As
filed with the Securities and Exchange Commission on November 17, 2020
Registration
No. 333-[ ]
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
F-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
SOS
Limited
(Exact
name of registrant as specified in its charter)
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Cayman
Islands
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N/A
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(State
or other jurisdiction of
incorporation or organization)
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(I.R.S.
Employer
Identification Number)
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Room
8888, Jiudingfeng Building, 888 Changbaishan Road,
Qingdao
Area, China (Shandong) Pilot Free Trade Zone
People’s
Republic of China
+86
0311-80910921
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware
19711
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Joan
Wu Esq.
Hunter
Taubman Fischer & Li, LLC
800
Third Avenue, Suite 2800
New
York, NY 10022
Tel:
(212) 530-2210
Facsimile:
(212) 202-6380
Approximate
date of commencement of proposed sale to the public: From time to time after the effective date of the registration statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. ☐
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. ☐
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging
growth company ☒
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards†
provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
†The
term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
CALCULATION
OF REGISTRATION FEE
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Title
of Each Class of Securities to be Registered(1)
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Amount
to
be
Registered(3)
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Proposed
Maximum
Aggregate
Price
Per
Share(4)
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Proposed
Maximum
Aggregate
Offering
Price
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Amount
of
Registration
Fee(8)
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Class A ordinary shares,
par value US$0.0001 per share, represented by American Depositary Shares (2)
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Preferred shares, par value US$0.0001 per share(5)
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Debt Securities
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Warrants(6)
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Units
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Rights(7)
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Total
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$
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60,000,000
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$
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6,546
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(1)
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Securities
registered hereunder may be sold separately, together or as units with other securities registered hereunder.
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(2)
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The Class A ordinary
shares, par value $0.0001 per share, will be represented by American Depositary Shares, or ADSs, evidenced by American Depositary
Receipts, issuable upon deposit of Class A ordinary shares of SOS Limited, or the Registrant which have been registered pursuant
to a separate registration statement on Form F-6 (Registration No. 333-217079). Pursuant to Rule 416(a) under the Securities
Act, this registration statement shall be deemed to cover any additional number of Class A ordinary shares that may be issued
from time to time to prevent dilution as result of a distribution, split, share dividend or similar transaction. Each ADS
represents ten (10) Class A ordinary shares.
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(3)
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There are being
registered under this registration statement such indeterminate number of securities as may be offered by the Registrant from
time to time at indeterminate prices, which shall have an aggregate offering price not to exceed $60,000,000. In addition,
pursuant to Rule 416 under the Securities Act of 1933, as amended, or the Securities Act, the ADSs being registered hereunder
include such indeterminate number of ADSs as may be issuable with respect to the Class A ordinary shares being registered
hereunder as a result of stock splits, stock dividends or similar transactions.
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(4)
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The proposed maximum
aggregate offering price per class of security will be determined from time to time by the Registrant in connection with the
issuance by the Registrant of the securities registered hereunder and is not specified as to each class of security in reliance
on Rule 457(o) under the Securities Act of 1933.
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(5)
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The preferred shares
registered hereby may be represented by the Registrant’s American Depositary Shares, or preferred ADSs, each of which
represent a specified number of preference shares. Preferred ADSs issuable upon deposit of the preference shares registered
hereby will be registered under a separate registration statement on Form F-6.
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(6)
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Warrants may be
exercised to purchase any of the other securities registered hereby.
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(7)
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Consisting of some
or all of the securities listed above, in any combination, including ADSs, preferred shares, warrants and units.
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(8)
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Calculated pursuant to Rule 457(o) under the
Securities act of 1933, as amended.
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The
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED NOVEMBER 17, 2020
PROSPECTUS
SOS
Limited
$60,000,000
Class
A Ordinary Shares,
Class
A Ordinary Shares in the Form of American Depositary Shares,
Preferred
Shares,
Preferred
Shares in the Form of American Depositary Shares,
Debt
Securities,
Warrants,
Units,
and
Rights
We
may, from time to time in one or more offerings, offer and sell up to $60,000,000 of any combination, together or separately,
of Class A ordinary shares, par value US$0.0001 per share; Class A ordinary shares in the form of American Depositary Shares,
or ADSs; preferred shares, par value US$0.0001 per share; preferred shares in the form of ADSs; debt securities; warrants; units;
rights; or any combination thereof as described in this prospectus. Any ADS will represent a specified number of ordinary shares
or preference shares. The warrants may be convertible into or exercisable or exchangeable for ordinary shares or preferred shares
or debt securities, the preferred shares may be convertible into or exchangeable for ordinary shares and the debt securities may
be convertible into or exchangeable for ordinary shares or preference shares or other debt securities. The prospectus supplement
for each offering of securities will describe in detail the plan of distribution for that offering. For general information about
the distribution of securities offered, please see “Plan of Distribution” in this prospectus.
This
prospectus provides a general description of the securities we may offer. We will provide the specific terms of the securities
offered in one or more supplements to this prospectus. We may also authorize one or more free writing prospectuses to be provided
to you in connection with these offerings. The prospectus supplement and any related free writing prospectus may add, update or
change information contained in this prospectus. You should read carefully this prospectus, the applicable prospectus supplement
and any related free writing prospectus, as well as the documents incorporated or deemed to be incorporated by reference, before
you invest in any of our securities. This prospectus may not be used to offer or sell any securities unless accompanied by
the applicable prospectus supplement.
Pursuant
to General Instruction I.B.5. of Form F-3, in no event will we sell the securities covered hereby in a public primary offering
with a value exceeding more than one-third of the aggregate market value of our ADSs in any 12-month period so long as the aggregate
market value of our outstanding ordinary shares held by non-affiliates remains below $75,000,000. During the 12 calendar months
prior to and including the date of this prospectus, we have not offered or sold any securities pursuant to General Instruction
I.B.5 of Form F-3.
Our
ADSs are listed on the New York Stock Exchange, or NYSE, under the symbol “SOS.” On November 16, 2020, the last reported
sale price of our ADS on the NYSE, was $2.17 per ADS. The applicable prospectus supplement will contain information, where applicable,
as to other listings, if any, on the NYSE or other securities exchange of the securities covered by the prospectus supplement.
Investing
in our securities involves a high degree of risk. See “Risk Factors” on page 5 of this prospectus and in the documents
incorporated by reference in this prospectus, as updated in the applicable prospectus supplement, any related free writing prospectus
and other future filings we make with the Securities and Exchange Commission that are incorporated by reference into this prospectus,
for a discussion of the factors you should consider carefully before deciding to purchase our securities.
We
may sell these securities directly to investors, through agents designated from time to time or to or through underwriters or
dealers. For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution”
in this prospectus. If any underwriters are involved in the sale of any securities with respect to which this prospectus is being
delivered, the names of such underwriters and any applicable commissions or discounts will be set forth in a prospectus supplement.
The price to the public of such securities and the net proceeds we expect to receive from such sale will also be set forth in
a prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities commission 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.
The
date of this prospectus is [ ], 2020.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, under the
Securities Act of 1933, as amended, or the Securities Act, using a “shelf” registration process. Under this shelf
registration process, we may, from time to time, sell the securities described in this prospectus in one or more offerings, up
to a total dollar amount of $60,000,000. We have provided to you in this prospectus a general description of the securities we
may offer. Each time we sell securities under this shelf registration, we will, to the extent required by law, provide a prospectus
supplement that will contain specific information about the terms of that offering. We may also authorize one or more free writing
prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement
and any related free writing prospectus that we may authorize to be provided to you may also add, update or change information
contained in this prospectus or in any documents that we have incorporated by reference into this prospectus. To the extent there
is a conflict between the information contained in this prospectus and the prospectus supplement or any related free writing prospectus,
you should rely on the information in the prospectus supplement or the related free writing prospectus; provided that if any statement
in one of these documents is inconsistent with a statement in another document having a later date – for example, a document
filed after the date of this prospectus and incorporated by reference into this prospectus or any prospectus supplement or any
related free writing prospectus – the statement in the document having the later date modifies or supersedes the earlier
statement.
We
have not authorized any dealer, agent or other person to give any information or to make any representation other than those contained
or incorporated by reference in this prospectus and any accompanying prospectus supplement, or any related free writing prospectus
that we may authorize to be provided to you. You must not rely upon any information or representation not contained or incorporated
by reference in this prospectus or an accompanying prospectus supplement, or any related free writing prospectus that we may authorize
to be provided to you. This prospectus and the accompanying prospectus supplement, if any, do not constitute an offer to sell
or the solicitation of an offer to buy any securities other than the registered securities to which they relate, nor do this prospectus
and the accompanying prospectus supplement constitute an offer to sell or the solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume
that the information contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus
is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated
by reference is correct on any date subsequent to the date of the document incorporated by reference (as our business, financial
condition, results of operations and prospects may have changed since that date), even though this prospectus, any applicable
prospectus supplement or any related free writing prospectus is delivered or securities are sold on a later date.
As
permitted by SEC rules and regulations, the registration statement of which this prospectus forms a part includes additional information
not contained in this prospectus. You may read the registration statement and the other reports we file with the SEC at its website
or at its offices described below under “Where You Can Find More Information.”
Unless
the context otherwise requires, all references in this prospectus to “SOS,” “SOS Ltd.,” “we,”
“us,” “our,” “the Company” or similar words refer to SOS Limited together with our subsidiaries.
COMMONLY
USED DEFINED TERMS
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“ADSs”
refers to our American depositary shares, each of which represents ten (10) Class A ordinary shares;
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“China,”
“Chinese” and “PRC,” are references to the People’s Republic of China;
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“Class
A Ordinary Shares” refers to Class A ordinary shares, par value US$0.0001 per share of SOS Limited;
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“Class
B Ordinary Shares” refers to Class B ordinary shares, par value US$0.0001 per share of SOS Limited;
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“Inner Mongolia
SOS” refers to Inner Mongolia SOS Insurance Agency Co., Ltd., a PRC company organized under the laws of PRC and a wholly-owned
subsidiary of SOS Information;
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“SOS Information”
refers to SOS Information Technology Co., Ltd, a PRC company organized under the laws of PRC and a variable interest entity
controlled by YBT;
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SOS,”
“SOS Ltd.,” “we,” “us,” “our,” “the Company” are references to
the combined business of SOS Limited and its wholly-owned subsidiaries;
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“Wei Bao Enterprise
Consulting” refers to Wei Bao Enterprise Consulting Management (Shijiazhuang) Co., Ltd., a PRC company organized under
the laws of PRC and a wholly-owned subsidiary of Yong Bao Two; and
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“Yong
Bao Two” or “YBT” refers to Yong Bao Two Limited, a British Virgin Islands company organized under the laws
of British Virgin Islands and a wholly-owned subsidiary of SOS.
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NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and our SEC filings that are incorporated by reference into this prospectus contain or incorporate by reference forward-looking
statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than
statements of historical fact are “forward-looking statements,” including any projections of earnings, revenue or
other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements
concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any
statements of management’s beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying
any of the foregoing. The words “believe,” “anticipate,” “estimate,” “plan,” “expect,”
“intend,” “may,” “could,” “should,” “potential,” “likely,”
“projects,” “continue,” “will,” and “would” and similar expressions are intended
to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking
statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties.
We cannot guarantee that we actually will achieve the plans, intentions or expectations expressed in our forward-looking statements
and you should not place undue reliance on these statements. There are a number of important factors that could cause our actual
results to differ materially from those indicated or implied by forward-looking statements. These important factors include those
discussed under the heading “Risk Factors” contained or incorporated by reference in this prospectus and in the applicable
prospectus supplement and any free writing prospectus we may authorize for use in connection with a specific offering. These factors
and the other cautionary statements made in this prospectus should be read as being applicable to all related forward-looking
statements whenever they appear in this prospectus. Except as required by law, we undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information, future events or otherwise.
OUR
BUSINESS
Our
History
We
were formed in Delaware on July 12, 2004 as China Risk Finance LLC. We began our credit analytics service provider business in
2001. We developed our proprietary, advanced technology over the past 18 years, during which our founders and management team
advised many of China’s largest banks in analyzing consumer credit to issue over one hundred million credit cards to consumers.
On April 28, 2017, our ADSs commenced trading on the NYSE under the symbol “XRF.” In May 2017, we completed our IPO
in which we sold a total of 11,500,000 of our ADSs, each representing one Class A Ordinary Shares and listing of our ADSs on the
NYSE. In the third quarter 2018, due to regulatory changes that made it cost-prohibitive, and in some ways very risky from the
regulatory compliance perspective, to own and operate our legacy marketplace lending platform, we decided to cease the customer
acquisition and loan facilitation at our legacy marketplace lending platform and started to transition our business to other industries.
On
May 5, 2020, we entered into a set of agreements with YBT, the shareholders of YBT (the “YBT Shareholders”), eight
individual investors introduced by YBT (collectively with the YBT Shareholders, the “Investors”) and True North Financial,
LLC to acquire YBT, which controls its variable interest entity SOS Information. The transaction was consummated on May 15, 2020.
As a result, we now own 100% of YBT, which controls its variable interest entity, SOS Information. The shares issued to the Investors
were relied on exemption from registration in accordance with Regulation S and/or Rule 4(a)(2) under the Securities Act of 1933,
as amended. Accordingly, we started our newly acquired data mining and targeted marketing services business through SOS Information.
On
August 3, 2020, we entered into certain share purchase agreement (the “Disposition SPA”) with Hantu (Hangzhou) Asset
Management Co., Ltd. (the “Purchaser”). Pursuant to the Disposition SPA, the Purchaser agreed to purchase CRF China
Holding Co. Limited, a Hong Kong limited company, China Capital Financial LLC, a Delaware limited liability company, CRF China
Limited, a British Virgin Islands company, CRF Technology LLC, a California limited liability company, and HML China LLC, a Delaware
limited liability company (collectively, the “XRF Subsidiaries”) in exchange for cash consideration of $3.5 million.
Upon the closing of the transaction (the “Disposition”) contemplated by the Disposition SPA, the Purchaser will become
the sole shareholder of the XRF Subsidiaries and as a result, assume all assets and liabilities of all the subsidiaries and variable
interest entities owned or controlled by the XRF Subsidiaries. The Disposition closed on August 6, 2020. As a result of the Disposition,
we ceased our legacy peer-to-peer lending business and have since focused on becoming a leading high-technology services business
with services including marketing data, technology and solutions for insurance companies and emergency rescue services in China.
We also changed our trading symbol to “SOS.”
Business
Overview
We
provide a wide range of data mining and analysis services to our corporate and individual members, including providing marketing
data, technology and solutions for insurance companies, emergency rescue services, and insurance product and health care information
portal in China. Our mission is to make it easier, safer and more efficient for our clients to obtain and process the data of
their target customers.
We
primarily address the large unmet demand for marketing-related data for clients such as insurance companies, financial institutions,
medical institutions, healthcare providers and other service providers in the emergency rescue services industry by creating a
SOS cloud emergency rescue service software as a service (SaaS) platform.
