units shall be made at or around 11:00 A.M., Eastern time, on the third (3rd) Trading
Day following the date of the Purchase Agreement in the case of the initial Closing or the date of the written notice delivered by one
or more Investors to purchase additional Units pursuant to the Purchase Agreement, or at such other day and/or time as shall be agreed
upon by the Placement Agent and the Company. Each Closing shall occur at the offices of Ortoli Rosenstadt LLP, 366 Madison Avenue, 3rd
Floor, New York, NY 10017 (“Placement Agent’s Counsel”) (or at such other place as shall be agreed upon by the
Placement Agent and the Company). On the Final Closing Date, the Company shall issue the Units subject to such Closing directly to the
account designated by the Placement Agent and, upon receipt of such Units, the Placement Agent shall electronically deliver the Shares,
the Series A Warrants and the Series B Warrants comprising the Units to the applicable Investor and payment shall be made by the Placement
Agent (or its clearing firm) by wire transfer to the Company. At such Closing, the Company shall deliver a Series A Warrant registered
in the name of each Investor to purchase up to an aggregate number of Ordinary Shares equal to 100% of the aggregate number of such Investor’s
Shares purchased pursuant to the Offering and a Series B Warrant registered in the name of each Investor to purchase up to an aggregate
number of Ordinary Shares equal to 100% of the aggregate number of such Investor’s Shares purchased pursuant to the Offering. Subject
to the terms and conditions hereof, at each Closing, payment of the purchase price for the Units sold on such Closing Date shall be made
by Federal Funds wire transfer, against delivery of the Shares (with the Series A Warrants and the Series B Warrants to follow as provided
in the previous sentence), and such Securities shall be registered in such name or names and shall be in such denominations, as the Placement
Agent may request at least one (1) business day before such Closing Date. Deliveries of the documents with respect to the purchase of
the Securities, if any, shall be made at the offices of Placement Agent’s Counsel; provided, however, that the Company shall be
deemed to have satisfied its obligations with respect to the delivery of the Series A Warrants and Series B Warrants by making available
a PDF copy of the executed Series A Warrants and Series B Warrants at the applicable Closing and delivering the originals thereof within
five (5) trading days of the Closing. All actions taken at a Closing shall be deemed to have occurred simultaneously.
(b) Payment
for the Units. The Units are being sold to the Investors at the public offering price as set forth in the Prospectus. The purchase
of the Units by each of the Investors shall be evidenced by the receipt of funds in the account designated by the Company and the Placement
Agent and execution of a Purchase Agreement by each such Investor and the Company.
(c) Delivery
of the Shares, Series A Warrants and Series B Warrants. Delivery of the Shares shall be made through the facilities of The Depository
Trust Company unless the Placement Agent shall otherwise instruct. Delivery of the Series A Warrants and the Series B Warrants shall be
made as set forth in Section 3(a) above.
(d) Offering
Period. The Offering Period shall commence on the effective date of the Registration Statement and will continue until the earlier
of (i) the completion of the sale of all Securities in the Offering and (ii) the date that is sixty (60) calendar days following such
effective date, unless such 60-day period is extended by the mutual written agreement of the Company and the Placement Agent for an additional
period of up to thirty (30) calendar days from such date (the “Offering Period”). After the initial Closing, subsequent closings
with respect to accepted subscriptions may take place at any time during the Offering Period in accordance with the Purchase Agreement.
Section 4. Covenants and
Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:
(a) Registration
Statement Matters. During the Prospectus Delivery Period (as defined below), the Company will advise the Placement Agent promptly
after it receives notice thereof of the time when any amendment to the Registration Statement has been filed or becomes effective or any
supplement to the Final Prospectus has been filed and will furnish the Placement Agent with copies thereof. During the Prospectus Delivery
Period, the Company will file promptly all reports and any definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date of any Prospectus. During the Prospectus
Delivery Period, the Company will advise the Placement Agent, promptly after it receives notice thereof (i) of any request by the Commission
to amend the Registration Statement or to amend or supplement any Prospectus or for additional information, and (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or
any order directed at any Incorporated Document, if any, or any amendment or supplement thereto or any order preventing or suspending
the use of the Preliminary Prospectus or the Final Prospectus or any prospectus supplement or any amendment or supplement thereto or any
post-effective amendment to the Registration Statement, of the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, of the institution or threatened institution of any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or a Prospectus or for additional information. The Company shall use its
commercially reasonable efforts to prevent the issuance of any such stop order or prevention or suspension of such use. If the Commission
shall enter any such stop order or order or notice of prevention or suspension at any time, the Company will use its commercially reasonable
efforts to obtain the lifting of such order at the earliest possible moment, or will file a new registration statement and use its best
efforts to have such new registration statement declared effective as soon as practicable. Additionally, the Company agrees that during
the Prospectus Delivery Period, it shall comply with the provisions of Rules 424(b), 430A, 430B and 430C, as applicable, under the Securities
Act, including with respect to the timely filing of documents thereunder, and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) are received in a timely manner by the Commission.
(b) Blue
Sky Compliance. The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the Securities for
sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Investors may reasonably
request and will make such applications, file such documents, and furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a consent, and provided further that the Company shall not be required
to produce any new disclosure document. During the Prospectus Delivery Period, the Company will, from time to time, prepare and file such
statements, reports and other documents as are or may be required to continue such qualifications in effect. During the Prospectus Delivery
Period, the Company will advise the Placement Agent promptly of the suspension of the qualification or registration of (or any such exemption
relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use
its commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.
(c) Amendments
and Supplements to a Prospectus and Other Matters. The Company will comply with the Securities Act and the Exchange Act, and the rules
and regulations of the Commission thereunder, so as to permit the completion of the distribution of the Securities as contemplated in
this Agreement, the Incorporated Documents and any Prospectus. If during the period in which a prospectus is required by law to be delivered
in connection with the distribution of Securities contemplated by the Incorporated Documents or any Prospectus (the “Prospectus
Delivery Period”), any event shall occur as a result of which, in the judgment of the Company or in the opinion of the Placement
Agent or Placement Agent’s Counsel, it becomes necessary to amend or supplement the Incorporated Documents or any Prospectus in
order to make the statements therein, in the light of the circumstances under which they were made, as the case may be, not misleading,
or if it is necessary at any time to amend or supplement the Incorporated Documents or any Prospectus or to file under the Exchange Act
any Incorporated Document to comply with any law, the Company will promptly prepare and file with the Commission, and furnish at its own
expense to the Placement Agent and to dealers, an appropriate amendment to the Registration Statement or supplement to the Registration
Statement, the Incorporated Documents or any Prospectus that is necessary in order to make the statements in the Incorporated Documents
and any Prospectus as so amended or supplemented, in the light of the circumstances under which they were made, as the case may be, not
misleading, or so that the Registration Statement, the Incorporated Documents or any Prospectus, as so amended or supplemented, will comply
with law. Before amending the Registration Statement or supplementing the Incorporated Documents or any Prospectus in connection with
the Offering, the Company will furnish the Placement Agent with a copy of such proposed amendment or supplement and will not file any
such amendment or supplement to which the Placement Agent reasonably objects.
(d) Copies
of any Amendments and Supplements to a Prospectus. The Company will furnish the Placement Agent, without charge, during the period
beginning on the date hereof and ending upon the completion of the Offering, as many copies of any Prospectus or prospectus supplement
and any amendments and supplements thereto, as the Placement Agent may reasonably request.
(e) Free
Writing Prospectus. The Company covenants that it will not, unless it obtains the prior written consent of the Placement Agent, make
any offer relating to the Securities that would constitute a Company Free Writing Prospectus or that would otherwise constitute a “free
writing prospectus” (as defined in Rule 405 of the Securities Act) required to be filed by the Company with the Commission or
retained by the Company under Rule 433 of the Securities Act. In the event that the Placement Agent expressly consents in writing to any
such free writing prospectus (a “Permitted Free Writing Prospectus”), the Company covenants that it shall (i) treat
each Permitted Free Writing Prospectus as an Company Free Writing Prospectus, and (ii) comply with the requirements of Rule 164 and 433
of the Securities Act applicable to such Permitted Free Writing Prospectus, including in respect of timely filing with the Commission,
legending and record keeping.
(f) Transfer
Agent. The Company will maintain, at its expense, a registrar and transfer agent for the Ordinary Shares.
(g) Earnings
Statement. As soon as practicable and in accordance with applicable requirements under the Securities Act, but in any event not later
than twelve (12) months after the initial Closing Date, the Company will make generally available to its security holders and to the Placement
Agent an earnings statement, covering a period of at least twelve (12) consecutive months beginning after the initial Closing Date, that
satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act.
(h) Periodic
Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the Commission and
The Nasdaq Stock Market LLC (“Trading Market”) all reports and documents required to be filed under the Exchange Act
within the time periods and in the manner required by the Exchange Act.
(i) Additional
Documents. The Company will enter into any subscription, purchase or other customary agreements as the Placement Agent or the
Investors deem necessary or appropriate to consummate each Closing in connection with the Offering, all of which will be in form and substance
reasonably acceptable to the Placement Agent and the Investors. The Company agrees that the Placement Agent may rely upon, and each is
a third-party beneficiary of, the representations and warranties, and applicable covenants, set forth in any purchase, subscription or
other agreement entered into with Investors in connection with the Offering.
(j) No
Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in, or that
has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities of the
Company.
(k) Acknowledgment.
The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the Board of
Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement Agent’s prior written
consent.
(l) Announcement
of Offering. The Company acknowledges and agrees that the Placement Agent may at its sole expense, subsequent to the Closing, make
public its involvement with the Offering.
(m) Reliance
on Others. The Company confirms that it will rely on its own counsel and accountants for legal and accounting advice.
(n) Research
Matters. By entering into this Agreement, the Placement Agent provides no promise, either
explicitly or implicitly, of favorable or continued research coverage of the Company and the Company hereby acknowledges and agrees that
the Placement Agent’s selection as the placement agent for the Offering was in no way conditioned, explicitly or implicitly, on
the Placement Agent’s providing favorable or any research coverage of the Company. In accordance with FINRA Rule 2711(e), the parties
acknowledge and agree that the Placement Agent has not directly or indirectly offered favorable research, a specific rating or a specific
price target, or threatened to change research, a rating or a price target, to the Company or inducement for the receipt of business or
compensation.
Section 5. Conditions
of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject to the accuracy in all
material respects of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case
as of the date hereof and as of the applicable Closing Date as though then made, to the timely performance by each of the Company of its
covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions:
(a) Accountants’
Comfort Letter. On each such Closing Date, the Placement Agent shall have received, and the Company shall have caused to be delivered
to the Placement Agent, a letter from each of WWC, P.C. and Onestop Assurance PAC (the independent registered public accounting firms
of the Company), addressed to the Placement Agent, dated as of such Closing Date, in form and substance reasonably satisfactory to the
Placement Agent. The letters shall not disclose any change in the condition (financial or other), earnings, operations, business or prospects
of the Company from that set forth in the Incorporated Documents or the applicable Prospectus or prospectus supplement, which, in the
Placement Agent’s sole judgment, is material and adverse and that makes it, in the Placement Agent’s reasonable judgment, impracticable
or inadvisable to proceed with the Offering of the Securities as contemplated by such Prospectus.
(b) Compliance
with Registration Requirements; No Stop Order; No Objection from FINRA. Each Prospectus (in accordance with Rule 424(b)) and “free
writing prospectus” (as defined in Rule 405 of the Securities Act), if any, shall have been duly filed with the Commission,
as appropriate; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by the Commission; no order preventing or suspending the use of
any Prospectus shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no
order having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company shall have
been issued by any securities commission, securities regulatory authority or stock exchange and no proceedings for that purpose shall
have been instituted or shall be pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory
authority or stock exchange; all requests for additional information on the part of the Commission shall have been complied with; and
FINRA shall have raised no objection to the fairness and reasonableness of the placement terms and arrangements.
(c) Corporate
Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement and each
Prospectus, and the registration, sale and delivery of the Securities, shall have been completed or resolved in a manner reasonably satisfactory
to the Placement Agent’s Counsel, and such counsel shall have been furnished with such papers and information as it may reasonably have
requested to enable such counsel to pass upon the matters referred to in this Section 5.
(d) No
Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, in the Placement
Agent’s reasonable judgment after consultation with the Company, there shall not have occurred any material adverse change or development
involving a prospective material adverse change in the condition or the business activities, financial or otherwise, of the Company from
the latest dates as of which such condition is set forth in the Registration Statement and Prospectus (each, a “Material Adverse
Change”).
(e) Opinion
of Counsels for the Company. The Placement Agent shall have received on each such Closing Date the opinion of U.S. legal counsel,
PRC legal counsel and Cayman Islands legal counsel to the Company, dated as of such Closing Date and addressed to the Placement Agent,
including, without limitation, a negative assurance letter from U.S. legal counsel to the Company, each in form and substance substantially
similar to the opinions delivered by U.S. legal counsel, PRC legal counsel and special Cayman Islands legal counsel to the Company in
connection with an offering of the type contemplated hereby, which shall be deemed reasonably satisfactory to the Placement Agent.
