Filed Pursuant
to Rule 424(b)(5)
Registration No. 333-280010
Prospectus Supplement
(To Prospectus dated June 6, 2024)
50,000,000 Class
A Ordinary Shares
Jayud Global Logistics Limited
We are offering 50,000,000 Class A ordinary shares directly to investors
without a placement agent or underwriter. The Class A ordinary shares will be sold at a negotiated price of $0.20 per share pursuant to
this prospectus supplement, the accompanying prospectus and a share purchase agreement dated December 3, 2024. We are not paying placement
agent fees or underwriting discounts in connection with the offering.
The Class A ordinary shares are listed on the NASDAQ Capital Market
under the symbol “JYD.” The last reported sale price of the Class A ordinary shares on December 2, 2024 was US$0.67 per Class
A ordinary share. We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended,
and, as such, will be subject to reduced public company reporting requirements.
The aggregate market value of our outstanding
Class A ordinary shares held by non-affiliates, or public float calculated pursuant to General Instruction I.B.5 of Form F-3, was approximately
US$41.3 million, which was based on 33,292,868 Class A ordinary shares held by non-affiliates and the per Class A ordinary share price
of US$1.24, which was the closing price of our Class A ordinary shares on November 26, 2024. During the prior 12 calendar month period
that ends on and includes the date of this prospectus supplement, we have not offered or sold any securities pursuant to General Instruction
I.B.5 of Form F-3 and accordingly we may sell up to US$13.8 million of our ordinary shares hereunder.
Our ordinary shares consist
of Class A ordinary shares and Class B ordinary shares. Each Class A ordinary share is entitled to one vote, and each Class B
ordinary share is entitled to 10 votes on all matters subject to vote at general meetings of our company. Each Class B ordinary
share can be convertible into Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares shall
not be convertible into Class B ordinary shares under any circumstances.
We are not a Chinese operating
company but a Cayman Islands holding company with operations conducted by our subsidiaries established in People’s Republic of China
(“PRC” or “China”), Hong Kong Special Administrative Region of the PRC (“Hong Kong”)
and the United States. Therefore, investing in our securities being offered pursuant to this prospectus involves unique and a high degree
of risk. The securities offered in this offering are of the offshore holding company Jayud Global Logistics Limited (the “Company”),
which owns equity interests, directly or indirectly, of the operating subsidiaries. Unless otherwise stated, as used in this prospectus
and in the context of describing our operations and consolidated financial information, “Jayud” “we,” “us,”
“Company,” or “our,” refers to Jayud Global Logistics Limited, a Cayman Islands exempted company. “PRC Subsidiaries”
refer to our subsidiaries incorporated in mainland China, and “Hong Kong Subsidiaries” refer to our subsidiaries incorporated
in Hong Kong. We will also refer to all of our subsidiaries, “Subsidiaries”.
We are also subject to legal
and operational risks associated with being based in and having the majority of the company’s operations in PRC. The Chinese government
may intervene or influence the operation of our PRC operating entities and exercise significant oversight and discretion over the conduct
of their business and may intervene in or influence their operations at any time, or may exert more control over offerings conducted overseas
and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our Class
A Ordinary Shares. Further, any actions by the Chinese government to exert more oversight and control over offerings that are conducted
overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors and cause the value of such securities to significantly decline or be worthless.
Recently, the PRC government
initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including
cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and
expanding the efforts in anti-monopoly enforcement. On July 6, 2021, the General Office of the Central Committee of the Communist Party
of China (the “General Office of CCC”) and the General Office of the State Council (the “General Office of
SC”) jointly released the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with Law (the “Opinions”).
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision
over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will
be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection
requirements, etc. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement.
