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1、2023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm1/101F-1/A 1 f1a.htm As filed with the Securities and Exchange Commission on December 27,2022.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashi
2、ngton,D.C.20549 FORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 BOZHI FANGLUE INTERNATIONAL INVESTMENTGROUP CO LTD(Exact name of Registrant as specified in its charter)United Kingdom 8742 Not Applicable(State or other jurisdiction of(Primary Standard Industrial(I.R.S.Employerincorporat
3、ion or organization)Classification Code Number)Identification Number)C-8A,Shennan Garden CommunityNo.11,Kexing RoadYuehai Street,Nanshan District,ShenzhenBOZHI FANGLUE INTERNATIONAL INVESTMENT GROUP CO LTDPeoples Republic of China 518057+44 07760185350(Address,including zip code,and telephone number
4、,including area code,of Registrants principal executive offices)4305 SNYDER AVE BROOKLYNNewYorkAmerican Tuoyuan International Securities Group Inc.(Name,address of agent for service)F15,Fudan Science Park Building,No.11 Guotai RoadYangpu District,ShanghaiShanghai Jinzhun Investment Management Co.,Lt
5、d(Name,address of agent for service)Copies to:Approximate date of commencement of proposed sale to the public:As soon as practicable after the effective date of this RegistrationStatement.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursua
6、nt to Rule 415 under theSecurities 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 thefollowing box and list the Securities Act registration statement number of the earlier effect
7、ive 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 theSecurities Act registration statement number of the earlier effective registration statement for the same offering.If
8、this Form is a post-effective amendment filed pursuant to Rule 462(d)under the Securities Act,check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering.Indicate by check mark whether the registrant is an eme
9、rging growth company as defined in Rule 405 of the Securities Act of 1933.Emerging growth company xIf an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for comply
10、ing with any new or revised financial accounting standardsprovided pursuant to Section 7(a)(2)(B)of the Securities Act.xThe Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until theRegistrant shall file a further amendment wh
11、ich specifically states that this registration statement shall thereafter become effective inaccordance with Section 8(a)of the Securities Act,as amended,or until the registration statement shall become effective on such date asthe Securities and Exchange Commission,acting pursuant to said Section 8
12、(a)may determine.2023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm2/101 2023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/195
13、9304/0000003/f1a.htm3/101 PRELIMINARY PROSPECTUSORDINARY SHARES We are offering ordinary shares.This is the initial public offering of ordinary shares of .The offering priceof our ordinary shares in this offering is expected to be$6.00 per share.Prior to this offering,there has been no pu
14、blic market for ourordinary shares.We have applied to list our ordinary shares on the Nasdaq Capital Market under the symbol“BZFL”.There is no assurance that suchapplication will be approved,and if our application is not approved,this offering may not be completed.Investing in our ordinary shares in
15、volves a high degree of risk.Before buying any shares,you should carefully read the discussionof material risks of investing in our ordinary shares in“Risk Factors”.We are an“emerging growth company”as defined under the federal securities laws and,as such,will be subject to reduced publiccompany rep
16、orting requirements.See“Prospectus SummaryImplications of Being an Emerging Growth Company”for additionalinformation.Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securitiesor passed upon the accuracy or adequacy of this prospectus.
17、Any representation to the contrary is a criminal offense.We are not a Chinese operating company,but rather a holding company incorporated in the United Kingdom.As a holding company withno material operations of our own,we conduct a substantial majority of our operations through our operating entitie
18、s established in thePeoples Republic of China(or the“PRC”).The Ordinary Shares offered in this prospectus are shares of the United Kingdom holdingcompany.Holders of our Class A Ordinary Shares do not directly own any equity interests in our Chinese operating subsidiaries,but willinstead own shares o
19、f a United Kingdom holding company.The Chinese regulatory authorities could disallow 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,includingthat it could cause the value of our Ordinary Shares to
20、significantly decline or become worthless.Unless otherwise stated,as used in thisprospectus and in the context of describing our operations and consolidated financial information,“we,”“us,”“Company,”or“our,”refersto BOZHI FANGLUE INTERNATIONAL INVESTMENT GROUP CO LTD,a United Kingdom holding company
21、.For a description ofour corporate structure,see“Corporate History and Structure.”See also“Risk Factors Risks Relating to Our Corporate Structure.”We face various legal and operational risks and uncertainties relating to our operations in China.These risks,together with uncertainties inChinas legal
22、system and the interpretation and enforcement of Chinese laws,regulations,and policies,could hinder our ability to offer orcontinue to offer our securities,result in a material adverse effect on our business operations,and damage our reputation,which couldcause our shares to significantly decline in
23、 value or become worthless.The Chinese government may intervene or influence the operationsof our PRC subsidiaries at any time and may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers,which could result in a material change in the operations of ou
24、r PRC subsidiaries and/or the value of our common stock.Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreigninvestment in China-based issuers could significantly limit or completely hinder our ability to offer or continue
25、 to offer securities toinvestors and cause the value of such securities to significantly decline or be worthless.Recently,the PRC government adopted a series oflaws,regulatory measures and issued statements to regulate business operations in China,including cracking down on illegal activities inthe
26、securities market,adopting new measures to extend the scope of cybersecurity reviews,and expanding the efforts in anti-monopolyenforcement.The Cyberspace Administration of China(“CAC”)has opened cybersecurity probes into several U.S.-listed technologycompanies focusing on anti-monopoly regulation,an
27、d how companies collect,store,process and transfer data,among other things.If weare subject to such a probe or are required to comply with the stringent requirements of the new regulations,our ability to conduct ourbusiness or list on a U.S.stock exchange may be restricted.As of the date of this pro
28、spectus,we and our subsidiaries have not beeninvolved in any investigations on cybersecurity review initiated by any Chinese regulatory authority,nor has any of them received anyinquiry,notice or sanction.There are currently no relevant laws or regulations in China that prohibit companies whose subs
29、idiaries orentity interests are within China from listing on overseas stock exchanges.However,since these statements and regulatory actions arenewly published,official guidance and related implementation rules have not been issued.It is highly uncertain what the potential impactsuch modified or new
30、policies and regulations will have on our daily business operation,the ability to accept foreign investments and ourability to continue trading on a U.S.securities marketplace or stock exchange.2023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archiv
31、es/edgar/data/1959304/0000003/f1a.htm4/101 PER SHARE TOTAL Initial public offering price$Underwriting discounts and commissions(1)$Proceeds,before expenses,to us$(1)Does not include accountable and non-accountable expense allowance payable to underwriters.Please see the section of thispro
32、spectus entitled“Underwriting”for additional information regarding underwriter compensation.We expect our total cash expenses for this offering(including cash expenses payable to our underwriters for their out-of-pocket expenses)to be approximately$,exclusive of the above commissions.In addition,we
33、will pay additional items of value in connection with thisoffering that are viewed by the Financial Industry Regulatory Authority,or FINRA,as underwriting compensation.These payments willfurther reduce proceeds available to us before expenses.See“Underwriting.”Neither we nor any of the underwriters
34、have authorized anyone to provide any information or to make any representations other than thosecontained in this prospectus or in any free writing prospectuses we have prepared.Neither we nor any of the underwriters takeresponsibility for,and can provide no assurance as to the reliability of,any o
35、ther information that others may give you.This prospectus isan offer to sell only the shares offered hereby,but only under circumstances and in jurisdictions where it is lawful to do so.Theinformation contained in this prospectus is current only as of its date,regardless of the time of delivery of t
36、his prospectus or of any sale ofour common stock.For investors outside the United States:Neither we nor any of the underwriters have done anything that would permit this offering orpossession or distribution of this prospectus in any jurisdiction where action for that purpose is required,other than
37、in the United States.Persons outside the United States who come into possession of this prospectus must inform themselves about,and observe any restrictionsrelating to,the offering of the shares of our common stock and the distribution of this prospectus outside the United States.Neither the Securit
38、ies and Exchange Commission nor any state securities commission nor any other regulatory body has approved ordisapproved of these securities or determined if this prospectus is truthful or complete.Any representation to the contrary is a criminaloffense.2023/2/9https:/www.sec.gov/Archives/edgar/data
39、/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm5/101 TABLE OF CONTENTS PagePROSPECTUS SUMMARY1OFFERINGS10RISK FACTORS11SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS39USE OF PROCEEDS41DIVIDEND POLICY42CAPITALIZATION43DILUTION45CORPORATE
40、 HISTORY AND STRUCTURE46MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS47INDUSTRY,MARKET AND OTHER DATA48BUSINESS50REGULATIONS66MANAGEMENT78PRINCIPAL SHAREHOLDERS83RELATED PARTY TRANSACTIONS83DESCRIPTION OF SHARE CAPITAL84SHARES ELIGIBLE FOR FUTURE SALE88TAXATION
41、90UNDERWRITING93WHERE YOU CAN FIND ADDITIONAL INFORMATION96 2023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm6/101 PROSPECTUS SUMMARY The following summary is qualified in its entirety by,and sho
42、uld be read in conjunction with,the more detailed information and financialstatements appearing elsewhere in 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”before de