Furthermore,
we have also established a data warehouse with 120 million active customer records as of the date of this report. Our data collection
covers a wide variety of sources and are mainly from offline third party purchases, online subscription, AI recognition and cold
calls, which account for approximately 75%, 18% and 7% of our data inventory, respectively.
Our
Products and Services
We
currently focused on four product offerings, including insurance marketing, 10086 hot-line, bank card call center and SaaS services.
Currently insurance marketing represents 96.2% of our total revenue, with 10086 hot-line, bankcard call center and SaaS individually
accounting for 3.3%, 0.3% and 0.2% of our total revenue, respectively.
Insurance
marketing
We
purchase data from our suppliers, including Shandong Subao IT Ltd., Jiangxi Chacha IT Ltd. and Liaoning Tianzheng Ltd. With a
stable supply of data, we use data mining and analytics technologies to find patterns and valuable data within the large amounts
of data we collect. We then provide specific data point recommendations to our clients.
Our
strong data mining capabilities lay a solid foundation for the solutions to our clients, which we believe differentiate us from
many other competitors in the same market. We have an experienced team of data experts in this field and we have a well-established
data infrastructure system, ranging from mining, to processing and distribution. SOS warehouses its data through a subscription
to Tencent’s iCloud service.
Our
main competitors include Jiutian Speed Rescue Technology Co., Ltd., which provides rescue services through operators and sells
membership cards, and Beijing Yuanbao Technology Co., Ltd. and Beijing Yuanshanbao Technology Co., Ltd., which provide insurance
marketing services.
We
currently only possess an insurance agent license for operations within Inner Mongolia, China. As such, as of the date of this
prospectus, our revenues are mainly generated through various insurance agents. We primarily work with two agents, Beijing Sense
Time Information Technology Co., Ltd. (“BSIT”), which generates the majority of our insurance marketing revenues,
as well as Beijing Ruijing Hengbao Insurance Agency Ltd.
Insurance
companies such as People's Insurance Company (Group) of China, Ltd. (“PICC”), or Ping An Insurance (Group) Company
of China, Ltd. (“Ping An”) will request shortlists from these insurance agents. The insurance agents will then
subcontract the task to various vendors such as SOS Information, and SOS Information will collect raw data from third parties
or from its own data warehouse and utilize its data mining and analytics technologies to process the data, creating a shortlist
and selling it to the agents. The agents will then provide the list to insurance companies. We charge information service fee
from these insurance agents based on the amount of insurance policy orders placed by insurance companies through these agents.
Our service model is represented by the following diagram:
10086
Hot-line
SOS
Information is contracted with China Mobile Limited as its outsourced service center and operates the 10086 hot-line for the Hebei
Province, charging China Mobile by customer call-in time.
Bank
Card Call Center
SOS
Information operates a promotional center for Guangdong Bank of Development and charges by the number of successfully registered
accounts.
SaaS
service
The
three major SaaS offerings by SOS Information are as follows:
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basic cloud system
(Medical Rescue Card, Auto Rescue Card, Financial Rescue Card and Life Rescue Card)
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cooperative cloud
system (information rescue center, intelligent big data, intelligent software and hardware)
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information cloud
system (Information Today and E-commerce Today)
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SOS
Information provides warehouse access to insurance companies, financial institution and medical institutions etc., and generates
revenues through a monthly subscription fee.
The
following diagram illustrates our current corporate structure:
Corporate Information
Our principal executive
office is located at Room 8888, Jiudingfeng Building, 888 Changbaishan Road, Qingdao Area, China (Shandong) Pilot Free Trade Zone,
People’s Republic of China. Our telephone number is +86 0311-80910921. We maintain a website at http://www.sosyun.com/ that
contains information about our Company, though no information contained on our website is part of this prospectus.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors”
described in our most recent annual report on Form 20-F, filed on June 15, 2020, as supplemented and updated by subsequent
current reports on Form 6-K that we have filed with the SEC, together with all other information contained or incorporated by
reference in this prospectus and any applicable prospectus supplement and in any related free writing prospectus in connection
with a specific offering, before making an investment decision. Each of the risk factors could materially and adversely affect
our business, operating results, financial condition and prospects, as well as the value of an investment in our securities, and
the occurrence of any of these risks might cause you to lose all or part of your investment.
In
addition to the risk factors referenced above, as described in our most recent annual report on Form 20-F, we want to disclose
the additional risk factors below.
Risks
Related to Our Newly Acquired Data Mining and Analysis Business
Development
of data warehouses is capital intensive. We may not be able to generate sufficient capital or obtain additional capital to meet
our future capital needs, on favorable terms or at all, which may lead to significant disruption to our business expansion and
adversely affect our financial position.
Expanding
and developing data warehouses and data mining capabilities are capital intensive. We are required to fund the costs of expanding
and developing our data warehouses and data mining capacity with cash deriving from operations. There can be no assurance that
our future revenues would be sufficient to offset increases in these costs, or that our business operations will generate capital
sufficient to meet our anticipated capital requirements. If increase in our future revenues would not be sufficient to offset
the increased costs, or we cannot generate sufficient capital to meet our anticipated capital requirements, our financial condition,
business expansion and future prospects could be materially and adversely affected.
To
fund our future growth, we may need to raise additional funds through equity or debt financing in the future in order to meet
our operating and capital needs, which may not be available on favorable terms, or at all. If we raise additional funds through
issuances of equity or equity-linked securities, our existing shareholders could suffer significant dilution in their ownership
percentage of our company, and any new equity securities we issue could have rights, preferences, and privileges senior to those
of holders of our ordinary shares. In addition, any debt financing that we may obtain in the future could have restrictive covenants
relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us
to obtain additional capital and to pursue business opportunities, including potential acquisitions. Our inability to obtain additional
debt and/or equity financing or to generate sufficient cash from operations may require us to prioritize projects or curtail capital
expenditures and could adversely affect our results of operations.
The
market in which we participate is competitive. Failure to compete effectively may result in loss of our market share and a decrease
in our revenues and profitability.
We
compete with other wide range of data mining providers in the markets we participate. Some of our current and future competitors
may have advantages over us, including greater name recognition, longer operating histories, pre-existing relationships
with current or potential clients, significantly greater financial, marketing and other resources and more ready access to capital,
all of which allow them to offer competitive prices and respond more quickly to new or changing opportunities. Many of these competitors
own capabilities similar to ours in the same markets in which our business targets, or in markets where the cost to operate a
data warehouse and data mining capacity is less than the costs to our operation. Many of our competitors and new entrants to the
data mining market are developing additional data warehouses space and data mining capacity in the markets that we serve.
We
face pricing pressure for our services. Prices for our services are affected by a variety of factors, including supply and demand
conditions and pricing pressures from our competitors. A buildup of new data warehouse and data mining capacity or reduced demand
for data warehouse services and data mining capacity could result in an oversupply of data warehouse space and data mining capacity
in the markets where we operate. Excess data warehouse or data mining capacity could cause downward pricing pressure and limit
the number of economically attractive markets that are available to us for expansion, which could negatively impact our business
and results of operations. In addition, our competitors may offer services that are more competitively priced compared to ours.
We may be required to lower our prices to remain competitive, which may decrease our margins and adversely affect our business
prospects, financial condition and results of operations.
We
will also face increased competition as we expand our operations, and our competitors in new markets we expand into may have more
experience than us in operating in those markets. If we fail to compete effectively, our business, financial performance and prospects
will be materially and adversely affected.
Our
revenues are highly dependent on a limited number of major clients, and the loss of any such client or any other significant client,
or the inability of any such client or any other significant client to make payments to us as due, could have a material adverse
effect on our business, results of operations and financial condition.
We
have in the past derived, and believe that we will continue to derive, a significant portion of our revenues from a limited number
of clients. 96.2% of our revenues generated in six months ended June 30, 2020, are from insurance marketing business, which we
highly rely on two key clients or agents to dispatch insurance data mining business to us from. Revenues from Beijing Sense Time
Information Technology Co., Ltd. (“BSIT”) accounted for 90% and 96% of our total revenues in 2019 and for the six
months ended June 30, 2020. Revenues from Beijing Ruijing Hengbao Insurance Agency Ltd. accounted for 4% and 2% of our total revenues
in 2019 and for the six months ended June 30, 2020. No other client accounted for 10% or more of our total revenues in 2019 and
for the six months ended June 30, 2020. As a data mining solution provider, we expect our revenues will continue to be highly
dependent on a limited number of clients who account for a large percentage of our contractually committed capacity. If one or
more of our significant clients fail to make payments to us or does not honor their contractual commitments, our revenues and
results of operations would be materially and adversely affected. In addition, some contracts we entered into with our significant
clients provide that they have early termination options if we breach the terms of contracts, subject to payment of liquidated
damages. If any of our significant clients exercises any applicable early termination options or we are unable to renew our existing
contracts with them on similar terms or at all, and we are unable to find new clients to utilize the space to be vacated in a
timely manner or at the same fee levels, our results of operations will be adversely affected. For example, certain of our agreements
with BSIT will expire in September, 2021, and we may not be able to renew them at favorable terms to us, or at all. As of the
date of this prospectus, none of our clients have exercised their early termination options which we believe would have a material
adverse effect on our business, results of operations and financial condition. However, we cannot provide any assurance that they
will not do so in the future.
There
are a number of factors that could cause us to lose major clients. Because many of our contracts involve services that are mission-critical
to our clients, any failure by us to meet a client’s expectations could result in cancellation or non-renewal of
the contract. Our contracts usually allow our clients or agents to terminate their contracts with us before the end of the contract
period under certain specified circumstances, including our failure to deliver services as required under such agreements. In
addition, our clients may decide to reduce spending on our services in response to a challenging economic environment or other
factors, both internal and external, relating to their business such as corporate restructuring or changing their outsourcing
strategy by moving more facilities in-house or outsourcing to other service providers. Some of our clients may choose
to develop or expand their own data warehouse facilities and data mining capacities in the future, which may result in a decline
in our existing or potential clients.
In
addition, our reliance on any individual significant client may give that client a degree of pricing leverage against us when
negotiating contracts and terms of services with us. The loss of any of our major clients, or a significant decrease in the extent
of the services that they outsource to us or the level of prices we offer, could materially and adversely affect our financial
condition and results of operations.
Any
of our clients could experience a downturn in their business, which in turn could result in their inability or failure to make
timely payments to us pursuant to their contracts with us. In the event of any client default, our liquidity could be adversely
impacted and we may experience delays in enforcing our rights and may incur substantial costs in protecting our investment. These
risks would be particularly significant if one of our major clients were to experience adverse effects to its business and defaults
under their contracts with us. The inability of any significant client to meet its payment obligations could impact us negatively
and significantly.
If
we do not succeed in attracting new clients or agents for our services and/or growing revenues from existing clients or agents,
our business and results of operation may be adversely affected.
We
have been expanding our client base to cover more insurance companies and different types of insurance category. We are highly
relying on our agents to dispatch data mining business of insurance company to us. Our ability to attract new clients, as well
as our ability to grow revenues from our existing clients, depends on a number of factors, including our data warehouse capacity,
our ability to offer high-quality services at competitive prices, the strength of our competitors and the capabilities of our
client acquisition team to attract new clients. If we fail to attract new clients, we may not be able to grow our revenue as quickly
as we anticipate or at all.
In
addition, as our client base grows and diversifies into other types of insurance category, we may be unable to provide services
that cater to their changing needs, which could result in client dissatisfaction, decreased overall demand for our services and
loss of expected revenues. Moreover, our inability to meet client expectations may damage our reputation and could consequently
limit our ability to retain existing clients and attract new clients, which would adversely affect our ability to generate revenues
and negatively impact our results of operations.
Factors
that adversely affect the industries in which our clients operate or information technology spending in these industries, particularly
in the Internet and cloud service industries and insurance industries, may adversely affect our business.
Our
clients are primarily technology companies in the Internet, cloud, software and other technology-based industries. The end-users
of our data mining products are primarily large insurance companies in China. Our clients, some of whom have experienced rapid
changes in their business, substantial price competition and pressures on their profitability, may request price reductions or
decrease their demand for our data mining analysis, which could harm our financial performance. Furthermore, a decline in the
technology industry or the demand for cloud-based services, or the desire of any of these companies, including our client and
the end-user insurance companies, to outsource their data warehouse and data mining needs, could lead to a decrease in the demand
for space in our data warehouses and data mining analysis business, which would have an adverse effect on our business and financial
condition. We also are susceptible to adverse developments in the industries in which our clients operate, such as decreases in
demand for their products or services, business layoffs or downsizing, industry slowdowns, relocations of businesses, costs of
complying with government regulations or increased regulation and other factors. We also may be materially adversely affected
by any downturns in the market for data warehouses and data mining due to, among other things, oversupply of or reduced demand
for space or a slowdown in the technology industry. Also, a lack of demand for data warehouse space and data mining by enterprise
clients could have a material adverse effect on our business, results of operations and financial condition. If any of these events
happen, we may lose clients or have difficulties in selling our services, which would materially and adversely affect our business
and results of operations.
We
purchase a significant portion of our meta data from a small number of data suppliers. A significant disruption in any of such
data suppliers could materially and adversely affect our business, results of operations and financial condition.
We
purchase a significant portion of our raw data from a small number of data suppliers and a significant disruption to any single
location could materially and adversely affect our operations. We highly rely on three data suppliers, Shandong Shubao IT Ltd.,
Jiangxi Chacha IT Ltd., and Liaoning Tianzheng Ltd. to provide large amounts of data that we need, in which we conducted data
mining and data analysis. The occurrence of a catastrophic event, or a prolonged disruption in any of these data providers, could
materially and adversely affect our operations.
If
we do not succeed in maintaining business relationship with our data suppliers, our business and results of operation may be adversely
affected.
We
have been purchasing a significant portion of our raw data from a small number of data suppliers and termination of business relationship
with them could materially and adversely affect our business. We are highly relying on our data suppliers to provide us large
amounts of data that we need. Our business to conduct data mining analysis, as well as our ability to sell our insurance marketing
information to our agents, depends on a number of factors, including a consistent and reliable data supply by our data suppliers.
If we fail to maintain our business relationship with our data suppliers, or the costs of gaining data from our data suppliers
increase, we may not be able to grow our revenue as quickly as we anticipate or at all.
If
we are unable to adapt to new technologies or industry standards in a timely and cost-effective manner, our business, financial
performance and prospects could be materially and adversely affected.
The
markets for the data warehouses and data mining facilities we own and operate, as well as certain of the insurance industry in
which our end-use clients operate, are characterized by rapidly changing technologies, evolving industry standards, and frequent
new service introductions. As a result, the infrastructure at our data warehouses and data mining facilities may become obsolete
or unmarketable due to demand for new processes and technologies, including new technology that permits higher levels of critical
load and heat removal than our data warehouses are currently designed to provide. In addition, the systems that connect our data
warehouses and data mining facilities to the Internet and other external networks may become outdated, including with respect
to latency, reliability and diversity of connectivity. When clients demand new processes or technologies, we may not be able to
upgrade our data warehouse facilities and data mining capacities on a cost-effective basis, or at all, due to, among other things,
increased expenses to us that cannot be passed on to clients or insufficient revenues to fund the necessary capital expenditures.
