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1、/As filed with the Securities and Exchange Commission on March 1,2023 Registration No. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 AMENDMENT NO.3TOFORM F-1/AREGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ZHONG YUAN BIO-TECHNOLOGY HOLDINGS LIMITED(Exact Name
2、 of Registrant as Specified in its Charter)Cayman Islands 2833 Not Applicable(State or Other Jurisdiction ofIncorporation or Organization)(Primary Standard IndustrialClassification Code Number)(I.R.S.EmployerIdentification No.)Suite 901,Tesbury Centre28 Queens Road EastWanchai,Hong KongTelephone:+85
3、2 2919-8916(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,New York 10168Telephone:800-221-0102_(Name,address,including zip code,and telephone number,including area code,of agen
4、t for service)Copies to:Henry F.Schlueter,Esq.Celia Velletri,Esq.Schlueter&Associates,P.C.5290 DTC Parkway,Suite 150Greenwood Village,CO 80111Telephone:303-292-3883Mark E.Crone,Esq.Liang Shih,Esq.The Crone Law Group P.C.420 Lexington Avenue,Suite 2446New York,New York 10170Telephone:646-861-7891 App
5、roximate date of commencement of proposed sale to the public:As soon as practicable after the effective date of thisregistration statement.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 underthe Securities Act of 1933,ch
6、eck the following box.If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,check thefollowing box and list the Securities Act registration statement number of the earlier effective registration statement for the sameoffering./If this
7、 Form is a post-effective 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 t
8、o Rule 462(d)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.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Secur
9、ities Act or Rule12b-2 of the Securities Exchange Act of 1934.Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any
10、new or revised financial accountingstandards provided pursuant to Section 7(a)(2)(B)of the Securities Act.The term new or revised financial accounting standard refers to any update issued by the Financial Accounting Standards Board toits Accounting Standards Codification after April 5,2012.The Regis
11、trant hereby amends this registration statement 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 S
12、ecurities Act of 1933 or until the registration statementshall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a)maydetermine./The information in this prospectus is not complete and may be changed.We may not sell these securities until thereg
13、istration statement filed with the Securities and Exchange Commission is effective.This prospectus is not an offer to sellthese securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.SUBJECT TO COMPLETIONDATED _,2023 PRELIMINARY PROSPE
14、CTUS ZHONG YUAN BIO-TECHNOLOGY HOLDINGS LIMITED 1,500,000 Ordinary Sharesand500,000 Ordinary Shares offered by the Selling Shareholder This is an offering of ordinary shares,US$0.001 par value per share(“Ordinary Shares”)of Zhong Yuan Bio-TechnologyHoldings Limited,an exempted company incorporated i
15、n the Cayman Islands with limited liability(the“Company”or“ZhongYuan Cayman”).The Company is offering,on a firm commitment engagement basis,1,500,000 Ordinary Shares.The SellingShareholder(as defined herein)is offering an additional 500,000 Ordinary Shares to be sold in the offering pursuant to this
16、prospectus.We will not receive any proceeds from the sale of the Ordinary Shares to be sold by the Selling Shareholder.Weanticipate that the public offering price of the Ordinary Shares will be between US$4.00 and US$6.00 per Ordinary Share.Prior to this offering,our Ordinary Shares were traded on t
17、he OTC Market under the symbol ZHYBF.However,there hasbeen only a limited trading market for our Ordinary Shares and there can be no assurance that a viable public market will everdevelop.We intend to list our Ordinary Shares on the Nasdaq Capital Market.There can be no assurance that we will be suc
18、cessfulin listing our Ordinary Shares on the Nasdaq Capital Market.We will not close this offering unless we have obtained approval fromthe Nasdaq Stock Market to list our Ordinary Shares on the Nasdaq Capital Market in conjunction with this public offering.Investing in our Ordinary Shares involves
19、a high degree of risk,including the risk of losing your entire investment.See“Risk Factors”beginning on page 23 to read about factors you should consider before buying our Ordinary Shares.We are an“emerging growth company”and a“foreign private issuer”under applicable U.S.federal securities laws and,
20、assuch,are eligible for reduced public company reporting requirements.Please see“Implications of Being an Emerging GrowthCompany and a Foreign Private Issuer”beginning on page 19 of this prospectus for more information.Upon completion of this offering,our issued and outstanding shares will consist o
21、f 19,179,618 Ordinary Shares.Assuming a public offering price of US$5.00 per Ordinary Share(being the mid-point range of US$4.00 and US$6.00 perOrdinary Share),the total underwriting discounts payable by us will be US$525,000,and the total proceeds to us,before expenses,will be US$6,975,000.We are n
22、ot a Chinese operating company but a holding company organized under the laws of the Cayman Islandswith operations conducted by our operating subsidiary based in the Peoples Republic of China(“China”and the“PRC”)and our principal executive offices located in Hong Kong.Because our operations are cond
23、ucted in China through ourwholly-owned operating subsidiary,the Chinese government may exercise significant oversight and discretion over theconduct of our business and may intervene in or influence our operations at any time,which could result in a materialchange in our operations and/or the value
24、of our Ordinary Shares./Recent statements by the Chinese government have indicated an intent to exert more oversight and control overofferings that are conducted overseas and/or foreign investments in China based issuers.Any future action by the Chinesegovernment expanding the categories of industri
25、es and companies whose foreign securities offerings are subject togovernment review could significantly limit or completely hinder our ability to offer or continue to offer securities toinvestors and could cause our securities to significantly decline in value or to be worthless.Pursuant to the Hold
26、ing Foreign Companies Accountable Act(the“HFCAA”),which became law in December2020,our Ordinary Shares may be prohibited from trading on a U.S.exchange if our auditor cannot be fully inspected bythe Public Company Accounting Oversight Board(the“PCAOB”).The HFCAA prohibits foreign companies from list
27、ingtheir securities on U.S.exchanges if the companys auditor has been unavailable for PCAOB inspection or investigation forthree consecutive years beginning in 2021.In June 2021,the Senate passed the Accelerating Holding Foreign CompaniesAccountable Act(the“AHFCAA”)which,if signed into law,would red
28、uce the time period for the delisting of foreigncompanies under the HFCAA to two consecutive years instead of three years.On December 16,2021,the PCAOB issued aDetermination Report(the“Determination Report”),which found that the PCAOB is unable to inspect or investigatecompletely registered public a
29、ccounting firms headquartered in:(1)mainland China of the Peoples Republic of Chinabecause of a position taken by one or more authorities in mainland China;and(2)Hong Kong,a Special AdministrativeRegion and dependency of the PRC,because of a position taken by one or more authorities in Hong Kong.In
30、addition,theDetermination Report identified specific registered public accounting firms subject to these determinations.Our previous public accounting firm,Centurion ZD CPA&Co(“Centurion ZD”),who audited our financialstatements for the fiscal years ended March 31,2020 and 2021,is headquartered in Ho
31、ng Kong and thus subject to thedeterminations announced by the PCAOB in its Determination Report.As the PCAOB was not able to fully conductinspections of our previous auditors work papers in Hong Kong,our shareholders were deprived of the benefits of suchinspection.Effective February 25,2022,to prot
32、ect our investors and to carry out the PCAOBs mandate,we dismissedCenturion ZD as our independent registered public accounting firm and we engaged K.R.Margetson Ltd.(“Margetson”),whose principal office is located in Vancouver,British Columbia,Canada,as our new independent registered publicaccounting
33、 firm.As Margetson is not located in China or Hong Kong,Margetson is not subject to the determinationsannounced by the PCAOB on December 16,2021.We believe that the PCAOBs inspectors and investigators will haveconsistent access to the audit work performed by Margetson for us.Therefore,we do not expe
34、ct to be affected by theHFCAA or the AHFCAA at this time.Therefore,in addition to subjecting our securities to the possibility of being prohibited from trading or delistedfrom a U.S.exchange,the inability of the PCAOB to conduct inspections of our auditors work papers in China or HongKong would make
35、 it more difficult to evaluate the effectiveness of our auditors audit procedures or quality controlprocedures as compared to auditors outside of China that are subject to PCAOB inspections.As a result,our investorswould be deprived of the benefits of the PCAOBs oversight of our auditor through such
36、 inspections and they may loseconfidence in our reported financial information and procedures and the quality of our financial statements.Also,wecannot assure you that U.S.regulatory authorities will not apply additional or more stringent criteria to us.Suchuncertainty could cause the market price o
37、f our Ordinary Shares to be materially and adversely affected.See“Risk Factors Risks Related to Our Company To the extent that our independent registered public accounting firms auditdocumentation related to their audit reports for the Company may,in the future,be located in China or in Hong Kong,ou
38、rOrdinary Shares could be delisted and prohibited from trading on a U.S.exchange”on page 28 of this prospectus./On August 26,2022,the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commissionand the Ministry of Finance of the PRC(the“SOP”),taking the first step toward open
39、ing access for the PCAOB to inspectand investigate registered public accounting firms headquartered in mainland China and Hong Kong completely,consistentwith U.S.law.Pursuant to the SOP,the PCAOB shall have independent discretion to select any issuer audits for inspectionor investigation and has the
40、 unfettered ability to transfer information to the SEC.However,uncertainties still exist as towhether the applicable parties,including governmental agencies,will fully comply with the framework.The PCAOB hasindicated that its December 2021 determinations under the HFCAA remain in effect;however,the
41、PCAOB is required toreassess those determinations by the end of 2022.Under the PCAOBs rules,a reassessment of a determination under theHFCAA may result in the PCAOB reaffirming,modifying or vacating the determination.Depending on the implementationof the SOP,if the PCAOB continues to be prohibited f
42、rom conducting complete inspections and investigations of PCAOB-registered public accounting firms in China and/or Hong Kong,then companies audited by those firms will be delistedpursuant to the HFCAA despite the SOP.Therefore,there is no assurance that the SOP will provide relief from the delisting
43、risk arising from the application of the HFCAA or the AHFCAA.Recently,the PRC government initiated a series of regulatory actions and made a number of public statements onthe regulation of business operations in China with little advance notice,including cracking down on illegal activities in thesec
44、urities market,enhancing supervision over China-based companies listed overseas using a variable interest entitystructure,adopting new measures to extend the scope of cybersecurity reviews and expanding efforts in anti-monopolyenforcement.We do not believe that we are directly subject to these regul
45、atory actions or statements,as we do not have avariable interest entity structure and our business does not involve the collection of user data,implicate cybersecurity orinvolve any other type of restricted industry.Because these statements and regulatory actions are new,however,it is highlyuncertai