(f) Officers’
Certificate. The Placement Agent shall have received on each such Closing Date, a certificate of the Company, dated as of such Closing
Date and which may be relied upon by the Placement Agent, signed by the Chief Executive Officer and Chief Financial Officer of the Company,
in their respective capacities as such officers only, in a form reasonably acceptable to the Placement Agent, to the effect that:
(i) The
representations and warranties of the Company in this Agreement are true and correct in all material respects, as if made on and as of
such Closing Date, and the Company has complied in all material respects with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to such Closing Date;
(ii) No
stop order suspending the effectiveness of the Registration Statement or the use of the Final Prospectus has been issued and no proceedings
for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened under the Securities Act; no order
having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company has been issued by
any securities commission, securities regulatory authority or stock exchange in the United States and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory
authority or stock exchange in the United States;
(iii) When
the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery of such certificate,
the Registration Statement and the Incorporated Documents, if any, when such documents became effective or were filed with the Commission,
contained all material information required to be included therein by the Securities Act and the Exchange Act and the applicable rules
and regulations of the Commission thereunder, as the case may be, and in all material respects conformed to the requirements of the Securities
Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and the Registration
Statement and the Incorporated Documents, if any, did not and do not include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading (provided, however, that the preceding representations and warranties contained in this paragraph (iii)
shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company
by the Placement Agent expressly for use therein) and, since the effective date of the Registration Statement, there has occurred no event
required by the Securities Act and the rules and regulations of the Commission thereunder to be set forth in the Incorporated Documents
which has not been so set forth; and
(iv) Subsequent
to the respective dates as of which information is given in the Registration Statement, the Incorporated Documents and the Final Prospectus,
there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company and the Subsidiaries taken as
a whole, except transactions entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is material
to the Company and the Subsidiaries taken as a whole, incurred by the Company or any Subsidiary, except obligations incurred in the ordinary
course of business; (d) any material change in the capital stock (except changes thereto resulting from the exercise of outstanding stock
options or warrants) or outstanding indebtedness of the Company or any Subsidiary; (e) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company; or (f) any loss or damage (whether or not insured) to the property of the Company or
any Subsidiary which has been sustained or will have been sustained which has a Material Adverse Effect.
(g) Chief
Financial Officer’s Certificate. The Placement Agent shall have received on each such Closing Date, a certificate of the Company,
dated as of such Closing Date and which may be relied upon by the Placement Agent, signed by the Chief Financial Officer of the Company,
with respect to certain financial data contained in or incorporated by reference into the Registration Statement, in a form reasonably
acceptable to the Placement Agent.
(h) Secretary’s
Certificate. The Placement Agent shall have received on each such Closing Date, a certificate of the Company, dated as of such Closing
Date and which may be relied upon by the Placement Agent, signed by the Secretary of the Company, certifying, among others, (i) that each
of the Company’s organizational documents is true and complete, has not been modified and is in full force and effect; (ii) that
the resolutions of the Company’s Board of Directors relating to the Offering are in full force and effect and have not been modified;
(iii) that each of the Company and its Subsidiaries is in good standing under the laws of the jurisdiction of its incorporation or organization;
(iv) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (v) as to the
incumbency of the officers of the Company, in a form reasonably acceptable to the Placement Agent.
(i) Exchange
Act Registration and Stock Exchange Listing. The Ordinary Shares shall have been registered under the Exchange Act and shall have
been approved for listing on the Trading Market, subject to official notice of issuance, and the Company shall not have taken any action
designed to terminate, or likely to have the effect of terminating, the registration of the Ordinary Shares under the Exchange Act or
delisting or suspending from trading the Ordinary Shares from the Trading Market, nor shall the Company have received any information
suggesting that the Commission or the Trading Market is contemplating terminating such registration or listing.
(j) Lock-Up
Agreement. On or prior to each of (i) the date of this Agreement and (ii) the Final Closing Date, the Company shall also have furnished
to the Placement Agent a letter substantially in the form of Exhibit A hereto (the “Lock-Up Agreement”)
from each executive officer, director and 5% shareholder of the Company addressed to the Placement Agent. The Company will use its reasonable
best efforts to enforce the terms of each Lock-Up Agreement and will issue stop-transfer instructions to the transfer agent for the Ordinary
Shares with respect to any transaction or contemplated transaction that would constitute a breach of or default under the applicable Lock-Up
Agreement.
(k) Subsequent Equity Sales.
(i) From the date hereof until
the ninety (90) days after the initial Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue
or announce the issuance or proposed issuance of any Ordinary Shares or any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Ordinary Shares, including, without limitation, any debt, preferred stock, right, option,
warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Ordinary Shares (“Ordinary Share Equivalents”).
(ii) From the date hereof
until the ninety (90) days after the initial Closing Date, the Company shall be prohibited from effecting or entering into an agreement
to effect any issuance by the Company or any of its Subsidiaries of Ordinary Shares or Ordinary Share Equivalents (or a combination of
units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the
Company (x) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right
to receive, additional Ordinary Shares either (A) at a conversion price, exercise price or exchange rate or other price that is based
upon, and/or varies with, the trading prices of or quotations for the Ordinary Shares at any time after the initial issuance of such debt
or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the
initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Ordinary Shares or (y) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price. The Placement
Agent shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition
to any right to collect damages.
(iii) Notwithstanding the
foregoing, this Section 5(k) shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt
Issuance. “Exempt Issuance” means the issuance of (a) Ordinary Shares or options to employees, officers or directors
of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder, and/or other securities
exercisable or exchangeable for or convertible into Ordinary Shares issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend
the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested
directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and
carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition
period set forth in Section 4.11(a) of the Purchase Agreement, and provided that any such issuance shall only be to a Person (or to the
equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities. “Person” means an individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.
(l) Additional
Documents. On or before each Closing Date, the Placement Agent and Placement Agent’s Counsel shall have received such information
and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of
the conditions or agreements, herein contained.
If any condition specified in
this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement Agent by
notice to the Company at any time on or prior to a Closing Date, which termination shall be without liability on the part of any party
to any other party, except that Section 1(a), Section 1(b), Section 6 (Payment of Expenses), Section 7 (Indemnification
and Contribution) and Section 8 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall
survive such termination.
Section 6. Payment of
Expenses. Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company agrees to pay all reasonable costs, fees and expenses incurred
by the Company in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby,
including, without limitation: (i) all expenses incident to the issuance, delivery and qualification of the Securities (including all
printing and engraving costs); (ii) all fees and expenses of the registrar and transfer agent of the Shares; (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the Securities; (iv) all fees and expenses of the Company’s
counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits,
schedules, consents and certificates of experts), the Preliminary Prospectus, the Final Prospectus and each prospectus supplement, if
any, and all amendments and supplements thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses
incurred by the Company or the Placement Agent in connection with qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Securities for offer and sale under the state securities or blue sky laws or the securities
laws of any other country; (vii) if applicable, the filing fees incident to the review and approval by FINRA of the Placement Agent’s
participation in the offering and distribution of the Securities; (viii) the fees and expenses associated with including the Securities
on the Trading Market; (ix) all costs and expenses incident to the travel and accommodation of the Company’s employees on the “roadshow,”
if any; (x) the Placement Agent’s clearing expenses; and (xi) all other fees, costs and expenses referred to in Part II of the Registration
Statement. The Company shall be obligated to pay or reimburse the Placement Agent for its actual and accountable out-of-pocket expenses
related to the Offering, including any fees and disbursements of the Placement Agent’s legal counsel and, if applicable, any electronic
road show service used in connection with the Offering; provided, however, that the maximum amount that the Company shall be required
to pay or reimburse the Placement Agreement pursuant to this sentence shall be Fifty Thousand Dollars (US$50,000). The Company further
agrees that, in addition to the expenses payable pursuant to this Section 6, on each Closing Date it shall pay to the Placement
Agent, by deduction from the net proceeds to be received with respect to such Closing, a non-accountable expense allowance equal to one
percent (1%) of the gross proceeds received by the Company from the sale of the Securities at such Closing.
Section 7. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless the Placement Agent, its affiliates and each person controlling the Placement Agent (within
the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the Placement Agent, their respective
affiliates and each such controlling person (the Placement Agent, and each such entity or person, an “Agent Indemnified Person”)
from and against any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”),
and shall reimburse each Agent Indemnified Person for all fees and expenses (including the reasonable fees and expenses of one counsel
for all Agent Indemnified Persons, except as otherwise expressly provided herein) (collectively, the “Expenses”) as
they are incurred by an Agent Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Agent
Indemnified Person is a party thereto, (i) caused by, or arising out of or in connection with, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any Incorporated Document, or any Prospectus or by any omission
or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading (other than untrue statements or alleged untrue statements in, or omissions or alleged omissions from,
information relating to an Agent Indemnified Person furnished in writing by or on behalf of such Agent Indemnified Person expressly for
use in the Registration Statement, any Incorporated Document, or any Prospectus) or (ii) otherwise arising out of or in connection with
advice or services rendered or to be rendered by any Agent Indemnified Person pursuant to this Agreement, the transactions contemplated
thereby or any Agent Indemnified Person’s actions or inactions in connection with any such advice, services or transactions; provided,
however, that, in the case of clause (ii) only, the Company shall not be responsible for any Liabilities or Expenses of any Agent
Indemnified Person that are finally judicially determined to have resulted solely from such Agent Indemnified Person’s (x) gross negligence
or willful misconduct in connection with any of the advice, actions, inactions or services referred to above or (y) use of any offering
materials or information concerning the Company in connection with the offer or sale of the Securities in the Offering which were not
authorized for such use by the Company and which use constitutes gross negligence or willful misconduct. The Company also agrees to reimburse
each Agent Indemnified Person for all Expenses as they are incurred in connection with enforcing such Agent Indemnified Person’s rights
under this Agreement.
(b)
The Placement Agent agrees to indemnify and hold harmless the Company, its affiliates and each person controlling the Company (within
the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the Company, its affiliates and
each such controlling person (the Company, and each such entity or person, a “Company Indemnified Person”) from and
against any Liabilities, and shall reimburse each Company Indemnified Person for all Expenses as they are incurred by a Company Indemnified
Person in investigating, preparing, pursuing or defending any actions, whether or not any Company Indemnified Person is a party thereto,
(i) caused by, or arising out of or in connection with, any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, any Incorporated Document, or any Prospectus or by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; but
in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Placement Agent furnished in writing to the Company by or on behalf of
such Placement Agent specifically for inclusion therein, or (ii) otherwise arising out of or in connection with advice or services rendered
or to be rendered by such Placement Agent pursuant to this Agreement, the transactions contemplated thereby or any Company Indemnified
Person’s actions or inactions in connection with any such advice, services or transactions; provided, however, that, in
the case of clause (ii) only, such Placement Agent shall not be responsible for any Liabilities or Expenses of any Company Indemnified
Person that are finally judicially determined to have resulted solely from such Company Indemnified Person’s (x) gross negligence or willful
misconduct in connection with any of the advice, actions, inactions or services referred to above or (y) use of any offering materials
or information concerning the Company in connection with the offer or sale of the Securities in the Offering which were not authorized
for such use by the Company and which use constitutes gross negligence or willful misconduct. The Placement Agent also agrees to reimburse
each Company Indemnified Person for all Expenses as they are incurred in connection with enforcing such Company Indemnified Person’s rights
under this Agreement. Notwithstanding the provisions of this Section 7(b), in no event shall any indemnity by a Placement Agent
under this Section 7(b) exceed the total commissions received by such Placement Agent in connection with the Offering.
(c)
Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to which indemnity may
be sought under this Agreement, such Indemnified Person shall promptly notify the Indemnifying Person in writing; provided that failure
by any Indemnified Person so to notify the Indemnifying Person shall not relieve the Indemnifying Person from any liability which the
Indemnifying Person may have on account of this indemnity or otherwise to such Indemnified Person, except to the extent the Indemnifying
Person shall have been prejudiced by such failure. The Indemnifying Person shall, if requested by the Indemnified Person, assume the defense
of any such Action including the employment of counsel reasonably satisfactory to the Indemnified Person, which counsel may also be counsel
to the Indemnifying Person. Any Indemnified Person shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Indemnifying
Person has failed promptly to assume the defense and employ counsel or (ii) the named parties to any such Action (including any impeded
parties) include such Indemnified Person and the Indemnifying Person, and such Indemnified Person shall have been advised in the reasonable
opinion of counsel that there is an actual conflict of interest that prevents the counsel selected by the Indemnifying Person from representing
both the Indemnifying Person (or another client of such counsel) and any Indemnified Person; provided that the Indemnifying Person shall
not in such event be responsible hereunder for the fees and expenses of more than one firm of separate counsel for all Indemnified Persons
in connection with any Action or related Actions, in addition to any local counsel. The Indemnifying Person shall not be liable for any
settlement of any Action effected without its written consent (which shall not be unreasonably withheld). In addition, the Indemnifying
Person shall not, without the prior written consent of the Indemnified Person (which shall not be unreasonably withheld), settle, compromise
or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened Action in respect of which indemnification
or contribution may be sought hereunder unless such settlement, compromise, consent or termination includes an unconditional release of
each Indemnified Person from all Liabilities arising out of such Action for which indemnification or contribution may be sought hereunder.
The indemnification required hereby shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and payable. “Action” means any action,
suit, inquiry, notice of violation, proceeding or investigation affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign).
(d) In
the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement, the Indemnifying
Person shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect (i) the relative benefits to the Indemnifying Person, on the one hand, and to the Indemnified Person and any other Indemnified
Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding
clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the Indemnifying Person, on
the one hand, and the Indemnified Person and any other Indemnified Person, on the other hand, in connection with the matters as to which
such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the Indemnifying
Person contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities
and Expenses in excess of the amount of fees actually received by the Indemnified Person pursuant to this Agreement. For purposes of this
paragraph, the relative benefits to the Company, on the one hand, and to the Placement Agent on the other hand, of the matters contemplated
by this Agreement shall be deemed to be in the same proportion as (a) the total value paid or contemplated to be paid to or received or
contemplated to be received by the Company in the transaction or transactions that are within the scope of this Agreement, whether or
not any such transaction is consummated, bears to (b) the fees paid to the Representative under this Agreement. Notwithstanding the above,
no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act, as amended, shall be entitled
to contribution from a party who was not guilty of fraudulent misrepresentation.