The obsolescence of our power and cooling systems and/or our inability to upgrade our data mining capacities, including associated
connectivity, could reduce revenues at our data mining and analysis and could have a material adverse effect on us. To be successful,
we must adapt to our rapidly changing market by continually improving the performance, features and reliability of our services
and modifying our business strategies accordingly, which could cause us to incur substantial costs. We may not be able to adapt
to changing technologies in a timely and cost-effective manner, if at all, which would adversely impact our ability to sustain
and grow our business. If we are unable to purchase the hardware or obtain a license for the software that our services depend
on, our business could be significantly and adversely affected.
Furthermore,
potential future regulations that apply to industries we serve may require us, our data suppliers, or our clients to seek specific
requirements from their data operations that we are unable to provide. If such regulations were adopted, we could lose clients
or be unable to attract new clients in certain industries, which could have a material adverse effect on us.
In
addition, new technologies or industry standards have the potential to replace or provide lower cost alternatives to our services.
We focus primarily on providing data mining services and solutions through data warehouses. We cannot guarantee that we will be
able to identify the emergence of all the new service alternatives successfully, modify our services accordingly, or develop and
bring new services to market in a timely and cost-effective manner to address these changes. If and when we do identify the emergence
of new service alternatives and introduce new services to market, those new services may need to be made available at lower profit
margins than our then-current services. Failure to provide services to compete with new technologies or the obsolescence of our
services could lead us to lose current and potential clients or could cause us to incur substantial costs, which would harm our
operating results and financial condition. Our introduction of new alternative services that have lower price points than our
current offerings may also result in our existing clients switching to the lower cost products, which could reduce our revenues
and have a material adverse effect on our results of operation.
Any
significant or prolonged failure in the data warehouse facilities and data mining facilities we operate or services we provide,
including events beyond our control, would lead to significant costs and disruptions and would reduce the attractiveness of our
facilities, harm our business reputation and have a material adverse effect on our results of operation.
The
data warehouse facilities and data mining facilities we operate are subject to failure. Any significant or prolonged failure in
any data warehouse and data mining facilities we operate or services that we provide, including a breakdown in critical plant,
equipment or services, such as the generators, backup batteries, routers, switches, or other equipment, power supplies, or network
connectivity, whether or not within our control, could result in service interruptions and data losses for our clients as well
as equipment damage, which could significantly disrupt the normal business operations of our clients and harm our reputation and
reduce our revenues. Any failure or downtime in one of the data warehouse and data mining facilities that we operate could affect
many of our clients. The total destruction or severe impairment of any of the data warehouse and data mining facilities we operate
could result in significant downtime of our services and catastrophic loss of client data. Since our ability to attract and retain
clients depends on our ability to provide highly reliable service, even minor interruptions in our service could harm our reputation
and cause us to incur financial penalties. The services we provide are subject to failures resulting from numerous factors, including,
but not limited to, human error or accident, natural disasters and security breaches, whether accidental or willful.
We
may in the future experience interruptions in service, power outages and other technical failures or be otherwise unable to satisfy
the requirements of the agreements we have with clients for reasons outside of our control. As our services are critical to many
of our clients’ business operations, any significant or prolonged disruption in our services could result in lost profits
or other indirect or consequential damages to our clients and subject us to lawsuits brought by the clients for potentially substantial
damages. Furthermore, these interruptions in service, regardless of whether they result in breaches of the agreements we have
with clients, may negatively affect our relationships with clients and lead to clients terminating their agreements with us or
seeking damages from us or other compensatory actions. We have taken and continue to take steps to improve our infrastructure
to prevent service interruptions and satisfy the requirements of the agreements we have with clients, including upgrading our
electrical and mechanical infrastructure and sourcing, designing the best facilities possible and implementing rigorous operational
procedures to maintenance programs to manage risk. Service interruptions continue to be a significant risk for us and could affect
our reputation, damage our relationships with clients and materially and adversely affect our business. Any breaches of the agreements
we have with clients will damage our relationships with clients and materially and adversely affect our business.
Security
breaches or alleged security breaches of our data warehouses could disrupt our operations and have a material adverse effect on
our business, financial condition and results of operation.
A
security breach of our data warehouse facilities could result in the misappropriation of our or our clients’ information,
and may cause interruptions or malfunctions in our operations or the operations of our clients. As we and our data warehouse service
provider commit to implementing effective security measures to safeguard our data warehouses, such a compromise could be particularly
harmful to our brand and reputation. We may be required to expend significant capital and resources to protect against
such threats or to alleviate problems caused by breaches in security. Security risks and deficiencies may also be identified in
the course of government inspections, which could subject us to fines and other sanctions. As techniques used to breach security
change frequently and are often not recognized until launched against a target, we may not be able to implement new security measures
in a timely manner or, if and when implemented, we may not be certain whether these measures could be circumvented. Any breaches
that may occur could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential clients, harm
to our reputation and increases in our security costs, which could have a material adverse effect on our financial condition and
results of operations.
In
addition, any assertions of alleged security breaches or systems failure made against us, whether true or not, could harm our
reputation, cause us to incur substantial legal fees and have a material adverse effect on our business, reputation, financial
condition and results of operations.
Our
subscription agreements for data warehouses could be terminated early and we may not be able to renew our existing leases on commercially
acceptable terms or our rent or payment under the agreements could increase substantially in the future, which could materially
and adversely affect our operations.
We
enter into certain data warehouse subscription agreements with Tencent Cloud Computing (Beijing) Co., Ltd. for our data warehouses.
Upon the expiration of such subscription agreements, we may not be able to renew these subscription agreements on commercially
reasonable terms, if at all. Under certain subscription agreements, the data warehouse service provider may terminate the agreement
by giving prior notice and paying default penalties to us. However, such default penalties may not be sufficient to cover our
losses. Even though the data warehouse service provider for our data warehouses generally do not have the right of unilateral
early termination unless they provide the required notice, the subscription agreements may nonetheless be terminated early if
we are in material breach of the subscription agreements. We may assert claims for compensation against the data warehouse service
provider if they elect to terminate a subscription agreement early and without due cause. Although there is no substantial barriers
to renew subscription agreements we want to renew, and we do not believe that any of our subscription agreements will be terminated
early in the future, there can be no assurance that the data warehouse service provider will not terminate any of our subscription
agreements prior to its expiration date. If the data warehouse subscription agreements were terminated early prior to their expiration
date, notwithstanding any compensation we may receive for early termination of such leases, or if we are not able to renew such
subscription agreements, or if we are unable to find suitable alternative data warehouses in a timely manner, we may have to incur
significant costs related to relocation of our data. Any relocation could also affect our ability to provide continuous uninterrupted
services to our customers and harm our reputation. Furthermore, rent or payment under such leases in the future may increase substantially
in the future. Any of the foregoing could have an adverse impact on our business and results of operations.
We
may face claims of privacy infringement and other related claims, which could be time-consuming and costly to defend and may result
in an adverse impact over our operations.
We
cannot assure you that our operations or any aspects of our business do not or will not infringe upon or violate privacy rights
owned or held by third parties. We may also be subject to legal or administrative proceedings and claims relating to privacy rights
of third parties in the future. If we become liable to third parties for infringing upon their privacy rights, we could be required
to pay a substantial damage award. We may also be subject to injunctions that prohibit us from using such data and require us
to alter our processes or methodologies, which may not be technically or commercially feasible and may cause us to expend significant
resources. Any claims or litigation in this area, whether we ultimately win or lose, could be time-consuming and costly, could
cause the diversion of management’s attention and resources away from the operations of our business and could damage our
reputation.
Although
we purchase data from our data suppliers, we cannot assure you that our use of such data will not be subject to infringement litigation
or proceeding. A third party who claims the ownership over data we purchase from our data suppliers may impeding our ability to
use the data. As of the date of this prospectus, we had not encountered any legal claims brought by third parties relating to
infringement or violation of any privacy rights which may have a material adverse effect on us. However, there can be no assurance
that third parties holding ownership over the data and privacy would not take actions against us alleging infringement of such
rights or otherwise assert their rights.
We
face risks related to natural disasters, health epidemics and other catastrophes, which could significantly disrupt our business,
operations, liquidity and financial condition.
Our
business could be materially and adversely affected by natural disasters or other catastrophes, such as earthquakes, fire, floods,
hail, windstorms, severe weather conditions, environmental accidents, power loss, communications failures, explosions, terrorist
attacks and similar events. Our business could also be materially and adversely affected by public health emergencies, such as
the outbreak of avian influenza, severe acute respiratory syndrome, or SARS, Zika virus, Ebola virus, COVID-19 or other local
health epidemics in China and worldwide. If any of our employees is suspected of having contracted any contagious disease, we
may under certain circumstances be required to quarantine such employees and the affected areas of our premises. As a result,
we may have to temporarily suspend part of or all our operations. Furthermore, authorities may impose restrictions on travel and
transportation and implement other preventative measures in affected regions to contain a disease outbreak, which may lead to
the temporary closure of our facilities and declining economic activity at large. A prolonged outbreak of any of these illness
or other adverse public health developments in China or elsewhere in the world could have a material adverse effect on our business
operations.
Risks
Relating to Doing Business in China
We
may fail to obtain, maintain and update licenses and permits necessary to conduct our operations in the PRC, and our business
may be materially and adversely affected as a result of any changes in the laws and regulations governing the VATS industry in
the PRC.
The
laws and regulations regarding value-added telecommunications services, or VATS, licenses in the PRC are relatively new and are
still evolving, and their interpretation and enforcement involve significant uncertainties. Investment activities in the PRC by
foreign investors are principally governed by the Industry Catalog Relating to Foreign Investment, or the Catalog. The Catalog
divides industries into three categories: encouraged, restricted and prohibited. Industries not included in the Catalog are permitted
industries. Industries such as VATS, including Internet data warehouse services, or IDC services, restrict foreign investment.
Specifically, the Administrative Regulations on Foreign-Invested Telecommunications Enterprises restrict the ultimate capital
contribution percentage held by foreign investor(s) in a foreign-invested VATS enterprise to 50% or less. Under the Telecommunications
Regulations, telecommunications service providers are required to procure operating licenses prior to their commencement of operations.
The Administrative Measures for Telecommunications Business Operating License, which took effect on April 10, 2009 and was
amended on September 1, 2017, set forth the types of licenses required to provide telecommunications services in China and
the procedures and requirements for obtaining such licenses.
As
of the date of this prospectus, we have obtained a Telecommunications Business License and a Telecommunication Network Number
Utilization Resource Certificate for our 10086 hot-line center and are currently applying for an ICP license from the Chinese
Ministry of Industry and Information Technology.
There
can be no assurance that we will be able to maintain our existing licenses or permits necessary to provide our current IDC services
in the PRC, renew any of them when their current term expires, or update existing licenses or obtain additional licenses necessary
for our future business expansion. The failure to obtain, retain, renew or update any license or permit generally, and our IDC
licenses in particular, could materially and adversely disrupt our business and future expansion plans.
In
addition, if future PRC laws or regulations governing the VATS industry require that we obtain additional licenses or permits
or update existing licenses in order to continue to provide our IDC services, there can be no assurance that we would be able
to obtain such licenses or permits or update existing licenses in a timely fashion, or at all. If any of these situations occur,
our business, financial condition and prospects would be materially and adversely affected.
We
may rely principally on dividends and other distributions on equity paid by our wholly foreign-owned entities, or WFOEs, to fund
any cash and financing requirements we may have, and any limitation on the ability of our WFOEs to pay dividends to us could have
a material adverse effect on our ability to conduct our business.
We
are a holding company, and we may rely principally on dividends and other distributions on equity paid by our WFOEs, which in
turn relies on consulting and other fees paid to us by our variable interest entities, for our cash and financing requirements,
including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur.
If our WFOEs incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay
dividends or make other distributions to us. In addition, the PRC tax authorities may require us to adjust our taxable income
under the contractual arrangements our WFOEs currently have in place with our VIEs in a manner that would materially and adversely
affect their ability to pay dividends and other distributions to us.
Under
PRC laws and regulations, our WFOEs, as wholly foreign-owned enterprise in the PRC, may pay dividends only out of their accumulated
profits as determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned enterprise,
such as our WFOEs, is required to set aside at least 10% of its accumulated after-tax profits after making up the previous
year’s accumulated losses each year, if any, to fund statutory reserve funds, until the aggregate amount of such fund reaches
50% of its registered capital. It may allocate a portion of its after-tax profits based on PRC accounting standards
to discretionary reserve funds according to its shareholder’s decision. These statutory reserve funds and discretionary
reserve funds are not distributable as cash dividends.
In
addition, the PRC Enterprise Income Tax Law and its implementation rules provide that withholding tax rate of 10% will be applicable
to dividends payable by PRC companies to non-PRC-resident enterprises unless otherwise exempted or reduced according
to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises
are incorporated.
Any
limitation on the ability of our WFOEs to pay dividends or make other distributions to us 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
and conduct our business.
Adverse
changes in China’s economic, political and social conditions, as well as laws and government policies, may materially and
adversely affect our business, financial condition, results of operations and growth prospects.
We
conduct businesses in the PRC, and therefore our financial conditions and results of operations are subject to influences from
PRC’s economic, political and social conditions to a great extent. The PRC economy differs from the economies of most developed
countries in many aspects, including, but not limited to, the degree of government involvement, control level of corruption, control
of capital investment, reinvestment control of foreign exchange, allocation of resources, growth rate and development level. Although
the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of
state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial
portion of productive assets in China is still owned by the government. In addition, the PRC government continues to play a significant
role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control
over China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting
monetary policy, regulating financial services and institutions and providing preferential treatment to particular industries
or companies.
For
approximately four decades, the PRC government has implemented economic reform measures to utilize market forces in the development
of the PRC economy. We cannot predict whether changes in the PRC’s economic, political and social conditions and in its
laws, regulations and policies will have any adverse effect on our current or future business, financial condition or results
of operations. In addition, many of the economic reforms carried out by the PRC government are unprecedented or experimental and
are expected to be refined and improved over time. This refining and improving process may not necessarily have a positive effect
on our operations and business development. For example, the PRC government has in the past implemented a number of measures intended
to slow down certain segments of the economy, including the real property industry, which the government believed to be overheating.
These actions, as well as other actions and policies of the PRC government, could cause a decrease in the overall level of economic
activity in the PRC and, in turn, have an adverse impact on our business and financial condition.
Uncertainties
in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.
We
conduct a substantial portion of business operations in the PRC, and our PRC subsidiaries and consolidated VIEs are subject to
laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written
statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value.
The PRC legal system is evolving rapidly, and the interpretation of many laws, regulations and rules may contain inconsistencies
and enforcement of these laws, regulations and rules involves uncertainties.