46、n how soon legislative or administrative regulation making bodies in China will respond to them,or what existingor new laws or regulations will be modified or promulgated,if any,or what the potential impact of any such modified ornew laws and regulations will be on our daily business operations or o
47、ur ability to accept foreign investments and list on aU.S.exchange.The structure of cash flows within our organization,and a summary of the applicable regulations,is as follows:1.Our equity structure is a direct holding structure,that is,the overseas entity that is trading on the OTC Marketin the Un
48、ited States is Zhong Yuan Cayman.Zhong Yuan Cayman directly controls China Bio-Technology HoldingsLimited(“China Bio”),a Seychelles company.China Bio directly controls Zhong Yuan Bio-Technology(Hong Kong)Limited(“Zhong Yuan HK”),a Hong Kong company.Zhong Yuan HK directly controls Zhong Yuan Bio-Tech
49、nology(Shenzhen)Limited(“Zhong Yuan SZ”),a China company and a wholly foreign owned entity(“WFOE”).Our WFOEconducts its operations through Bao-Feng Bio-Technology(Beijing)Limited(“Bao-Feng”),a China company and,currently,our sole operating subsidiary.See“Our Business-History of the Company”and“Our B
50、usiness-Corporate Structure”for additional details.2.Within our direct holding structure and based on our compliance with current foreign exchange regulations,thecross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the PRC.After investors
51、funds enter into Zhong Yuan Cayman,the funds can be directly transferred to Zhong Yuan HK.ZhongYuan HK can then directly transfer funds to Zhong Yuan SZ,and those funds can then be transferred to Bao-Feng.However,as these foreign exchange regulations,including their interpretation and implementation
52、,have been evolving,it isunclear how these regulations,and any future regulations concerning offshore or cross-border transactions,will beinterpreted,amended and implemented by the relevant government authorities.For example,we may be subject to a morestringent review and approval process with respe
53、ct to our foreign exchange activities,such as cross-border transfer offunds,remittance of dividends and foreign currency-denominated borrowings,which may adversely affect our financialcondition and results of operations.If the Company intends to distribute dividends,Bao-Feng will distribute dividend
54、s to Zhong Yuan SZ,our WFOE,which will then directly distribute dividends to Zhong Yuan HK in accordance with the laws and regulations of the PRC.Zhong Yuan HK will transfer dividends to China Bio,which will transfer them to the Company.The Company will thendistribute dividends to all of its shareho
55、lders in proportion to the Ordinary Shares they hold,regardless of whether theshareholders are U.S.investors or investors in other countries or regions.3.As of the date of this prospectus,neither the Company nor any of its subsidiaries has ever paid dividends ormade distributions to U.S.investors.Si
56、nce consummation of the Share Exchange,the Company has not transferred anyfunds to its subsidiaries to fund their business operations,nor has it received any transfer of funds from its subsidiaries.Inthe future,any cash proceeds raised from overseas financing activities,including this offering,may b
57、e transferred by us toour subsidiaries via capital contribution or shareholder loans,as the case may be.For a detailed description of the transfers/from the Company to its subsidiaries and from its subsidiaries to the Company,see“Transfers of Cash to and from OurSubsidiaries”in the“Prospectus Summar
58、y”section of this prospectus./4.Our PRC subsidiaries ability to distribute dividends is based upon their distributable earnings.Current PRCregulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulatedprofits,if any,determined in accordance wi
59、th PRC accounting standards and regulations.In addition,each of our PRCsubsidiaries is required to set aside at least 10%of its after-tax profits each year,if any,to fund a statutory reserve untilsuch reserve reaches 50%of its registered capital.These reserves are not distributable as cash dividends
60、.See“Regulationsin China Applicable to Our Business-Regulations On Dividend Distribution”for more information.To address persistent capital outflows and the RMBs depreciation against the U.S.dollar in the fourth quarter of2016,the Peoples Bank of China and the State Administration of Foreign Exchang
61、e,or SAFE,implemented a series ofcapital control measures,including stricter vetting procedures for China-based companies to remit foreign currency foroverseas acquisitions,dividend payments and shareholder loan repayments.The PRC government may continue tostrengthen its capital controls and our PRC
62、 subsidiaries dividends and other distributions may be subject to tightenedscrutiny in the future.The PRC government also imposes controls on the conversion of RMB into foreign currencies and theremittance of currencies out of the PRC.Therefore,we may experience difficulties in completing the admini
63、strativeprocedures necessary to obtain and remit foreign currency for the payment of dividends from our profits,if any.Furthermore,if our PRC subsidiaries incur debt on their own in the future,the instruments governing the debt may restricttheir ability to pay dividends or make other payments.In add
64、ition,the Enterprise Income Tax Law and its implementation rules provide that a 10%withholding tax willbe applicable to dividends payable by Chinese companies to non-PRC resident enterprises unless reduced under treaties orarrangements between the PRC central government and the governments of other
65、countries or regions where the non-PRCresident enterprises are tax resident.Pursuant to the tax agreement between Mainland China and the Hong Kong SpecialAdministrative Region,the withholding tax rate in respect of the payment of dividends by a PRC enterprise to a Hong Kongenterprise may be reduced
66、to 5%from the standard rate of 10%.However,if the relevant tax authorities determine thatour transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment,the relevant taxauthorities may adjust the favorable withholding tax in the future.Accordingly,there is no assur
67、ance that the reduced 5%withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries.Thiswithholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries.Please see“Risk Factors”beginning on page 23 of this prospectus for additio
68、nal information.Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of thesesecurities or passed upon the adequacy or accuracy of this prospectus.Any representation to the contrary is a criminaloffense.If we complete this offering,net procee
69、ds will be delivered to us on the closing date.The underwriters expect to deliver the Ordinary Shares to the purchasers against payment on or about,2022.You should not assume that the information contained in the registration statement to which this prospectus is a part isaccurate as of any date oth
70、er than the date hereof,regardless of the time of delivery of this prospectus or of any sale of the OrdinaryShares being registered in the registration statement of which this prospectus forms a part.No dealer,salesperson or any other person is authorized to give any information or make any represen
71、tations in connectionwith this offering other than those contained in this prospectus and,if given or made,the information or representations must not berelied upon as having been authorized by us.This prospectus does not constitute an offer to sell or a solicitation of an offer to buyany security o
72、ther than the securities offered by this prospectus,or an offer to sell or a solicitation of an offer to buy any securitiesby anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful./Per Share Total Offering price(1)US$5.00 US$10,000,000(4)Underwriting discount
73、s and commissions to be paid by us(2)US$0.35 US$525,000 Underwriting discounts and commissions to be paid by the SellingShareholder(2)US$0.35 US$175,000 Proceeds to the Company before expenses(3)US$4.65 US$6,975,000 Proceeds to the Selling Shareholder US$4.65 US$2,325,000 (1)Offering price per share
74、 is assumed to be US$5.00,being the mid-point of the offering price range.(2)We and the Selling Shareholder have agreed to pay the underwriters a discount equal to 7.0%of the gross proceeds of the offering.This tabledoes not include a non-accountable expense allowance equal to 1.0%of the gross proce
75、eds of this offering payable to the underwriters.For adescription of the other compensation to be received by the underwriters,see“Underwriting”beginning on page 109.(3)Excludes fees and expenses payable to the underwriters.The total amount of underwriters expenses related to this offering is set fo
76、rth in thesection entitled“Underwriting Discounts,Commission and Expenses”on page 109.(4)Includes US$7,500,000 gross proceeds from the sale of 1,500,000 Ordinary Shares offered by the Company and US$2,500,000 grossproceeds from the sale of 500,000 Ordinary Shares offered by the Selling Shareholder.N
77、either the United States Securities and Exchange Commission nor any state securities commission nor any otherregulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete.Any representation to the contrary is a criminal offense.REVERE SECURI
78、TIES LLC The date of this prospectus is,2023 /TABLE OF CONTENTS PageABOUT THIS PROSPECTUS2PRESENTATION OF FINANCIAL INFORMATION2MARKET AND INDUSTRY DATA2SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS2NOTES ON PROSPECTUS PRESENTATION4DEFINITIONS4PROSPECTUS SUMMARY6RISK FACTORS23ENFORCEABILITY OF C
79、IVIL LIABILITIES47USE OF PROCEEDS49MARKET FOR ORDINARY SHARES AND RELATED SHAREHOLDER MATTERS49DIVIDEND POLICY50CAPITALIZATION AND INDEBTEDNESS50DILUTION51SELECTED FINANCIAL DATA53MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS56OUR BUSINESS66REGULATIONS IN CHINA
80、APPLICABLE TO OUR BUSINESS82MANAGEMENT90COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS96PRINCIPAL AND SELLING SHAREHOLDERS100RELATED PARTY TRANSACTIONS102DESCRIPTION OF SHARE CAPITAL104CERTAIN CAYMAN ISLANDS COMPANY CONSIDERATIONS109SHARES ELIGIBLE FOR FUTURE SALE114UNDERWRITING115EXPENSES RELATED
81、 TO THIS OFFERING118LEGAL MATTERS118EXPERTS118WHERE YOU CAN FIND MORE INFORMATION119INDEX TO CONSOLIDATED FINANCIAL STATEMENTSF-1 Until _,2023(the 25th day after the date of this prospectus),all dealers that effect transactions in these OrdinaryShares,whether or not participating in this offering,ma
82、y be required to deliver a prospectus.This is in addition to the dealersobligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.1/ABOUT THIS PROSPECTUS Neither the Company,the Selling Shareholder nor any of the underwriters has au
83、thorized anyone to provide you with anyinformation or to make any representations other than as contained in this prospectus or in any related free writing prospectus.Neither the Company,the Selling Shareholder nor the underwriters take responsibility for,or provide any assurance about thereliabilit
84、y of,any information that others may give you.This prospectus is an offer to sell only the securities offered hereby,andonly under circumstances and in jurisdictions where it is lawful to do so.The information contained in this prospectus is accurateonly as of the date of this prospectus,regardless
85、of the time of delivery of this prospectus or any sale of the securities.TheCompanys business,financial condition,results of operations and prospects may have changed since that date.For investors outside the United States:Neither the Company,the Selling Shareholder nor the underwriters has doneanyt
86、hing that would permit this offering or possession or distribution of this prospectus in any jurisdiction,other than the UnitedStates,where action for that purpose is required.Persons outside the United States who come into possession of this prospectusmust inform themselves about,and observe any re
87、strictions relating to,the offering of the Ordinary Shares and the distribution ofthis prospectus outside the United States.PRESENTATION OF FINANCIAL INFORMATION Unless otherwise indicated,all financial information contained in this prospectus is prepared and presented in accordancewith generally ac
