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1、2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm1/221F-1/A 1 ea172555-f1a4_kepuniholdings.htm AMENDMENT NO.4 TO FORM F-1As filed with the U.S.S
2、ecurities and Exchange Commission on February 21,2023Registration No. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 AMENDMENT NO.4 TO FORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 Kepuni Holdings Inc.(Exact name of registrant as specified in its charte
3、r)Cayman Islands Not Applicable Not Applicable(State or other jurisdiction of incorporation or organization)(Primary Standard Industrial Classification Code Number)(I.R.S.Employer Identification Number)No.318 Yongping Road,Science and Technology Industrial ParkTaizhou City,Jiangsu ProvincePeoples Re
4、public of China,225300+86-52382988888(Address,including zip code,and telephone number,including area code,of registrants principal executive offices)Cogency Global Inc.122 East 42nd Street,18th FloorNew York,NY 10168+1-212-947-7200(Name,address,including zip code,and telephone number,including area
5、code,of agent for service)With a Copy to:William S.Rosenstadt,Esq.Mengyi“Jason”Ye,Esq.Yarona L.Yieh,Esq.Ortoli Rosenstadt LLP 366 Madison Avenue,3rd Floor New York,NY 10017 212-588-0022Benjamin A.TanSichenzia Ross Ference LLP1185 6th Avenue,37th FloorNew York,NY 10036212-930-9700 Approximate date of
6、 commencement of proposed sale to the public:Promptly 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 pursuant to Rule 415 underthe Securities Act of 1933 check the following box.If this
7、Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,please checkthe following box and list the Securities Act registration statement number of the earlier effective registration statement for thesame offering.If this Form is a post-effectiv
8、e amendment filed pursuant to Rule 462(c)under the Securities Act,check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the S
9、ecurities Act,check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 19332023/2/
10、23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm2/221 Emerging growth company If an emerging growth company that prepares its financial statements in
11、accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 7(a)(2)(B)of the Securities Act.The registrant hereby amends this registration state
12、ment on such date or dates as may be necessary to delay its effectivedate until the registrant shall file a further amendment which specifically states that this registration statement shallthereafter become effective in accordance with Section 8(a)of the Securities Act of 1933,as amended,or until t
13、heregistration statement shall become effective on such date as the Securities and Exchange Commission,acting pursuant tosuch Section 8(a),may determine.2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1
14、826202/0003259/ea172555-f1a4_kepuniholdings.htm3/221 The information in this preliminary prospectus is not complete and may be changed.We may not sell the securities until theregistration statement filed with the Securities and Exchange Commission is effective.This preliminary prospectus
15、is not an offerto sell these securities,and we are not soliciting any offer to buy these securities in any jurisdiction where such offer or sale is notpermitted.SUBJECT TO COMPLETIONPRELIMINARY PROSPECTUS DATED FEBRUARY 21,2023 Kepuni Holdings Inc.4,200,000 Ordinary Shares This is the initial public
16、 offering of 4,200,000 ordinary shares,par value$0.0001 per share,of Kepuni Holdings Inc.(“we,”“us,”“our company,”the“Company,”“our,”or“Kepuni Holdings”).The offering price of our ordinary shares in this offering will beUS$6 per share.Prior to this offering,there has been no public market for our or
17、dinary shares.We plan to list our ordinary shares on the Nasdaq Capital Market,or Nasdaq,under the symbol“KPN”.Nasdaq might not approvesuch application,and if our application is not approved,this offering cannot be completed.We are an“emerging growth company”as defined under federal securities laws
18、and,as such,will be subject to reduced publiccompany reporting requirements.See“Prospectus Summary Implications of Being an Emerging Growth Company and aForeign Private Issuer”on page 11 for additional information.Mr.Xiaofei Cui,our Chairman of the Board of Directors and Chief Executive Officer,is c
19、urrently the beneficial owner of 52.94%of our issued and outstanding ordinary shares,of which 100%are directly held by Optimal Coefficient Holdings Limited,a BritishVirgin Islands company,which is 100%owned by Mr.Cui.Upon the closing of this offering,our directors and officers will ownapproximately
20、37.3%of our issued and outstanding ordinary shares.We currently meet the definition of a“controlled company”under the corporate governance standards for Nasdaq listed companies and for so long as we remain a controlled company underthis definition,we are eligible to utilize certain exemptions from t
21、he corporate governance requirements of the Nasdaq StockMarket.See“Prospectus Summary Implication of Being a Controlled Company”on page 10 for additional information.We are a holding company incorporated under the laws of the Cayman Islands,with operations conducted by our subsidiary,Taizhou Kepuni
22、Communication Equipment Co.,Ltd.,or Taizhou Kepuni,based in China.2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm4/221 This is an offering of
23、the ordinary shares of the Cayman Islands holding company.We conduct our business throughTaizhou Kepuni.You will not and may never have direct ownership in the operating entity based in China.After therestructure that dissolved the VIE structure,Kepuni Holdings now controls and receives the economic
24、 benefits of TaizhouKepunis business operation,if any,through equity ownership.We are subject to certain legal and operational risks associated with having substantially all business operations in China,includingchanges in the legal,political and economic policies of the Chinese government,the relat
25、ions between China and the UnitedStates,or Chinese or United States regulations may materially and adversely affect our business,financial condition,results ofoperations and the market price of the ordinary shares.Any such changes could significantly limit or completely hinder our abilityto offer or
26、 continue to offer securities to investor and could cause the value of offered securities to significantly decline or becomeworthless.PRC laws and regulations governing our current business operations are sometimes vague and uncertain.Recently,thePRC government initiated a series of regulatory actio
27、ns and statements to regulate business operations in China with little advancenotice,including cracking down on illegal activities in the securities market,adopting new measures to extend the scope ofcybersecurity reviews,and expanding the efforts in anti-monopoly enforcement.Since these statements
28、and regulatory actions arenew,it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or newlaws or regulations or detailed implementations and interpretations will be modified or promulgated,if any,and the potentialimpact such modified o
29、r new laws and regulations will have on our daily business operation,the ability to accept foreigninvestments and list on an U.S.or other foreign exchange.These risks may cause significant depreciation of the value of ourordinary shares,or a complete hinderance of our ability to offer or continue to
30、 offer our securities to investors.See“Risk Factors Risks Related to Doing Business in China”beginning on page 24 and“Risks Related to this Offering,”beginning on page 42.Our ordinary shares may be prohibited from trading on a national exchange under the HFCAA if the Public Company AccountingOversig
31、ht Board(the“PCAOB”)is unable to inspect our auditors for three consecutive years beginning in 2021.If trading in ourordinary shares is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fullyinvestigate our auditor at such future time,Nasdaq may determin
32、e to delist our ordinary shares.On June 22,2021,United StatesSenate has passed the Accelerating Holding Foreign Companies Accountable Act(the“AHFCAA”),which was signed into law onDecember 29,2022,amending the HFCAA and requiring the SEC to prohibit an issuers securities from trading on any U.S.stock
33、exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years.OnAugust 26,2022,the PCAOB announced that it had signed a Statement of Protocol(the“SOP”)with the China SecuritiesRegulatory Commission and the Ministry of Finance of China.The SO
34、P,together with two protocol agreements governinginspections and investigations(together,the“SOP Agreement”),establishes a specific,accountable framework to make possiblecomplete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong,as required underU.S.law
35、.On December 15,2022,the PCAOB announced that it was able to secure complete access to inspect and investigatePCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022.The PCAOBBoard vacated its previous 2021 determinations that the PCAOB was unable to
36、 inspect or investigate completely registered publicaccounting firms headquartered in mainland China and Hong Kong.However,whether the PCAOB will continue to be able tosatisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kongis subje
37、ct to uncertainties and depends on a number of factors out of our and our auditors control.The PCAOB continues todemand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections inearly 2023 and beyond,as well as to continue pursuing ongoing inv
38、estigations and initiate new investigations as needed.ThePCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA ifneeded.Our auditor,WWC,P.C.,has been inspected by the PCAOB on a regular basis with the last inspection conducted duringNov
39、ember 2021 and it is not subject to the determinations announced by the PCAOB on December 16,2021.See“Risk Factors Risks Related to Doing Business in China The recent joint statement by the SEC and PCAOB,proposed rule changes submittedby Nasdaq,and the Holding Foreign Companies Accountable Act all c
40、all for additional and more stringent criteria to be applied toemerging market companies upon assessing the qualification of their auditors,especially the non-U.S.auditors who are notinspected by the PCAOB.These developments could add uncertainties to our offering”on page 38.As a holding company,Kep
41、uni Holdings may rely on dividends and other distributions on equity paid by our subsidiaries for ourcash and financing requirements.If any of our subsidiaries incurs debt on its own behalf in the future,the instruments governingsuch debt may restrict their ability to pay dividends to us.As of the d
42、ate of this prospectus,our Company,our subsidiaries have notdistributed any earnings,nor do they have any plan to distribute earnings in the foreseeable future.In the future,cash proceedsraised from overseas financing activities,including this offering,may be transferred by us to our subsidiaries vi
43、a capitalcontribution or shareholder loans,as the case may be.See“Prospectus Summary Transfers of Cash to and from OurSubsidiaries”beginning on page 8.Our PRC subsidiaries ability to distribute dividends is based upon their distributable earnings.Current PRC regulations permit our PRC subsidiaries t
44、o pay dividends to their respective shareholders only out of theiraccumulated profits,if any,as determined in accordance with PRC accounting standards and regulations.In addition,under PRClaw,each of our PRC subsidiaries is required to set aside at least 10%of its after-tax profits each year,if any,
45、to fund certainstatutory reserve funds until such reserve funds reach 50%of its registered capital.These reserves are not distributable as cashdividends.If any of our Chinese subsidiaries incurs debt on its own behalf in the future,the instruments governing such debt mayrestrict its ability to pay d
46、ividends to Kepuni Holdings.To date,there have not been any such dividends or other distributions fromour Chinese subsidiaries to our subsidiary located outside of China.In addition,as of the date of this prospectus,none of oursubsidiaries have issued any dividends or distributions to Kepuni Holding