43、ciding whether to buy our OrdinaryShares.Our Mission Our mission is to empower and energize global good projects,provide power for rapid project development,link global industries,connectcorporate business,integrate resources and achieve win-win situation.We will also focus on discovering,researchin
44、g and overcomingpainful and difficult problems encountered in business cooperation,and providing overall solutions.Overview of Our Company We are a digital business service planning SAAS platform that serves enterprise business planning and enterprise innovation anddevelopment,jointly initiated and
45、built by chambers of commerce,associations,overseas Chinese business associations,strongentrepreneurs,authoritative experts in scientific research,government advisors,and many elite institutions in the financial sector.It isinitiated and established by a number of strong shareholders of large enterp
46、rises,business leaders and elites in the investment and financesector,and innovates and upgrades the connectivity of enterprises,establishes EBDA Enterprise Business Digital Alliance,joins handswith business associations and government platforms,and is committed to serving millions of enterprises.Th
47、e main business service ofthe platform is to provide top-level design,strategic layout,industry and finance strategy,business model,consulting,marketing planning,intelligent attraction,technology output,project hosting,digital operation,new media marketing,talent think tank,investment landing,capita
48、l matching,resource integration,industrial capital planning and other service activities for enterprises.The founding team has yearsof rich operational experience and abundant resources in related fields.History and Development We are an emerging company with a deep history.At the management and mar
49、keting core team level,Linfang Liu,graduated from BeijingMedical College and has 16 years of clinical medical experience,with rich medical and health field of clinical experience and practicalexperience in the field of medicine and health care,and her team includes biotechnology and pharmaceutical r
50、esearch.In terms of productand industry innovation and industry-financial integration,she has launched many nationally renowned products,accelerated thedevelopment and integration between different fields,and provided experience and guarantee for the future development of the company.Through the rec
51、ognized high-quality projects launched by EBDA Enterprise Business Digital Alliance,we will assist in building thelisting,unite the alliance enterprises for win-win development,empower the EBDA Enterprise Alliance platform to spread its wingsthrough capital tools,feed member enterprises with the cap
52、ital operation dividends after the listing,create more public welfare freebusiness consultant matchmaking and underwriting business assistance activities,and form The innovative operation model of self-organized integration+strategic combination+aggregated investment advisor cluster+capital tools em
53、powerment+free futurebusiness,with the system platform of crowd creation,crowd sharing,crowd fundraising,crowd packaging,crowd marketing,crowdwinning,and the self-organized integration of industrial funds to help members The system platform of Crowd Creation,CrowdEnjoyment,Crowd Funding,Crowd Sourci
54、ng,Crowd Selling,Crowd Winning and the self-organized and integrated industrial fund willhelp the member enterprises quality projects,which will make the member enterprises upstream and downstream industrial chainsorganically combine,complement each other,share and win together,and form a powerful i
55、ndustrial platform and professional businessservice institution with core competitiveness,so as to build an ecosystem of mutual win-win and ten thousand enterprises.12023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/000195
56、930422000003/f1a.htm7/101 The Industry Enterprise consulting business service industry.We are a digital marketing cloud platform focusing on business planning for enterpriseinvestment,marketing,financing,technology leading,talent think tank,brand promotion,etc.By building a digital overall solution
57、forenterprise business planning with the core of industry-financing combination,good project hosting operation,investment advisor planning,technology output,talent think tank,management middle desk,marketing planning,we provide a whole process one-stop service forenterprise development.Our Solution
58、We will actively play the function of SAAS marketing business planning digital platform,based on the service of all kinds of enterprisesgood projects,the formation of talent think tank cloud,strengthen the industry self-regulation,timely attention to corporate demands.Through the establishment of ef
59、fective information communication,resource sharing,policy coordination,industrialization,capitalization,digital operation of business activities service platform,to further enhance the market competitiveness of high-quality small and medium-sized enterprises and independent innovation,technology emp
60、owerment,capital enrichment,digital operation,for the government andbusiness contacts between communication,cooperation and exchange between enterprises to build a service platform,to help enterprisesgood projects practical work on the ground,high-quality Rapid development.Our Services Our core busi
61、ness mainly includes the following eleven services:(a)consulting and planning services;(b)top-level production strategyplanning services;(c)investment project implementation services;(d)financing and investment services;(e)brand operation services;(f)corporate team building services;(g)corporate per
62、formance growth services;(h)corporate taxation and legal services;(i)new mediaoperation services;(j)business project incubation services;(k)corporate management training and education services,etc.Our Competitive Strengths I.Convergence of multiple strategic resources to create a digital business se
63、rvice platform for enterprisesWe are founded by a number of strong shareholders of large enterprises,business leaders and elites in the investment and finance sector,and we have innovated and upgraded the connectivity model among enterprises,established EBDA Enterprise Business Digital Alliance,join
64、ed hands with various chambers of commerce,associations,governments and other platforms,and committed to serving millions ofenterprises.22023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm8/101 II.
65、The founding team has been working in the industry for many years and has rich experience in related fieldsThe founding team has many years of operational experience and rich resources in related fields.III.Continuous innovative business operation model operation conceptWe will cooperate with the re
66、cognized high-quality projects launched by EBDA Enterprise Business Digital Alliance to assist in building alisting,unite alliance enterprises for win-win development,and empower the EBDA Enterprise Alliance platform to spread its wingsthrough capital tools.Our Challenges I.The negative impact of th
67、e long-term persistence of the COVID-19 epidemicIn the short term,the COVID-19 epidemic has stimulated the crisis awareness and transformation needs of traditional enterprises,which inturn has created a large demand for business consulting.However,in the long run,the long-term persistence of the nov
68、el COVID-19 isbound to bring substantial adverse impact on the Chinese economy and the global economy.II.Negative effects of increased competition in the Chinese marketIn the current market of Chinas corporate consulting industry,our main competitors include companies such as Peking UniversityZonghe
69、ng Management Consulting Group,Beijing Hejun Venture Management Consulting Company Limited,Zhongda ConsultingGroup,and Beijing Huaxia Cornerstone Enterprise Management Consulting Company Limited.As we continue to develop in Chinascorporate consulting industry,the business friction between us and the
70、se competitors is intensifying.III.The impact of the international market levelIn the current international market of corporate consulting industry,our main competitors include McKinsey&Company,The BostonConsulting Group and Bain&Company,and we will gradually face the impact of these competitors in
71、the international market in thefuture development stage.32023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm9/101 Our market opportunity Many small and medium-sized enterprises face the biggest pai
72、n point is the shortage of corporate cash flow,channel system is not perfect,market expansion difficulties,how to achieve accurate investment,rapid financing,industrial empowerment,is the common concern of allsectors of society urgently need to solve the problem.What we do The digital marketing clou
73、d platform focuses on business planning for enterprise investment,marketing,financing,technology leadership,talent pool,brand promotion,etc.It builds a digital overall solution for enterprise business planning with the combination of industry andfinance,good project trust operation,investment adviso
74、r planning,technology output,talent pool,management center,marketing planningas the core,and provides one-stop service for the whole process of enterprise development.Our Corporate Structure Our Strategy I.Structured equity structure designAfter consulting with legal and accounting professionals,and
75、 through repeated consultations and research by the management team,wehave designed a reasonable equity structure for our group.42023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm10/101 II.The amo
76、eba concept-based chain operation modelWe adopt a chain operation model based on the amoeba concept to encourage and support the continuous entrepreneurship of our chaininstitutions,achieve the continuous independence and fission of our subsidiaries,and continuously expand our scale and influence.II
77、I.The organizational structure is complete covering the industry chainUnder the unified command,leadership and deployment of the group headquarters,we have formed a more complete industry chain ineach business segment by integrating the three-in-one organizational structure of Bozhi Training Chain,G
78、uangdong Bozhi ConsultingManagement Consulting Co.Risk Factors Summary I.The Chinese government lacks supportive policies for the industryIn the current stage of Chinas economic and political development,the Chinese government shows low concern for the corporateconsulting industry and lacks policy s
79、upport for the industry.II.The ambiguity and absence of industry regulations in ChinaAt present,Chinas corporate consulting industry lacks targeted legal regulations and policies,which leads to the ambiguity anduncertainty of the current regulatory environment of our main business.III.Operational pr
80、oblems faced during the rapid growth periodIn recent years,we have been developing rapidly and our operation and development are entering into a rapid growth period.During thisphase,we will encounter some of the problems commonly faced by companies in the rapid growth period,including our relatively