88、cepted accounting principles in the United States of America(“U.S.GAAP”or“GAAP”).Certain amounts,percentages and other figures included in this prospectus have been subject to rounding adjustments.Accordingly,amounts,percentages and other figures shown as totals in certain tables or charts may not b
89、e the arithmeticaggregation of those that precede them,and amounts and figures expressed as percentages in the text may not total 100%or,whenaggregated,may not be the arithmetic aggregation of the percentages that precede them.MARKET AND INDUSTRY DATA Certain market data and forecasts used throughou
90、t this prospectus were obtained from internal company surveys,marketresearch,consultant surveys,reports of governmental and international agencies and industry publications and surveys.Industrypublications and third-party research,surveys and reports generally indicate that their information has bee
91、n obtained from sourcesbelieved to be reliable.This information involves a number of assumptions and limitations,and you are cautioned not to give undueweight to such estimates.Our estimates involve risks and uncertainties and are subject to change based on various factors,includingthose discussed u
92、nder the heading“Risk Factors”in this prospectus.SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements that relate to our current expectations and views of future events.These forward-looking statements are contained principally in the sections entitle
93、d“Prospectus Summary,”“Risk Factors,”“Use ofProceeds,”“Managements Discussion and Analysis of Financial Condition and Results of Operations,”“Industry Overview”and“Business.”These statements relate to events that involve known and unknown risks,uncertainties and other factors,includingthose listed u
94、nder“Risk Factors,”which may cause our actual results,performance or achievements to be materially different fromany future results,performance or achievements expressed or implied by the forward-looking statements.In some cases,these forward-looking statements can be identified by words or phrases
95、such as“believe,”“plan,”“expect,”“intend,”“should,”“seek,”“estimate,”“will,”“aim”and“anticipate,”or other similar expressions,but these are not the exclusivemeans of identifying such statements.All statements other than statements of historical facts included in this document,includingthose regardin
96、g future financial position and results,business strategy,plans and objectives of management for future operations(including development plans and dividends)and statements on future industry growth are forward-looking statements.In addition,we and our representatives may from time to time make other
97、 oral or written statements which are forward-looking statements,including in our periodic reports that we file with the SEC,other information sent to our shareholders and other written materials.2/These forward-looking statements are subject to risks,uncertainties and assumptions,some of which are
98、beyond ourcontrol.In addition,these forward-looking statements reflect our current views with respect to future events and are not a guaranteeof future performance.Actual outcomes may differ materially from the information contained in the forward-looking statements asa result of a number of factors
99、,including,without limitation,the risk factors set forth in“Risk Factors”and the following:our business and operating strategies and our various measures to implement such strategies;our operations and business prospects,including development and capital expenditure plans for our existing business;c
100、hanges in policies,legislation,regulations or practices in the industry and those countries or territories in which weoperate that may affect our business operations;our financial condition,results of operations and dividend policy;changes in political and economic conditions and competition in the
101、area in which we operate,including a downturnin the general economy;the regulatory environment and industry outlook in general;future developments in the market for our products and actions of our competitors;catastrophic losses from man-made or natural disasters,such as fires,floods,windstorms,eart
102、hquakes,diseases,epidemics,other adverse weather conditions or natural disasters,war,international or domestic terrorism,civildisturbances and other political or social occurrences;the loss of key personnel and the inability to replace such personnel on a timely basis or on terms acceptable to us;th
103、e overall economic environment and general market and economic conditions in the jurisdictions in which weoperate;our ability to execute our strategies;our ability to anticipate and respond to changes in the markets in which we operate,and in client demands,trends andpreferences;changes in the need
104、for capital and the availability of financing and capital to fund those needs;exchange rate fluctuations,including fluctuations in the exchange rates of currencies that are used in our business;changes in interest rates or rates of inflation;and legal,regulatory and other proceedings arising out of
105、our operations.3/NOTES ON PROSPECTUS PRESENTATION Numerical figures included in this prospectus have been subject to rounding adjustments.Accordingly,numerical figuresshown as totals in various tables may not be arithmetic aggregations of the figures that precede them.Certain market data and otherst
106、atistical information contained in this prospectus is based on information from independent industry organizations,publications,surveys and forecasts.Some market data and statistical information contained in this prospectus are also based on managementsestimates and calculations,which are derived fr
107、om our review and interpretation of the independent sources referenced above,ourinternal research and our knowledge of the health supplement industry and,specifically,Acer truncatum.While we believe suchinformation is reliable,we have not independently verified any third-party information and our in
108、ternal data has not been verifiedby any independent source.Accordingly,actual events or circumstances may differ materially from events and circumstances that are assumed in thisinformation and you are cautioned not to give undue weight to such data.DEFINITIONS“Amended and Restated Memorandum and Ar
109、ticles of Association”means the amended and restated memorandum of associationand the amended and restated articles of association of our Company as filed with the Cayman Islands Registrar of Companies onMarch 16,2018,as amended from time to time,a copy of which is filed as Exhibit A to our Definiti
110、ve Schedule 14(C)filed withthe SEC on January 16,2018.“Bao Feng”means Bao Feng Bio-Technology(Beijing)Limited,a limited liability company incorporated on August 30,2012under the laws of the PRC,which is the Companys primary operating subsidiary.“BF Internet”means Beijing Baofeng Internet Bio-technol
111、ogy Co.,Limited,a limited liability company incorporated on May 23,2022 under the laws of the PRC,which is one of the Companys operating subsidiaries.“Business Day”means any day other Saturday,Sunday or a day that is a public holiday in the United States.“Company”or“our Company”or“Zhong Yuan Cayman”
112、means Zhong Yuan Bio-Technology Holdings Limited,an exemptedcompany incorporated in the Cayman Islands with limited liability under the Companies Act,and its subsidiaries or any of them.“China Bio”means China Bio Technology Holdings Limited,a limited liability company incorporated on June 27,2016 un
113、der thelaws of Seychelles,which is a holding company and not conducting any operations.“Companies Act”means the Companies Act(Revised)of the Cayman Islands.“COVID-19”means the Coronavirus Disease 2019.“Dandong BF”means Dandong Bao Feng Seedling Technology Co.,Limited,a limited liability company inco
114、rporated on March11,2019 under the laws of the PRC,which was one of the Companys operating subsidiaries prior to its sale in September 2022.“Exchange Act”means the U.S.Securities Exchange Act of 1934,as amended.“FINRA”means Financial Industry Regulatory Authority,Inc.“Group,”“our Group,”“we,”“us,”or
115、“our”means the Company and its subsidiaries or any of them,or where the context sorequires,in respect of the period before the Company became the holding company of its present subsidiaries,such subsidiaries asif they were subsidiaries of the Company at the relevant time or the businesses which have
116、 since been acquired or carried on bythem or as the case may be their predecessors.“Hong Kong”or“H.K.”means the Hong Kong Special Administrative Region of the Peoples Republic of China.“Operating Subsidiary”means Bao Feng Technology(Beijing)Limited,a China company and an indirect subsidiary of theCo
117、mpany.“Ordinary Resolution”means a resolution passed by a simple majority of votes cast or approved in writing by all of the votesentitled to be cast by the shareholders entitled to vote at a general meeting of the Company./“Ordinary Shares”or“Shares”means the Companys Ordinary Shares,par value$0.00
118、1 per share.4/“PRC”or“China”means the Peoples Republic of China,excluding,for the purposes of this prospectus only,Hong Kong,theMacau Special Administrative Region of the Peoples Republic of China and Taiwan.“Resale Registration Statement”means the registration statement on Form F-1 filed by the Com
119、pany on June 11,2020 and declaredeffective by the SEC on June 29,2020(SEC File No.),plus any Post-Effective Amendments thereto,pursuant to which2,236,192 Ordinary Shares were registered for resale on behalf of certain existing shareholders of the Company.“Sarbanes-Oxley Act”means the U.S.S
120、arbanes-Oxley Act of 2002.“Securities Act”means the U.S.Securities Act of 1933,as amended.“Securities and Exchange Commission,”“SEC,”“Commission”or similar term means the United States Securities and ExchangeCommission.“Selling Shareholder”means Mr.Yu Chang,a pre-existing shareholder,who is selling
121、Ordinary Shares pursuant to theregistration statement on Form F-1 of which this prospectus is a part.“Special Resolution”means a resolution passed by a majority of not less than two-thirds of the shareholders entitled to vote on thematter,in person or,where proxies are allowed,by proxy,at a general
122、meeting of the Company or in writing by all of theshareholders entitled to vote on the matter.“WFOE”means a wholly foreign-owned entity,a common investment vehicle for a China-based business wherein foreign partiescan incorporate a foreign-owned limited liability company without the involvement of a
123、 Chinese investor;starting January 2020,per the new Foreign Investment Law,WFOE has been abolished and superseded by a new type of business referred to as foreign-funded enterprise and existing businesses are expected to transition to the new designation within five years.“Zhong Yuan HK”means Zhong
124、Yuan Bio-Technology(Hong Kong)Limited,a limited liability company incorporated onFebruary 27,2017 under the laws of Hong Kong,which is a holding company and not conducting any business operations.“Zhong Yuan SZ”means Zhong Yuan Bio-Technology(Shenzhen)Limited,a limited liability company incorporated
125、 on June 10,2014 under the laws of the PRC,and a wholly foreign owned entity,which is a holding company and not conducting any businessoperations.“United States,”“U.S.”and“US”refer to the United States of America.“$,”“U.S.$,”“U.S.dollars,”“dollars,”“US$”and“USD”refer to United States dollars.5/PROSP
126、ECTUS SUMMARYThis summary highlights information contained elsewhere in this prospectus and does not contain all of the informationthat you should consider in making your investment decision.Before investing in our Ordinary Shares,you should carefully readthe entire prospectus,including our financia
127、l statements and the related notes included elsewhere in this prospectus.You shouldalso consider,among other things,the matters described under“Risk Factors”and“Managements Discussion and Analysis ofFinancial Condition and Results of Operations,”in each case appearing elsewhere in this prospectus.Un
128、less otherwise stated,allreferences to“us,”“our,”“we,”the“Company”or“Zhong Yuan Cayman”and similar designations refer to Zhong Yuan Bio-Technology Holdings Limited,a Cayman Islands exempted company with limited liability.All references to“Operating Subsidiary”refer to Bao Feng Bio-Technology(Beijing