(e) The
Indemnifying Person also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Indemnifying Person for or in connection with advice or services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with
any such advice, services or transactions except for Liabilities (and related Expenses) of the Indemnifying Person that are finally judicially
determined to have resulted solely from such Indemnified Person’s gross negligence or willful misconduct in connection with any such advice,
actions, inactions or services.
(f) The
reimbursement, indemnity and contribution obligations of the Indemnifying Person set forth herein shall apply to any modification of this
Agreement and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person’s services
under or in connection with, this Agreement.
Section 8. Representations
and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the
Company or any person controlling the Company, of its officers, and of the Placement Agent set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or on behalf of the Placement Agent, the Company, or any
of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder and any termination of this Agreement. A successor to the Placement Agent, or to the Company, its directors
or officers or any person controlling the Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Agreement.
Section 9. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or e-mailed and confirmed to the parties hereto as
follows:
If to the Placement Agent to the address set forth
above, attention: Yi (Edric) Guo, Chief Executive Officer, e-mail: yguo@univest.us
With a copy to:
Ortoli Rosenstadt LLP
366 Madison Avenue, 3rd Fl
New York, NY 10017
Attention: Jason Ye, Esq.
Email: jye@orllp.legal
If to the Company:
U Power Limited
2F, Zuoan 88 A, Lujiazui,
Shanghai, People’s Republic of China
Attention: Jia Li
Email: Johnny.Li@upincar.com
With a copy to:
Hunter Taubman Fischer & Li LLC
950 Third Avenue, 19th Floor
New York, NY 10022
Attention: Ying Li, Esq.
E-mail: yli@htflawyers.com
Any party hereto may change
the address for receipt of communications by giving written notice to the others.
Section 10. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 7 hereof, and to their respective successors, and personal representative,
and no other person will have any right or obligation hereunder.
Section 11. Partial Unenforceability.
The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability
of any other section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 12. Governing
Law Provisions. This Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction,
effect and in all other respects by the internal laws of the State of New York, without regard to the conflict of laws principles thereof.
Each of the Placement Agent and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement
and/or the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York, (ii) waives any objection which it may have or hereafter to the venue of
any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the New York Supreme Court, County of New York,
and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Placement
Agent and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action
or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New
York and agrees that service of process upon the Company mailed by certified mail to the Company’s address shall be deemed in every
respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Placement
Agent mailed by certified mail to the Placement Agent’s address shall be deemed in every respect effective service process upon
the Placement Agent, in any such suit, action or proceeding. If either party shall commence an action or proceeding to enforce any provision
of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
Section 13. General Provisions.
(a) This
Agreement and the Transaction Documents together constitute the entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. Notwithstanding
anything herein to the contrary, the Engagement Agreement, dated June 26, 2023 (the “Engagement Agreement”), between
the Company and the Placement Agent, shall continue to be effective and the terms therein shall continue to survive and be enforceable
by the Placement Agent in accordance with its terms, provided that, in the event of a conflict between the terms of the Engagement Agreement
or any other Transaction Document and this Agreement, the terms of this Agreement shall prevail. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. Section headings herein
are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
(b) The
Company acknowledges that in connection with the Offering of the Securities: (i) the Placement Agent has acted at arm’s length,
is not an agent of, and owes no fiduciary duties to the Company or any other person, (ii) the Placement Agent owes the Company only those
duties and obligations set forth in this Agreement and (iii) the Placement Agent may have interests that differ from those of the Company.
The Company waives to the full extent permitted by applicable law any claims it may have against the Placement Agent arising from an alleged
breach of fiduciary duty in connection with the offering of the Securities.
[The remainder of this page has been intentionally
left blank.]
If the foregoing is in accordance
with your understanding of our agreement, please sign below whereupon this instrument, along with all counterparts hereof, shall become
a binding agreement in accordance with its terms.
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Very truly yours, |
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U POWER Limited |
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By: |
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Name: |
Jia Li |
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Title: |
Chief Executive Officer |
Accepted and agreed to as of
the date first written
above:
UNIVEST SECURITIES, LLC |
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By: |
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Name: |
Yi (Edric) Guo |
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Title: |
Chief Executive Officer |
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Exhibit A
Form of Lock-Up Agreement
Exhibit 4.2
SERIES A WARRANT
Warrant Shares: [_______] |
Issue Date: |
THIS ORDINARY SHARE PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
[___], and on or prior to 5:00 p.m. (New York City time) on [__], (the “Termination Date”) but not thereafter, to subscribe
for and purchase from U Power Limited, an exempted company organized under the laws of the Cayman Islands (the “Company”,
up to [______] Ordinary Shares (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one
ordinary, no par value per share of the Company (“Ordinary Shares”) under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated [___], among the Company and the purchasers signatory thereto.
Exercise.
Exercise of Warrant.
Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or a PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the
earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares
specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless
exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice
of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of
Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in
an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number
of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one
(1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
Exercise Price.
The exercise price per Ordinary Share under this Warrant shall be US$[___] [insert transaction purchase price], subject to
adjustment hereunder (the “Exercise Price”). The Exercise Price shall be reset immediately following the thirtieth (30th)
Trading Day following the Closing Date (the “Reset Date”) to a price that is equal to 105% of the arithmetic average
of the sum of the three lowest per share VWAPs of the Ordinary Shares on the Trading Market for the twenty (20) Trading Days immediately
prior to the Reset Date.
Cashless Exercise.
If at any time of exercise hereof, there is no effective registration statement registering, or the prospectus contained therein is not
available for, the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such
time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A) where:
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(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Ordinary Shares on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
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(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company
agrees not to take any position contrary to this Section 2(c). Without limiting the cashless exercise provision set forth in this Section
2(c), the liquidated damages provision in Section 2(d)(i) or the buy-in provision in Section 2(d)(iv), there is no circumstance that would
require the Company to net-cash settle this Warrant.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed
or quoted on a Trading Market, the bid price of the Ordinary Shares for the time in question (or the nearest preceding date) on the Trading
Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Ordinary Share so reported,
or (d) in all other cases, the fair market value of one Ordinary Share as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed
or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding
date) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the
Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported on
the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Ordinary Share so reported, or (d) in all other cases, the fair market value of one Ordinary Share as determined by an independent
appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
Notwithstanding anything herein
to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section
2(c).
Mechanics of
Exercise.
Delivery of Warrant
Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either
(A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the
Holder or (B) the Warrant is being exercise via cashless exercise, and otherwise by entering in the Company’s register of members
the name of the Holder or its designee as the holder of the number of Warrant Shares to which the Holder is entitled pursuant to such
exercise and physical delivery of a certificate in respect of such Warrant Shares to the address specified by the Holder in the Notice
of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising
the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”); Upon the delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO to have become
the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery
of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise)
is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period
following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject
to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not
as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Ordinary Shares on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder
rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant
remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Ordinary Shares as in effect
on the date of delivery of the Notice of Exercise.
Delivery of New
Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
Rescission Rights.
If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant
Share Delivery Date, then the Holder will have the right to rescind such exercise.
Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Ordinary
Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had the
Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Ordinary Shares with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver Ordinary Shares upon exercise of the Warrant as
required pursuant to the terms hereof.
No Fractional
Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or
round up to the next whole share.
Charges, Taxes
and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent
fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
Closing of Books.
The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant
to the terms hereof.
Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the
number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or non-converted
portion of any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall
have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For
purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding
Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may
be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting
forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one (1)
Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number
of outstanding shares of Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary
Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Ordinary Shares outstanding immediately
after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares
upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of
this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial
Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Certain Adjustments.
Share Dividends
and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution
or distributions on its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance
of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides its outstanding
Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse share split) its outstanding Ordinary Shares
into a smaller number of shares or (iv) issues by reclassification of its Ordinary Shares any capital shares of the Company, then in each
case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Ordinary Shares (excluding
treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares
outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
Intentionally
Omitted.
Subsequent Rights
Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Ordinary
Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of
Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Ordinary Shares
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant,
issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to
participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially
or completely exercised at the time of such grant, issuance or sale of the Purchase Rights, such Purchase Rights shall be held in abeyance
for the benefit of the Holder until the Holder has exercised this Warrant; provided, however, that to the extent such Purchase Rights
expire for the shareholders of the Company if not exercised, the Purchase Rights will also expire for the Holder as of such date.
Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this
Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder
would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders
of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the
Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary
Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution
shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
Fundamental Transaction.
If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related
transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities,
cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding Ordinary Shares, (iv) the Company,
directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary
Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectively converted into or exchanged for other securities,
cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme
of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the
outstanding Ordinary Shares (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by
a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any
Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days
after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental
Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined
below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided,
however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors,
Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same
proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Ordinary
Shares of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, shares or any
combination thereof, or whether the holders of Ordinary Shares are given the choice to receive from among alternative forms of consideration
in connection with the Fundamental Transaction; provided, further, that if holders of Ordinary Shares of the Company are not offered or
paid any consideration in such Fundamental Transaction, such holders of Ordinary Shares will be deemed to have received common equity
(or ordinary shares) of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental
Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for
pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization
factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C)
the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP
during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental
Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s
request pursuant to this Section 3(d) and (D) a remaining option time equal to the time between the date of the public announcement of
the applicable contemplated Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow. The payment of the Black
Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five
Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause
any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.
Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number
of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.
Notice to Holder.
Adjustment to
Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver
to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant
Shares and setting forth a brief statement of the facts requiring such adjustment.
Notice to Allow
Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares,
(B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize
the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all
of the assets of the Company, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or
property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear
upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of Ordinary Shares of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders
of Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.
To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company
or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly set forth herein.
Transfer of Warrant.
Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary and subject to Sections 2(a) and
2(d)(ii), the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the
Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith,
may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
New Warrants.
This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent
or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant thereto.
Warrant Register.
The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.
Miscellaneous.
No Rights as
Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder
of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company will make
and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.
Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein
shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
Authorized Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of completing
the issuance of the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such
reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued,
fully paid and non-assessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its amended
and restated memorandum and articles of association or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon
such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise of this Warrant and (iii) use
commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction
thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
Non-waiver and
Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant
or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.
Limitation of
Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Ordinary Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of
the Company.
Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
Successors and
Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit
of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of the Holder. The
provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or a holder of Warrant Shares.
Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
Exhibit 4.3
SERIES B WARRANT
Warrant Shares: [_______] |
Issue Date: |
THIS ORDINARY SHARE PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
[___], and on or prior to 5:00 p.m. (New York City time) on [__] (the “Termination Date”) but not thereafter, to subscribe
for and purchase from U Power Limited, an exempted company organized under the laws of the Cayman Islands (the “Company”),
up to [______] Ordinary Shares (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one
ordinary, no par value per share of the Company (“Ordinary Shares”) under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated [___], among the Company and the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy
or a PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the
Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank
unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. THE HOLDER HEREOF ACKNOWLEDGES AND AGREES THAT THE
WARRANT SHARES AVAILABLE HEREUNDER SHALL BE REDUCED BY THAT AMOUNT OF SHARES THAT HAVE BEEN EXERCISED UNDER THE [WARRANT 1 DEFINED TERM].The
Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases hereunder
and thereunder. The Company shall deliver any objection to any Notice of Exercise hereunder within one (1) Business Day of receipt of
such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions
of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise
Price. The exercise price per Ordinary Share under this Warrant shall be US$[___][Insert closing price at time of pricing],
subject to adjustment hereunder (the “Exercise Price”).
c) Cashless
Exercise. If at any time of exercise hereof, there is no effective registration statement registering, or the prospectus contained
therein is not available for, the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in
part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A) where:
|
(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Ordinary Shares on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
|
(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
|
(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
In
addition to the rights with respect to Cashless Exercise set forth above, the Holder may, at any time and in its sole discretion, exercise
this Warrant in whole by means of a one time only “alternative cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing (the Exercise Price minus the Lowest VWAP of the Ordinary
Shares over the 10 Trading Days immediately prior to the exercise date) by (50% of the Lowest VWAP of the Ordinary Shares over the 10
Trading Days immediately prior to the exercise date).
If
Warrant Shares are issued in either such cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The
Company agrees not to take any position contrary to this Section 2(c). Without limiting the cashless exercise provision set forth in this
Section 2(c), the liquidated damages provision in Section 2(d)(i) or the buy-in provision in Section 2(d)(iv), there is no circumstance
that would require the Company to net-cash settle this Warrant.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed
or quoted on a Trading Market, the bid price of the Ordinary Shares for the time in question (or the nearest preceding date) on the Trading
Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Ordinary Share so reported,
or (d) in all other cases, the fair market value of one Ordinary Share as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed
or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding
date) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the
Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported on
the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Ordinary Share so reported, or (d) in all other cases, the fair market value of one Ordinary Share as determined by an independent
appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
Notwithstanding anything herein
to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section
2(c).
d) Mechanics
of Exercise.
i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder or (B) the Warrant is being exercise via cashless exercise, and otherwise by entering in the Company’s register
of members the name of the Holder or its designee as the holder of the number of Warrant Shares to which the Holder is entitled pursuant
to such exercise and physical delivery of a certificate in respect of such Warrant Shares to the address specified by the Holder in the
Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising
the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”); Upon the delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO to have become
the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery
of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise)
is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period
following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject
to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not
as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Ordinary Shares on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder
rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant
remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Ordinary Shares as in effect
on the date of delivery of the Notice of Exercise.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Ordinary
Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had the
Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Ordinary Shares with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver Ordinary Shares upon exercise of the Warrant as
required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent
fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the
number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or non-converted
portion of any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall
have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For
purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding
Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may
be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting
forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one (1)
Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number
of outstanding shares of Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary
Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Ordinary Shares outstanding immediately
after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares
upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of
this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial
Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
a) Share
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes
a distribution or distributions on its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares
(which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides
its outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse share split) its outstanding
Ordinary Shares into a smaller number of shares or (iv) issues by reclassification of its Ordinary Shares any capital shares of the Company,
then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Ordinary
Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number
of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to
this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or
re-classification.
b) Intentionally
Omitted.