81、 limitedexperience in operating on an operational scale.Implications of Being an Emerging Growth Company I.Industrial environment factorsCompared with other macro environment,industrial environment is more important to the formation of competitive advantage ofenterprises,because the influence exerte
82、d by other macro environment on enterprises is carried out through industrial environment.Itmainly includes the production and operation scale,industrial status,competition status,production status,industrial layout,market supplyand demand,industrial policies,industry barriers and barriers to entry,
83、industry development prospects,etc.of the industry they are in orthe industry they want to enter.52023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm11/101 II.The market environment factorsIn the m
84、arket environment,the factors that affect the competitive advantage of enterprises mainly include market concentration,productdifferentiation,entry barriers,strategic groups and so on.Among them,strategic group mainly refers to the vertical value chainrelationship between enterprises and downstream
85、sellers and upstream suppliers.A good strategic group is conducive to stabilizing thesupply channels of raw materials and sales channels of products,reducing transaction costs,enabling enterprises to focus on improvinginternal efficiency and increasing their profits.III.The capital factorThe most im
86、portant thing for enterprise operation should be the working capital,there are many enterprises because of the lack of funds,the capital chain broke,and finally bankruptcy,which is a relatively bad result.Of course,more often than not,more developmentopportunities are missed because of the lack of c
87、apital circulation.Enterprises in order to survive and develop,in the fierce competition,often take super conventional,or even illegal means to reduce production costs,some even below the product production cost price salesproducts.In the same industry,they produce products and production processes
88、are not very different.The difference in production costs isalso small,the price of the product can not pull the grade.IV.Peer competition factorsNow many enterprises for orders,and began to compete with each other price,competition,accompanied by a number of other means,itled to the decline in the
89、efficiency of the use of resources throughout the market and market order chaos.And because of the lowefficiency of enterprises,the lack of government departments to properly guide and product quality supervision,which naturally leads tothe market can not form a good industry.V.ConclusionIn the fina
90、l analysis,the factors affecting the development of emerging enterprises are multifaceted and cannot be discussed in a singleway.However,enterprises want to develop in the long term,not greedy for a small profit,in addition to understanding the socialenvironment,keep up with the times,but also to ha
91、ve a sense of renewal of their own products.We are a digital marketing cloud platformfocusing on business planning for enterprise investment,marketing,financing,technology leading,talent think tank,brand promotion,etc.By building a digital overall solution for enterprise business planning with the c
92、ore of industry-financing combination,good projecthosting operation,investment advisor planning,technology output,talent think tank,management center and marketing planning,weprovide a whole process one-stop service for enterprise development.62023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0
93、000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm12/101 Implications of Our Being an“Emerging Growth Company”On September 9,2022,the SEC adopted inflation adjustments mandated by the Jumpstart Our Business Startups Act of 2012(the“JOBSAct”).As a resul
94、t,an“emerging growth company”will lose its emerging growth company status on the last day of the fiscal year in whichit has$1.235 billion or more in total.As a company with less than$1.235 billion in revenue during our last fiscal year,we qualify as an“emerging growth company”as defined in the JOBS
95、Act.“An“emerging growth company”may take advantage of reduced reportingrequirements that are otherwise applicable to larger public companies.In particular,as an emerging growth company,we:May present only two years of audited financial statements and only two years of related Managements Discussion
96、and Analysis ofFinancial Condition and Results of Operations;Are not required to provide a detailed narrative disclosure discussing our compensation principles,objectives and elements andanalyzing how those elements fit with our principles and objectives,which is commonly referred to as“compensation
97、 discussion andanalysis”;Are not required to obtain an attestation and report from our auditors on our managements assessment of our internal control overfinancial reporting pursuant to the Sarbanes-Oxley Act of 2002;Are not required to obtain a non-binding advisory vote from our shareholders on exe
98、cutive compensation or golden parachutearrangements(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 CEO pay ratiodisclosure;Are eligible to clai
99、m longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBSAct;and Will not be required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form20-F following the effectiveness of our initia
100、l public offering.We intend to take advantage of all of these reduced reporting requirements and exemptions,including the longer phase-in periods for theadoption of new or revised financial accounting standards under 107 of the JOBS Act.Our election to use the phase-in periods may makeit difficult t
101、o compare our financial statements to those of non-emerging growth companies and other emerging growth companies thathave opted out of the phase-in periods under 107 of the JOBS Act.72023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/da
102、ta/1959304/0000003/f1a.htm13/101 Under the JOBS Act,we may take advantage of the above-described reduced reporting requirements and exemptions until we no longermeet the definition of an emerging growth company.The JOBS Act provides that we would cease to be an“emerging growth company”att
103、he end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declaredeffective under the Securities Act of 1933,as amended(the“Securities Act”)occurred,if we have more than$1.235 billion in annualrevenue,have more than$700 million
104、 in market value of our Class A Ordinary Share held by non-affiliates,or issue more than$1 billionin principal amount of non-convertible debt over a three-year period.Foreign Private Issuer Status We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 19
105、34,as amended(the“ExchangeAct”).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 s
106、olely with our home country requirements,which are less rigorous than the rulesthat 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 issue
107、rs from making selective disclosures of materialinformation;We are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies,consents,or authorizationsin respect of a security registered under the Exchange Act;and We are not required to comply with Section 1
108、6 of the Exchange Act requiring insiders to file public reports of their share ownershipand trading activities and establishing insider liability for profits realized from any“short-swing”trading transaction.Implications of Being a Controlled Company Controlled companies are exempt from the majority
109、 of independent director requirements.Controlled companies are subject to anexemption from Nasdaq standards requiring that the board of a listed company consist of a majority of independent directors within oneyear of the listing date.Public Companies that qualify as a“Controlled Company”with securi
110、ties listed on the Nasdaq Stock Market(Nasdaq),must comply withthe exchanges continued listing standards to maintain their listings.Nasdaq has adopted qualitative listing standards.Companies that donot comply with these corporate governance requirements may lose their listing status.Under the Nasdaq
111、 rules,a“controlled company”isa company with more than 50%of its voting power held by a single person,entity or group.Under Nasdaq rules,a controlled company isexempt from certain corporate governance requirements including:The requirement that a majority of the board of directors consist of indepen
112、dent directors;82023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm14/101 The requirement that a listed company have a nominating and governance committee that is composed entirely of independentdi
113、rectors with a written charter addressing the committees purpose and responsibilities;The requirement that a listed company have a compensation committee that is composed entirely of independent directors with awritten charter addressing the committees purpose and responsibilities;and The requiremen
114、t for an annual performance evaluation of the nominating and governance committee and compensation committee.Controlled companies must still comply with the exchanges other corporate governance standards.These include having an auditcommittee and the special meetings of independent or non-management
115、 directors.Our Pre-IPO Prior to the IPO,we total share capital was about 300,000,000 ordinary shares.This time,about 60,000,000 ordinary shares were added,which is we expect that the initial public offering price will be no less than US$6.00 per share.Corporate Information Our principal executive of
116、fices are located at C-8A,Shennan Garden Community No.11,Kexing Road,Yuehai Street,Nanshan District,Shenzhen.Our telephone number at this address is+44 07760185350.92023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0001959
117、30422000003/f1a.htm15/101 OFFERINGS Below is a summary of the terms of the offering:IssuerBozhi Fanglue International Investment Group Co Ltd Securities Being Offered Ordinary Shares,par value US$0.0001 per share Offering PriceWe expect that the initial public offering price will be US$6.00 per Ordi
118、nary Share.Ordinary Shares Outstanding Immediately Before This Offering Ordinary Shares Ordinary Shares Outstanding Immediately After This Offering Ordinary Shares(or Ordinary Shares if the underwriters exercise theiroption to purchase additional Ordinary Shares in full).Voting RightsEach Ordinary S
119、hare is entitled to one vote.Use of Proceeds Proposed Nasdaq Trading Symbol and Listing Lock-upOur directors,executive officers,and shareholder who own 5%or more of the outstandingOrdinary Shares intended agreed with the underwriters not to offer for sale,issue,sell,contract to sell,pledge or otherw
120、ise dispose of any of our Ordinary Shares or securitiesconvertible into Ordinary Shares for a period of 6 months commencing on the date of thisprospectus.The Company is also prohibited from conducting offerings during this periodand from re-pricing or changing the terms of existing options and warra
121、nts.See“Underwriting”for additional information.Transfer Agent Risk factorsSee“Risk Factors”for a discussion of risks you should carefully consider before investingin our Ordinary Shares.102023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/ed