129、)Limited,a China company.Overview The Company was originally incorporated in the State of Delaware on April 4,2016 under the name“Agate IslandAcquisition Corporation.”Its business purpose was to seek the acquisition of,or merger with,an existing company.Accordingly,the Company was considered to be a
130、“blank check”company.On March 13,2017,the Companys name was changed to ChinaBiotech Holdings Limited in anticipation of entering into a transaction with a company in China engaged in the biopharma orbiotech industry.Effective August 21,2018,the Company was redomiciled from Delaware to the Cayman Isl
131、ands by merging intoits wholly-owned Cayman Islands subsidiary,Zhong Yuan Bio-Technology Holdings Limited(the“Redomicile Merger”).As aresult of the Redomicile Merger,the Companys name was changed to Zhong Yuan Bio-Technology Holdings Limited.In 2019,the Company closed on a share exchange(the“Share E
132、xchange”)with Zhong Yuan Investment Limited,(“ZhongYuan Investment”),a Seychelles company limited by shares,that owned 100%of the shares of China Bio-Technology HoldingsLimited(“China Bio”),a company organized under the laws of the Republic of Seychelles.As a result of the Share Exchange,China Bio i
133、s now a wholly-owned subsidiary of the Company and the Company,through its indirect subsidiary,Bao Feng,isengaged in the business of nervonic acid research,the development and sale of nervonic acid-based health supplements and thedevelopment of nervonic acid-based herbal and chemical drugs.See“Our B
134、usiness History of the Company”on page 66 of thisprospectus.The following chart sets forth our corporate structure as of the date of this prospectus./6/China Bio-Technology Holdings Limited(“China Bio”)was incorporated under the laws of the Republic of Seychelles onJune 27,2016 under the name Hua Ho
135、ng Powerloop Technology Limited.On February 13,2017,its name was changed to ChinaBio-Technology Limited,and on March 6,2017 it was changed to China Bio-Technology Holdings Limited.It became a wholly-owned subsidiary of the Company in August 2019 as a result of the Share Exchange described above.Zhon
136、g Yuan Bio-Technology(Hong Kong)Limited(“Zhong Yuan HK”)was incorporated in Hong Kong on June 13,2016.The original shareholders transferred all of the shares to China Bio on February 27,2017.Zhong Yuan Bio-Technology(Shenzhen)Limited(“Zhong Yuan SZ”)was established under the laws of the PRC on June1
137、0,2014 and is our WFOE.The original shareholders transferred all of the shares to Zhong Yuan HK on May 12,2017.Bao Feng Bio-Technology(Beijing)Limited(“Bao Feng)”was incorporated in the PRC on August 30,2012 under thename Beijing Acer Truncatum Century Agricultural Science and Technology Co.,Ltd.On
138、August 10,2017,the companys namewas changed to Bao Feng Bio-Technology(Beijing)Limited.It became a wholly-owned subsidiary of Zhong Yuan-SZ on February13,2019.Bao Feng is one of the Companys two operating subsidiaries.Beijing Baofeng Internet Bio-technology Co.,Limited(“BF Internet”)was incorporated
139、 in the PRC on May 23,2022 andis owned 51%by BF Beijing and 49%by a shareholder of the Company.The principal activities of BF Internet are to sell andmarket Bao Fengs nervonic acid-based health supplements over the internet.All of the above-referenced companies are either direct or indirect wholly-o
140、wned subsidiaries of the Company.China Bio,Zhong Yuan HK and Zhong Yuan SZ are holding companies and do not conduct any business operations.Bao Feng and BFInternet,both of which conduct business operations in China,are our only operating subsidiaries(our“Operating Subsidiaries”).The Company files an
141、nual and periodic reports with the United States Securities and Exchange Commission(the SEC)under Rule 13(a)of the Exchange Act.When we refer in this prospectus to business and financial information for periods prior to the consummation of the ShareExchange,we are referring to the business and finan
142、cial information of China Bio and its subsidiaries unless the context suggestsotherwise;when we use terms such as“we,”“our,”“Company”and“us,”we are referring to the Company and all of itssubsidiaries,as a combined entity.When we use the term“Operating Subsidiary,”we are referring to Bao Feng.Busines
143、s of Bao Feng Bao Feng is in the business of nervonic acid research,the development of nervonic acid based herbal and chemical drugsand the sale of health supplements containing nervonic acid.Nervonic acid is a long chain unsaturated omega 9 fatty acid that is animportant component in myelin biosynt
144、hesis in the central and peripheral nervous system.Myelin insulates nerve cell axons toincrease the speed at which information(encoded as an electrical signal)travels from one nerve cell body to another or from anerve cell to another type of cell in the body.It is thought that nervonic acid may enha
145、nce brain function and prevent demyelinationof nerve cells,and that,therefore,it may be effective in retaining or improving the health of the brain,for example in preventing orameliorating attention-deficit hyperactive disorder(“ADHD”)in children,Alzheimers disease and mental degradation in theelder
146、ly and cerebrovascular disease,as well as promoting normal brain development in premature infants.The role of nervonic acidis also being studied with respect to psychotic illnesses,such as schizophrenia.Bao Fengs goal is to provide a complete solution for neurological disorders,from screening to int
147、ervention.Bao Feng isdedicated to the development of early detection kits for brain diseases,plant-derived nervonic acid health supplements and newdrugs for neurological diseases.Over the past decade,it has focused on research related to neurological diseases and discoveredthat nervonic acid can be
148、used as a core molecular marker,laying the foundation for the development of the detection kits anddrugs.More recently,Bao Feng has made breakthroughs in the research and development of new drugs to treat cognitiveimpairment,brain atrophy and other encephalopathies caused by brain white matter damag
149、e.7/Nervonic acid is considered to be an important biomarker for many neurological diseases,such as ADHD in children andneurodegenerative diseases in the elderly and,thus,in high demand among those populations.Bao Fengs marketing efforts areprimarily aimed at the elderly population.The problem of th
150、e aging of the world population is becoming more and more serious.According to the United Nations“World Population Ageing 2019:Highlights”report,in 2019,there were 703 million personsaged 65 years or over in the world population,or approximately 10%of the global population.It is estimated that by 20
151、50 theworlds 65 and over population will double to 1.5 billion so that one in six people in the world will be aged 65 years or over.According to census statistics released by the National Bureau of Statistics,in 2022,China has 267 million persons aged 60 or over,representing 18.9%of the total popula
152、tion,and 14%of the countrys population are aged 65 or over.The price of nervonic acid in the world market ranges from approximately$2,000 to approximately$6,000 per kilogram,depending on the purity.Since it is considered to be an important biomarker for many neurological diseases,such as ADHD inchil
153、dren and neuro-degenerative diseases in the elderly,management believes that there exists a significant market for nervonic acidhealth supplements among those populations.Bao Fengs marketing efforts are primarily aimed at the elderly population.Nervonic acid is not present in many foods.In the past,
154、nervonic acid was derived from the brains of sharks.However,theextraction process from that source is difficult,and the cost is too high for commercialization.In addition,sharks are protected bythe United Nations and many countries.Another good source of nervonic acid is the malania oleifera plant,w
155、hich is native tosouthern China.The malania oliefera plant is said to have up to 40.9%to 50%nervonic acid;however,it is a threatened species inthe world and is on the list of key wild plants for state protection.The dried seeds of the Acer truncatum tree,which is a type ofmaple native to northern Ch
156、ina,Mongolia and Korea,were found to contain 5.8%nervonic acid.Therefore,the seed oil of the Acertruncatum tree is considered to be a good source of natural nervonic acid,as well as other compounds such as Vitamin E.Bao Fengextracts the nervonic acid that it utilizes in its products from Acer trunca
157、tum seeds.The raw material sources of nervonic acid are insufficient to meet Chinese demand.Therefore,Bao Feng has a contractwith the Wengniuteqi government pursuant to which it obtains Acer truncatum seeds for use in making its products.In 2011,theChinese government No.9 announcement“Food Safety La
158、w of the Peoples Republic of China”and“Regulations of Novel Foods”approved Acer truncatum seed oil as a new resource for food ingredients,thereby recognizing the safety status of Acer truncatum.Bao Feng intends to expand its product line by building factories for purification of nervonic acid for me
159、dical levelproduct usage.There can be no assurance,however,that either Bao Feng or the Company will be able to effect this plan.Bao Fengs current products consist of:NEURO ENHANCER nervonic acid oil;Muzhiyuan Acer truncatum formula oil;and Lifes NA Candy.Early detection kits Bao Feng is in the proce
160、ss of developing early screening kits for brain white matter signal abnormalities,Parkinsonsdisease and ischemic strokes.It is in the clinical trial stage.After completion of clinical trials,Bao Feng will apply to the Ministryof Health of the PRC for an innovation class III product registration cert
161、ificate and related business operation license in China forthe production and sale of domestic disposable medical devices.It intends to distribute its innovation class III products to majorclinics and hospitals through domestic distributors,as well as through direct sales to its partner hospitals an
162、d other medicalinstitutions.Plant-based and synthetic drugs Bao Feng has improved its purification process so as to produce high(medical)grade nervonic acid in a laboratory settingand is currently working on building factories in order to achieve mass production.The next step is expected to be the d
163、evelopmentof pharmaceutical products or the sale of raw materials for nervonic acid products throughout China and abroad.8/Application of Acer truncatum seed oil for regulation of intestinal flora Bao Feng has found that supplementation of Acer truncatum seed oil can regulate intestinal flora.Its re
164、search in this areafound that after taking nervonic acid oil,the abundance of Firmicobacterium,which increases with Alzheimers disease,showed adownward trend,while the abundance of Bacteroidetes,which decreases with Alzheimers disease,showed an upward trend.Therefore,we believe that taking nervonic
165、acid oil may help to improve Alzheimers disease.This research may also be used in thefuture to intervene in other diseases believed to be caused by disorders of intestinal flora,such as autism.Competitive Advantages Experienced team of scientists Our team of scientists has over 30 years of combined
166、experience in the field of Acer truncatum tree research,and morethan 10 years in nervonic acid applications.In addition,Bao Feng achieved the National High-Tech Enterprise Award in 2017.Thisaward recognizes the continuous research and development and the transformation of technological achievements
167、in the high-techfields supported by the state,forming the core independent intellectual property rights of the enterprise,and the carrying on ofbusiness activities on this basis in China(not including resident enterprises registered in Hong Kong,Macao and Taiwan)for morethan one year.Research in coo
168、peration with hospitals Bao Feng has participated in numerous academic and scientific research projects in cooperation with China MedicalUniversity,the first top-tier medical institution established in China,and Xuanwu Hospital of Capital Medical University,a pre-eminent general hospital in both Ger
169、iatrics and neuroscience.This research supplements Bao Fengs in-house research and,together,they provide the scientific basis for Bao Fengs current and proposed products.Stable source of high quality Acer truncatum Bao Feng obtains its Acer truncatum seeds from the Wengniuteqi District government fa