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Ordinary Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of
any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be
determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such
Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever,
as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has
not been partially or completely exercised at the time of such grant, issuance or sale of the Purchase Rights, such Purchase Rights shall
be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant; provided, however, that to the extent such
Purchase Rights expire for the shareholders of the Company if not exercised, the Purchase Rights will also expire for the Holder as of
such date.
d) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance
of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the
Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this
Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders
of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the
Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary
Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution
shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any
sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series
of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities,
cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding Ordinary Shares, (iv) the Company,
directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary
Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectively converted into or exchanged for other securities,
cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme
of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the
outstanding Ordinary Shares (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by
a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any
Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days
after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental
Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined
below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided,
however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors,
Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same
proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Ordinary
Shares of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, shares or any
combination thereof, or whether the holders of Ordinary Shares are given the choice to receive from among alternative forms of consideration
in connection with the Fundamental Transaction; provided, further, that if holders of Ordinary Shares of the Company are not offered or
paid any consideration in such Fundamental Transaction, such holders of Ordinary Shares will be deemed to have received common equity
(or ordinary shares) of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental
Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for
pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization
factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C)
the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP
during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental
Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s
request pursuant to this Section 3(d) and (D) a remaining option time equal to the time between the date of the public announcement of
the applicable contemplated Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow. The payment of the Black
Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five
Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause
any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number
of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.
g) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary
Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company
shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all
of the assets of the Company, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or
property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear
upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of Ordinary Shares of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders
of Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.
To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company
or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer
of Warrant.
a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary and subject to Sections 2(a) and
2(d)(ii), the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the
Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith,
may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes,
absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No
Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as
a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company will make
and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized
Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of completing
the issuance of the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such
reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued,
fully paid and non-assessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its amended
and restated memorandum and articles of association or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon
such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise of this Warrant and (iii) use
commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction
thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Non-waiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder
in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Ordinary Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of
the Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of the Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or a holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
NOTICE OF EXERCISE
TO:
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
☐
in lawful money of the United States; or
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account
Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of Investing Entity:
_________________________________________________
Name of Authorized Signatory:
___________________________________________________________________
Title of Authorized Signatory:
____________________________________________________________________
Date:
______________________________________________________________________________
12
Exhibit 4.4
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”), dated as of [●], 2023, is by between U Power Limited, a company organized under the laws
of the Cayman Islands (the “Company”), and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) as to the Units, Shares and the Ordinary Warrants, the Company desires to issue and sell to
each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed, provided that banks shall not be deemed to be authorized or obligated to be closed due to a “shelter
in place,” “non-essential employee” or similar closure of physical branch locations at the direction of any governmental
authority if such banks’ electronic funds transfer systems (including for wire transfers) are open for use by customers on such
day.
“CFTC”
means the United States Commodity Futures Trading Commission.
“Closing”
means the individual and collective reference to the Initial Closing and each subsequent closing on or before the Final Closing Date with
one or more Purchasers of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Initial Closing Date and the Final Closing Date.
“Commission”
means the United States Securities and Exchange Commission.
“Company
Cayman Islands Counsel” means Maples and Calder (Hong Kong) LLP.
“Company
PRC Counsel” means Guantao Law Firm.
“Company
U.S. Counsel” means Hunter Taubman Fischer & Li LLC.
“Control”
(including the terms “Controlled by” and “under common Control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership
of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities
having the power to elect a majority of the board of directors or similar body governing the affairs of such person or securities that
represent a majority of the outstanding voting securities of such person.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and
before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date
hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight
(New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof,
unless otherwise instructed as to an earlier time by the Placement Agent.
“DVP”
shall have the meaning ascribed to such term in Section 2.1.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) Ordinary Shares or options to employees, officers or directors of the Company pursuant to
any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority
of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities
upon the exercise or exchange of or conversion of any Securities issued hereunder pursuant to the Initial Closing or subsequent Closing(s),
and/or other securities exercisable or exchangeable for or convertible into Ordinary Shares issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities
or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or
combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved
by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities”
(as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection
therewith during the prohibition period in Section 4.11(a) herein, and provided that any such issuance shall only be to a Person (or to
the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business
synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds,
but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“Final
Closing Date” shall mean that date which shall be the earlier of (a) completion of the sale of all Securities in the Offering
and (b) the expiration of the Offering Period under the Placement Agency Agreement.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Initial
Closing” shall mean the Closing of the sale of Securities on the Initial Closing Date.
“Initial
Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second Trading Day
following the date of this Agreement.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Offering”
shall mean the offering of the Securities contemplated by this Agreement and the Registration Statement.
“Ordinary
Share(s)” means the ordinary shares of the Company, par value US$0.0000001 per share, and any other class of securities into
which such securities may hereafter be reclassified or changed.
“Ordinary
Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Ordinary Shares, including, without limitation, any debt, preferred shares, right, option, warrant or other instrument that
is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.
“Ordinary
Warrants” means, collectively, the Series A Ordinary Warrants and the Series B Ordinary Warrants.
“Ordinary
Warrant Shares” means the Ordinary Shares issuable upon exercise of the Ordinary Warrants.
“Ortoli”
means Ortoli Rosenstadt LLP, with offices located at 366 Madison Avenue 3rd Fl, New York, NY, 10017.
“Per Unit
Purchase Price” equals $[●], subject to adjustment for reverse and forward share splits, share dividends, share combinations
and other similar transactions of Ordinary Shares that occur after the date of this Agreement.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint share company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement
Agency Agreement” means the Placement Agency Agreement by and between the Company and the Placement Agent dated as of [●],
2023, as it may be amended from time to time.
“Placement
Agent” means Univest Securities, LLC.
“Preliminary
Prospectus” means the preliminary prospectus dated [●], 2023, filed with the Commission.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed for the Registration Statement.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration
Statement” means the effective registration statement on Form F-1 filed with Commission (File No. 333-[●]) which registers
the sale of the Units, the Shares, the Ordinary Warrants, and the Ordinary Warrant Shares to the Purchasers, and includes any Rule 462(b)
Registration Statement.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b)
Registration Statement” means any registration statement prepared by the Company registering additional Securities, which was
filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the
Commission pursuant to the Securities Act.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Units, the Shares, the Ordinary Warrants and the Ordinary Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series A
Ordinary Warrants” means the Ordinary Share purchase warrants delivered to the Purchasers at each Closing in accordance with
Section 2.2(a)(viii) hereof, which Series A Ordinary Warrants shall be exercisable immediately and have a term of exercise equal to [
] years, in the form of Exhibit A attached hereto.
“Series B
Ordinary Warrants” means the Ordinary Share purchase warrants delivered to the Purchasers at each Closing in accordance with
Section 2.2(a)(ix) hereof, which Series B Ordinary Warrants shall be exercisable immediately and have a term of exercise equal to [ ]
years, in the form of Exhibit B attached hereto. The Ordinary Shares available for exercise by each Purchaser under the Series
B Ordinary Warrants shall be reduced by that amount of Ordinary Shares that have been exercised by such Purchaser under the Series A Ordinary
Warrants.
“Shares”
means the Ordinary Shares included in the Units, which are issuable to each Purchaser pursuant to this Agreement.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include locating and/or borrowing Ordinary Shares).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Units purchased hereunder as specified below such
Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States
dollars and in immediately available funds.
“Subsidiary”
of any person means any corporation, partnership, limited liability company, joint stock company, joint venture or other organization
or entity, whether incorporated or unincorporated, which is Controlled by such Person, and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date of this Agreement.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Ordinary Shares are listed or quoted for trading on the
date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or
the NYSE American (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Ordinary Warrants, all exhibits and schedules thereto and hereto and any other documents
or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Transhare Corporation, the current transfer agent of the Company, with a mailing address of Bayside Center 1, 17755
US Highway 19 N, Suite 140, Clearwater FL 33764, and any successor transfer agent of the Company.
“Units”
means the units being offered by the Company pursuant to the Registration Statement, each unit being comprised of one Ordinary Share,
one Series A Ordinary Warrant to purchase one Ordinary Share with an exercise price of $[--] per share, subject to adjustement as set
forth therein, and one Series B Ordinary Warrant to purchase one Ordinary Share with an exercise price of $[--], subject to adjustement
as set forth therein.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.11(b).
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed
or quoted on a Trading Market, the daily volume weighted average price of an Ordinary Shares for such date (or the nearest preceding date)
on the Trading Market on which an Ordinary Shares is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of an Ordinary Shares for such date (or the nearest preceding date) on the OTCQB or OTCQX, (c) if Ordinary Shares s are
not then listed or quoted for trading on the OTCQB or OTCQX and if prices for Ordinary Shares s are then reported in the “Pink Sheets”
published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per share of an Ordinary Shares so reported, or (d) in all other cases, the fair market value of an Ordinary Shares as determined
by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
On each Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, an aggregate of [●] Units, each Unit consisting of one Ordinary Share, one Series A Ordinary
Warrant, as determined pursuant to Section 2.2(a)(viii) and one Series B Ordinary Warrant, as determined pursuant to Section 2.2(a)(ix).
Unless otherwise directed by the Placement Agent, each Purchaser shall deliver, via wire transfer, immediately available funds equal to
its Subscription Amount pursuant to Section 2.2(b)(ii), and the Company shall deliver to each Purchaser its respective Units consisting
of Shares, Series A Ordinary Warrants, and Series B Ordinary Warrants (as applicable to each Purchaser), as determined pursuant to Section
2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at each Closing. Each Purchaser’s
Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for “Delivery
Versus Payment” (“DVP”) settlement with the Company or its designee. The Company shall deliver to each Purchaser
its respective Shares, Series A Ordinary Warrants, and Series B Ordinary Warrants as determined pursuant to Section 2.2(a), and the Company
and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, each Closing shall occur at the offices of Ortoli or such other location as the parties
shall mutually agree. Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur via DVP (i.e., on the Closing
Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer Agent directly
to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly
electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the Placement Agent (or its clearing
firm) by wire transfer to the Company). At each Closing, the Company shall deliver Series A Ordinary Warrants registered in the name of
each Purchaser to purchase up to an aggregate number of Ordinary Shares equal to 100% of the aggregate number of such Purchaser’s
Shares purchased pursuant to the Offering and Series B Ordinary Warrants registered in the name of each Purchaser to purchase up to an
aggregate number of Ordinary Shares equal to 100% of the aggregate number of such Purchaser’s Shares purchased pursuant to the Offering.
The Company covenants that, if the Purchaser delivers a Notice of Exercise (as defined in the Ordinary Warrants) no later than 12:00 p.m.
(New York City time) on a Closing Date to exercise Ordinary Warrants between the date hereof and such Closing Date, the Company shall
deliver Ordinary Warrant Shares to the Purchaser on such Closing Date in connection with such Notice of Exercise; provided that the Purchasers
must deliver payment of the Exercise Price (as defined in the Ordinary Warrants) at or prior to such Closing.
2.2 Deliveries.
(a) Subject
to Section 5.21 below, as applicable, on or prior to each Closing, the Company shall deliver or cause to be delivered to each of the Purchasers,
as directed by the Placement Agent, the following:
(i) this
Agreement duly executed by the Company;
(ii) legal
opinions of (1) Company Cayman Islands Counsel, (2) Company PRC Counsel and (3) Company U.S Counsel, each addressed to the Placement Agent
and the Purchasers and in form and substance reasonably acceptable to the Placement Agent and Purchasers;
(iii) Officers’
Certificate of the Company;
(iv) Chief
Financial Officer’s Certificate of the Company;
(v) Secretary’s
Certificate of the Company;
(vi) Good
Standing Certificates of the Company and each Subsidiary;
(vii) subject
to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver
on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal
to such Purchaser’s Subscription Amount divided by the Per Unit Purchase Price, registered in the name of such Purchaser;
(viii) the
Series A Ordinary Warrants registered in the name of each Purchaser to purchase up to an aggregate number of Ordinary Shares equal to
100% of the Units sold to such Purchaser, with an exercise price equal to $[●] per Ordinary Share, subject to adjustment therein
(such Series A Ordinary Warrant certificate may be delivered within five Trading Days of each Closing Date);
(ix) the
Series B Ordinary Warrants registered in the name of each Purchaser to purchase up to an aggregate number of Ordinary Shares equal to
100% of the Units sold to such Purchaser, with an exercise price equal to $[●] per Ordinary Share, subject to adjustment therein
(such Series B Ordinary Warrant certificate may be delivered within five Trading Days of each Closing Date); and
(x) the
Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On
or prior to each Closing, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by each Purchaser; and
(ii) such
Purchaser’s purchase price as set forth on the signature page hereto executed by such Purchaser shall be made available for
DVP settlement with the Placement Agent or its designee.
2.3 Closing
Conditions.