122、gar/data/1959304/0000003/f1a.htm16/101 RISK FACTORS An investment in our Ordinary Shares involves a high degree of risk.Before deciding whether to invest in our Ordinary Shares,youshould consider carefully the risks described below,together with all of the other information set forth in t
123、his prospectus,including thesection titled“Managements Discussion and Analysis of Financial Condition and Results of Operations”and our consolidated financialstatements and related notes.If any of these risks actually occurs,our business,financial condition,results of operations or cash flowcould be
124、 materially and adversely affected,which could cause the trading price of our Ordinary Shares to decline,resulting in a loss of allor part of your investment.The risks described below and in the documents referenced above are not the only ones that we face.Additional risks not presently known to us
125、or that we currently deem immaterial may also affect our business.You should only considerinvesting in our Ordinary Shares if you can bear the risk of loss of your entire investment.Risks Related to Our Business We have grown rapidly in recent years and have limited experience operating at our curre
126、nt scale of operations.If we are unableto manage our growth effectively,our brand,company culture and financial results may suffer.We have grown rapidly in the past year and our recent growth rates and financial results should not be considered indicators of our futureperformance.In order to effecti
127、vely manage and leverage our growth,we must continue to expand our sales and marketing,focus oninnovative product and website development,and upgrade our management information systems.Our continued growth has in the past andmay in the future strain our existing resources and we may experience ongoi
128、ng operational difficulties in managing our operations innumerous jurisdictions,including difficulties in recruiting,training and managing a dispersed and growing employee base.Failure toexpand and maintain our company culture through growth may harm our future success,including our ability to retai
129、n and recruitpersonnel and to effectively focus on and pursue our corporate goals.The management consulting services industry is evolving rapidly and may not evolve as we expect.Even if our net sales continue to grow,our net sales growth rate may decline in the future due to a variety of factors,inc
130、luding macroeconomic factors,changes in supply andsupply chain,changes in consumer preferences,increased competition and the maturation of our business.Accordingly,you should notrely on our net sales growth rates for any prior period as an indicator of our future performance.Our overall growth in ne
131、t sales willdepend on many factors,including our ability to:1)Price our products and services effectively so that we can attract new customers and expand our relationships with existing customers.2)Accurately forecast our net sales and plan our operating expenses.3)Compete successfully with other co
132、mpanies that are or may be entering our competitive market in the future and respond todevelopments in those competitors,such as pricing changes and the introduction of new products and services.4)Complying with existing and new laws and regulations that apply to our business.5)Successfully expandin
133、g into existing markets and entering new markets,including new geographic areas and categories.6)The successful introduction of new products and enhancements to our products and services and their features,including in response tonew trends or competitive dynamics or customer needs or preferences.7)
134、Successfully identifying and acquiring or investing in businesses,products or technologies that we believe will complement or expandour business.8)Avoiding disruptions or interruptions in the distribution of our products and services.9)Providing quality support to our customers that meets their need
135、s.10)Hiring,integrating and retaining talented sales,customer service and other personnel.11)Effectively managing the growth of our business,personnel and operations,including the opening of new showrooms.12)Effectively managing the costs associated with our business and operations.13)Maintaining an
136、d enhancing our reputation and brand value.112023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm17/101 Because of our limited history of operating our business at our current scale,it is difficult
137、to assess our current operations and futureprospects,including our ability to plan for and model future growth.Our limited operating experience at this scale,combined with therapidly evolving nature of the markets in which we sell our products and services,the significant uncertainty about how these
138、 markets willdevelop and other economic factors beyond our control,reduces our ability to accurately forecast quarterly or annual revenues.Failure toeffectively manage our future growth could adversely affect our business,financial condition and results of operations.We have limited sources of worki
139、ng capital and will need substantial additional financing.The working capital required to implement our business strategy and R&D efforts will most likely be provided by funds obtained throughofferings of our equity,debt,debt-linked securities,and/or equity-linked securities,and revenues generated b
140、y us.No assurance can begiven that we will have revenues sufficient to sustain our operations or that we would be able to obtain equity/debt financing in the currenteconomic environment.If we do not have sufficient working capital and are unable to generate sufficient revenues or raise additionalfun
141、ds,we may delay the completion of or significantly reduce the scope of our current business plan;delay some of our development andclinical or marketing efforts;postpone the hiring of new personnel;or,under certain dire financial circumstances,substantially curtail orcease our operations.We may need
142、to engage in capital-raising transactions in the near future.Such financing transactions may well cause substantial dilution toour shareholders and could involve the issuance of securities with rights senior to the outstanding shares.Our ability to completeadditional financings is dependent on,among
143、 other things,the state of the capital markets at the time of any proposed offering,marketreception of the Company and the likelihood of the success of its business model and offering terms.There is no assurance that we will beable to obtain any such additional capital through asset sales,equity or
144、debt financing,or any combination thereof,on satisfactory terms orat all.Additionally,no assurance can be given that any such financing,if obtained,will be adequate to meet our capital needs and tosupport our operations.If we do not obtain adequate capital on a timely basis and on satisfactory terms
145、,our revenues and operations andthe value of our Ordinary Shares and Ordinary Share equivalents would be materially negatively impacted and we may cease ouroperations.We are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business,financ
146、ial condition and results of operations.Our success is,to a certain extent,attributable to the management,sales and marketing,and research and development expertise of keypersonnel.We are dependent upon the services of Chunjie Guan,our President,Linfang Liu,our Chairman of the Board,for the continue
147、dgrowth and operation of our Company,due to their industry experience,technical expertise,as well as their personal and business contactsin the PRC.Additionally,Ya Wang,Yahuan Song,Xinyu Jiang,Linfang Liu,performs key functions in the operation of our business.Wemay not be able to retain Chunjie Gua
148、n and Ya Wang,Yahuan Song,Xinyu Jiang,Linfang Liu for any given period of time.Although wehave no reason to believe that Chunjie Guan and Ya Wang,Yahuan Song,Xinyu Jiang,Linfang Liu will discontinue their services with usor Bozhi Holdings,the interruption or loss of his services would adversely affe
149、ct our ability to effectively run our business and pursue ourbusiness strategy as well as our results of operations.We do not carry key man life insurance for any of our key personnel,nor do weforesee purchasing such insurance to protect against the loss of key personnel.If we fail to maintain an ef
150、fective quality control system,our business could be materially and adversely affected.We place great emphasis on product quality and adhere to stringent quality control measures and have obtained quality controlcertifications for our products.To meet our customers requirements and expectations for
151、the quality and safety of our products,we haveadopted a stringent quality control system to ensure that every step of the production process is strictly monitored and managed.Failure tomaintain an effective quality control system or to obtain or renew our quality standards certifications may result
152、in a decrease in demandfor our products or cancellation or loss of purchase orders from our customers.Moreover,our reputation could be impaired.As a result,our business and results of operations could be materially and adversely affected.122023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/00019
153、5930422000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm18/101 The global coronavirus COVID-19 pandemic has caused significant disruptions in our business,which may continue to materiallyand adversely affect our results of operations and financial condition.On M
154、arch 11,2020,the World Health Organization declared the COVID-19 outbreak a global pandemic.Many businesses and socialactivities in China and other countries and regions were severely disrupted in 2020,including those of our suppliers,customers andemployees.This pandemic has also caused market panic
155、s,which materially and negatively affected the global financial markets,such asthe plunge of global stocks on major stock exchanges in March 2020.Such disruption and slowdown of the worlds economy in 2020 andbeyond had,and may continue to have,a material adverse effect on our results of operations a
156、nd financial condition.We and ourcustomers experienced significant business disruptions and suspension of operations due to quarantine measures to contain the spread ofthe pandemic,which caused shortage in the supply of raw materials,reduced our production capacity,increased the likelihood of defaul
157、tfrom our customers and delayed our product delivery.All of these had resulted in a material adverse effect on our results of operations andfinancial condition in the fiscal year 2021.The extent to which the COVID-19 pandemic may impact our business,operations andfinancial results will depend on num
158、erous evolving factors that the Company cannot accurately predict at this time,including theuncertainty on the potential resurgence of the COVID-19 cases in China,the continual spread of the virus globally,and the instability oflocal and global government policies and restrictions.We are closely mon
159、itoring the development of the COVID-19 pandemic andcontinuously evaluating any further potential impact on our business,results of operations and financial condition.If the pandemic persistsor escalates,we may be subject to further negative impact on our business operations and financial condition.