47、s or its shareholders.Furthermore,as of the date of thisprospectus,neither Kepuni Holdings nor any of its subsidiaries have paid dividends or made distributions to their shareholders.2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www
48、.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm5/221Kepuni Holdings is permitted under PRC laws and regulations as an offshore holding company to provide funding to its PRCsubsidiaries in China through shareholder loans or capital contributions,subject to sat
49、isfaction of applicable governmentregistration,approval and filing requirements.According to the relevant PRC regulations on foreign-invested enterprises in China,there are no quantity limits on Kepuni Holdings ability to make capital contributions to its PRC subsidiaries.However,our PRCsubsidiaries
50、 may not procure loans which exceed the difference between their respective registered capital and total investmentamount as recorded in the Foreign Investment Comprehensive Management Information System.In the future,cash proceedsraised from overseas financing activities,including this offering,may
51、 continue to be transferred by Kepuni Holdings to the PRCsubsidiaries via capital contribution or shareholder loans,as the case may be.We intend to retain most,if not all,of our availablefunds and any future earnings after this offering to the development and growth of our business in China.We do no
52、t expect to paydividends in the foreseeable future.See“Prospectus Summary Transfers of Cash to and from Our Subsidiaries”beginning onpage 8,“Selected Condensed Consolidated Financial Data”on page 16,our audited consolidated financial statements for the fiscalyears ended December 31,2021 and 2020,and
53、 our unaudited interim financial statements for the six months ended June 30,2022and 2021.Investing in our ordinary shares involves a high degree of risk.Before buying any ordinary shares,you should carefullyread the discussion of material risks of investing in our ordinary shares in“Risk Factors”be
54、ginning on page 20 of thisprospectus.2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm6/221 Neither the Securities and Exchange Commission nor a
55、ny other regulatory body has approved or disapproved of thesesecurities or passed upon the accuracy or adequacy of this prospectus.Any representation to the contrary is a criminaloffense.PERSHARE TOTAL(4)Initial public offering price(1)$6.00$25,200,000 Underwriting discounts(2)$0.42$1,764,000 Procee
56、ds,before expenses,to us(3)$5.58$23,436,000 (1)Initial public offering price per share is assumed as$6.00 per share,set forth on the cover page of this prospectus.(2)We have agreed to pay the underwriter a discount equal to(i)7%of the gross proceeds of the offering.In addition,we haveagreed to issue
57、 to the Underwriter,on the applicable closing date of this offering,warrants in an amount equal to 7%of theaggregate number of ordinary shares sold by us in this offering(the“Underwriters Warrants”)(not including over-allotmentshares),exercisable at 100%of the offering price per ordinary share for f
58、ive years.For a description of other terms of theUnderwriters Warrants and a description of the other compensation to be received by the Underwriter,see“Underwriting”beginning on page 109.(3)Excludes fees and expenses payable to the Underwriter.The total amount of Underwriters expenses related to th
59、is offering isset forth in the section entitled“Underwriting.”(4)Assumes that the Underwriter does not exercise any portion of their over-allotment option.We expect our total cash expenses for this offering(including cash expenses payable to our Underwriter for its out-of-pocketexpenses)to be approx
60、imately$1.1 million,exclusive of the above discounts.In addition,we will pay additional items of value inconnection with this offering that are viewed by the Financial Industry Regulatory Authority,or FINRA,as underwritingcompensation.These payments will further reduce proceeds available to us befor
61、e expenses.See“Underwriting”beginning onpage 109.This offering is being conducted on a firm commitment basis.Boustead Securities,LLC,the Underwriter,is obligated to take andpay for all of the ordinary shares if any such ordinary shares are taken.We have granted the Underwriter an option for a period
62、 of45 days after the closing of this offering to purchase up to 15%of the total number of our ordinary shares to be offered by uspursuant to this offering,solely for the purpose of covering over-allotments,at the initial public offering price less the underwritingdiscounts.If the underwriters exerci
63、se their option in full,the total underwriting discounts payable will be$1,887,480 based on anassumed offering price of$6.00 per ordinary share,and the total gross proceeds to us,before underwriting discounts and expenses,will be$26,964,000.If we complete this offering,net proceeds will be delivered
64、 to us on the applicable closing date.We will notbe able to use such proceeds in China,however,until we complete capital contribution procedures that require prior approval fromeach of the respective local counterparts of Chinas Ministry of Commerce,the State Administration for Industry and Commerce
65、,and the State Administration of Foreign Exchange.See remittance procedures in the section titled“Use of Proceeds”beginning onpage 51.The Underwriter expects to deliver the ordinary shares against payment as set forth under“Underwriting”,on or about ,2023.Boustead Securities,LLC Prospectus dated ,20
66、23.2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm7/221 TABLE OF CONTENTS Page ABOUT THIS PROSPECTUSii PROSPECTUS SUMMARY1 SELECTED CONDENSED
67、CONSOLIDATED FINANCIAL DATA16 RISK FACTORS20 SPECIAL NOTES REGARDING FORWARD-LOOKING STATEMENTS49 ENFORCEABILITY OF CIVIL LIABILITIES50 USE OF PROCEEDS51 DIVIDEND POLICY52 CAPITALIZATION53 DILUTION54 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS55 BUSINESS66 REG
68、ULATIONS77 MANAGEMENT84 EXECUTIVE COMPENSATION87 PRINCIPAL SHAREHOLDERS88 RELATED PARTY TRANSACTIONS89 DESCRIPTION OF SHARE CAPITAL90 SHARES ELIGIBLE FOR FUTURE SALE103 TAXATION104 UNDERWRITING109 EXPENSES RELATING TO THIS OFFERING112 LEGAL MATTERS112 EXPERTS112 WHERE YOU CAN FIND ADDITIONAL INFORMA
69、TION113 INDEX TO FINANCIAL STATEMENTSF-1 i2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm8/221 ABOUT THIS PROSPECTUS We and the Underwriter ha
70、ve not authorized anyone to provide any information or to make any representations other than thosecontained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred youand which we have filed with the U.S.Securities and Exchange Commission(
71、the“SEC”).We take no responsibility for,and canprovide no assurance as to the reliability of,any other information that others may give you.This prospectus is an offer to sell onlythe ordinary shares offered hereby,but only under circumstances and in jurisdictions where it is lawful to do so.We are
72、not makingan offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer orsale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale.For the avoidance of doubt,nooffer or invitation to s
73、ubscribe for our ordinary shares is made to the public in the Cayman Islands.The information contained inthis prospectus is current only as of the date on the front cover of the prospectus.Our business,financial condition,results ofoperations and prospects may have changed since that date.Commonly u
74、sed Defined Terms Unless otherwise indicated or the context requires otherwise,references in this prospectus to:“China”or the“PRC”refers to the Peoples Republic of China,excluding Taiwan and the special administrative regionsof Hong Kong and Macau for the purposes of this prospectus only;“Kepuni Hol
75、dings”refers to Kepuni Holdings Inc.,a Cayman Islands exempted company limited by shares;“Kepuni HK”refers to Kepuni HK Limited,a limited liability company organized under the laws of Hong Kong;“Kepuni WFOE”refers to Jiangsu Pailing Communication Technology Co.Ltd,a limited liability company organiz
76、edunder the laws of the PRC,which is wholly-owned by Kepuni HK;“ordinary shares”refers to the ordinary shares of the Company,par value US$0.0001 per share;“RMB”are to the legal currency of China;“Taizhou Kepuni”refers to Taizhou Kepuni Communication Equipment Co.Ltd.,a limited liability company orga
77、nizedunder the laws of the PRC,which is wholly-owned by Kepuni WFOE;“U.S.dollars,”“$,”“US$,”and“dollars”are to the legal currency of the United States;“we,”“us,”“our Company,”“the Company,”“our,”“Kepuni Holdings”refer to one or more of Kepuni Holdings Inc.Our business is conducted by Taizhou Kepuni
78、in the PRC,using Renminbi,or RMB,the official currency of China.Ourconsolidated financial statements are presented in United States dollars.In this prospectus,we refer to assets,obligations,commitments and liabilities in our consolidated financial statements in United States dollars.These dollar ref
79、erences are based onthe exchange rate of RMB to United States dollars,determined as of a specific date or for a specific period.Changes in theexchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars which mayresult in an increase or decrea
80、se in the amount of our obligations(expressed in dollars)and the value of our assets,includingaccounts receivable(expressed in dollars).On September 5,2022,we have amended our Memorandum and Articles of Association and effected a 50-to-1 forward stock splitof our ordinary shares(the“Stock Split”).Al
81、l shareholders have subsequently surrendered in an aggregative of 490,000,000ordinary shares on a pro-rata basis.We effected the Stock Split recently in order to restructure and recapitalize for this initial publicoffering.ii2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/
82、ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm9/221 PROSPECTUS SUMMARY The following summary is qualified in its entirety by,and should be read in conjunction with,the more detailed information andfinancial statement
83、s included elsewhere in this prospectus.In addition to this summary,we urge you to read the entireprospectus carefully,especially the risks of investing in our ordinary share,discussed under“Risk Factors,”before decidingwhether to buy our ordinary share.Corporate History and Structure We are a holdi
84、ng company incorporated under the laws of the Cayman Islands,with operations conducted by our operatingsubsidiary,Taizhou Kepuni in China.After the restructure that dissolved the VIE structure,Kepuni Holdings now controls andreceives the economic benefits of Taizhou Kepunis business operation,if any
85、,through equity ownership.The following diagram illustrates our corporate structure as of the date of this prospectus and upon completion of this offering.For more detail on our corporate history,please refer to“Business-Corporate History and Structure”beginning on page 67 ofthis prospectus.Kepuni H
86、oldings is a Cayman Islands exempted company incorporated on January 8,2020.We are a holding company with nosignificant assets or operation.We conduct our business in China through Taizhou Kepuni.Under its memorandum ofassociation,our authorized share capital is US$50,000 divided into 500,000,000 or
87、dinary shares,par value US$0.0001.Theregistered office of Kepuni Holding shall be situated at the offices of Osiris International Cayman Limited,Suite#4-210,Governors Square,23 Lime Tree Bay Avenue,PO Box 32311,Grand Cayman KY1-1209,Cayman Islands.Kepuni HK was incorporated on February 24,2020 under
88、 the law of Hong Kong SAR.Kepuni HK is our wholly-ownedsubsidiary and is currently not engaging in any active business and merely acting as a holding company.Kepuni WFOE was incorporated on September 27,2020,under the laws of the Peoples Republic of China.It is a wholly-owned subsidiary of Kepuni HK
89、 and a wholly foreign-owned entity under the PRC laws.The registered principal activity of thecompany is communication equipment sales and technical services.Taizhou Kepuni was incorporated on February 14,2012 under the laws of the Peoples Republic of China.It is registered underthe category of the
90、computer communications and electronic equipment manufacturing industries.The business scope ofTaizhou Kepuni includes nautical communication equipment,nautical electrical equipment,ship automation,etc.Its registeredcapital amount is approximately$14,781,966(RMB 100,000,000).2023/2/23https:/www.sec.