On February 17, 2023, the
CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial
Measures”) and five interpretive guidelines (collectively, the “CSRC Filing Rules”), which became effective
on March 31, 2023. Under the CSRC Filing Rules, a filing-based regulatory system shall be applied to “indirect overseas offerings
and listings” of PRC domestic enterprises, which refers to securities offerings and listings in an overseas market made under the
name of an offshore entity but based on the underlying equity, assets, earnings or other similar rights of a domestic enterprise that
operates its main business domestically. The CSRC Filing Rules state that, any post-listing follow-on offering by an issuer in the same
overseas market where it has previously offered and listed securities, including issuance of shares, convertible notes and other similar
securities, shall be subject to filing requirement within three business days after the completion of the offering, and if the subsequent
offering is conducted in other overseas markets, it shall be filed with the CSRC within three working days after the applications for
such offerings are submitted. Therefore, this offering and any of our future offering and listing of our securities in an overseas market
shall be subject to the filing requirements under the CSRC Filing Rules. In addition, we are required to submit a report to CSRC after
the occurrence and public disclosure of the following material events: (1) change of control; (2) investigations or sanctions imposed
by overseas securities regulatory agencies or other relevant competent authorities; (3) change of listing status or transfer of listing
segment and (4) voluntary or mandatory delisting. If we fail to complete the filing or reporting procedures, under the CSRC Filing Rules
or otherwise, for any future overseas securities offering or listing, we may face sanctions by the CSRC or other PRC regulatory authorities,
which may include orders for correction, warnings and fines. Any adverse regulatory actions or sanctions could have a material adverse
effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class
A Ordinary Shares.
Further, on February 24, 2023,
the CSRC, together with the Ministry of Finance of the PRC (the “MOF”), the National Administration of State Secrets
Protection of the PRC (the “NASSP”), and the National Archives Administration of the PRC (the “NAA”),
released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and
Listing by Domestic Enterprises (the “Confidentiality Provisions”), which has come into effect on March 31, 2023 with
the Trial Measures. Under the Confidentiality Provisions, domestic companies established in mainland China seeking overseas offering and
listing, by both direct and indirect means, are required to institute a sound confidentiality and archives system. If such domestic companies
established in mainland China intend to, either directly or through its overseas listed entity, publicly disclose or provide to relevant
individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials
that contain state secrets or working secrets of government agencies, they shall obtain approval from competent authorities and complete
the relevant filing procedure with the competent secrecy administrative department prior to their disclosure or provision of such documents
and materials. Further, if they provide or publicly disclose documents and materials which may adversely affect national security or public
interests, they shall strictly follow the corresponding procedures in accordance with relevant laws and regulations. Any failure or perceived
failure by us or our subsidiaries to comply with the above confidentiality and archives administration requirements under the Confidentiality
Provisions and other relevant PRC laws and regulations may cause relevant entities to be held legally liable by competent authorities,
and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. As of the date of this
prospectus supplement, we believe that we and our subsidiaries have not provided or publicly disclosed any documents or materials involving
state secrets or work secrets of PRC government agencies or any of which may adversely affect national security or public interests, to
relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. We intend
to strictly comply with the Confidentiality Provisions and other relevant PRC laws and regulations in our offering and listing on Nasdaq
in the future.
However, any failure of us
or our PRC Subsidiaries to fully comply with the CSRC Filing Rules (as defined below) and/or the Confidentiality Provisions, may significantly
limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares on Nasdaq, cause significant disruption
to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations
and cause our Class A Ordinary Shares to significantly decline in value or become worthless. See “Risk Factor — Risks Related
to Doing Business in China — The filing with the CSRC is required, and the approval of, filing or other procedures with other Chinese
regulatory authorities may be required, in connection with issuing securities to foreign investors under PRC law, and, if required, we
cannot predict whether we will be able, or how long it will take us, to obtain such approval or complete such filing or other procedures”.
We or our Subsidiaries may
also be subject to PRC laws relating to the use, sharing, retention, security and transfer of confidential and private information, such
as personal information and other data. On November 14, 2021, the Cyberspace Administration of China (“CAC”) released
the Regulations on the Network Data Security Management (Draft for Comments) the (“Data Security Management Regulations Draft”),
to solicit public opinion and comments till December 13, 2021. Pursuant to the Data Security Management Regulations Draft, data processors
holding more than one million users/users’ individual information shall be subject to cybersecurity review before listing abroad.
Data processing activities refers to activities such as the collection, retention, use, processing, transmission, provision, disclosure,
or deletion of data. On September 24, 2024, the State Council promulgated the Regulations on the Network Data Security Management (“Data
Security Management Regulations”), which will come into effect on January 1, 2025. According to the Data Security Management
Regulations, network data processing activities carried out by network data processors that affect or may affect national security shall
be subject to a national security review in accordance with the relevant provisions of the State. According to the latest amended Cybersecurity
Review Measures (the “Measures”), which was promulgated on December 28, 2021, and became effective on February 15,
2022, an online platform operator holding more than one million users/users’ individual information shall be subject to cybersecurity
review before listing abroad. As of the date of this prospectus supplement, we have not been informed by any PRC governmental authority
of any requirement that we or our Subsidiaries file for approval for this offering. We don’t believe that we or any of our Subsidiaries
will be subject to either the Measures or the Data Security Management Regulations since none of us hold more than one million users/users’
individual information or carry out any network data processing activities that affect or may affect national security. However, it is
uncertain how the above-mentioned new laws or regulations will be enacted, interpreted or implemented, and whether it will affect us.