160、A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and ourfinancial condition.Although the Chinese economy expanded well in the last two decades,the rapid growth of the Chinese economy has slowed down since2012,and there is considerable
161、 uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by thePeoples Bank of China and financial authorities of some of the worlds leading economies,including the United States and China.Therehave been concerns over unrest and terrorist threats in the Middle
162、 East,Europe and Africa,which have resulted in volatility in oil andother markets.There have also been concerns on the relationship among China and other Asian countries,which may result in or intensifypotential conflicts in relation to territorial disputes.Economic conditions in China are sensitive
163、 to global economic conditions,as well aschanges in domestic economic and political policies and the expected or perceived overall economic growth rate in China.Any severe orprolonged slowdown in the global or Chinese economy may materially and adversely affect our business,results of operations and
164、financial condition.Risks Related to Doing Business in China The Chinese government exerts substantial influence over the manner in which we must conduct our business activities.We arecurrently not required to obtain approval from Chinese authorities to list on U.S exchanges,however,if our subsidiar
165、ies or theholding company were required to obtain approval in the future and were denied permission from Chinese authorities to list onU.S.exchanges,we will not be able to continue listing on U.S.exchange,which would materially affect the interest of the investors.Because of our corporate structure
166、as a United Kingdom holding company with operations conducted by our PRC subsidiaries,it involvesunique risks to investors.Furthermore,Chinese regulatory authorities could change the rules and regulations regarding foreign ownershipin the industry in which the company operates,which would likely res
167、ult in a material change in our operations and/or a material change inthe value of the securities we are registering for sale,including that it could cause the value of such securities to significantly decline orbecome worthless.The Chinese government has exercised and continues to exercise substant
168、ial control over virtually every sector of theChinese economy through regulation and state ownership.Under the current government leadership,the government of the PRC has beenpursuing reform policies which have adversely affected China-based operating companies whose securities are listed in the Uni
169、ted States,with significant policies changes being made from time to time without notice.There are substantial uncertainties regarding theinterpretation and application of PRC laws and regulations,including,but not limited to,the laws and regulations governing our business,or the enforcement and per
170、formance of our contractual arrangements with borrowers in the event of the imposition of statutory liens,death,bankruptcy or criminal proceedings.Our ability to operate in China may be harmed by changes in its laws and regulations,including those relating to taxation,environmental regulations,land
171、use rights,property and other matters.The central or localgovernments of these jurisdictions may impose new,stricter regulations or interpretations of existing regulations that would requireadditional expenditures and efforts on our part to ensure our compliance with such regulations or interpretati
172、ons.Accordingly,governmentactions in the future,including any decision not to continue to support recent economic reforms and to return to a more centrally plannedeconomy or regional or local variations in the implementation of economic policies,could have a significant effect on economicconditions
173、in China or particular regions thereof,and could require us to divest ourselves of any interest we then hold in Chineseproperties.132023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm19/101 Given r
174、ecent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that areconducted overseas and/or foreign investment in China-based issuers,any such action could significantly limit or completely hinder ourability to offer or continue to offer secur
175、ities to investors and cause the value of such securities to significantly decline or becomeworthless.Recently,the General Office of the Central Committee of the Communist Party of China and the General Office of the State Counciljointly issued the Opinions on Severely Cracking Down on Illegal Secur
176、ities Activities According to Law,or the Opinions,which wasmade available to the public on July 6,2021.The Opinions emphasized the need to strengthen the administration over illegal securitiesactivities,and the need to strengthen the supervision over overseas listings by Chinese companies.Effective
177、measures,such as promotingthe construction of relevant regulatory systems,will be taken to deal with the risks and incidents of China-concept overseas listedcompanies.As of the date of this prospectus,we have not received any inquiry,notice,warning,or sanctions from PRC governmentauthorities in conn
178、ection with the Opinions.On June 10,2021,the Standing Committee of the National Peoples Congress of China,or the SCNPC,promulgated the PRC DataSecurity Law,which took effect in September 2021.The PRC Data Security Law imposes data security and privacy obligations on entitiesand individuals carrying
179、out data activities,and introduces a data classification and hierarchical protection system based on the importanceof data in economic and social development,and the degree of harm it will cause to national security,public interests,or legitimate rightsand interests of individuals or organizations w
180、hen such data is tampered with,destroyed,leaked,illegally acquired or used.The PRC DataSecurity Law also provides for a national security review procedure for data activities that may affect national security and imposes exportrestrictions on certain data an information.In early July 2021,regulatory
181、 authorities in China launched cybersecurity investigations with regard to several China-based companiesthat are listed in the United States.The Chinese cybersecurity regulator announced on July 2 that it had begun an investigation of DidiGlobal Inc.(NYSE:DIDI)and two days later ordered that the com
182、panys app be removed from smartphone app stores.On July 5,2021,the Chinese cybersecurity regulator launched the same investigation on two other Internet platforms,Chinas Full Truck Alliance of FullTruck Alliance Co.Ltd.(NYSE:YMM)and Boss of KANZHUN LIMITED(Nasdaq:BZ).On July 24,2021,the General Offi
183、ce of theCommunist Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for FurtherEasing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education,pursuant towhich foreign investment in such fir
184、ms via mergers and acquisitions,franchise development,and variable interest entities are banned fromthis sector.On August 17,2021,the State Council promulgated the Regulations on the Protection of the Security of Critical InformationInfrastructure,or the Regulations,which took effect on September 1,
185、2021.The Regulations supplement and specify the provisions on thesecurity of critical information infrastructure as stated in the Cybersecurity Review Measures.The Regulations provide,among others,thatprotection department of certain industry or sector shall notify the operator of the critical infor
186、mation infrastructure in time after theidentification of certain critical information infrastructure.142023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm20/101 On August 20,2021,the SCNPC promulga
187、ted the Personal Information Protection Law of the PRC,or the Personal InformationProtection Law,which took effect in November 2021.As the first systematic and comprehensive law specifically for the protection ofpersonal information in the PRC,the Personal Information Protection Law provides,among o
188、thers,that(i)an individuals consent shall beobtained to use sensitive personal information,such as biometric characteristics and individual location tracking,(ii)personal informationoperators using sensitive personal information shall notify individuals of the necessity of such use and impact on the
189、 individuals rights,and(iii)where personal information operators reject an individuals request to exercise his or her rights,the individual may file a lawsuitwith a Peoples Court.As such,the Companys business segments may be subject to various government and regulatory interference in the provinces
190、in whichthey operate.The Company could be subject to regulation by various political and regulatory entities,including various local andmunicipal agencies and government sub-divisions.The Company may incur increased costs necessary to comply with existing and newlyadopted laws and regulations or pen
191、alties for any failure to comply.Additionally,the governmental and regulatory interference couldsignificantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securitiesto significantly decline or be worthless.Furthermore,it is
192、uncertain when and whether the Company will be required to obtain permission from the PRC government to list onU.S.exchanges in the future,and even when such permission is obtained,whether it will be denied or rescinded.Although the Company iscurrently not required to obtain permission from any of t
193、he PRC federal or local government to obtain such permission and has notreceived any denial to list on the U.S.exchange,our operations could be adversely affected,directly or indirectly,by existing or futurelaws and regulations relating to its business or industry.On December 24,2021,the CSRC,togeth
194、er with other relevant government authorities in China issued the Provisions of the State Councilon the Administration of Overseas Securities Offering and Listing by Domestic Companies(Draft for Comments),and the Measures forthe Filing of Overseas Securities Offering and Listing by Domestic Companie
195、s(Draft for Comments)(“Draft Overseas ListingRegulations”).The Draft Overseas Listing Regulations requires that a PRC domestic enterprise seeking to issue and list its shares overseas(“Overseas Issuance and Listing”)shall complete the filing procedures of and submit the relevant information to CSRC.
196、The OverseasIssuance and Listing includes direct and indirect issuance and listing.Where an enterprise whose principal business activities areconducted in PRC seeks to issue and list its shares in the name of an overseas enterprise(“Overseas Issuer”)on the basis of the equity,assets,income or other
197、similar rights and interests of the relevant PRC domestic enterprise,such activities shall be deemed an indirectoverseas issuance and listing(“Indirect Overseas Issuance and Listing”)under the Draft Overseas Listing Regulations.Therefore,theproposed listing would be deemed an Indirect Overseas Issua
198、nce and Listing under the Draft Overseas Listing Regulations.As such,theCompany would be required to complete the filing procedures of and submit the relevant information to CSRC after the Draft OverseasListing Regulations become effective.In addition,on December 28,2021,the CAC,the National Develop
199、ment and Reform Commission(“NDRC”),and several otheradministrations jointly issued the revised Measures for Cybersecurity Review,or the Revised Review Measures,which became effectiveand has replaced the existing Measures for Cybersecurity Review on February 15,2022.According to the Revised Review Me
200、asures,if an“online platform operator”that is in possession of personal data of more than one million users intends to list in a foreign country,it mustapply for a cybersecurity review.Based on a set of Q&A published on the official website of the State Cipher Code Administration inconnection with t
201、he issuance of the Revised Review Measures,an official of the said administration indicated that an online platformoperator should apply for a cybersecurity review prior to the submission of its listing application with non-PRC securities regulators.Given the recency of the issuance of the Revised R
202、eview Measures and their pending effectiveness,there is a general lack of guidance andsubstantial uncertainties exist with respect to their interpretation and implementation.For example,it is unclear whether the requirement ofcybersecurity review applies to follow-on offerings by an“online platform