(a) Subject
to Section 5.21 below, as applicable, the obligations of the Company hereunder in connection with each Closing are subject to the following
conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) on such Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to such Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) Subject
to Section 5.21 below, as applicable, the respective obligations of the Purchasers hereunder in connection with each Closing are subject
to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on such Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to such Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date of this Agreement and to such Closing Date; and
(v) the
Shares and Ordinary Warrant Shares shall have been approved for listing on the Trading Market, subject to official notice of issuance,
and from the date of this Agreement to such Closing Date, trading in the Ordinary Shares shall not have been suspended by the Commission
or any Trading Market, and, at any time prior to such Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser,
makes it impracticable or inadvisable to purchase the Units at such Closing.
(vi) no
stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the
Securities Act.
2.4 Additional Units Allocation.
The Company hereby acknowledges and agrees that each Purchaser, severally, has the right to elect to purchase up to [●]% of the
number of Units (the “Additional Units Allocation”) each Purchaser purchased at the Initial Closing on or before 5:00
p.m., Eastern Time, on the Final Closing Date (the “Additional Units Allocation Period”) at the Per Unit Purchase Price
by delivery of one or more written notices (each, an “Additional Units Allocation Election Notice”) to the Company
during such Additional Units Allocation Period (each, an “Additional Closing”). Each Purchaser hereby acknowledges
and agrees that the Company and the Placement Agent have a one-time right to agree in their sole discretion and in writing to extend the
Offering Period for an additional thirty (30) calendar days as set forth in the Placement Agency Agreement. Each Additional Closing shall
occur on the second (2nd) Trading Day after such applicable Additional Units Allocation Election Notice and, subject to Section
5.21 below, as applicable, in accordance with Sections 2.2 and 2.3 hereof (with “Additional Closing” replacing “Closing”
therein with respect thereto); provided, however that the Final Closing shall occur on or prior to the Final Closing Date.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser as of the date
hereof and on each Closing Date (unless as of a specific date therein, in which case they shall be accurate as of such date):
(a) Subsidiaries.
All of the direct and indirect principal subsidiaries of the Company are set forth in Schedule 3.1(a). The Company owns, directly
or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries
or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and, if applicable under the laws of the jurisdiction in which they are formed, in good standing under the laws of the jurisdiction of
its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its
business as currently conducted. The Company and each of the Subsidiaries has all necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date of this Agreement to
conduct its business purpose in all material respects as described in the Registration Statement and SEC Reports and to own or lease its
properties. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate
or articles of incorporation or association, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any
of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other
than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or
upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it
is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do
not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation or association, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus, (iii) application(s) to each applicable Trading
Market for the listing of the Shares and the Ordinary Warrant Shares for trading thereon in the time and manner required thereby and (iv)
such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f) Issuance
of the Securities; Registration. The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company. The Ordinary
Warrants are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will constitute valid
and legally binding obligations of the Company, enforceable against the Company in accordance with their terms. The Ordinary Warrant Shares
are duly authorized and, when issued in accordance with the terms of the Ordinary Warrants against payment therefor as provided therein,
will be validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company. The Company has reserved from
its duly authorized capital the maximum number of Ordinary Shares issuable pursuant to this Agreement and the Ordinary Warrants. The Company
has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on
[●], 2023 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing
or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Preliminary Prospectus or the
Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company,
are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus with
the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date
of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material
respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Preliminary
Prospectus the Prospectus and any amendments or supplements thereto, at the time the Preliminary Prospectus and the Prospectus or any
amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements
of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) Capitalization.
The equity capitalization of the Company is as set forth on Schedule 3.1(g). The Company has not issued any capital stock since
its most recently filed Form 20-F. No Person has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents. There are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Ordinary Shares or Ordinary Share
Equivalents or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional Ordinary Shares or Ordinary Share Equivalents or capital stock of any Subsidiary.
The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue Ordinary Shares or Ordinary Share Equivalents
or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of
the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
The Company does not have any share appreciation rights or “phantom share” plans or agreements or any similar plan or agreement.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws where applicable, and none of such outstanding shares was issued
in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no
further approval or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities.
There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock
to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof and the registration
statement on Form F-1 (File No. 333-[●]), for the one year preceding the date of this Agreement (or such shorter period as the Company
was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, together with the Prospectus, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of
any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities
Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have
been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in
a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to
its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company
has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company share option plans. The
Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of
the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists
or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects,
properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to
the date that this representation is made.
(j) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of fiduciary duty, which could result in a Material Adverse
Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, transaction in
digital assets or currencies (e.g. bitcoin), product quality and safety and employment and labor matters, except in each case as could
not have or reasonably be expected to result in a Material Adverse Effect.
(m) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification
of any Material Permit.
(n) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each
case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal,
state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by
them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.
(o) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither
the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement,
except as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since
the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any
knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably
be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where
failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor
any of the Subsidiaries maintain insurance coverage for senior management or other key personnel. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(q) Transactions
With Affiliates and Employees. None of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company,
none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending
of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder,
member or partner, in each case in excess of $120,000, other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including share option agreements
under any share option plan of the Company.
(r) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date of this Agreement and applicable to the Company and the Subsidiaries,
and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date of this Agreement
and as of the Closing Date and applicable to the Company and the Subsidiaries. The Company and the Subsidiaries maintain a system of internal
accounting controls to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls
and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. There
have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and
its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting
of the Company and its Subsidiaries.
(s) Certain
Fees. Except as set forth in the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction Documents. Other than for Persons directly engaged by a Purchaser, if any,
the Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(t) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Units, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(u) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any
securities of the Company or any Subsidiary.
(v) Listing
and Maintenance Requirements. The Ordinary Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Ordinary
Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
The Company has not, in the twelve (12) months preceding the date of this Agreement, received notice from any Trading Market on which
the Ordinary Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance requirements.
(w) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its jurisdiction
of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities.
(x) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the Prospectus.
The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities
of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries,
their respective businesses and the transactions contemplated hereby is true and correct in all material respects and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under
which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(y) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on
which any of the securities of the Company are listed or designated.
(z) Solvency/Indebtedness.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Units hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that
will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities)
as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted
by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from
the Closing Date. Schedule 3.1(z) sets forth as of the date of this Agreement all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed that is in excess of $800,000 individually or $1,000,000 in aggregate in
the case of any liabilities lower than $1,000 (other than trade accounts payable incurred in the ordinary course of business and amounts
due to related parties as disclosed in the Registration Statement), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business; and (z) the present value of any lease payments due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(aa) Tax Status.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company and its Subsidiaries each (i) has made or filed all local income and all foreign income and franchise tax returns, reports
and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books
provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company or of any Subsidiary know of no basis for any such claim.
(bb) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.
(cc) Accountants.
The Company’s accounting firm is as set forth in the Prospectus. To the knowledge and belief of the Company, Onestop Assurance PAC,
being such accounting firm, is a registered public accounting firm as required by the Exchange Act, and shall express its opinion with
respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2023.
(dd) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(ee) Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Ordinary Shares, and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Ordinary
Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the
value of the existing shareholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.
The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(ff) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities,
or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement
of the Securities.
(gg) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”).
(hh) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(ii) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or
Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.
(jj) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(kk) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as
all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received
all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(ll) CFTC
Regulations To the Company’s knowledge, the operations of the Company and its Subsidiaries are and have been conducted at all
times in compliance with applicable CFTC Regulations, including the Commodity Exchange Act, and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving any Company or Subsidiary to any CFTC Regulation is
pending or, to the knowledge of the Company or any Subsidiary, threatened.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date of this Agreement and as of each applicable Closing Date to the Company as follows (unless as of a specific date therein, in which
case they shall be accurate as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty
not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with
applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date of this Agreement and each Closing date,
it is, and on each date on which it exercise any Ordinary Warrants, it will be an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and, has been afforded, (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement
Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities
nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information
with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Securities
to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material pricing
terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of
such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion
of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other
than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,
with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
The Company acknowledges and agrees that the representations
contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations
and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other
document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated
hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty,
or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Ordinary
Warrant Shares. If all or any portion of the Ordinary Warrants are exercised at a time when there is an effective registration statement
to cover the issuance or resale of the Ordinary Warrant Shares or if the Ordinary Warrants are exercised via cashless exercise, the Ordinary
Warrant Shares issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the
Registration Statement (or any subsequent registration statement registering the sale or resale of the Ordinary Warrant Shares) is not
effective or is not otherwise available for the sale or resale of the Ordinary Warrant Shares, the Company shall immediately notify the
holders of the Ordinary Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify
such holders when the registration statement is effective again and available for the sale or resale of the Ordinary Warrant Shares (it
being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the
Ordinary Warrant Shares in compliance with applicable federal and state securities laws). The Company shall use best efforts to keep a
registration statement (including the Registration Statement) registering the issuance or resale of the Ordinary Warrant Shares effective
during the term of the Ordinary Warrants.
4.2 Furnishing
of Information. Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Ordinary Warrants have expired, the
Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting
requirements of the Exchange Act.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval
is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the
transactions contemplated hereby, and (b) file a Report on Form 6-K, including the Transaction Documents as exhibits thereto, with the
Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to
the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company
or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that
any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their
Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press
releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release
nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser,
or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably
be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing
of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
4.5 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed
with the Company to keep such information confidential. The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public
information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not
have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees
or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or
Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable
law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission on a Report on Form 6-K.
The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.
4.7 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Units hereunder for expanding and increasing the number of
its regional sorting centers and for working capital purposes and other general corporate purposes, and shall not use such proceeds: (a)
for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s
business and prior practices), (b) for the redemption of any Ordinary Shares or Ordinary Share Equivalents, (c) for the settlement of
any outstanding litigation or (d) in violation of FCPA or OFAC regulations.
4.8 Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners
or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such
stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which
is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable
period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a
material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable
to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage
or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8
shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received
or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser
Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9 Reservation
of Ordinary Shares. As of the date of this Agreement, the Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of Ordinary Shares for the purpose of enabling the Company to issue
the Shares pursuant to this Agreement and Ordinary Warrant Shares pursuant to any exercise of the Ordinary Warrants.
4.10 Listing
of Shares. The Company hereby agrees to use commercially reasonable best efforts to maintain the listing or quotation of the Shares
and Ordinary Warrant Shares on each Trading Market on which any Ordinary Shares are currently listed, and concurrently with the Closing,
the Company shall apply to list or quote all of the Shares and Ordinary Warrant Shares on such Trading Markets and promptly secure the
listing of all of the Shares and Ordinary Warrant Shares on such Trading Markets. The Company further agrees, if the Company applies to
have the Ordinary Shares traded on any other Trading Market, it will then include in such application all of the Shares and Ordinary Warrant
Shares, and will take such other action as is necessary to cause all of the Shares and Ordinary Warrant Shares to be listed or quoted
on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing
and trading of its ordinary shares on a Trading Market and will comply in all material respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market.
4.11 Subsequent
Equity Sales.
(a) From
the date hereof until ninety (90) days after the Final Closing Date, neither the Company nor any Subsidiary shall issue, enter into any
agreement to issue or announce the issuance or proposed issuance of any Ordinary Shares or Ordinary Share Equivalents.
(b) From
the date hereof until ninety (90) days after the Final Closing Date, the Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any of its Subsidiaries of Ordinary Shares or Ordinary Share Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the
Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right
to receive additional Ordinary Shares either (A) at a conversion price, exercise price or exchange rate or other price that is based upon
and/or varies with the trading prices of or quotations for the Ordinary Shares at any time after the initial issuance of such debt or
equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial
issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the
business of the Company or the market for the Ordinary Shares (but not including antidilution protections related to future share issuances)
or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the
Company may issue securities at a future determined price. For the avoidance of doubt, following the ninety (90) day anniversary of the
Final Closing Date, sales effected under an “at-the-market” facility through the Placement Agent, should one be established,
shall not be considered a Variable Rate Transaction. Any Purchaser shall be entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(c) Notwithstanding
the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an
Exempt Issuance.
4.12 Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of Securities or otherwise.
4.13 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly, covenants that neither it nor any Affiliate acting on
its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s
securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated
by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. Each Purchaser, severally
and not jointly, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company
pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and
terms of this transaction. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the
Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not
engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the
Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate
portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this
Agreement.
4.14 Exercise
Procedures. The form of Notice of Exercise included in the Ordinary Warrants sets forth the totality of the procedures required of
the Purchasers in order to exercise the Ordinary Warrants. No additional legal opinion, other information or instructions shall be required
of the Purchasers to exercise their Ordinary Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required
in order to exercise the Ordinary Warrants. The Company shall honor exercises of the Ordinary Warrants and shall deliver Ordinary Warrant
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
ARTICLE V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder, by written notice to the other
parties, if the Initial Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof;
provided, however, that no such termination will affect the right of any party to sue for any breach by any other party
(or parties).
5.2 Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered
by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, and the Prospectus, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile
at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt
by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the
signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Report on Form 6-K.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Units based on the Subscription
Amounts hereunder (or, prior to the Initial Closing, the Company and each Purchaser) or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and
adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be a third-party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section
4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding. The Company
hereby appoints Cogency Global Inc.as its agent for service of process in New York. The choice of the laws of the State of New York as
the governing law of this Agreement is a valid choice of law and would be recognized and given effect to in any action brought before
a court of competent jurisdiction in the Cayman Islands, except for those laws (i) which such court considers to be procedural in nature,
(ii) which are revenue or penal laws or (iii) the application of which would be inconsistent with public policy, as such term is interpreted
under the laws of the Cayman Islands. The Company or any of their respective properties, assets or revenues does not have any right of
immunity under Cayman Islands or New York law, from any legal action, suit or proceeding, from the giving of any relief in any such legal
action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any Cayman Islands and New York or United States federal
court, from service of process, attachment upon or prior to judgment, or attachment in aid of execution of judgment, or from execution
of a judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of a judgment, in any such court,
with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement; and, to
the extent that the Company, or any of its properties, assets or revenues may have or may hereafter become entitled to any such right
of immunity in any such court in which proceedings may at any time be commenced, the Company hereby waives such right to the extent permitted
by law and hereby consents to such relief and enforcement as provided in this Agreement and the other Transaction Documents.