91、gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm10/22112023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps
92、:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm11/221 The Restructure On September 29,2020,Kepuni WFOE entered into a series of VIE agreements(the“VIE Agreements”)with Taizhou Kepuniand the shareholders of Taizhou Kepuni,which established the VIE structu
93、re.As a result of the VIE Agreements,KepuniWFOE was regarded as the primary beneficiary of Taizhou Kepuni,and we treated Taizhou Kepuni and its subsidiaries as thevariable interest entities under U.S.GAAP for accounting purposes.We have consolidated the financial results of TaizhouKepuni and its sub
94、sidiaries in our consolidated financial statements in accordance with the U.S.GAAP.On February 20,2022,Kepuni WFOE,Taizhou Kepuni and shareholders of Taizhou Kepuni signed a termination agreement ofthe VIE Agreements.The VIE structure was dissolved.On March 1,2022,a shareholder of Taizhou Kepuni tra
95、nsferred part of his shares to a non-Chinese individual.As a result,Taizhou Kepuni transformed from a Chinese domestic enterprise to a foreign-invested joint venture.On March 7,2022,Kepuni WFOE entered into equity transfer agreements with each shareholder of Taizhou Kepuni topurchase all the equity
96、interest in Taizhou Kepuni.The restructure was completed on March 9,2022.As a result,TaizhouKepuni became a wholly owned subsidiary of Kepuni WFOE.Taizhou Kepuni was a foreign-invested joint venture at the timeof the acquisition of its 100%equity interests by Kepuni WFOE,our PRC counsel,Guantao Law
97、Firm,is of the opinion thatthe establishment of Kepuni WFOE and the abovementioned acquisition of Taizhou Kepuni by Kepuni WFOE were not subjectto the M&A Rules and no approvals from CSRC or MOFCOM under the M&A Rules are required.For more detailedinformation on interpretations and implementations r
98、elated to the M&A Rules,see“Risk Factors Risks Related to DoingBusiness in China The approval of the China Securities Regulatory Commission may be required in connection with thisoffering,and,if required,we cannot predict whether we will be able to obtain such approval”on page 40.As of the date of t
99、his prospectus,all of our shareholders have completed the Circular 37 registration.We will ask ourprospective shareholders who are Chinese residents to make the necessary applications and filings as required by Circular 37.However,we cannot assure you that each of our shareholders who are PRC reside
100、nts will in the future complete the registrationprocess as required by Circular 37.Shareholders of offshore SPV who are PRC residents and who have not completed theirregistrations in accordance with Circular 37 are subject to certain absolute restrictions,under which they cannot contribute anyregist
101、ered or additional capital to such SPV for offshore financing purposes.In addition,these shareholders cannot repatriateany profits and dividends from the Special Purpose Vehicle(“SPV”)to China either.Shareholders who have completed theCircular 37 registration would not be adversely affected and are
102、allowed to contribute assets into the offshore special purposevehicle and repatriate profits and dividends from them.Since WFOE has completed its foreign exchange registration as aforeign investment enterprise,its ability to receive capital contribution,make distributions and pay dividends is not re
103、stricted.With respect to the application of the M&A Rules,we acquired the domestic operating entities through a“two-step slow-walk”method,so the approval process of the Ministry of Commerce is not applicable.The acquisition was broken into two steps:1)adding a non-PRC shareholder so that the domesti
104、c operating entity will be categorized as a Sino-foreign joint venture(anentity with mixed capital between one or more foreign and Chinese shareholders);2)WFOE to complete the equity acquisitionof Taizhou Kepuni from both the Chinese and foreign shareholders so that it would become a foreign-owned e
105、nterprise.OurPRC counsel,Guantao Law Firm,has completed substantial amount of research and study of the regulation and precedents andfound that this approach has been widely used in the past.In addition,it has never been penalized or challenged with respect tothe legality of this matter.While our PR
106、C counsel,Guantao Law Firm,believes that it is permitted to structure the acquisitionin this manner and the acquisition,in fact,has been completed without any challenge by any regulator,there is uncertainty withrespect to the interpretation of the current regulation as it is still evolving.In the ev
107、ent that this approach is deemed invalid orillegal and it is applied retroactively,WFOEs acquisition of Taizhou Kepuni could be deemed invalid and we will not be ableto consolidate the financial statements of Taizhou Kepuni.We have added a risk factor to disclose such risk on page 40.We do not belie
108、ve that the seventeen day interval will impact the consolidation of financial statements by Taizhou Kepuni.During the seventeen day interval,the major shareholder of Taizhou Kepuni is the same major shareholder of Kepuni HoldingsInc.,and hence Taizhou Kepuni can be consolidated under common control.
109、Besides,the timing gap was created as a result ofadministrative process from the converting the VIE to a wholly-owned subsidiary.In the interim period,the individualshareholders undertook and agreed to attribute all equity and economic interest to the WFOE and no dividends shall be paid inthe period
110、.The agreement has included as Exhibit 10.13 to the Registration Statement.22023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm12/221 Business Ove
111、rview Taizhou Kepuni is a high-tech enterprise integrating schematic designs,research and development(“R&D”),and supportingmarine communication for marine engineering,ship communication,navigation,driving control and power distributionequipment.An enterprise is recognized as a High-Tech Enterprise b
112、y the government if an enterprise(1)has been registeredand established for more than one year in China and(2)obtain the ownership of the intellectual property rights of its mainproducts and services through its independent research and development.Taizhou Kepuni has been recognized as a High-TechEnt
113、erprise and has obtained certification from the government.Founded in 2012,Taizhou Kepuni specializes in the marinecommunications and electronic equipment industries in China.The factory of Taizhou Kepuni has passed the certification ofISO 9001:2015.The products are customized,and Taizhou Kepuni use
114、s a build-to-order,or BTO,business model which means a flexible orderplacing model for production scheduling,material procurement,and delivery arrangement according to different customerorders.Taizhou Kepuni adopts an integrated business model to meet our clients needs.Customers firstly list their s
115、pecifiedrequirements to our sales department.The sales department later communicates with its technical department to evaluate thefeasibility.After that,the production department produces samples and submits them to the quality inspection department forinspection.The quality inspection department wi
116、ll submit the issued material warranty and inspection report to the salesdepartment.The sales department will submit the samples,inspection report,quality assurance,and quotation to the customerfor verification.After receiving the customers confirmation,the procurement department will purchase the r
117、aw materials andthe production department will produce the products.The inspection department will inspect and issue the inspection report.Lastly,the production department will pack and deliver the products to the customer.Our Products Taizhou Kepuni is a high-tech enterprise that offers a comprehen
118、sive range of products and services for the ocean,integratingnautical communications and telecommunications electrical systems.The major products and services include engineeringsupporting communication and telecommunications electrical systems and devices,integrated information managementsystems,na
119、utical internal communication systems,nautical automation(control)systems,and navigational driving consoles andpower distribution systems.The following products are currently available to the market:1.Electrical Control System:This series of products is a comprehensive console,which can realize the
120、centralizedcontrol of the cab,with reasonable structure and simple operation.It is suitable for various types of ships to ensure thesafe navigation of ships.2.Nautical Main Switchboard:This series of Nautical Main Switchboards is suitable for all kinds of nautical powerstations which are below three
121、-phase alternating current(“AC”)380V/50Hz or 440V/60Hz and below direct current(“DC”)230V.These nautical main switchboards are used to control,monitor and protect generator sets anddistribution grids.3.Waterproof Sound and Light Alarm:It is designed with reference to the relevant specifications of C
122、arbon Capture andStorage(“CCS”)and The International Convention for the Safety of Life at Sea(“SOLAS”)“SOLAS”.It is used inthe general emergency alarm system and can also be connected to the public broadcasting system,so that the alarmsignal can cover the entire ship through the broadcast speaker.4.