170、rm in Inner Mongolia,whichcontains approximately 70,000 mu of wild 100-year old Acer truncatum trees.Under a cooperation agreement entered into in 2017between Bao Feng and the Wengniuteqi District,Bao Feng provides the seedlings for an additional 10,000 mu of Acer truncatumtrees being grown on the g
171、overnment farm and Bao Feng has the exclusive right to purchase the seeds from both the old and thenew trees.Extensive intellectual property Bao Feng currently holds 17 invention patents and 18 computer software copyrights related to its research.It is also theholder of 20 trademarks related to its
172、products.Limited current competition The nervonic acid health product industry is in its early stages;therefore,Bao Feng does not face as much competition asit would in a more established industry.However,as more companies enter the market the competition may be expected to becomemore intense.Manage
173、ment of Bao Feng plans to preempt the effect of such competition by:(i)increasing its Acer truncatumproduction;(ii)increasing its investment in research and development;(iii)obtaining certification for innovation class III productsand drugs;and(iii)enhancing its purification of nervonic acid technol
174、ogy to enter the medical usage market.We will also continueto emphasize marketing in an effort to maintain and strengthen the companys position in the nervonic acid health product marketand will attempt to build the leading nervonic acid health product brand in China.9/Our own national laboratories
175、Genetic Metabolism Key Laboratory is a joint project of Bao Feng and Health Commission Occupational DiseaseResearch Center.Complete analytical and testing instruments are available,including LC-MS,GC-MS and LC-QTOF-MS,fortargeted and untargeted metabolomics,etc.Excellent laboratories are necessary t
176、o develop and prove our theories on theapplications of nervonic acid,and research on the mechanism through which nervonic acid works provides the direction for futureapplications of nervonic acid,giving Bao Feng a competitive edge in the future Clinical application of nervonic acid Bao Feng has form
177、ed strategic partnerships with the First Affiliated Hospital of Tsinghua University,Tiantan Hospital,Xuanwu Hospital and the First Hospital of Sanming City.The doctors of the hospitals are our consultants.In the future,we plan tocarry out clinical application trials of nervonic acid in different are
178、as of medicine.Only through clinical trials can the applicationand effective concentration of nervonic acid be found,and effective combinations of nervonic acid and other drugs to improve theefficacy of a single target drug be determined.Excellent Acer truncatum germplasm resources Although many man
179、ufacturers sell crude Acer truncatum oil,the content cannot reach our concentration of nervonic acidbecause we have an excellent seed plasm resource.We extract the nervonic acid utilized in our products from the seeds of Acertruncatum trees.Our seeds are supplied by the Wengniuteqi District governme
180、nt farm in Inner Mongolia,which containsapproximately 70,000 mu(11,532 acres)of wild 100-year old Acer truncatum trees.In March 2017,Bao Feng entered into acooperation agreement with the Wengniuteqi District(the“Cooperation Agreement”).In accordance with the terms and provisionsof the Cooperation Ag
181、reement,Bao Feng provides the seedlings for an additional 10,000 mu(1647 acres)of Acer truncatum treesand the government farm provides the land and plants and maintains the seedlings.The government farm harvests the seeds,whichare currently estimated to be approximately 400,000 tons per year,and Bao
182、 Feng has the exclusive right to purchase the seeds fromboth the old and the new trees.We believe that this germplasm resource is unmatched by other companies using newly sown Acertruncatum.Therefore,by using this high content,Acer truncatum crude oil,we can obtain a higher content of nervonic acid
183、with thesame process and cost as our competitors.Bao Fengs breeding base of seedlings results from agricultural technology developed by scientists under contract withBao Feng.The concentration of nervonic acid from young trees is significantly lower than that from older trees.Our breeding baseserves
184、 as a strategic reserve for the supply of raw materials for non-high-content nervonic acid products.Low levels of nervonicacid are used for daily supplements,medium levels for health care and high levels for future use in medicine and therapy.As theyoung trees mature,the concentration of nervonic ac
185、id in the seeds of those trees will increase.Therefore,our breeding base is animportant part of Bao Fengs strategy for corporate sustainability.Price Through product innovation and exclusive formulae,Bao Feng improves its products effectiveness and taste,while maintaining alow product cost and sales
186、 price.In this way it produces unique products at prices suitable for mass consumption.Market-driven research and development that allows for continual improvement and long-term client loyalty Bao Feng adheres to a market-oriented research and development approach and actively cooperates with univer
187、sities,hospitals,medical institutions,distributors and independent sales agents in sorting out our R&D orientation based on real marketdemand.We continuously upgrade and improve our products and technologies to better suit our customers.Business of BF Internet BF Internet commenced operations in May
188、 2022.It is owned 51%and 49%,respectively,by BF Beijing and a shareholderof the Company.The principal activities of BF Internet are to sell and market Bao Fengs nervonic acid-based health supplementsover the internet.10/Risks and Challenges Investing in our Ordinary Shares involves risks.The risks s
189、ummarized below are qualified by reference to“Risk Factors”beginning on page 23 of this prospectus,which you should carefully consider before making a decision to purchase our OrdinaryShares.If any of these risks actually occurs,our business,financial condition or results of operations would likely
190、be materiallyadversely affected.In such case,the trading price of our Ordinary Shares would likely decline,and you may lose all or part of yourinvestment.These risks include but are not limited to the following:Risks Related to Our Company The Company is in the process of developing its business and
191、 has a limited operating history.See“Risk Factors Risks Related to Our Company-Our limited operating history makes it difficult to evaluate our future prospects andresults of operations”on page 23 of this prospectus.The Company has experienced negative cash flow and losses from operations.See“Risk F
192、actors Risks Related toOur Company-The Company has incurred net losses in the past and may incur losses again inthe future”on page 23 of this prospectus.We may not be able to raise additional capital.See“Risk Factors Risks Related to Our Company-We may not beable to raise the additional capital nece
193、ssary to execute our business strategy,which could result in the curtailment ofour operations”on page 24 of this prospectus.We are a holding company with a total of four subsidiaries;however,at the current time only one subsidiary,BaoFeng,is conducting operations and we are and will remain dependent
194、 on Bao Feng for our revenue.See“Risk Factors Risks Related to Our Company-We currently have only one operating subsidiary and one line of products”on page24 of this prospectus.Our Operating Subsidiary may not be able to obtain or maintain all necessary licenses,permits and approvals and tomake all
195、necessary registrations and filings for its business activities in multiple jurisdictions and related to residentstherein,especially in the PRC,or otherwise relating to PRC residents.See“Risk Factors Risks Related to OurCompany-Our Operating Subsidiary may not be able to obtain or maintain all neces
196、sary licenses,permits andapprovals and to make all necessary registrations and filings for its business activities in multiple jurisdictions andrelated to residents therein,especially in the PRC,or otherwise relating to PRC residents”on page 24 of thisprospectus.It may be difficult or impossible for
197、 a shareholder to effect service of process or to bring an action against us oragainst our directors and officers in the Cayman Islands,in Hong Kong or in China in the event that a shareholderbelieves that his rights have been infringed under the securities laws or otherwise.Even if a shareholder is
198、 successfulin bringing an action of this kind,the laws of the Cayman Islands,Hong Kong and China may render the shareholderunable to enforce a judgment against our assets or the assets of our directors and officers.See“Risk Factors RisksRelated to Our Company-Our shareholders may face difficulties i
199、n protecting their interests,and their ability toprotect their rights through the U.S.federal courts may be limited because we are incorporated under Cayman Islandslaw,we conduct all of our operations in China and with the exception of Ms.Huang,one of our independent directorswho resides in the Unit
200、ed States,all of our other directors and officers reside outside the United States”as disclosedon page 25 of this prospectus.11/No overseas securities regulator is allowed to directly conduct investigation or evidence collection activities withinthe territory of the PRC.The inability of an overseas
201、securities regulator to directly conduct investigation or evidencecollection activities within China may result in difficulties faced by our shareholders in protecting their interests.See“Risk Factors Risks Related to Our Company-It may be difficult for overseas regulators to conduct investigationso
202、r collect evidence within China”on page 26 of this prospectus.If we fail to implement and maintain an effective system of internal controls over financial reporting,we may beunable to accurately report our results of operations,meet reporting obligations or prevent fraud.As a result,holdersof our se
203、curities could lose confidence in our financial and other public reporting,which would harm our business andthe trading price of our securities.See“Risk Factors Risks Related to Our Company-We have identified materialweaknesses in our internal control over financial reporting.If we fail to maintain
204、an effective system of internalcontrol over financial reporting,we may not be able to accurately report our financial results or prevent fraud.As aresult,shareholders could lose confidence in our financial and other public reporting,which would harm our businessand the future trading price of our Or
205、dinary Shares”on page 26 of this prospectus.U.S.public companies that have substantially all of their operations in China(including in Hong Kong)have been thesubject of intense scrutiny,criticism and negative publicity by investors,financial commentators and regulatoryagencies,such as the SEC.Much o
206、f the scrutiny,criticism and negative publicity has centered on financial andaccounting irregularities and mistakes,a lack of effective internal controls over financial accounting,inadequatecorporate governance policies or a lack of adherence thereto and,in many cases,allegations of fraud.See“RiskFa
207、ctors Risks Related to Our Company-The recent joint statement by the SEC,proposed rule changes submitted byNasdaq and an act passed by the U.S.Senate and the U.S.House of Representatives all call for additional and morestringent criteria to be applied to emerging market companies.These developments
208、could add uncertainties to ouroffering,business operations,Ordinary Share price and reputation”on page 27 of this prospectus.The HFCAA prohibits foreign companies from listing their securities on U.S.exchanges if the companys auditor hasbeen unavailable for PCAOB inspection or investigation for thre
209、e consecutive years beginning in 2021 and,if theAHFCAA becomes law,that time period would be reduced to two years.If our auditors work papers were to becomelocated in China or Hong Kong,and thereby not be available for PCAOB inspection,our Ordinary Shares could bedelisted and prohibited from trading
210、 on a U.S.exchange.See“Risk Factors Risks Related to Our Company-To theextent that our independent registered public accounting firms audit documentation related to their audit reports forthe Company may,in the future,be located in China or in Hong Kong,our Ordinary Shares could be delisted andprohi