In
1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters
in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to
various forms of foreign investment in China. However, China has not developed a fully integrated legal system, and recently enacted
laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to significant
degrees of interpretation by PRC regulatory agencies. In particular, because these laws, rules and regulations are relatively
new, and because of the limited number of published decisions and the nonbinding nature of such decisions, and because the laws,
rules and regulations often give the relevant regulator significant discretion in how to enforce them, the interpretation and
enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable.
From
time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC judicial
and administrative authorities have significant discretion in interpreting and implementing statutory provisions and contractual
terms, it may be more difficult to predict the outcome of a judicial or administrative proceeding than that in more developed
jurisdictions. Furthermore, the PRC legal system is based, in part, on government policies and internal rules, some of which are
not published in a timely manner, or at all, but which may have retroactive effects. As a result, we may not always be aware of
any potential violation of these policies and rules. Such unpredictability towards our contractual, property (including intellectual
property) and procedural rights could adversely affect our business and impede our ability to continue our operations.
Failure
to comply with PRC regulations regarding the registration requirements for employee share ownership plans or share option plans
may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Pursuant
to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive
Plan of Overseas Publicly Listed Company, issued by the State Administration of Foreign Exchange, or SAFE, in February 2012, employees,
directors, supervisors and other senior management participating in any stock incentive plan of an overseas publicly listed company
who are PRC citizens or who are non-PRC citizens residing in China for a continuous period of not less than one year,
subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiaries
of such overseas listed company, and complete certain other procedures. We and our directors, executive officers and other employees
who are PRC citizens or who reside in the PRC for a continuous period of not less than one year and who have been granted restricted
shares, restricted share units or options will be subject to these regulations if those employees exercise such restricted shares,
restricted share units or options. Separately, SAFE Circular 37 also requires certain registration procedures to be completed
if those employees exercise restricted shares, restricted share units or options before listing. Failure to complete the SAFE
registrations may subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into
our wholly foreign-owned subsidiaries in China and limit these subsidiaries’ ability to distribute dividends to us. We also
face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors and employees
under PRC law.
In
addition, the State Administration of Taxation, or the SAT has issued certain circulars concerning employee share options or restricted
shares. Under these circulars, the employees working in the PRC who exercise share options or are granted restricted share units
will be subject to PRC individual income tax. Our WFOEs have obligations to file documents related to employee share options or
restricted shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their
share options. If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations,
we may face sanctions imposed by the tax authorities or other PRC government authorities.
Failure
to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.
Companies
operating in China are required to participate in various government-mandated employee benefit contribution plans, including certain
social insurance, housing funds and other welfare plans, open and register accounts for social insurance accounts and housing
funds, and contribute in their own names to the plans in amounts equal to certain percentages of salaries, including bonuses and
allowances, of employees up to a maximum amount specified by the local government from time to time at locations where companies
operate our businesses. The requirements of employee benefit contribution plans have not been implemented consistently by the
local governments in China given the different levels of economic development in different geographical areas.
As
of the date of this prospectus, certain of our PRC subsidiaries failed to open and register the accounts for social insurance
and housing funds, and entrust third-party agencies to pay social insurance and housing provident fund for some of our employees.
We may be required to make up the contributions for these welfare plans as well as late fees and fines. If we are subject to investigations
or penalties related to non-compliance with labor laws, our business, financial condition and results of operations
could be adversely affected.
The
enforcement of the Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, and other labor-related
regulations in the PRC may increase our labor costs, impose limitations on our labor practices and adversely affect our business
and our results of operations.
On
June 29, 2007, the Standing Committee of the National People’s Congress of China enacted the PRC Labor Contract Law,
which became effective on January 1, 2008 and was amended on December 28, 2012. The PRC Labor Contract Law introduces
specific provisions related to fixed-term employment contracts, part-time employment, probation, consultation with labor unions
and employee assemblies, employment without a written contract, dismissal of employees, severance, and collective bargaining,
which together represent enhanced enforcement of labor laws and regulations. According to the PRC Labor Contract Law, an employer
is obliged to sign an unfixed-term labor contract with any employee who has worked for the employer for 10 consecutive years.
Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively,
the resulting contract must have an unfixed term, with certain exceptions. The employer must pay economic compensation to an employee
where a labor contract is terminated or expires in accordance with the PRC Labor Contract Law, except for certain situations which
are specifically regulated. In addition, the government has issued various labor-related regulations to further protect the rights
of employees. According to such laws and regulations, employees are entitled to annual leave ranging from five to 15 days
and are able to be compensated for any untaken annual leave days in the amount of three times their daily salary, subject to certain
exceptions. In the event that we decide to change our employment or labor practices, the PRC Labor Contract Law and its implementation
rules may also limit our ability to effect those changes in a manner that we believe to be cost-effective. In addition, as the
interpretation and implementation of these new regulations are still evolving, our employment practices may not be at all times
deemed in compliance with the new regulations. If we are subject to severe penalties or incur significant liabilities in connection
with labor disputes or investigations, our business and financial conditions may be adversely affected.
It
may be difficult to effect service of process upon us, our directors or our executive officers that reside in China or to enforce
any judgments obtained from non-PRC courts or bring actions against them or us in China.
Certain
of our directors and most of our executive officers reside in China. In addition, most of our assets and those of our directors
and executive officers are located in China. The PRC does not have treaties providing for the reciprocal recognition and enforcement
of judgments of courts with the United States, the United Kingdom, Japan and many other jurisdictions. As a result, it may not
be possible for investors to serve process upon us or those persons in China, or to enforce against us or them in China, any judgments
obtained from non-PRC jurisdictions.
On
July 14, 2006, the Supreme People’s Court of China and the Government of the Hong Kong Special Administrative Region
signed an Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters, or the 2006 Arrangement.
Under such arrangement, where any designated People’s Court or any designated Hong Kong court has made an enforceable final
judgment requiring payment of money in a civil and commercial case pursuant to a choice of court agreement, any party concerned
may apply to the relevant People’s Court or Hong Kong court for recognition and enforcement of the judgment. On January 18,
2019, the Supreme Court of the People’s Republic of China and the Department of Justice under the Government of the Hong
Kong Special Administrative Region signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region, or the 2019 Arrangement.
The 2019 Arrangement, for the reciprocal recognition and enforcement of judgments in civil and commercial matters between the
courts in mainland China and those in the Hong Kong Special Administrative Region, stipulates the scope and particulars of judgments,
the procedures and ways of the application for recognition or enforcement, the review of the jurisdiction of the court that issued
the original judgment, the circumstances where the recognition and enforcement of a judgment shall be refused, and the approaches
towards remedies, among others. After a judicial interpretation has been promulgated by the Supreme People’s Court and the
relevant procedures have been completed by the Hong Kong Special Administrative Region, both sides shall announce a date on which
the 2019 Arrangement shall come into effect. The 2019 Arrangement shall apply to any judgment made on or after its effective date
by the courts of both sides. The 2006 Arrangement shall be terminated on the same day when the 2019 Arrangement comes into effect.
If a “written choice of court agreement” has been signed by parties according to the 2006 Arrangement prior to the
effective date of the 2019 Arrangement, the 2006 Arrangement shall still apply. Although the 2019 Arrangement has been signed,
its effective date has yet to be announced. Therefore, there are still uncertainties about the outcomes and effectiveness of enforcement
or recognition of judgments under the 2019 Arrangement.
Shareholder
claims that are common in the United States, including securities law class actions and fraud claims, generally are difficult
to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles
to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign
entities. Although the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory
authorities of another country or region to implement cross-border supervision and administration, such regulatory cooperation
with the securities regulatory authorities in the United States has not been efficient in the absence of mutual and practical
cooperation mechanism. According to Article 177 of the PRC Securities Law which became effective in March 2020, no overseas securities
regulator is allowed to directly conduct investigation or evidence collection activities within the PRC. Accordingly, without
the consent of the competent PRC securities regulators or other relevant authorities, no entity or individual may provide any
documents and materials relating to securities business activities to foreign entities or government agencies.
Risk
Relating to Being a Smaller Reporting and Foreign Private Issuer
Because
we are a smaller reporting company, the requirements of being a public company, including compliance with the reporting requirements
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the requirements of the Sarbanes-Oxley
Act and the Dodd-Frank Act, may strain our resources, increase our costs and distract management, and we may be unable to comply
with these requirements in a timely or cost-effective manner.
As
a public company with listed equity securities, we must comply with the federal securities laws, rules and regulations, including
certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the
Dodd-Frank Act, related rules and regulations of the SEC and the NYSE, with which a private company is not required to comply.
Complying with these laws, rules and regulations occupies a significant amount of the time of our Board of Directors and management
and significantly increases our costs and expenses. Among other things, we must:
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maintain
a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley
Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;
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comply
with rules and regulations promulgated by the NYSE;
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prepare
and distribute periodic public reports in compliance with our obligations under the federal securities laws;
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maintain
various internal compliance and disclosures policies, such as those relating to disclosure controls and procedures and insider
trading in our ordinary shares;
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involve
and retain to a greater degree outside counsel and accountants in the above activities;
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maintain
a comprehensive internal audit function; and
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maintain
an investor relations function.
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Future
sales of our ADSs, whether by us or our shareholders, could cause our share price to decline
If
our existing shareholders sell, or indicate an intent to sell, substantial amounts of our ADSs in the public market, the trading
price of our ADSs could decline significantly. Similarly, the perception in the public market that our shareholders might sell
of our ADSs could also depress the market price of our ADSs. A decline in the price of our ADSs might impede our ability to raise
capital through the issuance of additional of our ADSs or other equity securities. In addition, the issuance and sale by us of
additional of our ADSs or securities convertible into or exercisable for our ADSs, or the perception that we will issue such securities,
could reduce the trading price for our ADSs as well as make future sales of equity securities by us less attractive or not feasible.
The sale of ADSs issued upon the exercise of our outstanding options and warrants could further dilute the holdings of our then
existing shareholders.
Securities
analysts may not cover our Ordinary Shares or ADSs and this may have a negative impact on the market price of our ordinary shares
The
trading market for our ADSs will depend, in part, on the research and reports that securities or industry analysts publish about
us or our business. We do not have any control over independent analysts (provided that we have engaged various non-independent
analysts). We do not currently have and may never obtain research coverage by independent securities and industry analysts. If
no independent securities or industry analysts commence coverage of us, the trading price for our ADSs would be negatively impacted.
If we obtain independent securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our
ADSs, changes their opinion of our shares or publishes inaccurate or unfavorable research about our business, our share price
would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand
for our ADSs could decrease and we could lose visibility in the financial markets, which could cause our share price and trading
volume to decline.
You
may experience future dilution as a result of future equity offerings or other equity issuances
We
may in the future issue additional of our ADSs or other securities convertible into or exchangeable for of our ADSs. We cannot
assure you that we will be able to sell of our ADSs or other securities in any other offering or other transactions at a price
per share that is equal to or greater than the price per share paid by investors in this offering. The price per share at which
we sell additional of our ADSs or other securities convertible into or exchangeable for our ADSs in future transactions may be
higher or lower than the price per share in this offering.
USE
OF PROCEEDS
Except
as described in any prospectus supplement and any free writing prospectus in connection with a specific offering, we currently
intend to use the net proceeds from the sale of the securities offered under this prospectus to fund the development and commercialization
of our projects and the growth of our business, primarily working capital, and for general corporate purposes. We may also use
a portion of the net proceeds to acquire or invest in technologies, products and/or businesses that we believe will enhance the
value of our Company, although we have no current commitments or agreements with respect to any such transactions as of the date
of this prospectus. We have not determined the amount of net proceeds to be used specifically for the foregoing purposes. As a
result, our management will have broad discretion in the allocation of the net proceeds and investors will be relying on the judgment
of our management regarding the application of the proceeds of any sale of the securities. If a material part of the net proceeds
is to be used to repay indebtedness, we will set forth the interest rate and maturity of such indebtedness in a prospectus supplement.
Pending use of the net proceeds will be deposited in interest bearing bank accounts.
DILUTION
If
required, we will set forth in a prospectus supplement the following information regarding any material dilution of the equity
interests of investors purchasing securities in an offering under this prospectus:
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the
net tangible book value per share of our equity securities before and after the offering;
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the
amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the
offering; and
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the
amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
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DESCRIPTION OF SHARE CAPITAL
The following description
of our share capital (which includes a description of securities we may offer pursuant to the registration statement of which this
prospectus, as the same may be supplemented, forms a part) does not purport to be complete and is subject to and qualified in its
entirety by our fifth Amended and Restated Memorandum and Articles of Association (“M&A”) and by the applicable
provisions of Cayman Islands law.
Our authorized share
capital is US$500,000 divided into 5,000,000,000 shares with a par value of US$0.0001 each (the “Ordinary Shares”),
comprised of (1) 4,900,000,000 Class A Ordinary Shares with a par value of $0.0001 each, and (2) 100,000,000 Class B Ordinary Shares
with a par value of $0.0001 each. Our directors may, in their absolute discretion and without the approval of our shareholders,
create and designate out of the unissued shares of our company (including unissued Class A Ordinary Shares) one or more classes
or series of preferred shares, comprising such number of preferred shares, and having such designations, powers, preferences, privileges
and other rights, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences,
as our directors may determine.
The following description
of our share capital is intended as a summary only and is qualified in its entirety by reference to our M&A, which have been
filed previously with the SEC, and applicable provisions of Cayman Islands law.
We, directly or through
agents, dealers or underwriters designated from time to time, may offer, issue and sell, together or separately, up to $60,000,000
in the aggregate of:
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Class A Ordinary Shares, represented by ADS;
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secured or unsecured debt securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities, senior subordinated debt securities or subordinated debt securities, each of which may be convertible into equity securities;
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warrants to purchase our securities;
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rights to purchase our securities; or
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units comprised of, or other combinations of, the foregoing securities.
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We may issue the debt
securities as exchangeable for or convertible into Ordinary Shares, preferred shares or other securities. The preferred shares
may also be exchangeable for and/or convertible into Ordinary Shares, another series of preferred shares or other securities. The
debt securities, the preferred shares, the Ordinary Shares and the warrants are collectively referred to in this prospectus as
the “securities.” When a particular series of securities is offered, a supplement to this prospectus will be delivered
with this prospectus, which will set forth the terms of the offering and sale of the offered securities.
Ordinary Shares
As of the date of this
prospectus, there are 301,616,985 Class A Ordinary Shares and 24,468,652 Class B Ordinary Shares issued and outstanding, held of
record by approximately 321 and 16 shareholders, respectively. We have never paid dividends on our Ordinary Shares. While any future
dividends will be determined by our directors after consideration of the earnings, financial condition, and other relevant factors,
it is currently expected that available cash resources will be utilized in connection with our ongoing operations.