123、Engine Room Monitoring Station:This series of Engine Room Monitoring Stations is an important part of modernship automation control,which can realize centralized monitoring,alarm monitoring,and safety protection of the mainengine and various auxiliary engines.5.Power Box:KP-5A and KP-10A DC power su
124、pplies of the Power Box are mainly used for radar,generalcommunication and monitoring equipment,with functions such as automatic switching between AC and DC,input andoutput indication,and overvoltage protection,among which,the AC power supply can be AC220V or AC110V.It caneffectively protect the saf
125、ety of equipment.Typically,shipyards and shipowners need to purchase nautical electrical products for production,including steering consoles,switchboards,internal communications,and external communications.Therefore,it will require at least four ship supportingenterprises to engage in the industry a
126、nd at least four supporting enterprises to coordinate installation and commissioning.Theintegration is also beneficial to shipyards since it reduces equipment procurement costs and improves technical communicationand installation coordination efficiency.2023/2/23https:/www.sec.gov/Archives/edgar/dat
127、a/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm13/221Taizhou Kepuni has a professional customer service team to provide comprehensive after-sales services.Each customer servicestaff has be
128、en professionally trained and is familiar with technical capabilities such as product grading,adjustment,qualityanalysis,and control.Taizhou Kepuni also seeks to provide high-quality customer service through increasing digitization,dispatch logistics and technical support availability.A specialized
129、engineering department is also responsible for managingafter-sales services.When receiving a customer request,the engineering department will ask for the customers information indetail and product failure causes.Generally,the customer service team would handle the problem within the same day,threeda
130、ys at the latest.On the technical side,an engineer would be dispatched to deal with the problem.For paid maintenanceservices or product replacement due to quality problems,the charging rate will be explained to the customer and customerconsent will be obtained before the maintenance or replacement,a
131、nd charge in accordance with regulations after thecompletion.If the problem cannot be handled properly on the spot,the situation to the customer will be explained to thecustomer and a new after-sales service time will be set.32023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259
132、/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm14/221 Growth Strategy Increase Sales We plan to increase the sales by providing sufficient training to our sales professionals,making fulluse of the existing client bas
133、e,taking initiatives to leverage our advantages,and maintaining existing customerrelationships.Brand Recognition We plan to increase our brand recognition through publicity.We plan to promote our brand interms of industry and geographic regions,including branching out into medium and large shipyard
134、markets from smalland medium-sized shipyard markets and exploring long-term customer partnerships from the coastal region base.Additionally,we aim to promote Taizhou Kepuni by providing customers with satisfactory and high-quality customerservice.We expect our expansion plan to bring sustainable dev
135、elopment.Strategic&Management Development We plan to set clear goals and strategies based on the companys currentsituation.We plan to better adapt to market changes,build stronger teamwork,and better judge future trends.Competitive Advantages We are committed to offering our customers superior produ
136、ct diversity,quality,and reliability.Taizhou Kepuni offers a flexibleorder placing model to satisfy our customers specialized needs.We believe the Taizhou Kepuni has a number of competitiveadvantages that will enable us to maintain and further increase our market position in the industry for the nat
137、ional market.Thecompetitive strengths include:Top-Notch Technology.The technology team has extensive experience.Our management believes that TaizhouKepuni can provide the best solutions for customers promptly at reasonable prices.Taizhou Kepuni has a specializedtechnology research and development te
138、am with 6 people,which helped the integration of new technologies intoproduct development.Integration of Intelligence System.Taizhou Kepuni has established a sophisticated intelligence system by integratingartificial intelligence and a systematic management platform.Competitive Pricing.Taizhou Kepun
139、i provides reasonable and competitive pricing for the products and services.Taizhou Kepuni also offers guarantees that the prices are comparable to those of the same quality provided by othercompanies in the industry in China.Rigorous Quality Control and Superior Customer Services.Our products play
140、a critical role in various construction,infrastructure,equipment,and safety applications.Our emphasis on establishing a comprehensive quality managementsystem,manufacturing processes,quality control testing,and product development help us deliver a high-qualityproduct to our customers.Taizhou Kepuni
141、 provides a one-year warranty and are dedicated to responding any customerservice inquiries or complaints within 24 hours for all the products.Experienced Management Team.Our management team has extensive experience in the nautical electronics industry,has a keen focus on tracking changes in the bus
142、iness environment,and has strong judgment on the industrys futuredevelopment trends.Additionally,the production team and inspection team of Taizhou Kepuni are equally skilled andexperienced,ensuring the companys efficient operation.Manufacture Capacity Efficient Operations with Significant Scale.Tai
143、zhou Kepuni is a manufacturing integrator,specializing in integrated information management system design,ship internal communication system,shipautomation control system,and ship driving control and power distribution system.The expertise and themanufacturing facilities are the prerequisites that e
144、nable Taizhou Kepuni to maintain lean manufacturing processes,which results in lower procurement costs for shipowners and shipyards,efficient shipyard design,and convenientcustomer services.42023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmht
145、tps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm15/221 Coronavirus(COVID-19)Update The ongoing outbreak of a novel strain of coronavirus(COVID-19)has resulted in quarantines,travel restrictions,and thetemporary closure of stores and business facilities
146、 globally for the past year.In March 2020,the World Health Organizationdeclared the COVID-19 to be a pandemic.Given the rapidly expanding nature of the COVID-19 pandemic,and becausesubstantially all of our business operations and our workforce are concentrated in China,we believe there is a risk tha
147、t ourbusiness,results of operations,and financial condition will be adversely affected.Potential impact to our results of operationswill also depend on future developments and new information that may emerge regarding the duration and severity of theCOVID-19 and the actions taken by government autho
148、rities and other entities to contain the COVID-19 or mitigate its impact,almost all of which are beyond our control.The business of Taizhou Kepuni returned to normal by the end of 2020.We have made some emergency plans for COVID-19and reminded our personnel to pay attention to the COVID-19.Because o
149、f the uncertainty surrounding the COVID-19outbreak,the business disruption and the related financial impact related to the outbreak of and response to the coronaviruscannot be reasonably estimated at this time.For a detailed description of the risks associated with the novel coronavirus,see“Risk Fac
150、torsRisks Related to Our BusinessOur business could be materially harmed by the ongoing coronavirus(COVID-19)pandemic”on page 38.Summary of Risk Factors Investing in our ordinary shares involves a high degree of risk.Below is a summary of material factors that make an investmentin our ordinary share
151、s speculative or risky.Importantly,this summary does not address all of the risks that we face.Please referto the information contained in and incorporated by reference under the heading“Risk Factors”on page 20 of this prospectus.Risks Related to Our Business Risks related to our business,beginning
152、on page 20 of this prospectus,include but are not limited to the following:We rely on Chinas shipbuilding and maritime supporting industries for our revenues and future growth,the prospectsof which are subject to many uncertainties,including government regulations and policies.Our business is substa
153、ntially dependent on our collaboration with our suppliers,including electronic componentsupplier,material dealers,and shipyard service providers,and our agreements with them typically do not contain long-term contractual commitments.Changes or difficulties in our relationships with our suppliers may
154、 harm our businessand financial results.Our business is dependent on certain major customers and changes or difficulties in our relationships with our majorcustomers may harm our business and financial results.Adverse worldwide economic or other conditions could result in prolonged reduction in the
155、demand for maritimeproducts and services,adversely impacting our operating results,cash flows and financial and potentially affectingother critical accounting estimates where the change may be material to our operating results.Increases in the shipbuilding costs,labor costs,and raw material prices m
156、ay adversely impact our pricing.Our success depends on our ability to protect our intellectual property.52023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniho
157、ldings.htm16/221 Risks Related to Our Corporate Structure Risks related to our corporate structure,beginning on page 23 of this prospectus,include but are not limited to the following:We are a holding company,and will rely on dividends paid by our subsidiaries for our cash needs.Any limitation onthe
158、 ability of our subsidiaries to make dividend payments to us,or any tax implications of making dividend paymentsto us,could limit our ability to pay our parent company expenses or pay dividends to holders of our ordinary shares.Risks Related to Doing Business in China Risks related to doing business
159、 in China,beginning on page 24 of this prospectus,include but are not limited to the following:There are significant legal and other obstacles to obtaining information needed for shareholder investigations orlitigation outside China or otherwise with respect to foreign entities.PRC regulation of loa
160、ns to,and direct investments in,PRC entities by offshore holding companies may delay orprevent us from using proceeds from this offering and/or future financing activities to make loans or additional capitalcontributions to our PRC operating subsidiaries.We must remit the offering proceeds to China
161、before they may be used to benefit our business in China,and thisprocess may take several months to complete.PRC regulation of loans to and direct investment in PRC entities by offshore holding companies to PRC entities maydelay or prevent us from making loans or additional capital contributions to
162、our PRC operating subsidiaries.Adverse changes in political and economic policies of the PRC government could have a material adverse effect on theoverall economic growth of China,which could reduce the demand for our products and services and materially andadversely affect our competitive position.