211、bited from trading on a U.S.exchange”on page 28 of this prospectus.Risks Related to the Business of Bao Feng and BF Internet We believe that market recognition of our brand is a key factor to ensuring our future success,and the quality andacceptance of our products will determine whether our brand b
212、ecomes recognized as a leading brand in the industry.As we continue to grow in size and broaden the scope of our product offerings,however,it may become increasinglydifficult to maintain the quality and consistency of the products we offer,which may negatively impact our brand andthe popularity of o
213、ur products offered thereunder.See“Risk Factors Risks Related to the Business of Bao Feng-Bao Fengs business depends on the market recognition of its brand.If we are not able to maintain our reputation andenhance our brand recognition,our business and operating results may be materially and adversel
214、y affected”on page30 of this prospectus Our business is in an industry that we expect to become increasingly competitive,and many of our competitors,bothlocal and international,may have substantially greater technical,financial and marketing resources than we have.See“Risk Factors Risks Related to t
215、he Business of Bao Feng-We may face increasing competition in our industry andmay not be able to successfully compete with our competitors”on page 30 of this prospectus.12/We currently offer three health supplement products.We intend to continue developing new products,as well asfurther enhancing ou
216、r existing products.However,this process is subject to risks and uncertainties.See“Risk Factors Risks Related to the Business of Bao Feng-We may not be successful in introducing new products or enhancingour existing products”on page 30 of this prospectus.We depend upon factors relating to discretion
217、ary consumer spending in China.See“Risk Factors Risks Related tothe Business of Bao Feng-Our business is affected by global,national and local economic conditions,as the productsit sells are discretionary”on page 31 of this prospectus.As substantially all of our assets and operations are located in
218、the PRC,our business,financial condition,results ofoperations and prospects may be influenced to a significant degree by political,economic and social conditions in thePRC generally.The Chinese government continues to play a significant role in regulating industry development and incontrolling the P
219、RCs economic growth.See“Risk Factors Risks Related to the Business of Bao Feng-Changes inChinas economic,political or social conditions or government policies could have a material adverse effect on ourbusiness and operations”on page 31 of this prospectus.If we fail to anticipate,identify or react a
220、ppropriately to changes in consumer demand,we could experience excessinventories,higher than normal markdowns or be unable to sell the products,which would reduce our revenue,financial position and results of operations.See“Risk Factors Risks Related to the Business of Bao Feng-Consumer preferences
221、in the health care industry change rapidly and are difficult to predict”on page 31 of thisprospectus.We depend on our largest customers for a significant portion of our sales revenue,and we cannot be certain that salesto these customers will continue.If sales to these customers do not continue,then
222、our sales revenue will decline andour business will be negatively impacted.See“Risk Factors Risks Related to the Business of Bao Feng-We dependon our largest customers for a significant portion of our sales revenue,and we cannot be certain that sales to thesecustomers will continue”on page 32 of thi
223、s prospectus.We collect and retain large volumes of data relating to our business and from our employees and customers forbusiness purposes.A penetrated or compromised data system or the intentional,inadvertent or negligent release ordisclosure of data could result in theft,loss or fraudulent or unl
224、awful use of data relating to our Company or ouremployees,independent distributors or customers,which could harm our reputation,disrupt our operations or result inremedial and other costs,fines or lawsuits.See“Risk Factors Risks Related to the Business of Bao Feng-Cybersecurity risks and the failure
225、 to maintain the integrity of data belonging to our Company,employees and customerscould expose us to data loss,litigation and liability,and our reputation could be significantly harmed”on page 33 ofthis prospectus.We currently market dietary supplements.However,if government officials should determ
226、ine that our products shouldbe categorized as health foods,this could end or limit our ability to market such products in China and have a materialadverse effect on our results of operations and financial condition.In addition,if we expand into the medical market,we will need to apply for medical qu
227、alifications.See“Risk Factors Risks Related to the Business of Bao Feng-Difficulties in registering our products for sale in Mainland China could have a material adverse effect on our resultsof operations and financial condition”on page 33 of this prospectus.Our business has been and may continue to
228、 be adversely impacted by the COVID-19 epidemic.We may alsoexperience negative effects from future public health crises beyond our control.These events are impossible toforecast,their negative effects may be difficult to mitigate and they could adversely affect our business,financialcondition and re
229、sults of operations.See“Risk Factors Risks Related to the Business of Bao Feng-Our business issubject to risks arising from epidemic diseases,such as the recent outbreak of COVID-19”on page 34 of thisprospectus.13/Risks Related to the Peoples Republic of ChinaAs a business operating in China,we are
230、subject to the laws and regulations of the PRC,which can be complex andevolve rapidly.The PRC government has the power to exercise significant oversight and discretion over the conductof our Operating Subsidiarys business,and the regulations to which it is subject may change rapidly and with littlen
231、otice to us or our shareholders.As a result,the application,interpretation and enforcement of new and existing lawsand regulations in the PRC are often uncertain.To the extent that any new or more stringent measures are required tobe implemented,our business,financial condition and results of operat
232、ions could be adversely affected,which couldmaterially decrease the value of our Ordinary Shares.See“Risk Factors Risks Related to the Peoples Republic ofChina-Because a substantial portion of our operations are in China,our business is subject to the complex andrapidly evolving laws and regulations
233、 there.The Chinese government may exercise significant oversight anddiscretion over the conduct of our business and may intervene in or influence our operations at any time,which couldresult in a material change in our operations and/or the value of our Ordinary Shares”on page 34 of this prospectus.
234、For further discussion,including the possible consequences for non-compliance,see“Regulations in China Applicableto Our Business”on page 76 of this prospectus.We may become subject to a variety of PRC laws and other regulations regarding data security or securities offeringsthat are conducted overse
235、as and/or other foreign investment in China-based issuers.See“Risk Factors Risks Relatedto the Peoples Republic of China-If the Chinese government were to impose new requirements for approval fromthe PRC authorities to issue the Companys Ordinary Shares to foreign investors or list on a foreign exch
236、ange,suchaction could significantly limit or completely hinder our ability to offer or continue to offer securities to investors andcause such securities to significantly decline in value or become worthless”and“If the Chinese government choosesto exert greater oversight and control over offerings t
237、hat are conducted overseas and/or foreign investment in Chinabased issuers,such action could significantly limit or completely hinder our ability to offer or continue to offersecurities to overseas investors and cause such securities to significantly decline in value or to be worthless”on pages35 an
238、d 37,respectively,of this prospectus.In recent years,international market conditions and the international regulatory environment have been increasinglyaffected by competition among countries and geopolitical frictions.Changes to national trade or investment policies,treaties and tariffs,fluctuation
239、s in exchange rates or the perception that these changes could occur,could adverselyaffect the financial and economic conditions in China,as well as our future international and cross-border operations,our financial condition and results of operations.See“Risk Factors Risks Related to the Peoples Re
240、public of China-Changes in international trade or investment policies and barriers to trade or investment,and the ongoinggeopolitical conflict,may have an adverse effect on our business and expansion plans and could lead to the delistingof our securities from U.S.exchanges and/or other restrictions
241、or prohibitions on investing in our securities”on page36 of this prospectus.Recently,there have been heightened tensions in the economic and political relations between the United States andChina.Legislative or administrative actions in respect of Sino-U.S.relations could cause investor uncertainty
242、foraffected issuers,including us,and the market price of our Ordinary Shares could be adversely affected.See“RiskFactors Risks Related to the Peoples Republic of China-The market price for our Ordinary Shares could beadversely affected by increased tensions between the United States and China”on pag
243、e 38 of this prospectus.While many of the economies in Asia,including China,have experienced rapid growth over the last two decades,theycurrently are experiencing inflationary pressures.Inflationary pressures may result in government intervention in theeconomy,including policies that may adversely a
244、ffect the overall performance of the respective countries economy,which could,in turn,adversely affect our operations and the price of our Ordinary Shares.See“Risk Factors RisksRelated to the Peoples Republic of China-Many of the economies in Asia,including China,are experiencingsubstantial inflatio
245、nary pressures,which may prompt governments to take action to control the growth of the economyand inflation that could lead to a significant decrease in our profitability”on page 39 of this prospectus.Our PRC Operating Subsidiary is subject to PRC laws and regulations.However,these laws and regulat
246、ions changefrequently,and their interpretation and enforcement involve uncertainties.Such uncertainties,including the inability toenforce our contracts,could affect our business and operations.See“Risk Factors Risks Related to the PeoplesRepublic of China-The PRC legal system embodies uncertainties,
247、which could limit law enforcement availability”onpage 40 of this prospectus.We are a Cayman Islands holding company,and we rely principally on dividends and other distributions on equityfrom our PRC subsidiaries for our cash requirements.Any limitation on the ability of our PRC subsidiaries to/distr
248、ibute dividends or other payments to their shareholders could materially and adversely limit our ability to grow,make investments or acquisitions that could be beneficial to our business,pay dividends or otherwise fund andconduct our business.See“Risk Factors Risks Related to the Peoples Republic of
249、 China-We rely on dividends andother distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have,and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverseeffect on our ability to conduct our bus
250、iness”on page 40 of this prospectus.14/Risks Related to the Companys Ordinary Shares There can be no assurance that a regular public market for our Ordinary Shares will ever develop.If a regular tradingmarket for our securities does not develop,you will likely not be able to sell your Ordinary Share
251、s.We cannot predictthe extent,if any,to which investor interest will lead to the development of a viable trading market in our OrdinaryShares.See“Risk Factors Risks Related to the Companys Ordinary Shares-There is currently only a limitedtrading market for our Ordinary Shares”on page 41 of this pros