Each outstanding Class
A Ordinary Share entitles the holder thereof to one vote per share on all matters. Each outstanding Class B Ordinary Share entitles
the holder thereof to ten (10) votes per share on all matters. Holders of shares of Class A Ordinary Shares and Class B Ordinary
Shares shall, at all times, vote together as one class on all matters submitted to a vote for shareholders’ consent. Our
M&A provides that elections for directors shall be by an ordinary resolution of our shareholders, which requires a simple majority
of votes cast at a general meeting of our shareholders, or a written resolution approved in writing by two-thirds of our shareholders
entitled to vote at a general meeting. Shareholders do not have preemptive rights to purchase shares in any future issuance of
our Ordinary Shares. Upon our liquidation, dissolution or winding up, and after payment of creditors and preferred shareholders,
if any, our assets available for distribution will be distributed amongst our shareholders in proportion to the par value of the
shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are
monies due, of all monies payable to our company for unpaid calls or otherwise.
The holders of our
Ordinary Shares are entitled to dividends out of funds legally available when and as declared by our board of directors (the “Board”).
The Board has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide
in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt
of dividends or other payments from our operating subsidiaries and other holdings and investments. In addition, our operating subsidiaries,
from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive
covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other
regulatory restrictions.
General. All of our issued
and outstanding Ordinary Shares are fully paid and non-assessable. Our Ordinary Shares are issued in registered form,
and are issued when registered in our register of members. Our shareholders who are nonresidents of the Cayman Islands
may freely hold and vote their shares. Under our M&A, we may issue only non-negotiable shares and may not issue
bearer or negotiable shares.
Dividends. The holders
of our Ordinary Shares are entitled to such dividends as may be declared by our board of directors. In addition, our
shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Under
Cayman Islands law, dividends may be declared and paid only out of funds legally available therefor, namely out of either profit
or our share premium account, provided that a dividend may not be paid if this would result in our company being unable to pay
its debts as they fall due in the ordinary course of business.
Classes of Ordinary Shares. Our
ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Except for conversion rights and
voting rights, the Class A ordinary shares and Class B ordinary shares carry equal rights and rank pari passu with one another,
including but not limited to the rights to dividends and other capital distributions.
Each Class B Ordinary Share is convertible
into one Class A Ordinary Share at any time by the holder thereof. In addition, (i) each Class B Ordinary Shares shall
automatically and immediately be converted into one Class A Ordinary Share if at any time the total number of the issued and outstanding
Class B ordinary shares in aggregate is less than 5% of the total number of Class B ordinary shares of our company issued and outstanding
immediately following the the Company's initial public offering, and (ii) upon any sale, transfer, assignment or disposition of
any Class B Ordinary Shares by a holder thereof to any person or entity which is not an Affiliate (as defined in our M&A) of
such holder, such Class B Ordinary Shares shall be automatically and immediately converted into an equal number of Class A Ordinary
Shares. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.
Voting Rights. Holders
of our Ordinary Shares vote as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be
required by law. In respect of matters requiring shareholders’ vote, each Class A Ordinary Share is entitled to
one vote and each Class B Ordinary Share is entitled to ten (10) votes. At any general meeting a resolution put to the vote of
the meeting shall be decided by poll.
An ordinary resolution to be passed by
the shareholders requires the affirmative vote of a simple majority of the votes cast by those shareholders entitled to vote who
are present in person or by proxy at a general meeting (or if passed as a resolution in writing, the approval of two-thirds of
our shareholders entitled to vote at a general meeting of our company), while a special resolution requires the affirmative vote
of no less than two-thirds of the votes cast by those shareholders entitled to vote who are present in person or by proxy at a
general meeting (or if passed as a written resolution, the approval of all of our shareholders entitled to vote at a general meeting
of our company). A special resolution is required for important matters such as a change of name or any amendment to
our M&A. Holders of our Ordinary Shares may effect certain changes by ordinary resolution, including increasing
the amount of our authorized share capital, consolidating all or any of our share capital into shares of larger amount than our
existing shares, sub-dividing our shares or any of them into shares of an amount smaller than that fixed by our M&A, and cancelling
any unissued shares.
General Meetings of Shareholders and
Shareholder Proposals. As a Cayman Islands exempted company, we are not obliged by the Companies Law to call shareholders’
annual general meetings. Our M&A provides that we may, but are not obliged to, in each year hold a general meeting
as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general
meeting shall be held at such time and place as may be determined by our directors.
Shareholders’ annual general meetings
and any other general meetings of our shareholders may be convened by our board of directors. Advance notice of at least
ten (10) calendar days is required for the convening of our annual general shareholders’ meeting and any other general meeting
of our shareholders. A quorum required for a general meeting of shareholders consists of one or more shareholders present
in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative, who hold shares
which represent, in aggregate, not less than one-third of the votes attaching to all issued and outstanding shares of our company
entitled to vote at general meetings.
Cayman Islands law provides shareholders
with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal
before a general meeting. However, these rights may be provided in a company’s articles of association. Our
M&A allows any of our shareholders holding in aggregate not less than two-thirds of the aggregate number of votes attaching
to all issued and outstanding shares of our company entitled to vote at general meetings, to requisition an extraordinary general
meeting of the shareholders, in which case our directors are obliged to call such meeting and to put the resolutions so requisitioned
to a vote at such meeting; however, our M&A does not provide our shareholders with any right to put any proposals before annual
general meetings or extraordinary general meetings not called by such shareholders.
Transfer of Shares. Subject
to the restrictions of our M&A set out below, as applicable, any of our shareholders may transfer all or any of his or her
Ordinary Shares by an instrument of transfer in writing and in such usual or common form or such other form approved by our board
of directors.
Our board of directors may, in its absolute
discretion, and without assigning any reason, refuse to register any transfer of any ordinary share which is not fully paid up
or upon which our company has a lien. Our directors may also decline to register any transfer of any ordinary share
unless (a) the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates
and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;
(b) the instrument of transfer is in respect of only one class of shares; (c) the instrument of transfer is properly stamped, if
required; (d) in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred
does not exceed four; or (e) a fee of such maximum sum as the NYSE may determine to be payable, or such lesser sum as our board
of directors may from time to time require, is paid to us in respect thereof.
If our directors refuse to register a transfer they shall, within
two months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice
of such refusal. The registration of transfers may, on fourteen (14) days’ notice being given by advertisement
in an appointed newspaper or any other newspapers or by any other means in accordance with the requirements of the NYSE to that
effect, be suspended at such times and for such periods (not exceeding in the whole thirty (30) calendar days in any year) as our
directors may determine.
Liquidation. On a winding up of our company,
if the assets available for distribution among our shareholders shall be more than sufficient to repay the whole of the share capital
at the commencement of the winding up, the surplus shall be distributed among our shareholders in proportion to the par value of
the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there
are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution
are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders
in proportion to the par value of the shares held by them.
Calls on Shares and Forfeiture of Shares. Our
board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served
to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called
upon and remain unpaid on the specified time are subject to forfeiture.
Redemption, Purchase and Surrender of Shares. We
may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders, on such terms
and in such manner as our board of directors, before the issue of such shares, or our shareholders by special resolution may determine. We
may also repurchase any of our shares provided that the manner and terms of such purchase have been approved by our board of directors
or by ordinary resolution of our shareholders, or are otherwise authorized by our memorandum and articles of association. Under
the Companies Law, the redemption or repurchase of any share may be paid out of our company’s profits or out of the proceeds
of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account
and capital redemption reserve) if the company can, immediately following such payment, pay its debts as they fall due in the ordinary
course of business. In addition, under the Companies Law no such share may be redeemed or repurchased (a) unless it
is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company
has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.
Variations of Rights of Shares. If at any
time, our share capital is divided into different classes of shares, the rights attached to any class of shares may be varied or
abrogated either with the written consent of the holders of two-thirds of the issued shares of that class, or with the sanction
of a special resolution passed at a general meeting of the holders of shares of that class. The rights conferred upon
the holders of the shares of any class issued with preferred or other rights will not, unless otherwise expressly provided by the
terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu
with such existing class of shares.
Inspection of Books and Records. Holders of
our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our
corporate records. However, at the discretion of our board of directors, we intend to provide our shareholders with
annual audited financial statements.
Changes in Capital. Our shareholders may from
time to time by ordinary resolution:
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increase our share capital
by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;
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consolidate or divide
all or any of our share capital into shares of a larger or smaller amount than our existing shares;
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sub-divide our existing
shares, or any of them into shares of as amount smaller than that fixed by our memorandum; and
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cancel any shares that,
at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount
of our share capital by the amount of the shares so cancelled.
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Our shareholders may, by special resolution
and subject to confirmation by the Grand Court of the Cayman Islands on an application by our company for an order confirming such
reduction, reduce our share capital and any capital redemption reserve in any manner authorized by law.
Issuance of Additional Shares. Our
M&A authorizes our board of directors to issue additional Ordinary Shares from time to time as our board of directors shall
determine, to the extent there are available authorized but unissued shares.
Our M&A authorizes our board of directors
to establish from time to time one or more series of convertible redeemable preferred shares and to determine, with respect to
any series of convertible redeemable preferred shares, the terms and rights of that series, including:
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designation of the series;
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the number of shares of the series;
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the dividend rights, conversion rights and voting rights; and
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the rights and terms of redemption and liquidation preferences.
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The issuance of convertible redeemable
preferred shares may be used as an anti-takeover device without further action on the part of the shareholders. Issuance
of these shares may dilute the voting power of holders of ordinary shares.
Anti-Takeover Provisions. Some
provisions of M&A may discourage, delay or prevent a change of control of our company or management that shareholders may consider
favorable, including provisions that:
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authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders; and
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limit the ability of shareholders to requisition and convene general meetings of shareholders.
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However, under Cayman Islands law, our
directors may only exercise the rights and powers granted to them under our M&A for a proper purpose and for what they believe
in good faith to be in the best interests of our company.
Exempted Company. We
are an exempted company with limited liability under the Companies Law. The Companies Law distinguishes between ordinary
resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business
mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted
company are essentially the same as for an ordinary company except that an exempted company:
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does not have to file an annual return of its shareholders with the Registrar of Companies;
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is not required to open its register of members for inspection;
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does not have to hold an annual general meeting;
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may issue negotiable or bearer shares or shares with no par value;
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may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
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may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
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may register as a limited duration company; and
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may register as a segregated portfolio company.
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Preferred Shares
The
Board is empowered to allot, issue, and dispose of shares (including, without limitation, preferred shares) (whether in certificated
form or non-certificated form), to such persons, in such manner, on such terms and having such rights and being subject to such
restrictions as they may from time to time determine. The Board may, without the approval of the shareholders, create and designate
out of the unissued shares of the Company (including unissued Class A Ordinary Shares) one or more classes or series of preferred
shares, comprising such number of preferred shares, and having such designations, powers, preferences, privileges and other rights,
including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, as the Board may
determine in their sole and absolute discretion.
You
should refer to the prospectus supplement relating to the series of preferred shares being offered for the specific terms of that
series, including:
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title of the series and the number of shares in the series;
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the price at which the preferred shares will be offered;
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the dividend rate or rates or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends on the preferred shares being offered will cumulate;
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the voting rights, if any, of the holders of preferred shares being offered;
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the provisions for a sinking fund, if any, and the provisions for redemption, if applicable, of the preferred shares being offered, including any restrictions on the foregoing as a result of arrearage in the payment of dividends or sinking fund installments;
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the liquidation preference per share;
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the terms and conditions, if applicable, upon which the preferred shares being offered will be convertible into our Ordinary Shares, including the conversion price, or the manner of calculating the conversion price, and the conversion period;
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the terms and conditions, if applicable, upon which the preferred shares being offered will be exchangeable for debt securities, including the exchange price, or the manner of calculating the exchange price, and the exchange period;
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any listing of the preferred shares being offered on any securities exchange;
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a discussion of any material federal income tax considerations applicable to the preferred shares being offered;
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the relative ranking and preferences of the preferred shares being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs;
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any limitations on the issuance of any class or series of preferred shares ranking senior or equal to the series of preferred shares being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs; and
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any additional rights, preferences, qualifications, limitations and restrictions of the series.
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Upon
issuance, the preferred shares will be fully paid and nonassessable, which means that its holders will have paid their purchase
price in full and we may not require them to pay additional funds.
Any
preferred share terms selected by the Board could decrease the amount of earnings and assets available for distribution to holders
of our Ordinary Shares or adversely affect the rights and power, including voting rights, of the holders of our Ordinary Shares
without any further vote or action by the stockholders. The rights of holders of our Ordinary Shares will be subject to, and may
be adversely affected by, the rights of the holders of any preferred shares that may be issued by us in the future. The issuance
of preferred shares could also have the effect of delaying or preventing a change in control of our company or make removal of
management more difficult.
DESCRIPTION OF THE AMERICAN DEPOSITARY
SHARES
Citibank, N.A. as Depositary,
will register and deliver ADSs. Each ADS represents ten (10) Class A Ordinary Shares. Citibank’s depositary offices are located
at 388 Greenwich Street, New York, New York 10013. ADSs may be represented by certificates that are commonly known as American
Depositary Receipts or ADRs. The Depositary typically appoints a custodian to safekeep the securities on deposit. In this case,
the custodian is Citibank, N.A. - Hong Kong, located 10/F, Harbour Front (II), 22, Tak Fung Street, Hung Hom, Kowloon, Hong Kong.
Each ADS represents
the right to receive, and to exercise the beneficial ownership interests in, ten Class A ordinary shares that are on deposit
with the Depositary and/or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in,
any other property received by the Depositary or the custodian on behalf of the owner of the ADS but that has not been distributed
to the owners of ADSs because of legal restrictions or practical considerations. We and the Depositary may agree to change the
ADS-to-share ratio by amending the deposit agreement. This amendment may give rise to, or change, the depositary fees payable by
ADS owners. The custodian, the Depositary and their respective nominees will hold all deposited property for the benefit of the
holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the Depositary, the
custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the deposit agreement be vested
in the beneficial owners of the ADSs. The Depositary, the custodian and their respective nominees will be the record holders of
the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs.
A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercise
beneficial ownership interests in, the deposited property only through the registered holders of the ADSs, the registered holders
of the ADSs (on behalf of the applicable ADS owners) only through the Depositary, and the Depositary (on behalf of the owners of
the corresponding ADSs) directly, or indirectly, through the custodian or their respective nominees, in each case upon the terms
of the deposit agreement.
If you become an owner
of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADR
that represents your ADSs. The deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations
as owner of ADSs and those of the Depositary. As an ADS holder, you appoint the Depositary to act on your behalf in certain circumstances.
The deposit agreement and the ADRs are governed by New York law. However, our obligations to the holders of Class A Ordinary
Shares will continue to be governed by the laws of the Cayman Islands, which may be different from the laws in the United States.
In addition, applicable
laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain circumstances.
You are solely responsible for complying with such reporting requirements and obtaining such approvals. Neither the Depositary,
the custodian, us or any of their or our respective agents or affiliates shall be required to take any actions whatsoever on your
behalf to satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.
As an owner of ADSs,
we will not treat you as one of our shareholders and you will not have direct shareholder rights. The Depositary will hold on your
behalf the shareholder rights attached to the Class A Ordinary Shares underlying your ADSs. As an owner of ADSs you will be able
to exercise the shareholders rights for the Class A Ordinary Shares represented by your ADSs through the Depositary only to the
extent contemplated in the deposit agreement. To exercise any shareholder rights not contemplated in the deposit agreement you
will, as an ADS owner, need to arrange for the cancellation of your ADSs and become a direct shareholder.