Since the regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond
and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any,
and the potential impact such modified or new laws and regulations will have on our Subsidiaries’ daily business operation, their
ability to accept foreign investments, and our ability to continue to list or offer securities on an U.S. exchange. See “Risk Factor
— The Chinese government has substantial oversight and influence over the manner in which we must conduct our business and may intervene
or influence our operations at any time, which actions could impact our operations materially and adversely, and significantly limit or
completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly
decline or be worthless.”
As a holding company, we may
rely upon dividends paid to us by our subsidiaries in the PRC to pay dividends and to finance any debt we may incur. As of the date of
this prospectus, none of our subsidiaries has issued any dividends or distributions to us and we have not made any dividends or distributions
to our shareholders. Our subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in our
business.
Under Cayman Islands law,
we may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this
would result in us being unable to pay our debts due in the ordinary course of business. If we determine to pay dividends, as a holding
company, we will be dependent on receipt of funds from our subsidiaries in PRC through our Hong Kong subsidiaries.
Current PRC regulations permit
our subsidiary in mainland China to pay dividends to the Company only out of its accumulated profits, if any, determined in accordance
with Chinese accounting standards and regulations. Under our current corporate structure, we rely on dividend payments or other distributions
from our subsidiaries to fund any cash and financing requirements we may have, including the funds necessary to pay dividends and other
cash distributions to our shareholders or to service any debt we may incur. If any subsidiary incurs debt on its own behalf in the future,
the instruments governing such debt may restrict its ability to pay dividends to us. In addition, under PRC laws and regulations, each
of our Chinese subsidiaries is required to set aside a portion of their after-tax profit each year to fund a statutory surplus reserve
until such reserve reaches 50% of its registered capital. This reserve is not distributable as dividends. As a result, our PRC subsidiaries
are restricted in their ability to transfer a portion of its net assets to us in the form of dividends, loans or advances. Further, the
PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC.
Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for
the payment of dividends from our profits, if any. If we are unable to receive funds from our subsidiaries, we may be unable to pay cash
dividends on our ordinary shares.
Cash dividends, if any, on
our ordinary shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we
pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate
of up to 10%. A 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises. Any gain realized
on the transfer of Class A Ordinary Shares by such investors is also subject to PRC tax at a current rate of 10% which in the case of
dividends will be withheld at source if such gain is regarded as income derived from sources within the PRC.
The Holding Foreign Companies
Accountable Act (the “HFCA Act”), was enacted on December 18, 2020. Pursuant to the HFCA Act, if the Securities and
Exchange Commission (the “SEC”), determines that we have filed audit reports issued by a registered public accounting
firm that has not been subject to inspections by the Public Company Accounting Oversight Board (the “PCAOB”), for two
consecutive years, the SEC will prohibit our Class A ordinary shares from being traded on a national securities exchange or in the over-the-counter
trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB
was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including
our auditor. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China
and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
Our auditor prior to December
8, 2022, Friedman LLP, or (“Friedman”), and current auditor, Marcum Asia CPAs LLP (“Marcum Asia”),
the independent registered public accounting firms that issue the audit reports incorporated into this registration statement by reference,
as auditors of companies that are traded publicly in the United States and firms registered with the PCAOB, have been subject to laws
in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional
standards. Neither Friedman nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021. The PCAOB is
expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China
and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond. For this
reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCA Act. Each year, the PCAOB will determine whether
it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines
in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong
and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed
with the SEC by then, we may be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for
the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal
year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCA Act,
and the value of our Class A ordinary shares may significantly decline or become worthless.
Investing in these securities involves
risks. See the “Risk Factors” on page S-8 of this prospectus supplement, and those included in the accompanying prospectus
and the documents incorporated by reference herein and therein to read about factors you should consider before investing in these securities.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy
of the disclosures in this prospectus supplement, and those included in the accompanying prospectus and the documents incorporated by
reference. Any representation to the contrary is a criminal offense.
The Class A ordinary shares are expected to be delivered on or about
December 10, 2024, subject to customary closing conditions.