163、Changes in Chinas economic,political or social conditions or government policies could have a material adverseeffect on our business and results of operations.Uncertainties with respect to the Chinese legal system,including uncertainties regarding the enforcement of laws,andsudden or unexpected chan
164、ges in laws and regulations in China with little advance notice could adversely affect us andlimit the legal protections available to you and us.Chinese government may intervene or influence our operations at any time or may exert more control over offeringsconducted overseas and foreign investment
165、in China-based issuers,which could result in a material change in ouroperations and/or the value of our ordinary shares.Additionally,the governmental and regulatory interference couldsignificantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause
166、thevalue of such securities to significantly decline or be worthless.62023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm17/221 Any actions by the
167、 Chinese government to exert more oversight and control over offerings that are conducted overseasand foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer orcontinue to offer our ordinary shares to investors and cause the value of our ordinary
168、 shares to significantly decline orbe worthless.We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.We may become subject to a variety of laws and regulations in the PRC regarding privacy,data security,cybersecurity,and data protection.We may be l
169、iable for improper use or appropriation of personal information provided by ourcustomers.Trading in our securities may be prohibited under the HFCAA and as a result an exchange may determine to delist oursecurities if it is later determined that the PCAOB is unable to inspect or investigate complete
170、ly our auditor because ofa position taken by an authority in a foreign jurisdiction.The recent joint statement by the SEC and PCAOB,proposed rule changes submitted by Nasdaq,and the HoldingForeign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging
171、market companies upon assessing the qualification of their auditors,especially the non-U.S.auditors who are notinspected by the PCAOB.These developments could add uncertainties to our offering.The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chine
172、secompanies by foreign investors,which could make it more difficult for us to pursue growth through acquisitions inChina.The approval of the China Securities Regulatory Commission may be required in connection with this offering,and,ifrequired,we cannot predict whether we will be able to obtain such
173、 approval.You may experience difficulties in effecting service of legal process,enforcing foreign judgments,or bringing actions inChina against us or our management and directors named in the prospectus.It may also be difficult for you or overseasregulators to conduct investigations or collect evide
174、nce within China.Risks Related to the Offering and Our Ordinary Shares Risks related to the offering and our ordinary shares,beginning on page 42 of this prospectus,include but are not limited to thefollowing:The trading price of the Ordinary Shares is likely to be volatile,which could result in sub
175、stantial losses to investors.We may experience extreme stock price volatility,including any stock-run up,unrelated to our actual or expectedoperating performance,financial condition or prospects,making it difficult for prospective investors to assess therapidly changing value of our Ordinary Shares.
176、We have not paid dividends to our shareholders.And we do not expect to pay cash dividends in the foreseeable future.For as long as we are an emerging growth company,we will not be required to comply with certain reportingrequirements.As a foreign private issuer,we are not subject to certain U.S.secu
177、rities law disclosure requirements that apply to adomestic U.S.issuer,which may limit the information publicly available to our shareholders.72023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0001
178、259/ea172555-f1a4_kepuniholdings.htm18/221 Holding Foreign Companies Accountable Act U.S.laws and regulations,including the Holding Foreign Companies Accountable Act,or HFCAA,may restrict or eliminateour ability to complete a business combination with certain companies,particularly those
179、acquisition candidates withsubstantial operations in China.On March 24,2021,the SEC adopted interim final rules relating to the implementation of certain disclosure and documentationrequirements of the HFCAA.An identified issuer will be required to comply with these rules if the SEC identifies it as
180、 having a“non-inspection”year under a process to be subsequently established by the SEC.On June 22,2021,United States Senate haspassed the AHFCAA,which was signed into law on December 29,2022,amending the HFCAA and requiring the SEC toprohibit an issuers securities from trading on any U.S.stock exch
181、ange if its auditor is not subject to PCAOB inspections fortwo consecutive years instead of three consecutive years.If our auditor cannot be inspected by the Public Company AccountingOversight Board,or the PCAOB,for two consecutive years,the trading of our securities on any U.S.national securitiesex
182、changes,as well as any over-the-counter trading in the U.S.,will be prohibited.On September 22,2021,the PCAOB adopteda final rule implementing the HFCAA,which provides a framework for the PCAOB to use when determining,as contemplatedunder the HFCAA,whether the PCAOB is unable to inspect or investiga
183、te completely registered public accounting firmslocated in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.On December 2,2021,the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.The rules
184、apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registeredpublic accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completelybecause of a position taken by an authority in foreig
185、n jurisdictions.On December 16,2021,the PCAOB issued a report on itsdeterminations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquarteredin mainland China and in Hong Kong,because of positions taken by PRC authorities in those jurisdictions.On A
186、ugust 26,2022,the PCAOB announced that it had signed a Statement of Protocol(the“SOP”)with the China Securities RegulatoryCommission and the Ministry of Finance of China.The SOP,together with two protocol agreements governing inspections andinvestigations(together,the“SOP Agreement”),establishes a s
187、pecific,accountable framework to make possible completeinspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong,as required under U.S.law.On December 15,2022,the PCAOB announced that it was able to secure complete access to inspect and investigatePCAOB-registe
188、red public accounting firms headquartered in mainland China and Hong Kong completely in 2022.The PCAOBBoard vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registeredpublic accounting firms headquartered in mainland China and Hong Kong.However,
189、whether the PCAOB will continue to beable to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China andHong Kong is subject to uncertainties and depends on a number of factors out of our and our auditors control.The PCAOBcontinues to demand com
190、plete access in mainland China and Hong Kong moving forward and is making plans to resumeregular inspections in early 2023 and beyond,as well as to continue pursuing ongoing investigations and initiate newinvestigations as needed.The PCAOB has also indicated that it will act immediately to consider
191、the need to issue newdeterminations with the HFCAA if needed.Our auditor,WWC,P.C.,has been inspected by the PCAOB on a regular basis with the last inspection conducted duringNovember 2021.As of the date of the prospectus,WWC,P.C.,our auditor,is not subject to the determinations as to inability toins
192、pect or investigate registered firms completely announced by the PCAOB on December 16,2021.The recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatoryauthorities would apply additional and more stringent criteria to us after considering the e
193、ffectiveness of our auditors auditprocedures and quality control procedures,adequacy of personnel and training,or sufficiency of resources,geographic reach orexperience as it relates to the audit of our financial statements.See“Risk Factors Risks Related to Doing Business in China The recent joint s
194、tatement by the SEC and PCAOB,proposed rule changes submitted by Nasdaq,and the Holding ForeignCompanies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies uponassessing the qualification of their auditors,especially the non-U.S.auditors wh
195、o are not inspected by the PCAOB.Thesedevelopments could add uncertainties to our offering”on page 38.Transfers of Cash to and from Our Subsidiaries Kepuni Holdings relies on dividends paid by its subsidiaries for its working capital and cash needs,including the fundsnecessary to pay dividends to it
196、s shareholders.If Kepuni Holdings subsidiaries incur debt on their own behalf in the future,theinstruments governing their debt may restrict their ability to pay dividends to Kepuni Holdings.Kepuni Holdings is permitted under the laws of the Cayman Islands to provide funding to Kepuni HK through loa
197、ns or capitalcontributions without restrictions on the amount of the funds.Kepuni HK is permitted under the respective laws of Hong Kongto provide funding to WFOE through dividend distribution without restrictions on the amount of the funds.There are norestrictions on dividends transfers from Hong K
198、ong to the Cayman Islands.2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm19/221 To transfer cash from Kepuni HK to WFOE,Kepuni HK can increase
199、 its registered capital in WFOE,which requires a filingwith the local commerce department,or through a shareholder loan,which requires a filing with the State Administration ofForeign Exchange or its local bureau.Aside from the declaration to the State Administration of Foreign Exchange,there is nor
200、estriction or limitations on such cash transfer or earnings distribution.82023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm20/221 To transfer ca
201、sh from WFOE to Taizhou Kepuni,WFOE can increase its registered capital in Taizhou Kepuni,which requires afiling with the local commerce department,or through a shareholder loan to Taizhou Kepuni,which requires a filing with theState Administration of Foreign Exchange or its local bureau.Aside from
202、the declaration to the State Administration of ForeignExchange,there is no restriction or limitations on such cash transfer or earnings distribution.However,our PRC subsidiariesmay not procure loans which exceed the difference between their respective registered capital and total investment amount a
203、srecorded in the Foreign Investment Comprehensive Management Information System.To make loans to Kepuni HK,WFOE or Taizhou Kepuni,according to Matters relating to the Macro-prudential Management ofComprehensive Cross-border Financing,or PBOC Circular 9 promulgated by the Peoples Bank of China,the to
204、tal cross-borderfinancing of a company shall be calculated using a risk-weighted approach and shall not exceed an upper limit.The upper limitshall be calculated as capital or assets(for enterprises,net assets shall apply)multiplied by a cross-border financing leverageratio and multiplied by a macro-
205、prudential regulation parameter.The macro-prudential regulation parameter is currently 1,which may be adjusted by the Peoples Bank of China and the State Administration of Foreign Exchange in the future,and thecross-border financing leverage ratio is 2 for enterprises.Therefore,the upper limit of th
206、e loans that a PRC company canborrow from foreign companies shall be calculated at 2 times the borrowers net assets.When WFOE and Taizhou Kepunijointly apply for borrowing foreign debt,the upper limit of borrowing shall be 2 times of the net assets in the consolidatedfinancial statement,and Taizhou
207、Kepuni shall make a commitment to refrain from borrowing foreign debt in their ownrespective names.As a result of PRC laws and regulations(noted below)that require annual appropriations of 10%of after-tax income to be setaside in a general reserve fund prior to payment of dividends,WFOE is restricte
208、d in that respect,as well as in other respectsnoted below,in their ability to transfer a portion of their net assets to Kepuni HK as a dividend.We note the following:1.PRC regulations currently permit the payment of dividends only out of accumulated profits,as determined inaccordance with accounting
209、 standards and PRC regulations;2.WFOE is required to set aside,at a minimum,10%of their net income after taxes,based on PRC accountingstandards,each year as statutory surplus reserves until the cumulative amount of such reserves reaches 50%of theirregistered capital;3.Such reserves may not be distri
210、buted as cash dividends;4.WFOE may also allocate a portion of their after-tax profits to fund their staff welfare and bonus funds;except in theevent of a liquidation,these funds may also not be distributed to shareholders;the Company does not participate in aCommon Welfare Fund;and 5.The incurrence
211、of debt,specifically the instruments governing such debt,may restrict a subsidiarys ability to paystockholder dividends or make other cash distributions.As of the date of this prospectus,Kepuni Holdings and its subsidiaries have not distributed any earnings or settled any amountsowed under the previ
212、ous VIE Agreements,nor does Kepuni Holdings and its subsidiaries have any plan to distribute earningsor settle amounts in the foreseeable future.As of the date of this prospectus,none of the subsidiaries have made any dividendsor distributions to Kepuni Holdings and Kepuni Holdings has not made any
213、dividends or distributions to our shareholders.Formore information,see“Selected Condensed Consolidated Financial Data”on page 16.Dividend Policy We anticipate that we will retain any earnings to support operations and to finance the growth and development of our businessafter the Companys initial pu
214、blic offering.Therefore,we do not expect to pay cash dividends again in the foreseeable future.Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will dependon a number of factors,including future earnings,capital requirements,financ
215、ial conditions and future prospects and otherfactors the board of directors may deem relevant.As of the date of this prospectus,we have not paid any dividends ordistributions to our shareholders.92023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.