As an owner of ADSs,
you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through
an account established by the Depositary in your name reflecting the registration of uncertificated ADSs directly on the books
of the Depositary, which is commonly referred to as the direct registration system or DRS. The direct registration system reflects
the uncertificated (book-entry) registration of ownership of ADSs by the Depositary. Under the direct registration system, ownership
of ADSs is evidenced by periodic statements issued by the Depositary to the holders of the ADSs. The direct registration system
includes automated transfers between the Depositary and The Depository Trust Company, or the DTC, the central book-entry clearing
and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping
account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically
hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement
systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have
any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee
of DTC. This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and,
as such, we will refer to you as the “holder.” When we refer to “you,” we assume the reader owns ADSs and
will own ADSs at the relevant time.
The registration of
the Class A Ordinary Shares in the name of the Depositary or the custodian shall, to the maximum extent permitted by applicable
law, vest in the Depositary or the custodian the record ownership in the applicable Class A ordinary shares with the beneficial
ownership rights and interests in such Class A Ordinary Shares being at all times vested with the beneficial owners of the ADSs
representing the Class A Ordinary Shares. The Depositary or the custodian shall at all times be entitled to exercise the beneficial
ownership rights in all deposited property, in each case only on behalf of the holders and beneficial owners of the ADSs representing
the deposited property.
The following is a
summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit
agreement and the form of ADR.
Dividends and Distributions
As a holder of ADSs,
you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt
of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive
such distributions under the terms of the deposit agreement in proportion to the number of ADSs held as of the specified record
date, after deduction the applicable fees, taxes and expenses.
Distributions of Cash
Whenever we make a
cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon receipt
of confirmation of the deposit of the requisite funds, the Depositary will arrange for the funds to be converted into U.S. dollars
and for the distribution of the U.S. dollars to the holders, subject to the laws and regulations of the Cayman Islands.
The
conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States.
The Depositary will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights)
held by the custodian in respect of securities on deposit.
The
distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms
of the deposit agreement. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account
for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that
the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.
Distributions
of Class A Ordinary Shares
Whenever
we make a free distribution of Class A Ordinary Shares for the securities on deposit with the custodian, we will deposit the
applicable number of Class A Ordinary Shares with the custodian. Upon receipt of confirmation of such deposit, the Depositary
will either distribute to holders new ADSs representing the Class A Ordinary Shares deposited or modify the ADS-to-share ratio,
in which case each ADS you hold will represent rights and interests in the additional Class A Ordinary shares so deposited.
Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed
as in the case of a cash distribution.
The
distribution of new ADSs or the modification of the ADS-to-share ratio upon a distribution of Class A Ordinary Shares will
be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement.
In order to pay such taxes or governmental charges, the Depositary may sell all or a portion of the new Class A Ordinary Shares
so distributed.
No
such distribution of new ADSs will be made if it would violate a law (i.e., the U.S. securities laws) or if it is not operationally
practicable. If the Depositary does not distribute new ADSs as described above, it may sell the Class A Ordinary Shares received
upon the terms described in the deposit agreement and will distribute the proceeds of the sale as in the case of a distribution
of cash.
Distributions
of Rights
Whenever
we intend to distribute rights to purchase additional Class A Ordinary Shares, we will give prior notice to the Depositary
and we will assist the Depositary in determining whether it is lawful and reasonably practicable to distribute rights to purchase
additional ADSs to holders.
The
Depositary will establish procedures to distribute rights to purchase additional ADSs to holders and to enable such holders to
exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide
all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of the transaction).
You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your
rights. The Depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights
to purchase new Class A Ordinary Shares other than in the form of ADSs.
The
Depositary will not distribute the rights to you if:
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We do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or
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We fail to deliver satisfactory documents to the Depositary; or
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It is not reasonably practicable to distribute the rights.
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The Depositary will
sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such
sale will be distributed to holders as in the case of a cash distribution. If the Depositary is unable to sell the rights, it will
allow the rights to lapse.
Elective Distributions
Whenever we intend
to distribute a dividend payable at the election of shareholders either in cash or in additional Class A Ordinary Shares,
we will give prior notice thereof to the Depositary and will indicate whether we wish the elective distribution to be made available
to you. In such case, we will assist the Depositary in determining whether such distribution is lawful and reasonably practicable.
The Depositary will
make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated
in the deposit agreement. In such case, the Depositary will establish procedures to enable you to elect to receive either cash
or additional ADSs, in each case as described in the deposit agreement.
If the election is
not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in the Cayman Islands
would receive upon failing to make an election, as more fully described in the deposit agreement.
Other Distributions
Whenever we intend
to distribute property other than cash, Class A Ordinary Shares or rights to purchase additional Class A Ordinary Shares,
we will notify the Depositary in advance and will indicate whether we wish such distribution to be made to you. If so, we will
assist the Depositary in determining whether such distribution to holders is lawful and reasonably practicable.
If it is reasonably
practicable to distribute such property to you and if we provide all of the documentation contemplated in the deposit agreement,
the Depositary will distribute the property to the holders in a manner it deems practicable.
The distribution will
be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order
to pay such taxes and governmental charges, the Depositary may sell all or a portion of the property received.
The Depositary will
not distribute the property to you and will sell the property if:
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We do not request that the property be distributed to you or if we ask that the property not be distributed to you; or
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We do not deliver satisfactory documents to the Depositary; or
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The Depositary determines that all or a portion of the distribution to you is not reasonably practicable.
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The proceeds of such
a sale will be distributed to holders as in the case of a cash distribution.
Redemption
Whenever we decide
to redeem any of the securities on deposit with the custodian, we will notify the Depositary in advance. If it is practicable and
if we provide all of the documentation contemplated in the deposit agreement, the Depositary will provide notice of the redemption
to the holders.
The custodian will
be instructed to surrender the Class A Ordinary Shares being redeemed against payment of the applicable redemption price.
The Depositary will convert the redemption funds received into U.S. dollars upon the terms of the deposit agreement and will establish
procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the Depositary. You
may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are
being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the Depositary may determine.
Changes Affecting Class A Ordinary
Shares
The Class A Ordinary
Shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value,
split-up, cancellation, consolidation or any other reclassification of such Class A Ordinary Shares or a recapitalization,
reorganization, merger, consolidation or sale of assets of our company.
If any such change
were to occur, your ADSs would, to the extent permitted by law, represent the right to receive the property received or exchanged
in respect of the Class A Ordinary Shares held on deposit. The Depositary may in such circumstances deliver new ADSs to you,
amend the deposit agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your existing
ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the Class A
ordinary shares. If the Depositary may not lawfully distribute such property to you, the Depositary may sell such property and
distribute the net proceeds to you as in the case of a cash distribution.
Issuance of ADSs upon Deposit of Class A
Ordinary Shares
The Depositary will
deliver ADSs if you or your broker deposits shares or evidence of rights to receive shares with the custodian. Upon payment
of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the Depositary will
register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or
persons that made the deposit.
Transfer, Combination and Split Up of
ADRs
As an ADR holder, you
will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have
to surrender the ADRs to be transferred to the Depositary and also must:
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ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;
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provide such proof of identity and genuineness of signatures as the Depositary deems appropriate;
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provide any transfer stamps required by the State of New York or the United States; and
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pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the deposit agreement, upon the transfer of ADRs.
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To have your ADRs either
combined or split up, you must surrender the ADRs in question to the Depositary with your request to have them combined or split
up, and you must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the deposit agreement,
upon a combination or split up of ADRs.
Withdrawal of Class A Ordinary
Shares Upon Cancellation of ADSs
As a holder, you will
be entitled to present your ADSs to the Depositary for cancellation and then receive the corresponding number of underlying Class A
Ordinary Shares at the custodian’s offices. Your ability to withdraw the Class A Ordinary Shares held in respect of
the ADSs may be limited by U.S. and Cayman Islands law considerations applicable at the time of withdrawal. In order to withdraw
the Class A Ordinary Shares represented by your ADSs, you will be required to pay to the Depositary the fees for cancellation
of ADSs and any charges and taxes payable upon the transfer of the Class A Ordinary Shares. You assume the risk for delivery
of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the deposit agreement.
If you hold ADSs registered
in your name, the Depositary may ask you to provide proof of identity and genuineness of any signature and such other documents
as the Depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the Class A Ordinary Shares represented
by your ADSs may be delayed until the Depositary receives satisfactory evidence of compliance with all applicable laws and regulations.
Please keep in mind that the Depositary will only accept ADSs for cancellation that represent a whole number of securities on deposit.
You will have the right
to withdraw the securities represented by your ADSs at any time except for:
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Temporary delays that may arise because (i) the transfer books for the Class A Ordinary Shares or ADSs are closed, or (ii) Class A Ordinary shares are immobilized on account of a shareholders’ meeting or a payment of dividends.
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Obligations to pay fees, taxes and similar charges.
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Restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.
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The deposit agreement
may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatory provisions
of law.
Voting Rights
As a holder, you generally
have the right under the deposit agreement to instruct the Depositary to exercise the voting rights for the Class A Ordinary
Shares represented by your ADSs. The voting rights of holders of Class A Ordinary Shares are described in “Description
of Share Capital.”
At our request, the
Depositary will distribute to you any notice of shareholders’ meeting received from us together with information explaining
how to instruct the Depositary to exercise the voting rights of the securities represented by ADSs.
If the Depositary timely
receives voting instructions from a holder of ADSs, it will endeavor to cause the Class A Ordinary Shares on deposit to be
voted in accordance with the voting instructions received from holders of ADSs. Class A Ordinary Shares in respect of which
no timely voting instructions have been received from ADS holders will not be voted.
Securities for which
no voting instructions have been received will not be voted (except as otherwise contemplated herein). Please note that the ability
of the Depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities
on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to
the Depositary in a timely manner.
Fees and Charges
As an ADS holder, you will be required
to pay the following fees under the terms of the deposit agreement:
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Service
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Fees
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● Issuance of ADSs (i.e., an issuance of ADS upon a deposit of Class A ordinary shares or upon a change in the ADS-to-share ratio), excluding ADS issuances as a result of distributions of Class A ordinary shares
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Up to U.S. 5¢ per ADS issued
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● Cancellation of ADSs (i.e., a cancellation of ADSs for delivery of deposited property or upon a change in the ADS-to-share ratio)
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Up to U.S. 5¢ per ADS cancelled
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● Distribution of cash dividends or other cash distributions (i.e., upon a sale of rights and other entitlements)
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Up to U.S. 5¢ per ADS held
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● Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs
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Up to U.S. 5¢ per ADS held
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● Distribution of securities other than ADSs or rights to purchase additional ADSs (i.e., upon a spin-off)
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Up to U.S. 5¢ per ADS held
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● ADS Services
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Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the Depositary
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As an ADS holder you
will also be responsible to pay certain charges such as:
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taxes (including applicable interest and penalties) and other governmental charges;
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the registration fees as may from time to time be in effect for the registration of Class A Ordinary Shares on the share register and applicable to transfers of Class A Ordinary Shares to or from the name of the custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;
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certain cable, telex and facsimile transmission and delivery expenses;
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the expenses and charges incurred by the Depositary in the conversion of foreign currency;
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the fees and expenses incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Class A Ordinary Shares, ADSs and ADRs; and
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the fees and expenses incurred by the Depositary, the custodian, or any nominee in connection with the servicing or delivery of deposited property.
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ADS fees and charges
payable upon (i) the issuance of ADSs, and (ii) the cancellation of ADSs are charged to the person to whom the ADSs are
issued (in the case of ADS issuances) and to the person whose ADSs are cancelled (in the case of ADS cancellations). In the case
of ADSs issued by the Depositary into DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions
made through DTC, and may be charged to the DTC participant(s) receiving the ADSs being issued or the DTC participant(s) holding
the ADSs being cancelled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s)
to the account of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participants as
in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of
the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted
from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders
as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may be deducted
from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash
and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC participants in accordance
with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges
to the beneficial owners for whom they hold ADSs.
In the event of refusal
to pay the Depositary fees, the Depositary may, under the terms of the deposit agreement, refuse the requested service until payment
is received or may set off the amount of the Depositary fees from any distribution to be made to the ADS holder. Certain of the
depositary fees and charges (such as the ADS services fee) may become payable shortly after the closing of the ADS offering. Note
that the fees and charges you may be required to pay may vary over time and may be changed by us and by the Depositary. You will
receive prior notice of such changes. The Depositary may reimburse us for certain expenses incurred by us in respect of the ADR
program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and
conditions as we and the Depositary agree from time to time.
Amendments
and Termination
We
may agree with the Depositary to modify the deposit agreement at any time without your consent. We undertake to give holders 30
days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit
agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are
reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each
case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you
with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of
law.
You
will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit
agreement become effective. The deposit agreement cannot be amended to prevent you from withdrawing the Class A Ordinary Shares
represented by your ADSs (except as permitted by law).
We
have the right to direct the Depositary to terminate the deposit agreement. Similarly, the Depositary may in certain circumstances
on its own initiative terminate the deposit agreement. In either case, the Depositary must give notice to the holders at least
30 days before termination. Until termination, your rights under the deposit agreement will be unaffected.
After
termination, the Depositary will continue to collect distributions received (but will not distribute any such property until you
request the cancellation of your ADSs) and may sell the securities held on deposit. After the sale, the Depositary will hold the
proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest bearing account. At that point,
the Depositary will have no further obligations to holders other than to account for the funds then held for the holders of ADSs
still outstanding (after deduction of applicable fees, taxes and expenses).
In
connection with any termination of the deposit agreement, the Depositary may make available to owners of ADSs a means to withdraw
the Class A Ordinary Shares represented by ADSs and to direct the Depositary of such shares into an unsponsored American depositary
share program established by the Depositary. The ability to receive unsponsored American depositary shares upon termination of
the deposit agreement would be subject to satisfaction of certain U.S. regulatory requirements applicable to the creation of unsponsored
American depositary shares and the payment of applicable depositary fees.
Books of Depositary
The
Depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular
business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the
ADSs and the deposit agreement.
The
Depositary will maintain in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer
of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.
Limitations
on Obligations and Liabilities
The
deposit agreement limits our obligations and the Depositary’s obligations to you. Please note the following:
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We and the Depositary are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith.
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The Depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement.
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The Depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in Class A ordinary shares, for the validity or worth of the Class A Ordinary Shares, for any tax consequences that result from the ownership of ADSs, for the creditworthiness of any third party, for allowing any rights to lapse under the terms of the deposit agreement, for the timeliness of any of our notices or for our failure to give notice.
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We and the Depositary will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.
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We and the Depositary disclaim any liability if we or the Depositary are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision of any provision of our memorandum and articles of association, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond our control.
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We and the Depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the deposit agreement or in our articles of incorporation or in any provisions of or governing the securities on deposit.
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We and the Depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting Class A Ordinary Shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith to be competent to give such advice or information.