5.10 Survival.
The representations and warranties contained herein shall survive each Closing and the delivery of the Securities for the applicable statute
of limitations.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that in the case of a rescission of an exercise of
an Ordinary Warrant, the applicable Purchaser shall be required to return any Ordinary Shares subject to any such rescinded exercise notice
concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration
of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Ordinary Warrant (including, issuance of a replacement
warrant certificate evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
Ortoli. Ortoli does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested
to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other
Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not
between and among the Purchasers.
5.18 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.19 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and Ordinary Shares in any Transaction Document shall be subject to adjustment for reverse and forward share splits, share
dividends, share combinations and other similar transactions of the Ordinary Shares and Ordinary Warrants that occur after the date of
this Agreement.
5.21 Sales
During Pre-Settlement Period. Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of
this Agreement by the Company and an applicable Purchaser, through, and including the time immediately prior to a Closing (the “Pre-Settlement
Period”), such Purchaser sells to any Person all, or any portion, of any Shares to be issued hereunder to such Purchaser at
such Closing (collectively, the “Pre-Settlement Shares”), such Purchaser shall, automatically hereunder (without any
additional required actions by such Purchaser or the Company), be deemed to be unconditionally bound to purchase, and the Company shall
be deemed unconditionally bound to sell, such Pre-Settlement Shares to such Purchaser at such Closing; provided, that the Company shall
not be required to deliver any Pre-Settlement Shares to such Purchaser prior to the Company’s receipt of the purchase price of such
Pre-Settlement Shares hereunder; and provided further that the Company hereby acknowledges and agrees that the forgoing shall not constitute
a representation or covenant by such Purchaser as to whether or not during the Pre-Settlement Period such Purchaser shall sell any Shares
to any Person and that any such decision to sell any Shares by such Purchaser shall be made, in the sole discretion of such Purchaser,
at the time such Purchaser elects to effect any such sale, if any.
5.22 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
U POWER LIMITED |
|
Address for Notice: |
|
|
|
By: |
|
|
|
Name: |
Jia Li |
|
E-Mail: |
Title: |
Chief Executive Officer |
|
Fax: |
|
|
|
|
With a copy to (which shall not constitute notice): |
|
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
[PURCHASER SIGNATURE PAGES TO U
POWER LIMITED SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: ________________________________________________________
Signature of Authorized Signatory of Purchaser:
_________________________________
Name of Authorized Signatory: _______________________________________________
Title of Authorized Signatory: ________________________________________________
Email Address of Authorized Signatory: _________________________________________
Facsimile Number of Authorized Signatory: __________________________________________
Address for Notice to Purchaser (and delivery of Ordinary Warrants):
Address for Delivery of Units to Purchaser (if not same as address
for notice):
Subscription Amount: $_________________
Shares: _________________
Series A Ordinary Warrants: __________________
Series B Ordinary Warrants: __________________
EIN Number: _______________________
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
35
Exhibit 5.1
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex5-1_001.jpg)
| Our ref | VSL/797888-000001/27940049v5 |
U Power Limited
2F, Zuoan 88 A
Lujiazui, Shanghai
People’s Republic of China
17 November 2023
Dear Sirs
U Power Limited
We have acted as Cayman Islands
legal advisers to U Power Limited (the "Company") in
connection with the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the "Registration
Statement"), filed with the Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended to date
relating to the offering by the Company of the following securities:
| (a) | up to 10,000,000 units (each unit contains one ordinary share
of par value US$0.0000001 each of the Company (each, a “Unit Share”,
and collectively, the “Unit Shares”), one series A
warrant to purchase one ordinary share of par value US$0.0000001 each of the Company (each, a “Series
A Warrant,” and collectively, the "Series A Warrants"),
and one series B warrant to purchase one ordinary share of par value US$0.0000001 each of the Company (each, a “Series
B Warrant,” and collectively the "Series B Warrants",
and together with the Series A Warrants, the "Warrants"))
(the "Units") to be issued under a securities purchase
agreement to be entered into between the Company and each investor (the "Securities
Purchase Agreement"), in connection with a placement agency agreement to be entered between the Company and the placement
agent (the “Placement Agency Agreement”); and |
| (b) | up to 20,000,000 ordinary shares of par value US$0.0000001
each of the Company underlying the Warrants (each, a “Warrant Share”,
and collectively, the "Warrant Shares", and together
with the Units Shares, the “Shares”). |
We are furnishing this opinion as Exhibit 5.1 and 23.3 to
the Registration Statement.
For the purposes of this opinion,
we have reviewed only originals, copies or final drafts of the following documents:
1.1 | The certificate of incorporation of the Company dated 17 June 2021 issued by the Registrar of Companies
in the Cayman Islands. |
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex5-1_002.jpg)
1.2 | The amended and restated memorandum and articles of association of the Company as conditionally adopted
by a special resolution passed on 20 December 2022 and effective immediately prior to the completion of the Company’s initial public
offering of the Shares on 21 April 2023 (the "Memorandum and Articles"). |
1.3 | The written resolutions of the board of directors of the Company dated 17 November
2023 (the "Board Resolutions"). |
1.4 | A certificate from a director of the Company, a copy of which is attached hereto
(the "Director's Certificate"). |
1.5 | A certificate of good standing dated 3 November 2023, issued by the Registrar of Companies in the Cayman
Islands (the "Certificate of Good Standing"). |
1.6 | The Registration Statement. |
The following opinions are given
only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions
only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving these opinions we have
relied (without further verification) upon the completeness and accuracy, as of the date of this opinion letter, of the Director's Certificate
and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
2.1 | Copies of documents, conformed copies or drafts of documents provided to us are
true and complete copies of, or in the final forms of, the originals. |
2.2 | All signatures, initials and seals are genuine. |
2.3 | There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands
law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Registration Statement
and a duly authorised, executed and delivered Securities Purchase Agreement and Placement Agency Agreement. |
2.4 | The Company will have sufficient authorised but unissued ordinary shares in its authorised share capital
to effect the issue of the Shares at the time of issuance. |
2.5 | The Securities Purchase Agreement, the Warrants, the Units and the Placement Agency
Agreement are or will be, legal, valid, binding and enforceable against all relevant parties in accordance with their terms under the
laws of the State of New York and all other relevant laws (other than, with respect to the Company, the laws of the Cayman Islands). |
2.6 | The choice of the laws of the State of New York as the governing law of the Securities Purchase Agreement,
the Warrants, the Units and the Placement Agency Agreement, will be made in good faith and would be regarded as a valid and binding selection
which will be upheld by the courts of the State of New York and any other relevant jurisdiction (other than the Cayman Islands) as a matter
of the laws of the State of New York and all other relevant laws (other than the laws of the Cayman Islands). |
2.7 | The capacity, power, authority and legal right of all parties under all relevant
laws and regulations (other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into,
execute, unconditionally deliver and perform their respective obligations under the Securities Purchase Agreement, the Warrants, the Units
and the Placement Agency Agreement. |
2.8 | No monies paid to or for the account of the Company in respect of the Shares or the Warrants represent
or will represent proceeds of criminal conduct or criminal property or terrorist property (as defined in the Proceeds of Crime Act (As
Revised) and the Terrorism Act (As Revised) respectively). |
2.9 | There is nothing contained in the minute book or corporate records of the Company (which we have not inspected)
which would or might affect the opinions set out below. |
2.10 | There is nothing under any law (other than the law of the Cayman Islands), which
would or might affect the opinions set out below. |
2.11 | The issue of the Shares, the Warrants and the Units under the Placement Agency Agreement will be of commercial
benefit to the Company. |
2.12 | No invitation has been or will be made by or on behalf of the Company to the public
in the Cayman Islands to subscribe for any of the Shares, or the Warrants. |
Based upon the foregoing and subject to the qualifications
set out below and having regard to such legal considerations as we deem relevant, we are of the opinion that:
3.1 | The Company has been duly incorporated as an exempted company with limited liability
and is validly existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
3.2 | The authorised share capital of the Company, is US$50,000 divided into 500,000,000,000
ordinary shares of a par value of US$0.0000001 each. |
3.3 | With respect to the Shares, when (i) the board of directors of the Company (the
"Board") has taken all necessary corporate action to
approve the issue thereof, the terms of the offering thereof and related matters; (ii) the issue of such Shares has been recorded in the
Company's register of members (shareholders); and (iii) the subscription price of such Shares (being not less than the par value of the
Shares) has been fully paid in cash or other consideration approved by the Board, the Shares will be duly authorised, validly issued,
fully paid and non-assessable. |
3.4 | With respect to each issue of Warrants, when (i) the Board has taken all necessary
corporate action to approve the creation and terms of the Warrants and to approve the issue thereof, the terms of the offering thereof
and related matters; (ii) a Placement Agency Agreement relating to the Warrants shall have been duly authorised and validly executed and
delivered by the Company and the placement agent thereunder; and (iii) the certificates representing the Warrants have been duly executed,
countersigned, registered and delivered in accordance with the Placement Agency Agreement relating to the Warrants and the applicable
definitive purchase, underwriting or similar agreement approved by the Board upon payment of the consideration therefor provided therein,
the Warrants will be duly authorised, and constitute legal and binding obligations of the Company. |
3.5 | With respect to each issue of the Units, when (i) the Board has taken all necessary
corporate action to approve the creation and terms of the Units and to approve the issue thereof, the terms of the offering thereof and
related matters; (ii) a Securities Purchase Agreement and a Placement Agency Agreement relating to the Units and the Units shall have
been authorised and duly executed and delivered by and on behalf of the Company and all the relevant parties thereunder in accordance
with all relevant laws; and (iii) when such Units issued thereunder have been duly executed and delivered on behalf of the Company and
authenticated in the manner set forth in the Securities Purchase Agreement and the Placement Agency Agreement relating to such issue of
Units and delivered against due payment therefor pursuant to, and in accordance with, the terms of the Registration Statement and any
relevant prospectus supplement, such Units issued pursuant to the Securities Purchase Agreement and Placement Agency Agreement will have
been duly executed, issued and delivered. |
The opinions expressed above are subject to the following
qualifications:
4.1 | To maintain the Company in good standing under the laws of the Cayman Islands,
annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law. |
4.2 | The obligations assumed by the Company under the Securities Purchase Agreement,
the Placement Agency Agreement or the Warrants and Units issued thereunder will not necessarily be enforceable in all circumstances in
accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation,
readjustment of debts or moratorium or other laws of general application relating to, protecting or affecting the rights of creditors
and/or contributories; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable
remedies such as specific performance may not be available, inter alia,
where damages are considered to be an adequate remedy; |
| (c) | some claims may become barred under relevant statutes of limitation or may be or become subject to defences
of set off, counterclaim, estoppel and similar defences; |
| (d) | where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable
in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; |
| (e) | the courts of the Cayman Islands have jurisdiction to give judgment in the currency
of the relevant obligation and statutory rates of interest payable upon judgments will vary according to the currency of the judgment.
If the Company becomes insolvent and is made subject to a liquidation proceeding, the courts of the Cayman Islands will require all debts
to be proved in a common currency, which is likely to be the "functional currency" of the Company determined in accordance with
applicable accounting principles. Currency indemnity provisions have not been tested, so far as we are aware, in the courts of the Cayman
Islands; |
| (f) | arrangements that constitute penalties will not be enforceable; |
| (g) | enforcement may be prevented by reason of fraud, coercion, duress, undue influence,
misrepresentation, public policy or mistake or limited by the doctrine of frustration of contracts; |
| (h) | provisions imposing confidentiality obligations may be overridden by compulsion
of applicable law or the requirements of legal and/or regulatory process; |
| (i) | the courts of the Cayman Islands may decline to exercise jurisdiction in relation
to substantive proceedings brought in matters where they determine that such proceedings may be tried in a more appropriate forum; |
| (j) | we reserve our opinion as to the enforceability of the relevant provisions of the
documents to the extent that they purport to grant exclusive jurisdiction as there may be circumstances in which the courts of the Cayman
Islands would accept jurisdiction notwithstanding such provisions; and |
| (k) | a company cannot, by agreement or in its articles of association, restrict the
exercise of a statutory power and there is doubt as to the enforceability of any provision in the Securities Purchase Agreement and the
Placement Agency Agreement whereby the Company covenants to restrict the exercise of powers specifically given to it under the Companies
Act (As Revised) of the Cayman Islands (the "Companies Act"),
including, without limitation, the power to increase its authorised share capital, amend its memorandum and articles of association or
present a petition to a Cayman Islands court for an order to wind up the Company. |
4.3 | We express no opinion as to the meaning, validity or effect of any references to foreign (i.e. non-Cayman
Islands) statutes, rules, regulations, codes, judicial authority or any other promulgations and any references to them in the Securities
Purchase Agreement, the Warrants, the Placement Agency Agreement or the Units. |
4.4 | We have not reviewed the final form of any of the Securities Purchase Agreement,
the Warrants, the Placement Agency Agreement and the Units to be issued thereunder, and our opinions are qualified accordingly. |
4.5 | We reserve our opinion as to the extent to which the courts of the Cayman Islands would, in the event
of any relevant illegality or invalidity, sever the relevant provisions of the Securities Purchase Agreement or the Warrants, the Placement
Agency Agreement or the Units and enforce the remainder or the transaction of which such provisions form a part, notwithstanding any express
provisions in this regard. |
4.6 | Under the Companies Act, the register of members of a Cayman Islands company is by statute regarded as
prima facie evidence of any matters which the Companies Act directs or authorises to be inserted in it. A third party interest in the
ordinary shares of the Company in question would not appear. An entry in the register of members may yield to a court order for rectification
(for example, in the event of fraud or manifest error). |
4.7 | In this opinion the phrase "non-assessable" means, with respect to ordinary shares of the Company,
that a shareholder shall not, solely by virtue of its status as a shareholder and in absence of a contractual arrangement, or an obligation
pursuant to the memorandum and articles of association, to the contrary, be liable for additional assessments or calls on the ordinary
shares by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship
or an illegal or improper purpose or other circumstances
in which a court may be prepared to pierce or lift the corporate veil). |
Except as specifically stated herein,
we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the
documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject
of this opinion.