216、htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm21/221 Implication of Being a Controlled Company We are and will continue,following this offering,to be a“controlled company”within the meaning of the Nasdaq Stock MarketRules and,as a result,may rel
217、y on exemptions from certain corporate governance requirements that provide protection toshareholders of other companies.We are a“controlled company”as defined under the Nasdaq Stock Market Rules,as our Chief Executive Officer and Chairmanof the Board,Mr.Xiaofei Cui,owns more than 50%of the voting r
218、ight represented by our issued and outstanding ordinaryshares.For so long as we are a controlled company under that definition,we are permitted to elect to rely,and may rely,oncertain exemptions from corporate governance rules,including:an exemption from the rule that a majority of our Board of Dire
219、ctors must be independent directors;an exemption from the rule that the compensation of our chief executive officer must be determined orrecommended solely by independent directors;and An exemption from the rule that our director nominees must be selected or recommended solely by independentdirector
220、s.As a result,you will not have the same protection afforded to shareholders of companies that are subject to these corporategovernance requirements.Although we do not intend to rely on the“controlled company”exemption under the Nasdaq listing rules,we could elect to relyon this exemption after we c
221、omplete this offering.If we elected to rely on the“controlled company”exemption,a majority ofthe members of our Board of Directors might not be independent directors and our nominating and corporate governance andcompensation committees might not consist entirely of independent directors after we co
222、mplete this offering.See“Risk Factors Risks Related to the Offering and Our Ordinary Shares We are a controlled company within the meaning of the Nasdaqlisting requirements and,as a result,will qualify for,and intend to rely on,exemptions from certain corporate governancerequirements.You will not ha
223、ve the same protections afforded to shareholders of companies that are subject to suchrequirements”on page 46 of this prospectus.Additionally,pursuant to Nasdaqs phase-in rules for newly listed companies,we have one year from the date on which we arefirst listed on Nasdaq to comply fully with the Na
224、sdaq listing standards.We do not plan to rely on the phase-in rules for newlylisted companies and will comply fully with the Nasdaq listing standards at the time of listing.102023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov
225、/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm22/221 Implications of Being an Emerging Growth Company and a Foreign Private Issuer 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
226、 the Jumpstart Our Business Startups Act,or JOBS Act,enacted in April 2012,and may take advantage of reducedreporting requirements that are otherwise applicable to public companies.These provisions include,but are not limited to:being permitted to present only two years of audited financial statemen
227、ts and only two years of related ManagementsDiscussion and Analysis of Financial Condition and Results of Operations in our filings with the SEC;not being required to comply with the auditor attestation requirements in the assessment of our internal control overfinancial reporting;reduced disclosure
228、 obligations regarding executive compensation in periodic reports,proxy statements and registrationstatements;and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholderapproval of any golden parachute payments not previously approved.We may t
229、ake advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of thefirst sale of our ordinary shares pursuant to this offering.However,if certain events occur before the end of such five-yearperiod,including if we become a“large accelerated file
230、r,”our annual gross revenues exceed$1.235 billion or we issue morethan$1.0 billion of non-convertible debt in any three-year period,we will cease to be an emerging growth company before theend of such five-year period.In addition,Section 107 of the JOBS Act provides that an“emerging growth company”c
231、an take advantage of the extendedtransition period provided in Section 7(a)(2)(B)of the Securities Act of 1933,as amended,or the Securities Act,for complyingwith new or revised accounting standards.We have elected to take advantage of the extended transition period for complyingwith new or revised a
232、ccounting standards and acknowledge such election is irrevocable pursuant to Section 107 of the JOBSAct.We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934,as amended(the“Exchange Act”).As such,we are exempt from certain provisions applicable to
233、United States domestic public companies.Forexample:we are not required to provide as many Exchange Act reports,or as frequently,as a U.S.domestic public company;for interim reporting,we are permitted to comply solely with our home country requirements,which are less rigorousthan the rules that apply
234、 to domestic public companies;we are not required to provide the same level of disclosure on certain issues,such as executive compensation;we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures ofmaterial information;we are not required to comply
235、 with the sections of the Exchange Act regulating the solicitation of proxies,consents,orauthorizations in respect of a security registered under the Exchange Act;and we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of theirshare ownership a
236、nd trading activities and establishing insider liability for profits realized from any“short-swing”trading transaction.We intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers,which permit us tofollow certain corporate governance rules that conform to the
237、Cayman Islands requirements in lieu of many of the Nasdaqcorporate governance rules applicable to U.S.companies.As a result,our corporate governance practices may differ from thoseyou might otherwise expect from a U.S.company listed on Nasdaq.112023/2/23https:/www.sec.gov/Archives/edgar/data/1826202
238、/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm23/221 Recent Regulatory Development in PRC On November 7,2016,the Standing Committee of the PRC National Peoples Congress issued the Cyber Security L
239、aw of thePRC,or Cyber Security Law,which became effective on June 1,2017.On June 10,2021,the Standing Committee of the NPC promulgated the PRC Data Security Law,which became effective onSeptember 1,2021.The Data Security Law mainly sets forth specific provisions regarding establishing basic systems
240、for datasecurity management,including hierarchical data classification management system,risk assessment system,monitoring andearly warning system,and emergency disposal system.In addition,it clarifies the data security protection obligations oforganizations and individuals carrying out data activit
241、ies and implementing data security protection responsibility.On October 29,2021,thirteen PRC regulatory agencies,namely,the CAC,the NDRC,the Ministry of Industry and InformationTechnology,the Ministry of Public Security,the Ministry of State Security,the Ministry of Finance,MOFCOM,SAMR,CSRC,the Peop
242、les Bank of China,the National Radio and Television Administration,National Administration of State SecretsProtection and the National Cryptography Administration,jointly adopted and published the Measures for CybersecurityReview(2021),which became effective on February 15,2022.The Measures for Cybe
243、rsecurity Review(2021)required that,among others,in addition to“operator of critical information infrastructure”any“operator of network platform”holdingpersonal information of more than one million users which seeks to list in a foreign stock exchange should also be subject tocybersecurity review.In
244、 addition,on November 14,2021,the CAC released the Regulations on Network Data Security(draft for public comments),or the draft Regulations on Network Data Security,and will accept public comments until December 13,2021.According to thedraft Regulations on Network Data Security,if a data processor t
245、hat processes personal data of more than one million usersintends to list overseas,it shall apply for a cybersecurity review.In addition,data processors that process important data or arelisted overseas shall carry out an annual data security assessment on their own or by engaging a data security se
246、rvicesinstitution,and the data security assessment report for the prior year should be submitted to the local cyberspace affairsadministration department before January 31 of each year.Currently,the draft Regulations on Network Data Security has beenreleased for public comment only,and its implement
247、ation provisions and anticipated adoption or effective date remainssubstantially uncertain and may be subject to change.We do not know what regulations will be adopted or how such regulationswill affect us and our listing on Nasdaq.In the event that the CAC determines that we are subject to these re
248、gulations,we maybe required to delist from Nasdaq and we may be subject to fines and penalties.We do not expect to be subject to the cybersecurity review by the CAC for this offering,given that:(i)using our products andservices does not require users to provide any personal information;(ii)we do not
249、 possess any personal information of users inour business operations;and(iii)data processed in our business does not have a bearing on national security and thus may notbe classified as core or important data by the authorities.Neither the CAC nor any other PRC regulatory agency oradministration has
250、 contacted the Company in connection with Taizhou Kepunis operations.The Company is currently notrequired to obtain regulatory approval from the CAC nor any other PRC authorities for Taizhou Kepunis operations.However,there remains uncertainty as to how the Measures for Cybersecurity Review(2021)wil
251、l be interpreted or implemented andwhether the PRC regulatory agencies,including the CAC,may adopt new laws,regulations,rules,or detailed implementationand interpretation related to the Measures for Cybersecurity Review(2021).We cannot assure you that PRC regulatoryagencies,including the CAC,would t
252、ake the same view as we do,and there is no assurance that we can fully or timely complywith such laws.In the event that the applicable laws,regulations,or interpretations change such that we are subject to anymandatory cybersecurity review and other specific actions required by the CAC,we cannot gua
253、rantee whether we can completethe registration process in a timely manner,or at all.Given such uncertainty,we may be further required to suspend our relevantbusiness,shut down our website,or face other penalties,which could materially and adversely affect our business,financialcondition,results of o
254、perations and the value of our ordinary shares,significantly limit or completely hinder our ability to offeror continue to offer securities to investors,or cause such securities to significantly decline in value or become worthless.122023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0001213900
255、23013259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm24/221 For more detailed information,see“Risk Factors Risks Related to Doing Business in China “We may become subject to avariety of laws and regulations in the