252、pectus.The trading price of our Shares may be volatile.See“Risk Factors Risks Related to the Companys Ordinary Shares-It is likely that there will be significant volatility in the trading price of our Ordinary Shares”on page 41 of thisprospectus.We may experience extreme volatility that is seemingly
253、 unrelated to the underlying performance of our business,which may make it difficult for prospective investors to assess the value of our Ordinary Shares.See Risk Factors-Risks Related to the Companys Ordinary Shares-Certain recent initial public offerings of companies with publicfloats comparable t
254、o our anticipated public float have experienced extreme volatility that was seemingly unrelated tothe underlying performance of the company.We may experience similar volatility,which may make it difficult forprospective investors to assess the value of our Ordinary Shares on page 43 of this prospect
255、us.We intend to list our Ordinary Shares on the Nasdaq Capital Market concurrently with this offering,and we will notclose this offering unless we have obtained approval from the Nasdaq Stock Market to list our Ordinary Shares on theNasdaq Capital Market.In order to continue listing our Shares on Na
256、sdaq subsequent to closing this offering,we mustmaintain certain financial and share price levels,and we may be unable to meet these requirements in the future.Wecannot assure you that our Ordinary Shares will continue to be listed on Nasdaq in the future.See“Risk Factors Risks Related to the Compan
257、ys Ordinary Shares We may not maintain the listing of our Ordinary Shares on theNasdaq Capital Market which could limit investors ability to make transactions in our Ordinary Shares and subject usto additional trading restrictions”on page 41 of this prospectus.We currently intend to retain all of ou
258、r available funds and any future earnings after this offering to fund thedevelopment and growth of our business.As a result,we do not expect to pay any cash dividends in the foreseeablefuture.Therefore,you should not rely on an investment in our Ordinary Shares as a source for any future dividendinc
259、ome.Accordingly,the return on your investment in our securities will likely depend entirely upon any future priceappreciation of our Ordinary Shares.There is no guarantee that our Ordinary Shares will appreciate in value after thisoffering or even maintain the price at which you purchased our Ordina
260、ry Shares.You may not realize a return on yourinvestment in our Ordinary Shares and you may even lose your entire investment.See“Risk Factors Risks Relatedto the Companys Ordinary Shares-Because we do not expect to pay dividends in the foreseeable future,you mustrely on price appreciation of our Ord
261、inary Shares for a return on your investment”on page 42 of this prospectus.As of the date of this prospectus,our principal shareholders own approximately 78.4%of our Ordinary Shares andafter this offering they will,collectively,continue to own approximately 72.8%of our Shares.The interests of ourpri
262、ncipal shareholders may differ from the interests of our other shareholders.See“Risk Factors Risks Related tothe Companys Ordinary Shares-We are controlled by our principal shareholders whose interests may differ fromthose of the other shareholders”on page 42 of this prospectus.The trading market fo
263、r our Ordinary Shares will be influenced by research or reports that industry or securitiesanalysts publish about our business.If one or more analysts downgrade our Shares,cease to cover us or fail toregularly publish reports on us,we could lose visibility in the financial markets,which in turn coul
264、d cause the marketprice or trading volume for our Shares to decline.See“Risk Factors Risks Related to the Companys OrdinaryShares-If securities or industry analysts do not publish research or reports about our business,or if they adverselychange their recommendations regarding our Ordinary Shares,th
265、e market price for our Ordinary Shares and tradingvolume could decline”on page 42 of this prospectus.If you purchase Ordinary Shares in this offering,you will pay substantially more than the corresponding amount paidby existing shareholders for their Shares and more than our net tangible book value
266、per Share.As a result,you willexperience immediate and substantial dilution.See“Risk Factors Risks Related to the Companys Ordinary Shares-Because our public offering price is substantially higher than our net tangible book value per Ordinary Share,you willexperience immediate and substantial diluti
267、on”on page 42 of this prospectus.We are an“emerging growth company,”as defined in the Jumpstart Our Business Startups Act of 2012(the“JOBS/Act”),and take advantage of certain exemptions from various requirements applicable to other reporting companiesthat are not emerging growth companies.Compliance
268、 with certain reduced disclosure requirements available toemerging growth companies may make our Ordinary Shares less attractive to investors.See“Risk Factors-RisksRelated to the Companys Ordinary Shares-We are an emerging growth company within the meaning of theSecurities Act and will take advantag
269、e of certain reduced reporting requirements”on page 43 of this prospectus.15/Certain Legal Consequences of Foreign Incorporation and Operations We are organized as an exempted company under the laws of the Cayman Islands,our principal executive offices arelocated in Hong Kong and we conduct all of o
270、ur operations in China.With the exception of Ms.Huang,one of ourindependent directors who resides in the United States,all of our other directors and officers reside outside the UnitedStates and their assets are located outside of the United States.Outside the United States,it may be difficult forin
271、vestors to enforce judgments obtained against us in actions brought in the United States,including actionspredicated upon the civil liability provisions of United States federal securities laws.In particular,certain of ourofficers and directors are resident in China and that may make it even more di
272、fficult to enforce any judgmentsobtained from foreign courts(including from a U.S.state or federal court)against such persons compared to thecircumstance of residence in another non-U.S.and non-China jurisdiction.See“Risk Factors Certain LegalConsequences of Foreign Incorporation and Operations-Judg
273、ments against us and our management may be difficultto obtain or enforce”on page 43 of this prospectus.We are organized under the laws of the Cayman Islands.Principles of law relating to matters affecting the validity ofcorporate procedures,the fiduciary duties of our management,directors and contro
274、lling shareholder and the rights ofour shareholders differ from,and may not be as protective of shareholders as,those that would apply if we wereincorporated in a jurisdiction within the United States.See“Risk Factors Certain Legal Consequences of ForeignIncorporation and Operations-Because we are i
275、ncorporated in the Cayman Islands,you may not have the sameprotections as shareholders of U.S.corporations”on page 44 of this prospectus.We are a foreign private issuer within the meaning of rules promulgated under the Exchange Act.We are not subjectto certain provisions of the Exchange Act applicab
276、le to United States public companies.See“Risk Factors CertainLegal Consequences of Foreign Incorporation and Operations-Our shareholders do not have the same protections orinformation generally available to shareholders of U.S.corporations because the reporting requirements for foreignprivate issuer
277、s are more limited than those applicable to public corporations organized in the United States”on page44 of this prospectus.Holding Foreign Companies Accountable Act The HFCAA prohibits foreign companies from listing their securities on U.S.exchanges if the companys auditor has beenunavailable for P
278、CAOB inspection or investigation for three consecutive years beginning in 2021.In June 2021,the Senate passedthe AHFCAA which,if signed into law,would reduce the time period for the delisting of foreign companies under the HFCAA totwo consecutive years instead of three years.On December 16,2021,the
279、PCAOB issued the Determination Report,which foundthat the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in(i)mainlandChina of the Peoples Republic of China because of a position taken by one or more authorities in mainland China;and(ii)HongKong
280、,a Special Administrative Region and dependency of the PRC,because of a position taken by one or more authorities in HongKong.In addition,the Determination Report identified specific registered public accounting firms subject to these determinations.On August 26,2022,the PCAOB signed a Statement of
281、Protocol with the China Securities Regulatory Commission andthe Ministry of Finance of the PRC(the“SOP”),taking the first step toward opening access for the PCAOB to inspect andinvestigate registered public accounting firms headquartered in mainland China and Hong Kong completely,consistent with U.S
282、.law.Pursuant to the SOP,the PCAOB shall have independent discretion to select any issuer audits for inspection or investigationand has the unfettered ability to transfer information to the SEC.However,uncertainties still exist as to whether the applicableparties,including governmental agencies,will
283、 fully comply with the framework.The PCAOB has indicated that its December 2021determinations under the HFCAA remain in effect;however,the PCAOB is required to reassess those determinations by the end of2022.Under the PCAOBs rules,a reassessment of a determination under the HFCAA may result in the P
284、CAOB reaffirming,modifying or vacating the determination.Depending on the implementation of the SOP,if the PCAOB continues to be prohibitedfrom conducting complete inspections and investigations of PCAOB-registered public accounting firms in China and/or HongKong,then companies audited by those firm
285、s will be delisted pursuant to the HFCAA despite the SOP.Therefore,there is noassurance that the SOP will provide relief from the delisting risk arising from the application of the HFCAA or the AHFCAA.Our previous public accounting firm,Centurion ZD CPA&Co(“Centurion ZD”),who audited our financial s
286、tatements forthe fiscal years ended March 31,2020 and 2021,is headquartered in Hong Kong and thus subject to the determinations announcedby the PCAOB in its Determination Report.As the PCAOB was not able to fully conduct inspections of our previous auditorswork papers in Hong Kong,our shareholders w
287、ere deprived of the benefits of such inspection./Effective February 25,2022,to protect our investors and to carry out the PCAOBs mandate,we dismissed Centurion ZDas our independent registered public accounting firm and we engaged K.R.Margetson Ltd.,whose principal office is located inVancouver,Briti
288、sh Columbia,Canada,as our new independent registered public accounting firm.Since Margetson is not located inChina or Hong Kong,Margetson is not subject to the determinations announced by the PCAOB on December 16,2021.We believethat the PCAOBs inspectors and investigators will have consistent access
289、 to the audit work performed by Margetson for us.Therefore,we do not expect to be affected by the HFCAA or the AHFCAA at this time.16/However,to the extent that our auditors work papers may,in the future,become located in mainland China or in Hong Kong,such work papers may not be available for inspe
290、ction by the PCAOB,even with the SOP,because the PCAOB is currently unableto conduct inspections without the approval of the Chinese or Hong Kong authorities.If such lack of inspection were to extend forthe requisite period of time under the HFCAA or the AHFCAA,our Ordinary Shares could be delisted
291、and prohibited from tradingon a U.S.exchange.In addition,inspections of certain other firms that the PCAOB has conducted outside of China have identifieddeficiencies in those firms audit procedures and quality control procedures,which may be addressed as part of the inspectionprocess to improve futu
292、re audit quality.Therefore,in addition to subjecting our securities to the possibility of being prohibited fromtrading or delisted from a U.S.exchange,the inability of the PCAOB to conduct inspections of our auditors work papers in Chinaor Hong Kong would make it more difficult to evaluate the effec