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We and the Depositary also disclaim liability for the inability by a holder to benefit from any distribution, offering, right or other benefit that is made available to holders of Class A Ordinary Shares but is not, under the terms of the deposit agreement, made available to you.
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We and the Depositary may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties.
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We and the Depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit agreement.
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No disclaimer of any Securities Act liability is intended by any provision of the deposit agreement.
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Pre-Release
Transactions
Subject
to the terms and conditions of the deposit agreement, the Depositary may issue to broker/dealers ADSs before receiving a deposit
of Class A Ordinary Shares or release Class A ordinary shares to broker/dealers before receiving ADSs for cancellation.
These transactions are commonly referred to as “pre-release transactions,” and are entered into between the Depositary
and the applicable broker/dealer. The deposit agreement limits the aggregate size of pre-release transactions (not to exceed 30%
of the shares on deposit in the aggregate) and imposes a number of conditions on such transactions (i.e., the need to receive collateral,
the type of collateral required, the representations required from brokers, etc.). The Depositary may retain the compensation received
from the pre-release transactions.
Taxes
You
will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs.
We, the Depositary and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and
may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any
deficiency if the sale proceeds do not cover the taxes that are due.
The
Depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all
taxes and charges are paid by the applicable holder. The Depositary and the custodian may take reasonable administrative actions
to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide
to the Depositary and to the custodian proof of taxpayer status and residence and such other information as the Depositary and
the custodian may require to fulfill legal obligations. You are required to indemnify us, the Depositary and the custodian for
any claims with respect to taxes based on any tax benefit obtained for you.
Foreign Currency
Conversion
The
Depositary will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical,
and it will distribute the U.S. dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses
incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other
governmental requirements.
If
the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable
cost or within a reasonable period, the Depositary may take the following actions in its discretion:
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Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the conversion and distribution is lawful and practical.
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Distribute the foreign currency to holders for whom the distribution is lawful and practical.
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Hold the foreign currency (without liability for interest) for the applicable holders.
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Governing Law/Waiver
of Jury Trial
The
deposit agreement and the ADRs will be interpreted in accordance with the laws of the State of New York. The rights of holders
of Class A Ordinary Shares (including Class A Ordinary Shares represented by ADSs) is governed by the laws of the Cayman
Islands.
AS
A PARTY TO THE DEPOSIT AGREEMENT, YOU WAIVE YOUR RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE DEPOSIT AGREEMENT
OR THE ADRs AGAINST US AND/OR THE DEPOSITARY.
DESCRIPTION OF DEBT SECURITIES
As used in this prospectus,
the term “debt securities” means the debentures, notes, bonds and other evidences of indebtedness that we may issue
from time to time. The debt securities will either be senior debt securities, senior subordinated debt or subordinated debt securities.
We may also issue convertible debt securities. Debt securities issued under an indenture (which we refer to herein as an Indenture)
will be entered into between us and a trustee to be named therein. It is likely that convertible debt securities will not be issued
under an Indenture.
The Indenture or forms
of Indentures, if any, will be filed as exhibits to the registration statement of which this prospectus is a part.
As you read this
section, please remember that for each series of debt securities, the specific terms of your debt security as described in the
applicable prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in the summary
below. The statement we make in this section may not apply to your debt security.
Events of Default Under the Indenture
Unless we provide otherwise
in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, the following are
events of default under the indentures with respect to any series of debt securities that we may issue:
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if we fail to pay the principal or premium, if any, when due and payable at maturity, upon redemption or repurchase or otherwise;
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if we fail to pay interest when due and payable and our failure continues for certain days;
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if we fail to observe or perform any other covenant contained in the Securities of a Series or in this Indenture, and our failure continues for certain days after we receive written notice from the trustee or holders of at least certain percentage in aggregate principal amount of the outstanding debt securities of the applicable series. The written notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default”;
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if specified events of bankruptcy, insolvency or reorganization occur; and
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if any other event of default provided with respect to securities of that series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officers’ Certificate as defined in the Form of Indenture.
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We covenant in the
Form of Indenture to deliver a certificate to the trustee annually, within certain days after the close of the fiscal year, to
show that we are in compliance with the terms of the indenture and that we have not defaulted under the indenture.
Nonetheless, if we
issue debt securities, the terms of the debt securities and the final form of indenture will be provided in a prospectus supplement.
Please refer to the prospectus supplement and the form of indenture attached thereto for the terms and conditions of the offered
debt securities. The terms and conditions may or may not include whether or not we must furnish periodic evidence showing that
an event of default does not exist or that we are in compliance with the terms of the indenture.
The statements and
descriptions in this prospectus or in any prospectus supplement regarding provisions of the Indentures and debt securities are
summaries thereof, do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of
the provisions of the Indentures (and any amendments or supplements we may enter into from time to time which are permitted under
each Indenture) and the debt securities, including the definitions therein of certain terms.
General
Unless otherwise specified
in a prospectus supplement, the debt securities will be direct secured or unsecured obligations of our company. The senior debt
securities will rank equally with any of our other unsecured senior and unsubordinated debt. The subordinated debt securities will
be subordinate and junior in right of payment to any senior indebtedness.
We may issue debt securities
from time to time in one or more series, in each case with the same or various maturities, at par or at a discount. Unless indicated
in a prospectus supplement, we may issue additional debt securities of a particular series without the consent of the holders of
the debt securities of such series outstanding at the time of the issuance. Any such additional debt securities, together with
all other outstanding debt securities of that series, will constitute a single series of debt securities under the applicable Indenture
and will be equal in ranking.
Should an indenture
relate to unsecured indebtedness, in the event of a bankruptcy or other liquidation event involving a distribution of assets to
satisfy our outstanding indebtedness or an event of default under a loan agreement relating to secured indebtedness of our company
or its subsidiaries, the holders of such secured indebtedness, if any, would be entitled to receive payment of principal and interest
prior to payments on the senior indebtedness issued under an Indenture.
Prospectus Supplement
Each prospectus supplement
will describe the terms relating to the specific series of debt securities being offered. These terms will include some or all
of the following:
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the title of debt securities and whether they are subordinated, senior subordinated or senior debt securities;
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any limit on the aggregate principal amount of debt securities of such series;
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the percentage of the principal amount at which the debt securities of any series will be issued;
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the ability to issue additional debt securities of the same series;
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the purchase price for the debt securities and the denominations of the debt securities;
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the specific designation of the series of debt securities being offered;
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the maturity date or dates of the debt securities and the date or dates upon which the debt securities are payable and the rate or rates at which the debt securities of the series shall bear interest, if any, which may be fixed or variable, or the method by which such rate shall be determined;
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the basis for calculating interest if other than 360-day year or twelve 30-day months;
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the date or dates from which any interest will accrue or the method by which such date or dates will be determined;
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the duration of any deferral period, including the maximum consecutive period during which interest payment periods may be extended;
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whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments;
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the dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date;
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the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon us pursuant to the applicable Indenture;
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the rate or rates of amortization of the debt securities;
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if we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;
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our obligation or discretion, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation;
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the terms and conditions, if any, regarding the option or mandatory conversion or exchange of debt securities;
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the period or periods within which, the price or prices at which and the terms and conditions upon which any debt securities of the series may be redeemed, in whole or in part at our option and, if other than by a board resolution, the manner in which any election by us to redeem the debt securities shall be evidenced;
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any restriction or condition on the transferability of the debt securities of a particular series;
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the portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration of the maturity of the debt securities in connection with any event of default if other than the full principal amount;
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the currency or currencies in which the debt securities will be denominated and in which principal, any premium and any interest will or may be payable or a description of any units based on or relating to a currency or currencies in which the debt securities will be denominated;
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provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events;
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any deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable Indenture;
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any limitation on our ability to incur debt, redeem stock, sell our assets or other restrictions;
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the application, if any, of the terms of the applicable Indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities;
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what subordination provisions will apply to the debt securities;
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the terms, if any, upon which the holders may convert or exchange the debt securities into or for our Ordinary Shares, preferred shares or other securities or property;
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whether we are issuing the debt securities in whole or in part in global form;
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any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default;
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the depositary for global or certificated debt securities, if any;
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any material federal income tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;
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any right we may have to satisfy, discharge and defease our obligations under the debt securities, or terminate or eliminate restrictive covenants or events of default in the Indentures, by depositing money or U.S. government obligations with the trustee of the Indentures;
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the names of any trustees, depositories, authenticating or paying agents, transfer agents or registrars or other agents with respect to the debt securities;
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to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable Indenture;
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if the principal of or any premium or interest on any debt securities is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined);
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the portion of the principal amount of any debt securities which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable Indenture if other than the entire principal amount;
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if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined); and
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any other specific terms of the debt securities, including any modifications to the events of default under the debt securities and any other terms which may be required by or advisable under applicable laws or regulations.
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Unless otherwise specified
in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange. Holders of the debt
securities may present registered debt securities for exchange or transfer in the manner described in the applicable prospectus
supplement. Except as limited by the applicable Indenture, we will provide these services without charge, other than any tax or
other governmental charge payable in connection with the exchange or transfer.
Debt securities may
bear interest at a fixed rate or a variable rate as specified in the prospectus supplement. In addition, if specified in the prospectus
supplement, we may sell debt securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing
market rate, or at a discount below their stated principal amount. We will describe in the applicable prospectus supplement any
special federal income tax considerations applicable to these discounted debt securities.
We may issue debt securities
with the principal amount payable on any principal payment date, or the amount of interest payable on any interest payment date,
to be determined by referring to one or more currency exchange rates, commodity prices, equity indices or other factors. Holders
of such debt securities may receive a principal amount on any principal payment date, or interest payments on any interest payment
date, that are greater or less than the amount of principal or interest otherwise payable on such dates, depending upon the value
on such dates of applicable currency, commodity, equity index or other factors. The applicable prospectus supplement will contain
information as to how we will determine the amount of principal or interest payable on any date, as well as the currencies, commodities,
equity indices or other factors to which the amount payable on that date relates and certain additional tax considerations.
DESCRIPTION OF WARRANTS
We may issue warrants
to purchase our ADSs or preferred shares. Warrants may be issued independently or together with any other securities that may be
sold by us pursuant to this prospectus or any combination of the foregoing and may be attached to, or separate from, such securities.
To the extent warrants that we issue are to be publicly-traded, each series of such warrants will be issued under a separate warrant
agreement to be entered into between us and a warrant agent. While the terms we have summarized below will apply generally to any
warrants that we may offer under this prospectus, we will describe in particular the terms of any series of warrants that we may
offer in more detail in the applicable prospectus supplement and any applicable free writing prospectus. The terms of any warrants
offered under a prospectus supplement may differ from the terms described below.
We will file as exhibits
to the registration statement of which this prospectus is a part, or will incorporate by reference from another report that we
file with the SEC, the form of the warrant and/or warrant agreement, if any, which may include a form of warrant certificate, as
applicable that describes the terms of the particular series of warrants we may offer before the issuance of the related series
of warrants. We may issue the warrants under a warrant agreement that we will enter into with a warrant agent to be selected by
us. The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship
of agency or trust for or with any registered holders of warrants or beneficial owners of warrants. The following summary of material
provisions of the warrants and warrant agreements is subject to, and qualified in its entirety by reference to, all the provisions
of the form of warrant and/or warrant agreement and warrant certificate applicable to a particular series of warrants. We urge
you to read the applicable prospectus supplement and any related free writing prospectus, as well as the complete form of warrant
and/or the warrant agreement and warrant certificate, as applicable, that contain the terms of the warrants.
The particular terms
of any issue of warrants will be described in the prospectus supplement relating to the issue. Those terms may include:
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the title of the warrants;
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the price or prices at which the warrants will be issued;
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the designation, amount and terms of the securities or other rights for which the warrants are exercisable;
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the designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants issued with each other security;
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the aggregate number of warrants;
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any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;
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the price or prices at which the securities or other rights purchasable upon exercise of the warrants may be purchased;
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if applicable, the date on and after which the warrants and the securities or other rights purchasable upon exercise of the warrants will be separately transferable;
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a discussion of any material U.S. federal income tax considerations applicable to the exercise of the warrants;
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the date on which the right to exercise the warrants will commence, and the date on which the right will expire;
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the maximum or minimum number of warrants that may be exercised at any time;
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information with respect to book-entry procedures, if any; and
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any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.
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Exercise of Warrants
Each warrant will entitle
the holder of warrants to purchase the number of ADSs or preferred shares of the relevant class or series at the exercise price
stated or determinable in the prospectus supplement for the warrants. Warrants may be exercised at any time up to the close of
business on the expiration date shown in the applicable prospectus supplement, unless otherwise specified in such prospectus supplement.
After the close of business on the expiration date, if applicable, unexercised warrants will become void. Warrants may be exercised
in the manner described in the applicable prospectus supplement. When the warrant holder makes the payment and properly completes
and signs the warrant certificate at the corporate trust office of the warrant agent, if any, or any other office indicated in
the prospectus supplement, we will, as soon as possible, forward the securities or other rights that the warrant holder has purchased.
If the warrant holder exercises less than all of the warrants represented by the warrant certificate, we will issue a new warrant
certificate for the remaining warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may
surrender securities as all or part of the exercise price for warrants.
Prior to the exercise
of any warrants to purchase ADSs or preferred shares of the relevant class or series, holders of the warrants will not have any
of the rights of holders of ADSs or preferred shares purchasable upon exercise, including the right to vote or to receive any payments
of dividends or payments upon our liquidation, dissolution or winding up on the ADSs or preferred shares purchasable upon exercise,
if any.
Outstanding Warrants
As of the date of this
prospectus, there are 186,363,343 outstanding warrants to purchase Class A Ordinary Shares.
DESCRIPTION OF RIGHTS
We may issue rights
to purchase our securities. The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection
with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or other
persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after
such rights offering. Each series of rights will be issued under a separate rights agent agreement to be entered into between us
and one or more banks, trust companies or other financial institutions, as rights agent, that we will name in the applicable prospectus
supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship
of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The prospectus supplement
relating to any rights that we offer will include specific terms relating to the offering, including, among other matters:
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the date of determining the security holders entitled to the rights distribution;
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the aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights;
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the conditions to completion of the rights offering;
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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and
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any applicable federal income tax considerations.
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Each right would entitle
the holder of the rights to purchase for cash the principal amount of securities at the exercise price set forth in the applicable
prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided
in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become
void.
If less than all of
the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than
our security holders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant
to standby arrangements, as described in the applicable prospectus supplement.
DESCRIPTION OF UNITS
The following description,
together with the additional information we may include in any applicable prospectus supplement, summarizes the material terms
and provisions of the units that we may offer under this prospectus. While the terms we have summarized below will apply generally
to any units that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail
in the applicable prospectus supplement and any related free writing prospectus. The terms of any units offered under a prospectus
supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that
are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its
effectiveness.