We hereby consent to the filing
of this opinion as an exhibit to the Registration Statement and to the reference to our name under the headings "Enforceability of
Civil Liabilities" and "Legal Matters" and elsewhere in the Registration Statement. In giving such consent, we do not thereby
admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended,
or the Rules and Regulations of the Commission thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Maples and Calder (Hong Kong) LLP
Director's Certificate
03.11.2023
To: | Maples and Calder (Hong Kong) LLP
26th Floor, Central Plaza
18 Harbour Road
Wanchai, Hong Kong |
Dear Sirs
U Power Limited (the "Company")
I, the undersigned, being a director
of the Company, am aware that you are being asked to provide a legal opinion (the "Opinion")
in relation to certain aspects of Cayman Islands law. Capitalised terms used in this certificate have the meaning given to them in the
Opinion. I hereby certify that:
1 | The Memorandum and Articles remain in full and effect and are otherwise unamended. |
2 | The Board Resolutions were duly passed in the manner prescribed in the Memorandum
and Articles (including, without limitation, with respect to the disclosure of interests (if any) by directors of the Company) and have
not been amended, varied or revoked in any respect. |
3 | The authorised share capital of the Company is US$50,000 divided into 500,000,000,000
shares of a par value of US$0.0000001 each. |
4 | All of the issued shares in the capital of the Company have been duly and validly
authorised and issued and are fully paid and non-assessable (meaning that no further sums are payable to the Company on such shares and
the Company has received payment therefor). |
5 | The shareholders of the Company have not restricted or limited the powers of the
directors in any way and there is no contractual or other prohibition (other than as arising under Cayman Islands law) binding on the
Company prohibiting it from issuing and allotting the Shares or otherwise performing its obligations under the Registration Statement. |
6 | The directors of the Company at the date of the Board Resolutions and as at the date of this certificate
were and are as follows: |
Chen Quanshi
Li Xiaochun
Lyu Bo
Zhao Bingyi
Li Jia
7 | Each director of the Company considers the transactions contemplated by the Registration
Statement to be of commercial benefit to the Company and has acted bona fide in the best interests of the Company, and for a proper purpose
of the Company in relation to the transactions which are the subject of the Opinion. |
8 | To the best of my knowledge and belief, having made due inquiry, the Company is
not the subject of legal, arbitral, administrative or other proceedings in any jurisdiction and neither the directors nor Shareholders
have taken any steps to have the Company struck off or placed in liquidation. Further, no steps have been taken to wind up the Company
or to appoint restructuring officers or interim restructuring officers, and no receiver has been appointed in relation to any of the Company's
property or assets. |
9 | The Company is listed on Nasdaq. |
I confirm that you may continue to rely on this Certificate
as being true and correct on the day that you issue the Opinion unless I shall have previously notified you personally to the contrary.
[signature
page follows]
Signature: |
/s/ Jia Li |
|
Name: |
Jia Li |
|
Title: |
Chairman of the Board of Directors |
|
Exhibit 5.2
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex5-2_001.jpg)
November 17, 2023
U Power Limited
2F, Zuoan 88 A, Lujiazui,
Shanghai, People’s Republic of China
Ladies and Gentlemen:
We have acted as United States counsel to U Power
Limited, a company incorporated under the laws of the Cayman Islands (the “Company”), in connection with the filing of a registration
statement on Form F-1 (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Securities
Act”). The Registration Statement relates to the following securities of the Company: (i) up to 10,000,000 units (each a “Unit,”
and collectively, the “Units”), with each Unit consisting of one ordinary share (each an “Ordinary Share,” and
collectively, the “Ordinary Shares”), par value US$0.0000001 per share, one warrant exercisable to purchase one Ordinary Share
(each a “Series A Warrant,” and collectively, the “Series A Warrants”), and one warrant exercisable to purchase
one Ordinary Share (each a “Series B Warrant,” and collectively, the “Series B Warrants”; the Series A Warrants
and Series B Warrants are collectively referred to herein as the “Warrants”), and (ii) up to 20,000,000 Ordinary Shares underlying
the Warrants (the “Warrant Shares”). The Units and the Warrant Shares are collectively referred to herein as the “Securities.”
In rendering the opinions set forth below, we
have assumed that (i) all information contained in all documents reviewed by us is true and correct; (ii) all signatures on all documents
examined by us are genuine; (iii) all documents submitted to us as originals are authentic and all documents submitted to us as copies
conform to the authentic originals of such documents; (iv) each natural person signing any document reviewed by us had the legal capacity
to do so; and (v) the certificates representing the Securities will be duly executed and delivered.
We have also assumed that (i) the Company has
been duly incorporated, and is validly existing and in good standing; (ii) the Company has requisite legal status and legal capacity under
the laws of the jurisdiction of its incorporation; (iii) the Company has complied and will comply with all aspects of the laws of the
jurisdiction of its incorporation, in connection with the transactions contemplated by, and the performance of its obligations under the
Warrants; (iv) the Company has the corporate power and authority to execute, deliver, and perform all its obligations under the Warrants;
(v) the Warrants have been duly authorized by all requisite corporate action on the part of the Company; (vi) except to the extent expressly
stated in the opinions contained herein, the opinions stated herein are limited to the agreements specifically identified in exhibit 1.1
(Form of Placement Agency Agreement) (the “Placement Agency Agreement”), exhibit 4.2 (Form of Series A Warrant), exhibit 4.3
(Form of Series B Warrant), and exhibit 4.4 (Form of Securities Purchase Agreement) to the Registration Statement without regard to any
agreement or other document referenced in such agreement (including agreements or other documents incorporated by reference or attached
or annexed thereto); (vii) as provided in Section 12 of the Placement Agency Agreement, the transactions contemplated hereby shall be
governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York,
without regard to the conflict of laws principles thereof; (viii) service of process will be effected in the manner and pursuant to the
methods of the State of New York at the time such service is effected; and (ix) at the time of exercise of the Warrants, a sufficient
number of Ordinary Shares that have been reserved by the Company’s board of directors or a duly authorized committee thereof will
be authorized and available for issuance and that the consideration for the issuance and sale of the Ordinary Shares in connection with
such exercise is in an amount that is not less than the par value of such Ordinary Shares.
www.htflawyers.com | info@htflawyers.com
950 Third Avenue, 19th Floor - New York, NY 10022
| Office: (212) 530-2210 | Fax: (212) 202-6380
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex5-2_001.jpg)
In connection with this matter, we have examined
the Registration Statement, including the exhibits thereto, and such other documents, corporate records, and instruments and have examined
such laws and regulations as we have deemed necessary for purposes of rendering the opinions set forth herein.
We are members of the Bar of the State of New
York. We do not hold ourselves out as being conversant with, or expressing any opinion with respect to, the laws of any jurisdiction other
than the federal laws of the United States of America and the laws of the State of New York. Accordingly, the opinions expressed herein
are expressly limited to the federal laws of the United States of America and the laws of the State of New York.
Based upon and subject to the foregoing, we are
of the opinion that (i) when the Units have been duly executed and delivered by the Company against payment of the consideration therefor
pursuant to the Placement Agency Agreement, such Units will constitute binding obligations of the Company, enforceable against the Company
in accordance with the respective terms of the Ordinary Shares and the Warrants; and (ii) when the Warrants included in the Units have
been duly executed and delivered by the Company against payment of the consideration therefor pursuant to the Placement Agency Agreement,
such Warrants will constitute binding obligations of the Company, enforceable against the Company in accordance with their terms.
Our opinions set forth above with respect to the
validity or binding effect of any security or obligation may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
marshaling, moratorium, or other similar laws affecting the enforcement generally of the rights and remedies of creditors and secured
parties or the obligations of debtors, (ii) general principles of equity (whether considered in a proceeding in equity or at law), including
but not limited to principles limiting the availability of specific performance or injunctive relief, and concepts of materiality, reasonableness,
good faith, and fair dealing, (iii) the possible unenforceability under certain circumstances of provisions providing for indemnification,
contribution, exculpation, release, or waiver that may be contrary to public policy or violative of federal or state securities laws,
rules, or regulations, and (iv) the effect of course of dealing, course of performance, oral agreements, or the like that would modify
the terms of an agreement or the respective rights or obligations of the parties under an agreement.
This opinion letter speaks only as of the date
hereof and we assume no obligation to update or supplement this opinion letter if any applicable laws change after the date of this opinion
letter or if we become aware after the date of this opinion letter of any facts, whether existing before or arising after the date hereof,
that might change the opinions expressed above.
This opinion letter is furnished in connection
with the Registration Statement and may not be relied upon for any other purpose without our prior written consent in each instance. Further,
no portion of this letter may be quoted, circulated, or referred to in any other document for any other purpose without our prior written
consent.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the use of our name as it appears under the caption “Legal Matters” in
the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. This opinion
is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent
changes in the facts stated or assumed herein or of any subsequent changes in applicable laws.
|
Very
truly yours, |
|
|
|
/s/ HHUNTER TAUBMAN FISCHER &
LI LLC |
|
|
|
HHUNTER TAUBMAN FISCHER &
LI LLC |
www.htflawyers.com | info@htflawyers.com
950 Third Avenue, 19th Floor - New York, NY 10022 | Office: (212) 530-2210
| Fax: (212) 202-6380
Exhibit 10.20
Form of Lock-Up Agreement
_________, 2023
Univest Securities, LLC
75 Rockefeller Plaza , Suite 1838
New York, NY, 10019
As Placement Agent, pursuant to a Placement Agency Agreement between
Univest Securities, LLC and U Power Limited, dated __, 2023
Re: Offering and Sale of Securities of U Power
Limited
Ladies and Gentlemen:
The undersigned
understands that you (the “Placement Agent”) propose to enter into a Placement Agency Agreement (the “Placement
Agency Agreement”) providing for the placement by the Placement Agent of Units, each Unit consisting of one ordinary share,
par value US$0.0000001 per share, (the “Shares”) and one warrant to purchase one ordinary share (the “Warrants”)
(the “Offering”), of U Power Limited, an exempted company with limited liability incorporated under the laws
of the Cayman Islands (the “Company”), to certain investors (the “Investors”) who
execute and enter into a Securities Purchase Agreement with the Company (the “Purchase Agreement”).
In consideration
of the execution of the Placement Agency Agreement by the Placement Agent and the Purchase Agreement by the Investors, and for other good
and valuable consideration, the undersigned hereby irrevocably agrees that, without the prior written consent of the Placement Agent,
on behalf of the Investors, the undersigned will not, directly or indirectly, (a) offer for sale, sell, pledge, or otherwise transfer
or dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition
by any person at any time in the future of) any ordinary shares (including, without limitation, ordinary shares that may be deemed to
be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and ordinary
shares that may be issued upon exercise of any options or warrants) or securities convertible into or exercisable or exchangeable for
ordinary shares; (b) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of ordinary shares, whether any such transaction described in clause (a) or (b) above is to be settled
by delivery of ordinary shares or other securities, in cash or otherwise; (c) except as provided for below, make any demand for or exercise
any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any ordinary
shares or securities convertible into or exercisable or exchangeable for ordinary shares or any other securities of the Company; or (d)
publicly disclose the intention to do any of the foregoing for a period commencing on the date hereof and ending ninety (90) days after
the date hereof (such 90-day period, the “Lock-Up Period”).