203、operator”that is in possession of personal data of more thanone million users where the offshore holding company of such operator is already listed overseas.Furthermore,the CAC released the draftof the Regulations on Network Data Security Management in November 2021 for public consultation,which amo
204、ng other things,stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security serviceprovider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 ofthe f
205、ollowing year.If the draft Regulations on Network Data Security Management are enacted in the current form,we,as an overseaslisted company,will be required to carry out an annual data security review and comply with the relevant reporting obligations.152023/2/9https:/www.sec.gov/Archives/edgar/data/
206、1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm21/101 As of the date of this prospectus,none of our PRC subsidiaries operations involve storing of personal information of PRC individualclients.However,given the above uncertainties,it is unc
207、lear how the Revised Review Measures and the final draft Regulations onNetwork Data Security Management will affect us.We have been closely monitoring the development in the regulatory landscape inChina,particularly regarding the requirement of approvals,including on a retrospective basis,from the C
208、SRC,the CAC or other PRCauthorities with respect to this offering,as well as regarding any annual data security review or other procedures that may be imposed onus.If any approval,review or other procedure is in fact required,we are not able to guarantee that we will obtain such approval orcomplete
209、such review or other procedure timely or at all.For any approval that we may be able to obtain,it could nevertheless be revokedand the terms of its issuance may impose restrictions on our operations and offerings relating to our securities.Changes in Chinas economic,political or social conditions or
210、 government policies could have a material adverse effect on ourbusiness and results of operations.Substantially all of our operations are located in China.Accordingly,our business,prospects,financial condition,and results of operationsmay be influenced significantly by political,economic,and social
211、 conditions in China generally and by continued economic growth inChina as a whole.The Chinese economy differs from the economies of most developed countries in many respects,including the amount of governmentinvolvement,level of development,growth rate,control of the foreign exchange,and allocation
212、 of resources.Although the Chinesegovernment has implemented measures emphasizing the utilization of market forces for economic reform,the reduction of state ownershipof productive assets,and the establishment of improved corporate governance in business enterprises,a substantial portion of producti
213、veassets in China is still owned by the government.In addition,the Chinese government continues to play a significant role in regulatingindustry development by imposing industrial policies.The Chinese government also exercises significant control over Chinas economicgrowth through allocating resourc
214、es,controlling payment of foreign currency-denominated obligations,setting monetary policy,andproviding preferential treatment to particular industries or companies.While the Chinese economy has experienced significant growth over the past decades,growth has been uneven,both geographically andamong
215、various sectors of the economy.The Chinese government has implemented various measures to encourage economic growth andguide the allocation of resources.Some of these measures may benefit the overall Chinese economy but may harm us.For example,ourfinancial condition and results of operations may be
216、adversely affected by government control over capital investments or changes in taxregulations.In addition,in the past,the Chinese government has implemented certain measures,including interest rate increases,to controlthe pace of economic growth.These measures may cause decreased economic activity
217、in China,and since 2012,Chinas economic growthhas slowed down.Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materiallyand adversely affect our business and results of operations.162023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/000195930
218、422000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm22/101 We may also decide to finance our PRC subsidiaries using capital contributions.The Ministry of Commerce(“MOC”)or its localcounterpart must approve these capital contributions.On March 30,2015,the State A
219、dministration of Foreign Exchange,or SAFE,promulgated Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding the Settlementof Foreign Exchange Capital of Foreign-invested Enterprises,or Circular 19,which expands a pilot reform of the administration of
220、 thesettlement of the foreign exchange capitals of foreign-invested enterprises nationwide.Circular 19 came into force and replaced previousCircular 142 and Circular 36 on June 1,2015.On June 9,2016,SAFE promulgated the Circular of the State Administration of ForeignExchange on Reforming and Regulat
221、ing Policies on the Control over Foreign Exchange Settlement of Capital Accounts,or Circular 16,tofurther expand and strengthen such reform.Under Circular 19 and Circular 16,foreign-invested enterprises in the PRC are allowed to usetheir foreign exchange funds under capital accounts and RMB funds fr
222、om exchange settlement for expenditure under current accountswithin its business scope or expenditure under capital accounts permitted by laws and regulations,except that such funds shall not be usedfor(i)expenditure beyond the enterprises business scope or expenditure prohibited by laws and regulat
223、ions;(ii)investments in securitiesor other investments than principal-secured products issued by banks;(iii)granting loans to non-affiliated enterprises,except where it isexpressly permitted in the business license;and(iv)construction or purchase of real estate for purposes other than self-use(excep
224、t for realestate enterprises).In addition,SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currencyregistered capital of a foreign-invested company.The use of such RMB capital may not be altered without SAFEs approval,and suchRMB capital may not,in any ca
225、se,be used to repay RMB loans if the proceeds of such loans have not been used.Violations of thesecirculars could result in severe monetary or other penalties.These circulars may significantly limit our ability to use RMB converted fromthe cash provided by our offshore financing activities to fund t
226、he establishment of new entities in China by our PRC subsidiaries,to investin or acquire any other PRC companies through our PRC subsidiaries.In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holdingcompanies,we cannot assur
227、e you that we will be able to complete the necessary government registrations or obtain the necessarygovernment approvals on a timely basis,if at all,with respect to future loans to our PRC subsidiaries or future capital contributions by usto our PRC subsidiaries.If we fail to complete such registra
228、tions or obtain such approvals,our ability to use the proceeds we expect toreceive from our initial public offering to capitalize or otherwise fund our PRC operations may be negatively affected,which couldmaterially and adversely affect our liquidity and our ability to fund and expand our business.T
229、he PRC government may impose restrictions on our ability to transfer cash out of China and to U.S.investors.The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and,in certain cases,the remittance ofcurrency out of China.To the extent that our income is recei
230、ved in Renminbi,shortages in foreign currencies may restrict our ability to paydividends or other payments,or otherwise satisfy our foreign currency denominated obligations,if any.Under existing PRC foreignexchange regulations,payments of current account items,including profit distributions,interest
231、 payments and expenditures from trade-related transactions,can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange,orSAFE,as long as certain procedural requirements are met.Approval from appropriate government authorities is required if Renminbi isc
232、onverted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreigncurrencies.The PRC government may,at its discretion,impose restrictions on access to foreign currencies for current account transactions.To address persistent capital
233、 outflows and the RMBs depreciation against the U.S.dollar in the fourth quarter of 2016,the Peoples Bankof China and the SAFE implemented a series of capital control measures in the subsequent months,including stricter vetting proceduresfor China-based companies to remit foreign currency for overse
234、as acquisitions,dividend payments and shareholder loan repayments.ThePRC government may continue to strengthen its capital controls and our PRC subsidiaries dividends and other distributions may besubject to tightened scrutiny in the future.The PRC government also imposes controls on the conversion
235、of RMB into foreign currenciesand the remittance of currencies out of the PRC.Therefore,we may experience difficulties in completing the administrative proceduresnecessary to obtain and remit foreign currency for the payment of dividends from our profits,if any.Furthermore,there can be noassurance t
236、hat the PRC government will not intervene or impose restrictions on our ability to transfer or distribute cash within ourorganization or to foreign investors,which could result in an inability or prohibition on making transfers or distributions outside of Chinaand adversely affect our business as we
237、ll as your investment.172023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm23/101 As of the date of this prospectus,we are not aware of other material restrictions and limitations on our ability to
238、 distribute earnings fromour businesses,including our subsidiaries,to the parent company and U.S.investors or our ability to settle amounts owed,or on foreignexchange or our ability to transfer cash between entities within our group,across borders,or to U.S.investors.PRC laws and regulations governi
239、ng our current business operations are sometimes vague and uncertain and any changes in suchlaws and regulations may impair our ability to operate profitably.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including,but not limited to,the
240、laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certaincircumstances.The laws and regulations are sometimes vague and may be subject to future changes,and their official interpretation andenforcement may involve substantial uncert
241、ainty.The effectiveness and interpretation of newly enacted laws or regulations,includingamendments to existing laws and regulations,may be delayed,and our business may be affected if we rely on laws and regulations whichare subsequently adopted or interpreted in a manner different from our understa
242、nding of these laws and regulations.New laws andregulations that affect existing and proposed future businesses may also be applied retroactively.We cannot predict what effect theinterpretation of existing or new PRC laws or regulations may have on our business.Substantial uncertainties exist with r
243、espect to the enactment timetable and final content of draft China Foreign Investment Lawand how it may impact the viability of our current corporate structure,corporate governance and business operations.The MOFCOM published a discussion draft of the proposed Foreign Investment Law in January 2015(
244、the“Draft FIL”).The Draft FILembodies an expected Chinese regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing internationalpractice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.Among other
245、 things,the Draft FIL expands the definition of foreign investment and introduces the principle of“actual control”indetermining whether a company is considered a foreign-invested enterprise(“FIE”).The Draft FIL specifically provides that entitiesestablished in China but“controlled”by foreign investo
246、rs will be treated as FIEs,whereas an entity set up in a foreign jurisdiction wouldnonetheless be,upon market entry clearance,treated as a Chinese domestic investor provided that the entity is“controlled”by Chineseentities and/or citizens.Once an entity is determined to be an FIE,it will be subject
247、to the foreign investment restrictions or prohibitionsset forth in a Negative List to be separately issued by the State Council later.Unless the underlying business of the FIE falls within theNegative List,which calls for market entry clearance,prior approval from the government authorities as manda