256、PRC regarding privacy,data security,cybersecurity,and data protection.We may be liablefor improper use or appropriation of personal information”on page 35 of this prospectus.Permission Required from PRC Authorities We and our PRC subsidiaries currently have received all material permissions and appr
257、ovals required for our operations incompliance with the relevant PRC laws and regulations in the PRC.The business license is the only permission that is requiredfor our operations.The business license is a permit issued by Market Supervision and Administration that allows the companyto conduct speci
258、fic business within the governments geographical jurisdiction.Each of our PRC subsidiaries has received itsbusiness license.Approval Recipient Issuing body IssuingDate Validity Regions The Scope of Conduct AllowedBusinessLicense KepuniWFOE MarketSupervision andAdministrationof Taizhou City September
259、27,2020 Unlimited Taizhou city,Jiangsu Province,PRC Sales of communication equipment;Technology service,technologydevelopment,technology consultation,technology exchange,technologytransfer and technology promotion;Sales of optical communicationequipment;Sales of mobilecommunication equipment;Informa
260、tion system integration serviceand Network equipment sales BusinessLicense TaizhouKepuni MarketSupervision andAdministrationof Taizhou City March 9,2022 Unlimited Taizhou City,Jiangsu Province,PRC Manufacturing of communicationequipment;Manufacturing of marineautomation,detection and monitoringsyste
261、m;Manufacturing of refrigerationand air conditioning equipment;Manufacturing of power transmissionand distribution and control equipment;Sales of power transmission anddistribution and control equipment;Manufacturing of electrical signalequipment;Sales of electrical signalequipment:repair of electri
262、calequipment:manufacturing ofmechanical and electrical equipment;Sales of mechanical and electricalequipment:Sales of electricalequipment;Domestic trade agent:software sales;Software development;Manufacturing of power electroniccomponents:manufacturing ofelectronic components and wholesaleof electro
263、nic components As of the date of this prospectus,Kepuni Holdings and our subsidiaries are not required to obtain any other permissions orapprovals from any Chinese authorities to operate its business.However,applicable laws and regulations may be tightened,andnew laws or regulations may be introduce
264、d to impose additional government approval,license and permit requirements.If weor our subsidiaries fail to obtain and maintain such approvals,licenses,or permits required for our business,inadvertentlyconclude that such approval is not required,or respond to changes in the regulatory environment,we
265、 or our subsidiaries couldbe subject to liabilities,penalties and operational disruption,which may materially and adversely affect our business,operatingresults,financial condition and the value of our ordinary shares,significantly limit or completely hinder our ability to offer orcontinue to offer
266、securities to investors,or cause such securities to significantly decline in value or become worthless.The M&A Rules,which were adopted in 2006 by six PRC regulatory agencies and amended in 2009,including the CSRC,purport to require offshore special purpose vehicles that are controlled by PRC compan
267、ies or individuals and that were formedfor the purpose of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies orassets to obtain CSRC approval prior to publicly listing and trading of their securities on an overseas stock exchange.The2023/2/23https:/
268、www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm25/221interpretation and application of the regulations remain unclear,and this offering may ultimately require
269、 approval from theCSRC.If CSRC approval is required,it is uncertain how long it will take us to obtain the approval and whether we will obtainthe approval.Recently,the General Office of the Central Committee of the Communist Party of China and the General Office of the StateCouncil jointly issued th
270、e Opinions on Strictly Cracking Down on Illegal Securities Activities,which were made available tothe public on July 6,2021.The Opinions on Strictly Cracking Down on Illegal Securities Activities emphasized the need tostrengthen the administration over illegal securities activities,and the need to s
271、trengthen the supervision over overseas listingsby Chinese companies.Effective measures,such as promoting the construction of relevant regulatory systems will be taken todeal with the risks and incidents of China-based overseas listed companies,and cybersecurity and data privacy protectionrequiremen
272、ts and similar matters.It is still uncertain how PRC governmental authorities will regulate overseas listing in generaland whether we are required to obtain any specific regulatory approvals.Furthermore,if the CSRC or other regulatory agencieslater promulgate new rules or explanations requiring that
273、 we obtain their approvals for this offering and any follow-on offering,we may be unable to obtain such approvals which could significantly limit or completely hinder our ability to offer or continueto offer securities to our investors.132023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/000121
274、390023013259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm26/221 On December 24,2021,the China Securities Regulatory Commission,or the CSRC,issued Provisions of the State Council onthe Administration of Overseas Sec
275、urities Offering and Listing by Domestic Companies(Draft for Comments)(the“Administration Provisions”),and the Provisions of the State Council on the Administration of Overseas Securities Offeringand Listing by Domestic Companies(Draft for Comments)(the“Measures”),which are now open for public comme
276、nts.TheAdministration Provisions and Measures for overseas listings lay out specific requirements for filing documents and includeunified regulation management,strengthening regulatory coordination,and cross-border regulatory cooperation.Domesticcompanies seeking to list abroad must carry out releva
277、nt security screening procedures if their businesses involve suchsupervision.Companies endangering national security are among those off-limits for overseas listings.According to Relevant Officials of the CSRC Answered Reporter Questions(“CSRC Answers”),after the AdministrationProvisions and Measure
278、s are implemented upon completion of public consultation and due legislative procedures,the CSRCwill formulate and issue guidance for filing procedures to further specify the details of filing administration and ensure thatmarket entities could refer to clear guidelines for filing,which means it sti
279、ll takes time to make the Administration Provisionsand Measures into effect.As the Administration Provisions and Measures have not yet come into effect,we are currentlyunaffected.However,according to CSRC Answers,only new initial public offerings and follow-on offerings by existentoverseas listed Ch
280、inese companies will be required to go through the filing process;other existent overseas listed companieswill be allowed sufficient transition period to complete their filing procedure,which means if we complete the offering prior tothe effectiveness of Administration Provisions and Measures,we wil
281、l be required go through the filing process in the future,either because of future follow-on offerings or as an existent overseas listed Chinese company.Our PRC counsel,Guantao Law Firm,has advised us that neither the holding company and our subsidiaries are currentlyrequired to obtain approval from
282、 Chinese authorities,including the CSRC,or the CAC,to list on U.S exchanges or issuesecurities to foreign investors,given that:(i)our PRC subsidiary was incorporated as a wholly foreign-owned enterprise bymeans of direct investment rather than by merger or acquisition of equity interest or assets of
283、 a PRC domestic company ownedby PRC companies or individuals as defined under the M&A Rules that are our beneficial owners;(ii)the CSRC currently hasnot issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject to theM&A Rules;and(iii)no pr
284、ovision in the M&A Rules clearly classifies contractual arrangements as a type of transactionsubject to the M&A Rules.However,there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of anoverseas offering and the opinions summarized above are subject
285、to any new laws,rules and regulations or detailedimplementations and interpretations in any form relating to the M&A Rules.We cannot assure you that relevant PRCgovernment agencies,including the CSRC,would reach the same conclusion as our PRC counsel,Guantao Law Firm,does andhence we may face regula
286、tory actions or other sanctions from the CSRC or other PRC regulatory agencies.These regulatoryagencies may impose fines and penalties on our operations in China,limit our operating privileges in China,delay or restrict therepatriation of the proceeds from this offering into China,restrict or prohib
287、it the payments or remittance of dividends by ourPRC subsidiaries,or take other actions that could have a material adverse effect on our business,financial condition,results ofoperations,reputation and prospects,as well as the trading price of the shares.It is uncertain when and whether the Companyw
288、ill be required to obtain permission from the PRC government to list on U.S.exchanges in the future,and even when suchpermission is obtained,whether it will be denied or rescinded.The PRC government may intervene or influence our operations at any time,which could result in a material change in ouro
289、perations.For example,the PRC government has recently published new policies that significantly affected certain industriessuch as the education and internet industries,and we cannot rule out the possibility that it will in the future release regulationsor policies regarding any industry that could
290、adversely affect the business,financial condition and results of operations of ourcompany.Recently,the PRC government initiated a series of regulatory actions and statements to regulate business operationsin China with little advance notice,including cracking down on illegal activities in the securi
291、ties market,adopting newmeasures to extend the scope of cybersecurity reviews,and expanding the efforts in anti-monopoly enforcement.As confirmedby our PRC counsel,Guantao Law Firm,we currently are not subject to cybersecurity review with the CAC,to conductbusiness operations in China,given that:(i)
292、we do not possess a large amount of personal information in our businessoperations;and(ii)data processed in our business does not have a bearing on national security and thus may not be classified ascore or important data by the authorities.In addition,as confirmed by our PRC counsel,Guantao Law Fir
293、m,we are not subjectto merger control review by Chinas anti-monopoly enforcement agency due to the level of our revenues which provided fromus and audited by our auditor WWC,P.C.,and the fact that we currently do not expect to propose or implement any acquisitionof control of,or decisive influence o