The foregoing paragraph
shall not apply to (a) transactions relating to ordinary shares or other securities acquired in the open market after the date of the
final closing of the Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), shall be required or shall be voluntarily made in connection with such transfers; (b) bona
fide gifts of shares of any class of the Company’s capital stock or any security convertible into ordinary shares, in each case
that are made exclusively between and among the undersigned or members of the undersigned’s family, or affiliates of the undersigned,
including its partners (if a partnership) or members (if a limited liability company); (c) any transfer of ordinary shares or any security
convertible into ordinary shares by will or intestate succession upon the death of the undersigned; (d) transfer of ordinary shares or
any security convertible into ordinary shares to an immediate family member (for purposes of this Lock-Up Agreement, “immediate
family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin) or any trust, limited
partnership, limited liability company or other entity for the direct or indirect benefit of the undersigned or any immediate family member
of the undersigned; provided that, in the case of clauses (b), (c) and (d) above, it shall be a condition to any such transfer
that (i) the transferee/donee agrees to be bound by the terms of this Lock-Up Agreement (including, without limitation, the restrictions
set forth in the preceding sentence) to the same extent as if the transferee/donee were a party hereto; (ii) each party (donor, donee,
transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act
of 1933, as amended (the “Securities Act”), and the Exchange Act) to make, and shall agree to not voluntarily
make, any filing or public announcement of the transfer or disposition prior to the expiration of the 6-month period referred to above;
and (iii) the undersigned notifies the Placement Agent at least two (2) business days prior to the proposed transfer or disposition; (e)
the transfer of shares to the Company to satisfy withholding obligations for any equity award granted pursuant to the terms of the Company’s
stock option/incentive plans, such as upon exercise, vesting, lapse of substantial risk of forfeiture, or other similar taxable event,
in each case on a “cashless” or “net exercise” basis (which, for the avoidance of doubt shall not include “cashless”
exercise programs involving a broker or other third party), provided that as a condition of any transfer pursuant to this clause
(e), that if the undersigned is required to file a report under Section 16(a) of the Exchange Act, reporting a reduction in beneficial
ownership of ordinary shares or any securities convertible into or exercisable or exchangeable for ordinary shares during the Lock-Up
Period, the undersigned shall include a statement in such report, and if applicable an appropriate disposition transaction code, to the
effect that such transfer is being made as a share delivery or forfeiture in connection with a net value exercise, or as a forfeiture
or sale of shares solely to cover required tax withholding, as the case may be; (f) transfers of ordinary shares or any security convertible
into or exercisable or exchangeable for ordinary shares pursuant to a bona fide third party tender offer made to all holders of the ordinary
shares, merger, consolidation or other similar transaction involving a change of control (as defined below) of the Company, including
voting in favor of any such transaction or taking any other action in connection with such transaction, provided that in the event
that such merger, tender offer or other transaction is not completed, the ordinary shares and any security convertible into or exercisable
or exchangeable for ordinary shares shall remain subject to the restrictions set forth herein; (g) the exercise of warrants or the exercise
of stock options granted pursuant to the Company’s stock option/incentive plans or otherwise outstanding on the date hereof; provided,
that the restrictions shall apply to ordinary shares issued upon such exercise or conversion; (h) the establishment of any contract, instruction
or plan that satisfies all of the requirements of Rule 10b5-1 (a “Rule 10b5-1 Plan”) under the Exchange Act;
provided, however, that no sales of ordinary shares or securities convertible into, or exchangeable or exercisable for,
ordinary shares, shall be made pursuant to a Rule 10b5-1 Plan prior to the expiration of the Lock-Up Period; provided further,
that the Company is not required to report the establishment of such Rule 10b5-1 Plan in any public report or filing with the Commission
under the Exchange Act during the lock-up period and does not otherwise voluntarily effect any such public filing or report regarding
such Rule 10b5-1 Plan; and (i) any demands or requests for, exercise any right with respect to, or take any action in preparation of,
the registration by the Company under the Securities Act of the undersigned’s ordinary shares, provided that no transfer of the
undersigned’s ordinary shares registered pursuant to the exercise of any such right and no registration statement shall be filed
under the Securities Act with respect to any of the undersigned’s ordinary shares during the Lock-Up Period. For purposes of clause
(f) above, “change of control” shall mean the consummation of any bona fide third party tender offer, merger, purchase,
consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3)
of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of a
majority of total voting power of the voting stock of the Company.
The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of
the undersigned’s securities subject to this Lock-Up Agreement except in compliance with this Lock-Up Agreement.
It is understood that, if
the Company notifies the Placement Agent that it does not intend to proceed with the Offering, if the Placement Agency Agreement does
not become effective, or if the Placement Agency Agreement (other than the provisions thereof which survive termination) shall terminate
or be terminated prior to the initial closing of the Offering, the undersigned will be released from its obligations under this Lock-Up
Agreement.
The undersigned understands
that the Company and the Placement Agent will proceed with the Offering and the Investors will execute and enter into the Securities Purchase
Agreement in reliance on this Lock-Up Agreement.
Whether or not the Offering
actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to a Placement Agency
Agreement, the terms of which are subject to negotiation between the Company and the Placement Agent.
This Lock-Up Agreement shall
automatically terminate upon the earliest to occur, if any, of (a) the termination of the Placement Agency Agreement before the initial
closing of the Offering; and (b) [_], 2023, in the event that the initial closing of the Offering has not occurred by that date.
This Lock-Up Agreement shall
be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
Delivery of a signed copy of this Lock-Up Agreement by e-mail/.pdf transmission shall be effective as the delivery of the original hereof.
The undersigned hereby represents
and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that, upon request, the undersigned
will execute any additional documents necessary in connection with the enforcement hereof. Any obligations of the undersigned shall be
binding upon the heirs, personal representative, successors and assigns of the undersigned.
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Very truly yours, |
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Print Name: |
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Address: |
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3
Exhibit 21.1
Principal Subsidiaries of the Registrant
Entity | |
Date of Incorporation | |
Place of Incorporation | |
% of Ownership |
U Power Limited | |
June 17, 2021 | |
Cayman Islands | |
Parent |
Youcang Limited | |
June 30, 2021 | |
BVI | |
100% |
Energy U Limited | |
July 19, 2021 | |
Hong Kong | |
100% |
U Robur Limited | |
January 5, 2022 | |
British Virgin Islands | |
100% |
U Robur Limited | |
January 24, 2022 | |
Hong Kong | |
100% |
Shandong Yousheng New Energy Technology Development Co., Ltd. | |
January 27, 2022 | |
PRC | |
100% |
Anhui Yousheng New Energy Co., Ltd. | |
May 16, 2013 | |
PRC | |
100% |
Youpin Automobile Service (Shandong) Co., Ltd.. | |
June 30, 2020 | |
PRC | |
87% |
Shanghai Youxu New Energy Technology Co., Ltd.. | |
March 22, 2021 | |
PRC | |
100% |
Zhejiang Youguan Automobile Service Co., Ltd. | |
May 21, 2020 | |
PRC | |
80% |
Chengdu Youyineng Automobile Service Co., Ltd. | |
October 29, 2020 | |
PRC | |
100% |
Shanghai Youteng Automobile Service Co., Ltd. | |
November 3, 2020 | |
PRC | |
70% |
Youpin Automobile Service Group Co., Ltd. | |
July 18, 2013 | |
PRC | |
53.1% |
Youxu New Energy Technology (Zibo) Co., Ltd. | |
July 29, 2021 | |
PRC | |
100% |
Zibo Hengsong UCAR Equity Investment Fund Partnership (Limited Partnership). | |
November 2, 2020 | |
PRC | |
99% |
Beijing Youxu New Energy Technology Co., Ltd. | |
December 21, 2021 | |
PRC | |
100% |
Wuhu Youxu New Energy Technology Co., Ltd.. | |
November 12, 2021 | |
PRC | |
100% |
Xinjiang Youxu Supply Chain Management Co., Ltd. | |
October 12, 2021 | |
PRC | |
100% |
Youxu (Xiamen) Power Exchange Network Technology Co., Ltd. | |
August 10, 2021 | |
PRC | |
100% |
Quanzhou Youyi Power Exchange Network Technology Co., Ltd. | |
June 29, 2021 | |
PRC | |
100% |
Tai’an Youxu New Energy Technology Co., Ltd. | |
August 22, 2022 | |
PRC | |
100% |
Shandong Youxu New Energy Co., Ltd. | |
August 26, 2022 | |
PRC | |
100% |
Henan Youxu New Energy Technology Co., Ltd. | |
December 1, 2022 | |
PRC | |
80% |
Chengdu Zhibo Premium Technology Co., Ltd. | |
September 22, 2022 | |
PRC | |
40% |
Dalian Youshengchi Automobile Trading Service Co., Ltd. | |
March 23, 2021 | |
PRC | |
100% |
Youguan Financial Leasing Co., Ltd. | |
February 27, 2017 | |
PRC | |
100% |
Liaoning Youguan New Energy Technology Co., Ltd. | |
November 8, 2019 | |
PRC | |
100% |
Chengdu Youyipin Trading Co., Ltd. | |
June 21, 2019 | |
PRC | |
100% |
Shanghai Haiyou Automobile Service Co., Ltd. | |
November 26, 2013 | |
PRC | |
70% |
Shanghai Youqiao International Trade Co., Ltd. | |
May 29, 2014 | |
PRC | |
100% |
Zibo Youyipin Trading Co., Ltd. | |
March 18, 2021 | |
PRC | |
100% |
Zhejiang Zhongxinda Financial Leasing Co., Ltd. | |
December 9, 2016 | |
PRC | |
75% |
Nanning Youguan Digital Technology Co., Ltd. | |
July 12, 2022 | |
PRC | |
100% |
Shanghai Youchuangneng Digital Technology Co., Ltd. | |
November 13, 2015 | |
PRC | |
100% |
Youxu New Energy (Dalian) Co., Ltd | |
June 8, 2022 | |
PRC | |
100% |
Exhibit 23.1
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex23-1_001.jpg)
Consent of Independent Registered Public
Accounting Firm
We
hereby consent to the incorporation by reference in the Registration Statements on Form F-1 of our report dated August 12, 2022,
relating to the audit of the consolidated balance sheets of U Power Limited and its subsidiaries (collectively
the “Company”) as of December 31, 2021, and the related consolidated statements of comprehensive loss, shareholders’
equity, and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the financial statements),
which appears in the Form 20-F filed by the Company with the U.S. Securities Exchange Commission on August 22, 2023.
|
/s/ WWC, P.C. |
San Mateo, California |
WWC, P.C. |
November 17, 2023 |
Certified Public Accountants |
|
PCAOB ID No. 1171 |
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex23-1_002.jpg)
Exhibit 23.2
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex23-2_001.jpg) |
Onestop
Assurance PAC |
10
Anson Road |
#13-09
International Plaza |
Singapore
079903 |
Email:
audit@onestop-ca.com |
Website:
www.onestop-ca.com |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We hereby consent to the inclusion in this Registration Statement on
Form F-1 of our report dated August 22, 2023, with respect to the consolidated financial statements of U Power Limited for the year ended
December 31, 2022.
We also consent to the reference to our firm under
the heading “Experts” in such Registration Statements.
/s/ OneStop Assurance PAC
OneStop Assurance PAC
November 17, 2023
Exhibit 23.4
![](https://www.sec.gov/Archives/edgar/data/1939780/000121390023088453/ex23-4_001.jpg) |
观韬中茂律师事务所
Guantao
Law Firm |
中国北京市西城区金融大街5号
新盛大厦B座19层
邮编:100032 |
Tel:
86 10 66578066 Fax: 86 10 66578016
E-mail: guantao@guantao.com
http: // www.guantao.com |
|
19/F, Tower B, Xinsheng Plaza, 5 Finance
Street, Xicheng District, Beijing 100032,
China |
CONSENT LETTER
November 17, 2023
To: |
U Power Limited |
|
2F, Zuoan 88 A, Lujiazui, |
|
Shanghai, People’s Republic of China |
Dear Sir/Madam,
We consent to the references to our firm in the
registration statement on Form F-1 filed by U Power Limited with the U.S. Securities and Exchange Commission (the “SEC”) on
November 17, 2023 (the “Registration Statement”) and the filing of this consent letter with the SEC as an exhibit to the Registration
Statement.
In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the
Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder
Yours faithfully, |
|
|
|
/S/ Guantao Law Firm |
|
Guantao Law Firm |
|
Exhibit 107
Calculation of Filing Fee Tables
F-1
(Form Type)
U Power Limited
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
| |
| |
| |
Fee | |
| | |
Proposed | | |
Proposed | | |
| | |
| |
| |
| |
| |
Calculation | |
| | |
Maximum | | |
Maximum | | |
| | |
| |
| |
| |
| |
or
Carry | |
| | |
Offering | | |
Aggregate | | |
| | |
Amount
of | |
| |
Security | |
Security | |
Forward | |
Amount | | |
Price
Per | | |
Offering | | |
| | |
Registration | |
| |
Type | |
Class
Title | |
Rule | |
Registered | | |
Unit | | |
Price | | |
Fee
Rate | | |
Fee | |
Fees
to Be Paid | |
Equity | |
Units, each consisting
of one Ordinary Share, par value $0.0000001 per share, one Warrant to purchase one Ordinary Share (“Series A Warrant”),
and one additional Warrant to purchase one Ordinary Share (“Series A Warrant”) | |
Rule
457(a) | |
| 10,000,000 | | |
$ |
2.42 | | |
$ | 24,200,000 | | |
| 0.00014760 | | |
$ | 3,571.92 | |
| |
Equity | |
Ordinary Shares included as
part of the Units(1) | |
Rule
457(g) | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| |
Equity | |
Series A Warrants to purchase
Ordinary Shares included as part of the Units(1) | |
Rule
457(g) | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| |
Equity | |
Series B Warrants to purchase
Ordinary Shares included as part of the Units(1) | |
Rule
457(g) | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| |
Equity | |
Ordinary Shares issuable upon
exercise of the Series A Warrants | |
Rule
457(a) | |
| 10,000,000 | | |
$ | 2.54 | | |
$ | 25,400,000 | | |
| 0.00014760 | | |
$ | 3,749.04 | |
| |
Equity | |
Ordinary Shares issuable upon
exercise of the Series B Warrants | |
Rule
457(a) | |
| 10,000,000 | | |
$ | 2.42 | | |
$ | 24,200,000 | | |
| 0.00014760 | | |
$ | 3,571.92 | |
Fees
Previously Paid | |
– | |
– | |
– | |
| – | | |
| – | | |
| – | | |
| – | | |
$ | 0 | |
| |
Total
Offering Amounts | | |
| | | |
$ | 73,800,000 | | |
| | | |
$ | 10,892.88 | |
| |
Total
Fees Previously Paid | | |
| | | |
| | | |
| | | |
$ | 0 | |
| |
Total
Fee Offset | | |
| | | |
| | | |
| | | |
$ | 0 | |
| |
Net
Fee Due | | |
| | | |
| | | |
| | | |
$ | 10,892.88 | |
(1) | In
accordance with Rule 457(g) under the Securities Act, because the Registrant’s Ordinary Shares underlying the Warrants are registered
hereby, no separate registration fee is required with respect to the Warrants registered hereby. |
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