248、ted by the existing foreigninvestment legal regime would no longer be required for establishment of the FIE.On December 27,2021,the NDRC and MOFCOM,jointly issued the Special Administrative Measures for Entry of Foreign Investment(Negative List)(2021 Version),or the Negative List,which became effect
249、ive and replaced the previous version on January 1,2022.Pursuant to the Negative List,if a PRC company,which engages in any business where foreign investment is prohibited under theNegative List,or prohibited businesses,seeks an overseas offering or listing,it must obtain the approval from competent
250、 governmentalauthorities.Based on a set of Q&A published on the NDRCs official website,a NDRC official indicated that after a PRC companysubmits its application for overseas listing to the CSRC and where matters relating to prohibited businesses under the Negative List areimplicated,the CSRC will co
251、nsult the regulatory authorities having jurisdiction over the relevant industries and fields.182023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm24/101 Because the Overseas Listing Rules are curre
252、ntly in draft form and given the novelty of the Negative List,there remain substantialuncertainties as to whether and what requirements,including filing requirements,will be imposed on a PRC company with respect to itslisting and offerings overseas as well as with the interpretation and implementati
253、on of existing and future regulations in this regard.Forexample,it is unclear as to whether the approval requirement under the Negative List will apply to follow-on offerings by PRC companiesengaged in prohibited businesses and whose offshore holding company is listed overseas.If such approval is in
254、 fact required and given theNDRCs indication of CSRCs involvement in the approval process,there is also a lack of clarity on the application procedure,requirement and timeline which may not be resolved until the Overseas Listing Rules,which provide for the filing procedures of theoverseas offering a
255、nd listing of a PRC company with the CSRC,is enacted.If the Overseas Listing Rules are enacted in the current formbefore the completion of this offering,we will be required to make a filing with the CSRC in connection with this offering within threebusiness days after its completion.If the approval
256、requirement under the Negative List applies to follow-on offerings by PRC companieswhose offshore holding company is listed overseas,we may be required to obtain an approval for this offering or we may be required torelinquish our licenses pertaining to prohibited businesses.If we relinquish or are
257、required to relinquish these licenses,while we do notexpect our business operation to be materially adversely affected,we are uncertain whether or when the relevant procedures will becompleted.There are uncertainties under the PRC laws relating to the procedures for U.S.regulators to investigate and
258、 collect evidence fromcompanies located in the PRC.According to Article 177 of the newly amended PRC Securities Law which became effective in March 2020(the“Article 177”),thesecurities regulatory authority of the PRC State Council may collaborate with securities regulatory authorities of other count
259、ries or regionsin order to monitor and oversee cross border securities activities.Article 177 further provides that overseas securities regulatory authoritiesare not allowed to carry out investigation and evidence collection directly within the territory of the PRC,and that any Chinese entities andi
260、ndividuals are not allowed to provide documents or materials related to securities business activities to overseas agencies without priorconsent of the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council.Our PRC counsel,has advised us of th
261、eir understanding that(i)the Article 177 is applicable in the limited circumstances related to directinvestigation or evidence collection conducted by overseas authorities within the territory of the PRC(in such case,the foregoing activitiesare required to be conducted through collaboration with or
262、by obtaining prior consent of competent Chinese authorities);(ii)the Article177 does not limit or prohibit the Company,as a company duly incorporated in United Kingdom and to be listed on Nasdaq,fromproviding the required documents or information to Nasdaq or the SEC pursuant to applicable Listing R
263、ules and U.S.securities laws;and(iii)as the Article 177 is relatively new and there is no implementing rules or regulations which have been published regarding applicationof the Article 177,it remains unclear how the law will be interpreted,implemented or applied by the Chinese Securities Regulatory
264、Commission or other relevant government authorities.As of the date hereof,we are not aware of any implementing rules or regulationswhich have been published regarding application of Article 177.However,we cannot assure you that relevant PRC government agencies,including the securities regulatory aut
265、hority of the PRC State Council,would reach the same conclusion as we do.As such,there areuncertainties as to the procedures and time requirement for the U.S.regulators to bring about investigations and evidence collection withinthe territory of the PRC.Our principal business operation is conducted
266、in the PRC.In the event that the U.S.regulators carry out investigation on us and there is aneed to conduct investigation or collect evidence within the territory of the PRC,the U.S.regulators may not be able to carry out suchinvestigation or evidence collection directly in the PRC under the PRC law
267、s.The U.S.regulators may consider cross-border cooperationwith securities regulatory authority of the PRC by way of judicial assistance,diplomatic channels or regulatory cooperation mechanismestablished with the securities regulatory authority of the PRC.We rely on dividends,loans and other distribu
268、tions on equity paid by our PRC subsidiaries to fund any cash and financingrequirements we may have.Any limitation on the ability of our PRC subsidiaries to make loans or payments to us could have amaterial adverse effect on our ability to conduct our business.We are a holding company and rely on di
269、vidends,loans and other distributions on equity paid by our PRC subsidiaries for our cash andfinancing requirements,including the funds necessary to pay dividends and other cash distributions to our shareholders and service anydebt or pay any expense we may incur.In the event that our PRC subsidiari
270、es incur debt on their own behalf in the future,the instrumentsgoverning the debt may restrict their ability to pay dividends or make other distributions to us.In addition,the PRC tax authorities mayrequire our PRC subsidiaries to adjust their taxable income in a manner that would materially and adv
271、ersely affect their ability to paydividends and other distributions to us.192023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htm25/101 Under PRC laws and regulations,our PRC subsidiaries,as wholly f
272、oreign-owned enterprises in China,may pay dividends only out of theirrespective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations.In addition,a whollyforeign-owned enterprise is required to set aside at least 10%of its accumulated after-tax profi
273、ts each year,if any,to fund certain statutoryreserve funds until the aggregate amount of such funds reaches 50%of its registered capital.At its discretion,a wholly foreign-ownedenterprise may allocate a portion of its after-tax profits based on PRC accounting standards to staff welfare and bonus fun
274、ds.These reservefunds and staff welfare and bonus funds are not distributable as cash dividends.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
275、without prior approval from the State Administration of ForeignExchange,or the SAFE,by complying with certain procedural requirements.Therefore,our PRC subsidiaries are able to pay dividends inforeign currencies to us without prior approval from SAFE,subject to the condition that the remittance of s
276、uch dividends outside of thePRC complies with certain procedures under PRC foreign exchange regulations,such as the overseas investment registrations by ourshareholders or the ultimate shareholders of our corporate shareholders who are PRC residents.Approval from,or registration with,appropriate gov
277、ernment authorities is,however,required where the RMB is to be converted into foreign currency and remitted out ofChina to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at itsdiscretion restrict access in the future to foreign curre
278、ncies for current account transactions.Current PRC regulations permit our PRCsubsidiaries to pay dividends to the Company only out of their accumulated profits,if any,determined in accordance with Chineseaccounting standards and regulations.In response to the persistent capital outflow and the Renmi
279、nbis depreciation against the U.S.dollarin the fourth quarter of 2016,the Peoples Bank of China and the State Administration of Foreign Exchange,or SAFE,have implementeda series of capital control measures,including stricter vetting procedures for China-based companies to remit foreign currency for
280、overseasacquisitions,dividend payments,and shareholder loan repayments.The PRC government may continue to strengthen its capital controls,and our PRC subsidiaries dividends and other distributions may be subjected to tighter scrutiny in the future.Any limitation on the abilityof our PRC subsidiaries
281、 to pay dividends or make other distributions to us could materially and adversely limit our ability to grow,makeinvestments or acquisitions that could be beneficial to our business,pay dividends,or otherwise fund and conduct our business.Fluctuations in exchange rates could have a material adverse
282、effect on our results of operations and the price of our ordinaryshares.Substantially,our revenues and expenditures are denominated in RMB,whereas our reporting currency is the U.S.dollar.As a result,fluctuations in the exchange rate between the U.S.dollar and RMB will affect the relative purchasing
283、 power in RMB terms of our U.S.dollar assets and the proceeds from our initial public offering.Our reporting currency is the U.S.dollar,while the functional currency forour PRC subsidiaries is RMB.Gains and losses from the re-measurement of assets and liabilities receivable or payable in RMB areincl
284、uded in our consolidated statements of operations.The re-measurement has caused the U.S.dollar value of our results of operations tovary with exchange rate fluctuations,and the U.S.dollar value of our results of operations will continue to vary with exchange ratefluctuations.A fluctuation in the val
285、ue of RMB relative to the U.S.dollar could reduce our profits from operations and the translated valueof our net assets when reported in U.S.dollars in our financial statements.This change in value could negatively impact our business,financial condition,or results of operations as reported in U.S.d
286、ollars.In the event that we decide to convert our RMB into U.S.dollars tomake payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S.dollar against the RMB willharm the U.S.dollar amount available to us.In addition,fluctuations in currencies relative to
287、the periods in which the earnings aregenerated may make it more difficult to perform period-to-period comparisons of our reported results of operations.202023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Archives/edgar/data/1959304/0000003
288、/f1a.htm26/101 The value of the RMB against the U.S.dollar and other currencies is affected by,among other things,changes in Chinas political andeconomic conditions and Chinas foreign exchange policies.On July 21,2005,the PRC government changed its decades-old policy ofpegging the value of the RMB t
289、o the U.S.dollar,and the RMB appreciated more than 20%against the U.S.dollar over the following threeyears.However,the PBOC regularly intervenes in the foreign exchange market to limit fluctuations in RMB exchange rates and achievepolicy goals.Between July 2008 and June 2010,the exchange rate betwee
290、n the RMB and the U.S.dollar had been stable and traded withina narrow range.Since June 2010,the RMB has fluctuated against the U.S.dollar,at times significantly and unpredictably.Since October 1,2016,Renminbi has joined the International Monetary Fund(IMF)s basket of currencies that make up the Spe