We will file as an
exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from another report
we file with the SEC, the form of unit agreement that describes the terms of the series of units we may offer under this prospectus,
and any supplemental agreements, before the issuance of the related series of units. The following summaries of material terms
and provisions of the units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement
and any supplemental agreements applicable to a particular series of units. We urge you to read the applicable prospectus supplement
and any related free writing prospectus, as well as the complete unit agreement and any supplemental agreements that contain the
terms of the units.
We may issue units
consisting of any combination of the other types of securities offered under this prospectus in one or more series. We may evidence
each series of units by unit certificates that we may issue under a separate agreement. We may enter into unit agreements with
a unit agent. Each unit agent, if any, may be a bank or trust company that we select. We will indicate the name and address of
the unit agent, if any, in the applicable prospectus supplement relating to a particular series of units. Specific unit agreements,
if any, will contain additional important terms and provisions. We will file as an exhibit to the registration statement of which
this prospectus is a part, or will incorporate by reference from a current report that we file with the SEC, the form of unit and
the form of each unit agreement, if any, relating to units offered under this prospectus.
If we offer any units,
certain terms of that series of units will be described in the applicable prospectus supplement, including, without limitation,
the following, as applicable
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the title of the series of units;
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identification and description of the separate constituent securities comprising the units;
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the price or prices at which the units will be issued;
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the date, if any, on and after which the constituent securities comprising the units will be separately transferable;
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a discussion of certain United States federal income tax considerations applicable to the units; and
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any other material terms of the units and their constituent securities.
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The provisions described
in this section, as well as those described under “Description of Share Capital - Ordinary Shares and Preferred Shares”
and “Description of Warrants” will apply to each unit and to any Ordinary Shares, preferred shares or warrant included
in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in
numerous distinct series as we determine.
Transfer Agent and Registrar
The transfer agent and registrar for our
Class A Ordinary Shares is SMP Partners (Cayman) Limited, located in Cayman Islands. Their mailing address is 42/F, One Taikoo
Place, Taikoo Place, 979 King’s Road, Quarry Bay, Hong Kong.
New York Stock Exchange Listing
Our ADSs are listed on the NYSE under the
symbol “SOS.”
PLAN OF DISTRIBUTION
We may sell the securities
offered through this prospectus (i) to or through underwriters or dealers, (ii) directly to purchasers, including our affiliates,
(iii) through agents, or (iv) through a combination of any these methods. The securities may be distributed at a fixed price or
prices, which may be changed, market prices prevailing at the time of sale, prices related to the prevailing market prices, or
negotiated prices. The prospectus supplement will include the following information:
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the terms of the offering;
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the names of any underwriters or agents;
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the name or names of any managing underwriter or underwriters;
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the purchase price of the securities;
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any over-allotment options under which underwriters may purchase additional securities from us;
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the net proceeds from the sale of the securities;
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any delayed delivery arrangements;
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any underwriting discounts, commissions and other items constituting underwriters’ compensation;
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any initial public offering price;
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any discounts or concessions allowed or reallowed or paid to dealers;
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any commissions paid to agents; and
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any securities exchange or market on which the securities may be listed.
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Sale Through Underwriters or Dealers
Only underwriters named
in the prospectus supplement are underwriters of the securities offered by the prospectus supplement. If underwriters are used
in the sale, the underwriters will acquire the securities for their own account, including through underwriting, purchase, security
lending or repurchase agreements with us. The underwriters may resell the securities from time to time in one or more transactions,
including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other
securities (described in this prospectus or otherwise), including other public or private transactions and short sales. Underwriters
may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly
by one or more firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters
to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered
securities if they purchase any of them. The underwriters may change from time to time any public offering price and any discounts
or concessions allowed or reallowed or paid to dealers.
If dealers are used
in the sale of securities offered through this prospectus, we will sell the securities to them as principals. They may then resell
those securities to the public at varying prices determined by the dealers at the time of resale. The prospectus supplement will
include the names of the dealers and the terms of the transaction.
We will provide in
the applicable prospectus supplement any compensation we will pay to underwriters, dealers or agents in connection with the offering
of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers.
Direct Sales and Sales Through Agents
We may sell the securities
offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such securities may also be
sold through agents designated from time to time. The prospectus supplement will name any agent involved in the offer or sale of
the offered securities and will describe any commissions payable to the agent. Unless otherwise indicated in the prospectus supplement,
any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities
directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with
respect to any sale of those securities. The terms of any such sales will be described in the prospectus supplement.
Delayed Delivery Contracts
If the prospectus supplement
indicates, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities
at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified
date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The applicable
prospectus supplement will describe the commission payable for solicitation of those contracts.
Market Making, Stabilization and Other
Transactions
Unless the applicable
prospectus supplement states otherwise, other than our ADSs, all securities we offer under this prospectus will be a new issue
and will have no established trading market. We may elect to list offered securities on an exchange or in the over-the-counter
market. Any underwriters that we use in the sale of offered securities may make a market in such securities, but may discontinue
such market making at any time without notice. Therefore, we cannot assure you that the securities will have a liquid trading market.
Any underwriter may
also engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the
Securities Exchange Act. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose
of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve purchases of the securities
in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty bids permit
the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member
are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence of the transactions.
The underwriters may, if they commence these transactions, discontinue them at any time.
General Information
Agents, underwriters,
and dealers may be entitled, under agreements entered into with us, to indemnification by us against certain liabilities, including
liabilities under the Securities Act. Our agents, underwriters, and dealers, or their affiliates, may be customers of, engage in
transactions with or perform services for us, in the ordinary course of business.
LEGAL MATTERS
Except as otherwise
set forth in the applicable prospectus supplement, certain legal matters in connection with the securities offered pursuant to
this prospectus will be passed upon for us by Hunter Taubman Fischer & Li LLC to the extent governed by the laws of the State
of New York, and by Maples and Calder (Hong Kong) LLP to the extent governed by the laws of the Cayman Islands. If legal matters
in connection with offerings made pursuant to this prospectus are passed upon by counsel to underwriters, dealers or agents, such
counsel will be named in the applicable prospectus supplement relating to any such offering.
EXPERTS
The financial statements
incorporated by reference in this prospectus for the year ended December 31, 2019 have been audited by Shandong Haoxin Certified
Public Accountants Co., Ltd. as set forth in their report thereon included therein, and incorporated herein by reference, and are
included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
FINANCIAL INFORMATION
The financial statements
for the year ended December 31, 2019 and 2018 are included in our Annual Report on Form 20-F, which are incorporated by reference
into this prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to
“incorporate by reference” into this prospectus the information we file with the SEC. This means that we can disclose
important information to you by referring you to those documents. Any statement contained in a document incorporated by reference
in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained herein, or in any subsequently filed document, which also is incorporated by reference herein, modifies or supersedes
such earlier statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
We hereby incorporate
by reference into this prospectus the following documents that we have filed with the SEC under the Exchange Act:
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(1)
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the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2019, filed with the SEC on June 15, 2020;
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(2)
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the Company’s Current Reports on Form 6-K, filed with the SEC on June 23, 2020, June 29, 2020, July 2, 2020, July 21, 2020, August 4, 2020, August 7, 2020, August 27, 2020, September 15, 2020, September 28, 2020, October 21, 2020, October 26, 2020, October 30, 2020 and November 5, 2020; and
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(3)
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the description of Ordinary Shares and ADSs incorporated by reference in our registration statement on Form 8-A, as amended (File No. 001-38051) filed with the Commission on April 4, 2017, including any amendment and report subsequently filed for the purpose of updating that description; and
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All documents that
we file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (and in the case of a Current Report on
Form 6-K, so long as they state that they are incorporated by reference into this prospectus,
and other than Current Reports on Form 6-K, or portions thereof, furnished under Form 6-K) (i) after the initial filing
date of the registration statement of which this prospectus forms a part and prior to the effectiveness of such registration statement
and (ii) after the date of this prospectus and prior to the termination of the offering shall be deemed to be incorporated by reference
in this prospectus from the date of filing of the documents, unless we specifically provide otherwise. Information that we file
with the SEC will automatically update and may replace information previously filed with the SEC. To the extent that any information
contained in any Current Report on Form 6-K or any exhibit thereto, was or is furnished to, rather than filed with the SEC, such
information or exhibit is specifically not incorporated by reference.
Upon request, we will
provide, without charge, to each person who receives this prospectus, a copy of any or all of the documents incorporated by reference
(other than exhibits to the documents that are not specifically incorporated by reference in the documents). Please direct written
or oral requests for copies to us at Room 8888, Jiudingfeng Building, 888 Changbaishan Road, Qingdao Area, China (Shandong) Pilot
Free Trade Zone, People’s Republic of China, Attention: Yandai Wang, +86 0311-80910921.
WHERE YOU CAN FIND MORE INFORMATION
As permitted by SEC
rules, this prospectus omits certain information and exhibits that are included in the registration statement of which this prospectus
forms a part. Since this prospectus may not contain all of the information that you may find important, you should review the full
text of these documents. If we have filed a contract, agreement or other document as an exhibit to the registration statement of
which this prospectus forms a part, you should read the exhibit for a more complete understanding of the document or matter involved.
Each statement in this prospectus, including statements incorporated by reference as discussed above, regarding a contract, agreement
or other document is qualified in its entirety by reference to the actual document.
We are subject to the
information reporting requirements of the Exchange Act that are applicable to foreign private issuers, and, in accordance
with these requirements, we file annual and current reports and other information with the SEC. You may inspect, read (without
charge) and copy the reports and other information we file with the SEC at the SEC’s Public Reference Room located at 100
F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains an internet website at www.sec.gov that contains our filed reports
and other information that we file electronically with the SEC.
We maintain a corporate
website at http://www.sosyun.com/. Information contained on, or that can be accessed through, our website does not constitute a
part of this prospectus.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated
under the laws of the Cayman Islands as an exempted company with limited liability. We incorporated in the Cayman Islands because
of certain benefits associated with being a Cayman Islands exempted company, such as political and economic stability, an effective
judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability
of professional and support services. However, the Cayman Islands have a less developed body of securities laws that provide significantly
less protection to investors as compared to the securities laws of the United States. In addition, Cayman Islands companies may
not have standing to sue before the federal courts of the United States.
All of our assets are
located in China. In addition, some of our directors and officers are residents of jurisdictions other than the United States and
all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors
to effect service of process within the United States upon us or our directors and officers, or to enforce against us or them judgments
obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of
the United States or any state in the United States.
According to our local
Cayman Islands’ counsel, there is uncertainty with regard to Cayman Islands law relating to whether a judgment obtained from
the United States courts under civil liability provisions of the securities laws will be determined by the courts of the Cayman
Islands as penal or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or
enforce the judgment against a Cayman Islands’ company. The courts of the Cayman Islands in the past determined that disgorgement
proceedings brought at the instance of the Securities and Exchange Commission are penal or punitive in nature and such judgments
would not be enforceable in the Cayman Islands. Other civil liability provisions of the securities laws may be characterized as
remedial, and therefore enforceable but the Cayman Islands’ Courts have not yet ruled in this regard. Our Cayman Islands’
counsel has further advised us that a final and conclusive judgment in the federal or state courts of the United States under which
a sum of money is payable other than a sum payable in respect of taxes, fines, penalties or similar charges, may be subject to
enforcement proceedings as a debt in the courts of the Cayman Islands.
As of the date hereof, no treaty or other
form of reciprocity exists between the Cayman Islands governing the recognition and enforcement of judgments.
Cayman Islands’
counsel further advised that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United
States, a judgment obtained in such jurisdictions will be recognized and enforced in the courts of the Cayman Islands at common
law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in
the Grand Court of the Cayman Islands, provided such judgment (1) is given by a foreign court of competent jurisdiction, (2) imposes
on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (3) is final, (4) is not in respect
of taxes, a fine or a penalty, and (5) was not obtained in a manner and is of a kind the enforcement of which is contrary to natural
justice or the public policy of the Cayman Islands.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been informed that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is, therefore, unenforceable.
SOS LIMITED
$60,000,000
Class A Ordinary Shares,
Class A Ordinary Shares in the Form of
American Depositary Shares,
Preferred Shares,
Preferred Shares in the Form of American
Depositary Shares,
Debt Securities,
Warrants,
Units, and
Rights
PROSPECTUS
[ ], 2020
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors
and Officers
Cayman Islands law
does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of
officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public
policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our M&A requires
us to indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities
incurred or sustained by such indemnified persons, other than by reason of such their own dishonesty, willful default or fraud,
in or about the conduct of the Company’s business or affairs (including as a result of any mistake or judgement) or in the
execution or discharge of their duties, powers, authorities or discretions, including without prejudice to the generality of the
foregoing, any costs, expenses, losses or liabilities incurred by such indemnified persons in defending (whether successfully or
otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere.
This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
Item 9. Exhibits
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To be filed by amendment or as an exhibit to a filing with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 and incorporated by reference in connection with the offering of securities to the extent required for any such offering.
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Item 10 Undertakings
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(a)
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The undersigned registrant
hereby undertakes:
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(1)
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To file, during any
period in which offers or sales are being made, a post-effective amendment to this registration statement:
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(i)
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To include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933;
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(ii)
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To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
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(iii)
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To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
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provided, however, that
paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b).
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(2)
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That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3)
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To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4)
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That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
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(i)
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Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
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(ii)
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Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
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(5)
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That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(i)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
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(ii)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(iii)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(b)
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That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(c)
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Qingdao, China, on November 17, 2020.
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SOS LIMITED
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By:
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/s/ Yandai Wang
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Name:
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Yandai Wang
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Title:
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Chief Executive Officer
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POWER OF ATTORNEY
Each person whose signature
appears below hereby constitutes and appoints Yandai Wang, and each of them, individually, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, in his or her name, place and stead, in any and all capacities
(including his capacity as a director and/or officer of the registrant), to sign any and all amendments and post-effective amendments
and supplements to this registration statement, and including any registration statement for the same offering that is to be effective
upon filing pursuant to Rule 462(b) under the U.S. Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the U.S. Securities Act of 1933, as amended, this Form F-3 registration statement has been signed by the following persons in
the capacities and on the date indicated.
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Name
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Position
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Date
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/s/ Yandai Wang
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Chief Executive Officer and Executive Chairman
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November 17, 2020
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Yandai Wang
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/s/ Li Sing Leung
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Chief Financial Officer and Director
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November 17, 2020
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Li Sing Leung
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/s/ Russell Krauss
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Director
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November 17, 2020
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Russell Krauss
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/s/ Douglas L. Brown
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Director
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November 17, 2020
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Douglas L. Brown
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/s/ Ronggang (Jonathan) Zhang
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Director
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November 17, 2020
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Ronggang (Jonathan) Zhang
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/s/ Wenbin Wu
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Director
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November 17, 2020
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Wenbin Wu
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SIGNATURE OF AUTHORIZED REPRESENTATIVE
IN THE UNITED STATES
Pursuant to the Securities
Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America, has signed this registration
statement thereto in Newark, DE on November 17, 2020.
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By:
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/s/ Donald J. Puglisi
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Name:
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Donald J. Puglisi
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Title:
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Managing Director
Puglisi & Associates
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II-4
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