294、ver,any company with revenues within China of more than RMB 400 million.Although we are currently not required to obtain permission from any of the PRC governmental agencies to obtain suchpermission and has not received any denial to list on the U.S.exchange or conduct our daily business operation,i
295、t is highlyuncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws orregulations or detailed implementations and interpretations will be modified or promulgated,if any,and the potential impactsuch modified or new laws and regulations will
296、have on our daily business operation,the ability to accept foreign investments2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm27/221and list ou
297、r securities on an U.S.or other foreign exchange.For more detailed information.For more detailed information,see“Risk Factors Risks Related to Doing Business in China The approval of the China Securities Regulatory Commission maybe required in connection with this offering,and,if required,we cannot
298、predict whether we will be able to obtain suchapproval”on page 40.Corporate Information Our principal executive office is located at No.318 Yongping Road,Science and Technology Industrial Park Taizhou City,Jiangsu Province Peoples Republic of China,225300.The telephone number of our principal execut
299、ive offices is+86-52382988888.Our registered agent in the Cayman Islands is Osiris International Cayman Limited.Our registered office andour registered agents office in the Cayman Islands are both located at Suite#4-210,Governors Square,23 Lime Tree BayAvenue,PO Box 32311,Grand Cayman KY1-1209,Cayma
300、n Islands.Our agent for service of process in the United Statesis Cogency Global Inc.located at 122 East 42nd Street,18th Floor,New York,NY 10168.142023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/182620
301、2/0003259/ea172555-f1a4_kepuniholdings.htm28/221 THE OFFERING Shares Offered 4,200,000 ordinary shares(or 4,830,000 ordinary shares assuming that the underwritersexercise their over-allotment option in full)Over-allotment Option We have granted the underwriter an option exercisable up to
302、45 days after the closing of thisoffering to purchase up to an additional 15%of the ordinary shares sold in this offering on thesame terms as the other ordinary shares being purchased by the underwriter from us.Ordinary share outstandingprior to completion of thisoffering 10,000,000 ordinary shares
303、Ordinary share outstandingimmediately after thisoffering 14,200,000 ordinary shares(or 14,830,000 ordinary shares assuming that the underwritersexercise their over-allotment option in full)Use of Proceeds We estimate that our net proceeds from this offering will be approximately$22,100,000,based on
304、an initial public offering price of$6.00 per ordinary share and after deductingestimated underwriting discounts and advisory fee and estimated offering expenses andassuming no exercise of the over-allotment option granted to the underwriters.See“Use ofProceeds”on page 51 of this prospectus for more
305、information.Underwriter Boustead Securities,LLC Underwriters Warrants We have agreed to sell to Boustead Securities,LLC warrants(the“Underwriters Warrants”)to purchase up to a total of 294,000 ordinary shares(equal to 7%of the aggregate number ofordinary shares sold in the offering)at a price equal
306、to the price of our ordinary shares offeredhereby.The Underwriter will receive Underwriters Warrants if for the portion of the offeringpursuant to the over-allotment option.Nasdaq Trading symbol We intend to list our ordinary shares on Nasdaq Capital Market under the symbol“KPN”.Ourapplication could
307、 be rejected by Nasdaq,and this offering may not close until we havereceived Nasdaqs approval for our application.Transfer Agent Transhare Corporation.Risk Factors Investing in these securities involves a high degree of risk.As an investor,you should be ableto bear a complete loss of your investment
308、.You should carefully consider the information setforth in the“Risk Factors”section of,and elsewhere in,this prospectus before deciding toinvest in our ordinary shares.Lock-Up Our directors,executive officers,and all shareholders have agreed with the underwriters not tooffer for sale,issue,sell,cont
309、ract to sell,pledge or otherwise dispose of any of our ordinaryshares or securities convertible into ordinary shares for a period of 6 months from the date onwhich the trading of the ordinary shares commences.However,shareholders who own 5%ormore of the outstanding ordinary shares have agreed with t
310、he underwriters not to offer forsale,issue,sell,contract to sell,pledge or otherwise dispose of any of our ordinary shares orsecurities convertible into ordinary shares for a period of 12 months from the date on whichthe trading of the ordinary shares commences.See“Underwriting”beginning on page 109
311、 formore information.152023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm29/221 SELECTED CONDENSED CONSOLIDATED FINANCIAL DATA The consolidated f
312、inancial statements included in this prospectus reflect financial position and cash flows of the registrant,Cayman Islands incorporated parent company,Kepuni Holdings,together with those of its subsidiaries,on a consolidated basis.The tables below are condensed consolidating schedules summarizing se
313、parately the financial position and cash flows of theregistrant,Cayman Islands incorporated parent company,Kepuni Holdings(“Parent Company”in the tables below),its non-VIE subsidiaries and Taizhou Kepuni which was a VIE prior to its conversion to a wholly-owned subsidiary of Kepuni WFOEeffective Mar
314、ch 9,2022,together with eliminating adjustments.After the restructure that dissolved the VIE structure,KepuniHoldings now controls and receives the economic benefits of Taizhou Kepunis business operation,if any,through equityownership.Consolidated Statements of Operations Information For the six mon
315、ths ended June 30,2022 Parent Non-VIE subsidiaries VIE*Elimination Consolidated Revenues$11,201,667$11,201,667 Cost of revenues$7,682,319$7,682,319 Gross profits$3,519,348$3,519,348 Selling and marketing expense$1,861,355$1,861,355 General and administrative expenses$83,357$1,445,672$1,529,029 Incom
316、e taxes$(24,012)$(24,012)Share of loss from non-VIE subsidiaries$Share of loss from VIEs$Net Income$65,585$65,585 Comprehensive loss$(211,500)$(211,500)*Effective March 9,2022,all shareholders of Taizhou Kepuni transferred their 100%equity interests to Kepuni WFOE.Asa result,Taizhou Kepuni has becom
317、e a wholly-owned subsidiary of Kepuni WFOE,and the VIE agreements wereterminated.The Company no longer has any VIE as of the date of this prospectus.For the year ended December 31,2021 Parent Non-VIE subsidiaries VIE Elimination Consolidated Revenues$10,615,693$10,615,693 Cost of revenues$6,289,083$
318、6,289,083 Gross profits$4,326,610$4,326,610 Selling and marketing expense$374,894$374,894 General and administrative expenses$230,000$1,335,343$1,565,343 Income taxes$(299,369)$(299,369)Share of loss from non-VIE subsidiaries$Share of loss from VIEs$Net Income$1,990,731$1,990,731 Comprehensive incom
319、e$2,108,118$2,108,118 For the year ended December 31,2020 Parent Non-VIE subsidiaries VIE Elimination Consolidated Revenues$9,366,670$9,366,670 Cost of revenues$5,787,710$5,787,710 Gross profits$3,578,960$3,578,960 Selling and marketing expense$339,509$339,509 General and administrative expenses$490
320、,114$1,086,999$1,577,113 Income taxes$(231,700)$(231,700)Share of loss from non-VIE subsidiaries$Share of loss from VIEs$Net income$1,351,217$1,351,217 Comprehensive income$1,548,901$1,548,901 2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm
321、https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm30/221162023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepunih
322、oldings.htm31/221 Consolidated Balance Sheets Information As of June 30,2022 Parent Non-VIE subsidiaries VIE*Elimination Consolidated Cash$147,659$147,659 Notes receivable 138,909 138,909 Accounts receivable,net of$86,874allowance for doubtful accounts as of June 30,2022$3,088,568$3,088,568 Prepayme
323、nts$574,438$574,438 Other receivables$91,712$91,712 Amounts due from related parties$125,581$125,581 Amount due from intercompany entity$803,471$(803,471)$Inventory$2,901,341$2,901,341 Total current assets$7,068,209$7,068,209 Construction in progress$Property,plant and equipment,net$5,677,294$5,677,
324、294 Intangible assets,net$643,867$643,867 Deferred tax asset,net$13,031$13,031 Investments in non-VIE subsidiaries$Equity in VIEs through VIE agreements$Total non-current assets$6,334,192$6,334,192 Total assets$13,402,401$13,402,401 Short term bank loans$595,845$595,845 Notes payable 138,909 138,909
325、 Accounts payable$1,919,089$1,919,089 Advance from customers$724,183$724,183 Amount due to related parties$Amount due to intercompany entity$803,471$(803,471)$Payroll payable$101,446$101,446 Tax payable$4,521,388$4,521,388 Other payables$159,837$159,837 Total liabilities$8,160,648$8,160,648 Sharehol
326、ders equity$50,000$5,241,753$(50,000)$5,241,753 *Effective March 9,2022,all shareholders of Taizhou Kepuni transferred their 100%equity interests to Kepuni WFOE.Asa result,Taizhou Kepuni has become a wholly-owned subsidiary of Kepuni WFOE,and the VIE agreements wereterminated.The Company no longer h
327、as any VIE as of the date of this prospectus.As of December 31,2021 Parent Non-VIE subsidiaries VIE Elimination Consolidated Cash$20,528$20,528 Accounts receivable,net of$254,524allowance for doubtful accounts as of December31,2021$911,244$911,244 Prepayments$388,559$388,559 Other receivables$101,13
328、7$101,137 Amounts due from related parties$392,732$392,732 Amount due from intercompany entity$720,114$(720,114)$Inventory$3,308,817$3,308,817 Total current assets$5,123,017$5,123,017 Property,plant and equipment,net$6,105,441$6,105,441 Intangible assets,net$685,502$685,502 Deferred tax asset,net$38
329、,179$38,179 Investments in non-VIE subsidiaries$Equity in VIEs through VIE agreements$Total non-current assets$6,829,122$6,829,122 Total assets$11,952,139$11,952,139 2023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.sec.gov/Archives
330、/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm32/221Short term bank loans$1,338,309$1,338,309 Accounts payable$321,093$321,093 Advance from customers$213,179$213,179 Amount due to related parties$Amount due to intercompany entity$720,114$(720,114)$Payroll payable$116,189$116
331、,189 Tax payable$4,276,316$4,276,316 Accrued interest$Other payables$233,800$233,800 Total liabilities$6,498,886$6,498,886 Shareholders equity$50,000$5,453,253$(50,000)$5,453,253 172023/2/23https:/www.sec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htmhttps:/www.s
332、ec.gov/Archives/edgar/data/1826202/0003259/ea172555-f1a4_kepuniholdings.htm33/221 As of December 31,2020 Parent Non-VIE subsidiaries VIE Elimination Consolidated Cash$8,527$8,527 Accounts receivable,net of$213,493allowance for doubtful accounts as of December31,2020$2,204,364$2,204,364 Pr
333、epayments$2,240,694$2,240,694 Other receivables$170,634$170,634 Amounts due from related parties$109,206$109,206 Amount due from intercompany entity$490,114$(490,114)$Inventory$1,441,967$1,441,967 Total current assets$6,175,392$6,175,392 Construction in progress$3,749,160$3,749,160 Property,plant and equipment,net$406,202$406,202 Intangible assets,net$683,241$683,241 Deferred tax asset,net$31,667$