293、tiveness of our auditors audit procedures or quality controlprocedures as compared to auditors outside of China that are subject to PCAOB inspections.As a result,our investors would bedeprived of the benefits of the PCAOBs oversight of our auditor through such inspections and they may lose confidenc
294、e in ourreported financial information and procedures and the quality of our financial statements.Also,we cannot assure you that U.S.regulatory authorities will not apply additional or more stringent criteria to us.Such uncertainty could cause the market price of ourOrdinary Shares to be materially
295、and adversely affected.See“Risk Factors Risks Related to Our Company-To the extent that ourindependent registered public accounting firms audit documentation related to their audit reports for the Company may,in thefuture,be located in China or in Hong Kong,our Ordinary Shares could be delisted and
296、prohibited from trading on a U.S.exchange”on page 28 of this prospectus.Transfers of Cash to and from Our Subsidiaries We conduct our primary operations through our WFOE and Operating Subsidiary,although we have an office in Hong Kongfor administrative purposes.We do not have or intend to set up any
297、 subsidiary or enter into any contractual arrangements toestablish a VIE structure with any entity in China.Hong Kong is a special administrative region of the PRC and the basic policiesof the PRC regarding Hong Kong are reflected in the Basic Law,which provides Hong Kong with a high degree of auton
298、omy andexecutive,legislative and independent judicial powers,including that of final adjudication under the principle of“one country,twosystems.”The laws and regulations of the PRC currently have restrictions on currency conversion,cross-border remittance andoffshore investment for PRC citizens.See“
299、Risk Factors-Risks Related to the Peoples Republic of China-We rely on dividendsand other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have,and anylimitation on the ability of our PRC subsidiaries to make payments to us could have a material
300、 and adverse effect on our ability toconduct our business.”However,the laws and regulations of the PRC do not currently have any material impact on the transfer of cash from theCompany to our Seychelles or Hong Kong subsidiaries,or from our Seychelles and Hong Kong subsidiaries to the Company andthe
301、 investors in the U.S.As a result,cash can be transferred freely between the Company and its Seychelles and Hong Kongsubsidiaries,across borders,and to U.S.investors.As of the date of this prospectus,we do not have any internal cash managementpolicies specifically regarding the transfer of funds thr
302、ough our organization.The structure of cash flows within our organization,and a summary of the applicable regulations,is as follows:1.Our equity structure is a direct holding structure,that is,the overseas entity that is applying to trade on Nasdaq in the UnitedStates is the Company,Zhong Yuan Cayma
303、n.Zhong Yuan Cayman directly controls China Bio-Technology Holdings Limited(“China Bio”),a Seychelles company.China Bio directly controls Zhong Yuan Bio-Technology(Hong Kong)Limited(“ZhongYuan HK”),a Hong Kong company.Zhong Yuan HK directly controls Zhong Yuan Bio-Technology(Shenzhen)Limited(“ZhongY
304、uan SZ”),a China company and a wholly foreign owned entity(“WFOE”).Our WFOE directly controls and conducts itsoperations through Bao Feng Bio-technology(Beijing)Limited(“Bao Feng”),a China company and our sole operating subsidiary.See“Our Business-History of the Company”and“Our Business-Corporate St
305、ructure”for additional details.2.Within our direct holding structure,the cross-border transfer of funds within our corporate group is legal and compliant withthe laws and regulations of the PRC.After investors funds are received by Zhong Yuan Cayman,the funds can be directlytransferred to Zhong Yuan
306、 HK.Zhong Yuan HK can then directly transfer funds to Zhong Yuan SZ,and those funds can then betransferred to the subordinate operating entity,Bao Feng.However,as these foreign exchange regulations,including theirinterpretation and implementation,have been constantly evolving,it is unclear how these
307、 regulations,and any future regulationconcerning offshore or cross-border transactions,will be interpreted,amended and implemented by the relevant governmentauthorities.For example,we may be subject to a more stringent review and approval process with respect to our foreign exchangeactivities,such a
308、s cross-border transfers,remittance of dividends or foreign currency-denominated borrowings,which mayadversely affect our financial condition and results of operations.17/If the Company intends to distribute dividends,our Operating Subsidiary,Bao Feng,will distribute dividends to Zhong YuanSZ,which
309、will further distribute them to Zhong Yuan HK in accordance with the laws and regulations of the PRC.Zhong Yuan HKwill distribute dividends to China Bio,which will distribute them to the Company,Zhong Yuan Cayman.Zhong Yuan Cayman willthen distribute dividends to all of its shareholders in proportio
310、n to the Ordinary Shares that they hold,regardless of whether theshareholders are U.S.investors or investors in other countries or regions.3.As of the date of this prospectus,neither the Company nor its Operating Subsidiary has ever paid dividends or madedistributions to U.S.investors.Since consumma
311、tion of the Share Exchange,the Company has not transferred any assets or funds toits Operating Subsidiary to fund its business operations,nor has it received any transfer of funds from its Operating Subsidiary.Inthe future,any cash proceeds raised from overseas financing activities may be transferre
312、d by us to our Operating Subsidiary viacapital contribution or shareholder loans,as the case may be.4.Our Operating Subsidiarys ability to distribute dividends is based upon its distributable earnings.Current PRC regulationspermit our Operating Subsidiary to pay dividends to its shareholder only out
313、 of accumulated profits,if any,determined inaccordance with PRC accounting standards and regulations.In addition,our Operating Subsidiary is required to set aside at least10%of its after-tax profits each year,if any,to fund a statutory reserve until such reserve reaches 50%of its registered capital.
314、These reserves are not distributable as cash dividends.See“Regulations in China Applicable to Our Business-Regulations OnDividend Distribution”for more information.PRC Regulations and Restrictions To address persistent capital outflows and the RMBs depreciation against the U.S.dollar in the fourth q
315、uarter of 2016,thePeoples Bank of China and the State Administration of Foreign Exchange,or SAFE,implemented a series of capital controlmeasures,including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions,dividend payments and shareholder loan
316、repayments.The PRC government may continue to strengthen its capital controls and ourPRC subsidiaries dividends and other distributions may be subject to tightened scrutiny in the future.The PRC government alsoimposes controls on the conversion of RMB into foreign currencies and the remittance of cu
317、rrencies out of the PRC.Therefore,wemay experience difficulties in completing the administrative procedures,primarily registration with SAFE,required pursuant toSAFE Circular 19 and SAFE Circular 16,necessary to obtain and remit foreign currency for the payment of dividends from ourprofits,if any.Fu
318、rthermore,if our subsidiaries in the PRC incur debt on their own in the future,the instruments governing the debtmay restrict their ability to pay dividends or make other payments.Any transfer of funds by us to our PRC subsidiaries,either as a shareholder loan or as an increase in registered capital
319、,issubject to approval by or registration or filing with relevant governmental authorities in China.According to the relevant PRCregulations on foreign-invested enterprises in China,capital contributions to our PRC subsidiaries are subject to the approval of orfiling with the Ministry of Commerce in
320、 its local branches and registration with a local bank authorized by SAFE.In addition,(i)any foreign loan procured by our PRC subsidiaries is required to be registered with SAFE or its local branches or filed with SAFEin its information system;and(ii)our PRC subsidiaries may not procure loans which
321、exceed the difference between their totalinvestment amount and registered capital or,as an alternative,only procure loans subject to the calculation approach and limitationas provided in the Peoples Bank of China Notice No.9(“PBOC Notice No.9”).Any medium-or long-term loan to be provided byus to our
322、 PRC-based subsidiaries must be registered with the National Development and Reform Commission and SAFE or its localbranches.In light of the various requirements imposed by PRC regulations,for example,SAFE Circular 19 and SAFE Circular 16,onloans to,and direct investment in,a PRC subsidiary by offsh
323、ore holding companies,and the fact that the PRC government may atits discretion restrict access to foreign currencies for current account transactions in the future,we cannot assure you that we will beable to complete the necessary government registrations or obtain the necessary government approval
324、s on a timely basis,if at all,with respect to future loans by us to a PRC subsidiary or with respect to future capital contributions by us to a PRC subsidiary.Ifwe fail to complete such registrations or obtain such approvals,our ability to conduct our business and to capitalize or otherwisefund PRC
325、operations may be negatively affected,which could materially and adversely affect our liquidity and our ability to fundand expand our business.See“Risk Factors-Risks Related to the Peoples Republic of China”on page 40.In addition,the Enterprise Income Tax Law and its implementation rules provide tha
326、t a withholding tax at a rate of 10%will beapplicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties orarrangements between the PRC central government and the governments of other countries or regions where the non-PRC-residententerprises are
327、tax resident.Pursuant to the tax agreement between mainland China and the Hong Kong Special AdministrativeRegion,the withholding tax rate in respect of the payment of dividends by a PRC enterprise to a Hong Kong enterprise may bereduced to 5%from the standard rate of 10%.However,if the relevant tax
328、authorities determine that our transactions orarrangements are for the primary purpose of enjoying a favorable tax treatment,the relevant tax authorities may adjust the favorable/withholding tax in the future.Accordingly,there is no assurance that the reduced 5%withholding rate will apply to dividen
329、dsreceived by our Hong Kong subsidiary from our PRC subsidiaries.This withholding tax will reduce the amount of dividends wemay receive from our PRC subsidiaries.Recent PRC regulations have extended the PRC tax jurisdiction to transactions involving the transfer of taxable assets throughoffshore tra
330、nsfer of a foreign intermediate holding company.Where a non-resident enterprise transfers taxable assets indirectly bydisposing of the equity interests of an overseas holding company,which is an“Indirect Transfer,”the non-resident enterprise aseither transferor or transferee,or the PRC entity that d
331、irectly owns the taxable assets,may report such Indirect Transfer to therelevant tax authority.Using a“substance over form”principle,the PRC tax authority may disregard the existence of the overseasholding company if it lacks a reasonable commercial purpose and was established for the purpose of red
332、ucing,avoiding or deferringthe PRC tax.As a result,gains derived from such Indirect Transfer may be subject to the PRC enterprise income tax,and thetransferee or other person who pays for the transfer is obligated to withhold the applicable taxes currently at a rate of 10%for thetransfer of equity i
333、nterests in a PRC resident enterprise.Both the transferor and the transferee may be subject to penalties under thePRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.Our Company may be subject tofiling obligations or taxed if we are the transferor in such transactions,and may be subject to withholding obligations if ourCompany is the transferee in s