291、cial Drawing Right(SDR)and the U.S.dollar,the Euro,the Japanese yen,and the British pound.In the fourth quarter of 2016,the RMB has depreciated significantlyin the backdrop of a surging U.S.dollar and persistent capital outflows of China.With the development of the foreign exchange marketand progres
292、s towards interest rate liberalization and Renminbi internationalization,the PRC government may announce further changes tothe exchange rate system.We cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S.dollar in the future.It is difficult to
293、predict how market forces or PRC or U.S.government policy may impact the exchange rate betweenthe Renminbi and the U.S.dollar in the future.There remains significant international pressure on the PRC government to adopt a flexible currency policy.Any significant appreciationor depreciation of the RM
294、B may materially and adversely affect our revenues,earnings and financial position,and the value of,and anydividends payable on,our ordinary shares in U.S.dollars.For example,to the extent that we need to convert U.S.dollars we receive fromour initial public offering into RMB to pay our operating ex
295、penses,appreciation of the RMB against the U.S.dollar would adversely affectthe RMB amount we would receive from the conversion.Conversely,a significant depreciation of the RMB against the U.S.dollar maysignificantly reduce the U.S.dollar equivalent of our earnings,which in turn could adversely affe
296、ct the price of our ordinary shares.Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations.To date,we have not entered intoany hedging transactions to reduce our exposure to foreign currency exchange risk.While we may decide to enter into hedgingtran
297、sactions in the future,the availability and effectiveness of these hedges may be limited.We may not be able to hedge our exposureadequately.In addition,our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability toconvert RMB into foreign currency.As a
298、 result,fluctuations in exchange rates may have a material adverse effect on the price of ourordinary shares.PRC regulation of loans to,and direct investments in,PRC entities by offshore holding companies may delay or prevent us frommaking loans or additional capital contributions to our PRC operati
299、ng subsidiaries and thereby prevent us from funding ourbusiness.As an offshore holding company with PRC subsidiaries,we may transfer funds to our PRC subsidiaries by means of loans or capitalcontributions.Any loans to these PRC subsidiaries,which are foreign-invested enterprises,cannot exceed statut
300、ory limits based on thedifference between the amount of our investments and registered capital in such subsidiaries,and shall be registered with SAFE,or itslocal counterparts.Furthermore,any capital increase contributions we make to our PRC subsidiaries,which are foreign-investedenterprises,shall be
301、 approved by MOFCOM,or its local counterparts.We may not be able to obtain these government registrations orapprovals on a timely basis,if at all.If we fail to receive such registrations or approvals,our ability to provide loans or capital to increasecontributions to our PRC subsidiaries may be nega
302、tively affected,which could adversely affect their liquidity and our ability to fund andexpand their business.PRC regulations relating to the establishment of offshore special purpose vehicles by PRC residents may subject our PRC-residentbeneficial owners or our PRC subsidiaries to liability or pena
303、lties,limit our ability to make capital contributions into our PRCsubsidiaries,limit our PRC subsidiaries ability to distribute profits to us,or otherwise adversely affect our financial position.212023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.gov/Arc
304、hives/edgar/data/1959304/0000003/f1a.htm27/101 Under several regulations promulgated by SAFE,PRC residents and PRC corporate entities are required to register with and obtainapproval from local branches of SAFE or designated qualified foreign exchange banks in mainland China in connection
305、 with their direct orindirect offshore investment activities.In addition,any PRC resident who is a direct or indirect shareholder of an offshore company isrequired to update the previously filed registration with the local branch of SAFE,with respect to any material change involving thatoffshore com
306、pany,such as an increase or decrease in capital,transfer or swap of shares,merger or division.These regulations apply to alldirect and indirect shareholders and beneficial owners of our company who are PRC residents,or PRC-Resident Shareholders,and mayapply to any offshore acquisitions that we make
307、in the future.To the best of our knowledge,as of the date of this prospectus,each of ourprincipal shareholders who is required to make the foreign exchange registration under SAFE Circular 37 had completed such registration.However,we may not at all times be fully aware or informed of the identities
308、 of all the PRC residents holding direct or indirect interests inour company,and we cannot assure you that all of our shareholders and beneficial owners who are PRC residents will comply with theseforeign exchange regulations.If any PRC-Resident Shareholder fails to make the required registration or
309、 update a previously filed registration,our PRC subsidiaries maybe prohibited from distributing their profits and proceeds from any reduction in capital,share transfer or liquidation to us,and we may alsobe prohibited from injecting additional capital into our PRC subsidiaries.Moreover,failure to co
310、mply with the various foreign exchangeregistration requirements described above could result in liability on the related PRC-Resident shareholder or our PRC subsidiaries underthe PRC laws for evasion of applicable foreign exchange restrictions.Governmental control of currency conversion may limit ou
311、r ability to utilize our net revenues effectively and affect the value ofyour investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and,in certain cases,the remittance ofcurrency out of China.We receive substantially all of our net revenues in RMB.Un
312、der our current corporate structure,our company in theUnited Kingdom may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.Under existing PRC foreign exchange regulations,payments of current account items,such as profit distributions and trad
313、e and service-related foreign exchange transactions,can be made in foreign currencies without prior approval from SAFE by complying with certainprocedural requirements.Therefore,our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval fromSAFE,subject to the
314、condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRCforeign exchange regulation,such as the overseas investment registrations by the beneficial owners of our company who are PRCresidents.But approval from or registration with appropriate gover
315、nment authorities is required where RMB is converted into foreigncurrency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.In light of Chinas flood of capital outflows in 2016 due to the weakening RMB,the PRC government has imposed mo
316、re restrictiveforeign exchange policies and stepped up scrutiny of major outbound capital movements.More restrictions and a substantial vettingprocess are put in place by SAFE to regulate cross-border transactions falling under the capital account.The PRC government may also,atits discretion,restric
317、t access in the future to foreign currencies for current account transactions.In the event that the foreign exchangecontrol system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands,we may not be able to paydividends in foreign currencies to our sharehol
318、ders.We must remit the offering proceeds to PRC before they may be used to benefit our business in the PRC,and this process maytake several months.The proceeds of this offering must be sent back to the PRC,and the process for sending such proceeds back to the PRC may take severalmonths after the clo
319、sing of this offering.We may be unable to use these proceeds to grow our business until we receive such proceeds inthe PRC.To remit the offering proceeds to the PRC,we will take the following actions:222023/2/9https:/www.sec.gov/Archives/edgar/data/1959304/0000003/f1a.htmhttps:/www.sec.go
320、v/Archives/edgar/data/1959304/0000003/f1a.htm28/101 First,we will open a special foreign exchange account for capital account transactions.To open this account,we must submit to StateAdministration for Foreign Exchange(“SAFE”)certain application forms,identity documents,transaction docume
321、nts,a form of foreignexchange registration of overseas investments by domestic residents,and foreign exchange registration certificate of the investedcompany.Second,we will remit the offering proceeds into this special foreign exchange account.Third,we will apply for settlement of the foreign exchan
322、ge.To do so,we must submit to SAFE certain application forms,identitydocuments,payment order to a designated person,and a tax certificate.The timing of the process is difficult to estimate because the efficiencies of different SAFE branches can vary materially.Ordinarily,theprocess takes several mon
323、ths to complete but is required by law to be accomplished within 180 days of application.Until theabovementioned approvals,the proceeds of this offering will be maintained in an interest-bearing account maintained by us in the UnitedStates.Some of our shareholders are not in compliance with the PRCs
324、 regulations relating to offshore investment activities by PRCresidents,and as a result,the shareholders may be subject to penalties if we are not able to remediate the non-compliance.In July 2014,the State Administration of Foreign Exchange promulgated the Circular on Issues Concerning Foreign Exch
325、angeAdministration over the Overseas Investment and Financing and Roundtrip Investment by Domestic Residents via Special PurposeVehicles,or“Circular 37”.According to Circular 37,prior registration with the local SAFE branch is required for Chinese residents tocontribute domestic assets or interests
326、to offshore companies,known as SPVs.Circular 37 further requires amendment to a PRC residentsregistration in the event of any significant changes with respect to the SPV,such as an increase or decrease in the capital contributed byPRC individuals,share transfer or exchange,merger,division,or other m
327、aterial event.Further,foreign investment enterprises establishedby way of round-tripping shall complete the relevant foreign exchange registration formalities pursuant to the prevailing foreign exchangecontrol provisions for direct investments by foreign investors,and disclose the relevant informati
328、on such as actual controlling party of theshareholders truthfully.Currently,some of our shareholders have completed Circular 37 Registration and are in compliance.Some of our beneficial owners,whoare PRC residents,have not completed the Circular 37 Registration.All our significant shareholders,direc
329、tors and officers have completedCircular 37 Registration.We have asked our shareholders who are Chinese residents to make the necessary applications and filings asrequired by Circular 37.We attempt to comply,and attempt to ensure that our shareholders who are subject to these rules comply,with there
330、levant requirements.We cannot,however,provide any assurances that all of our and future shareholders who are Chinese residents willcomply with our request to make or obtain any applicable registration or comply with other requirements required by Circular 37 or otherrelated rules.The Chinese residen
331、t shareholders failure to comply with Circular 37 registration may result in restrictions being imposedon part of foreign exchange activities of the offshore special purpose vehicles,including restrictions on its ability to receive registeredcapital as well as additional capital from Chinese residen
332、t shareholders who fail to complete Circular 37 registration;and repatriation ofprofits and dividends derived from special purpose vehicles to China,by the Chinese resident shareholders who fail to complete Circular37 registration,are also illegal.In addition,the failure of the Chinese resident shar
333、eholders to complete Circular 37 registration maysubject each of the shareholders to fines less than RMB50,000.We cannot assure you that each of our Chinese resident shareholders willin the future complete the registration process as required by Circular 37.Failure to make adequate contributions to various employee benefit plans required by PRC regulations may subject us topenalties.232023/2/9http