Prospectus Supplement dated December 3, 2024
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
No dealer, salesperson, or other person
is authorized to give any information or to represent anything not contained in this prospectus supplement or the accompanying prospectus.
You must not rely on any unauthorized information or representations. This prospectus supplement and the accompanying prospectus are an
offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus supplement and the accompanying prospectus is current only as of their respective dates.
ABOUT THIS PROSPECTUS SUPPLEMENT
On June 6, 2024, we filed with the U.S.
Securities and Exchange Commission (the “SEC”) a registration statement on Form F-3 (File No. 333-280010),which was amended
on June 27, 2024, utilizing a shelf registration process relating to the securities described in this prospectus supplement, and the registration
statement was declared effective by the SEC on July 3, 2024. Under this shelf registration process, we may, from time to time, in one
or more offerings, offer and sell up to $100,000,000 of our Class A ordinary shares, preferred shares, debt securities, warrants, either
individually or as units composed of one or more of the other securities, as described in the accompanying prospectus. We are selling
Class A ordinary shares in this offering. Other than Class A ordinary shares being sold pursuant to this offering, we have not sold any
securities under this shelf registration statement.
This document is in two parts. The first
part is the prospectus supplement, which describes the specific terms of this offering and also adds to and updates information contained
in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying prospectus.
The second part is the accompanying prospectus dated June 6, 2024 included in the registration statement on Form F-3 (No. 333-280010),
including the documents incorporated by reference therein, which provides more general information, some of which may not be applicable
to this offering.
This prospectus supplement provides
specific details regarding the offering. If the description of the offering varies between this prospectus supplement and the accompanying
prospectus, you should rely on the information in this prospectus supplement.
You should rely only on the information
contained or incorporated by reference in this prospectus supplement and the accompanying prospectus or any free writing prospectus provided
in connection with this offering. We have not authorized any other person to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. You should assume that the information appearing in this prospectus
supplement, the accompanying prospectus and the documents incorporated by reference is accurate only as of their respective dates, regardless
of the time of delivery of this prospectus supplement, the accompanying prospectus or any other offering materials, or any sale of relevant
securities. Our business, financial condition, results of operations and prospects may have changed since those dates. We are not making
an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. Neither this prospectus supplement nor
the accompanying prospectus constitutes an offer, or an invitation on behalf of us to subscribe for and purchase, any of the securities
and may not be used for or in connection with an offer or solicitation by anyone, in any jurisdiction in which such an offer or solicitation
is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.
In this prospectus supplement and the
accompanying prospectus, unless otherwise indicated or unless the context otherwise requires, references to:
| ● | “China” or the “PRC”
refers to the People’s Republic of China, including Hong Kong Special Administrative Region and the Macau Special Administrative
Region, unless referencing specific laws and regulations adopted by the PRC and other legal or tax matters only applicable to mainland
China, and excluding, for the purposes of this prospectus only, Taiwan; |
| ● | “PRC subsidiaries”
refer to entities established in accordance with PRC laws and regulations; |
| ● | “Class A ordinary shares”
refers to the class A ordinary shares of par value of US$0.0001 per share in the capital of the Company; |
| ● | “Class B ordinary shares”
refers to the class B ordinary shares of par value of US$0.0001 per share in the capital of the Company; |
| ● | “Companies Act”
refers to the Companies Act (Revised) of the Cayman Islands; |
| ● | “Company” refers
to Jayud Global Logistics Limited, an exempted company incorporated in the Cayman Islands with limited liability; |
| ● | “RMB” and “Renminbi”
refer to the legal currency of China; |
| ● | “Shares” or “shares”
refers to any share in the capital of the Company, including Class A ordinary shares and Class B ordinary shares; |
| ● | “US$,” “U.S.
dollars,” “$” and “dollars” refer to the legal currency of the United States; and |
| ● | “we”, “us”,
“our company”, “the Company” and “our” refer to Jayud Global Logistics Limited and its consolidated
subsidiaries. We conduct operations in China through our PRC subsidiaries. |
All discrepancies in any table between
the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.
This prospectus
supplement contains translations between Renminbi and U.S. dollars solely for the convenience of the reader. Unless otherwise stated,
the translation of Renminbi into U.S. dollars has been made at RMB7.1268 to US$1.00, the central parity rate on June 30, 2024 published
by the Bank of China. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into
U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all.
PROSPECTUS SUPPLEMENT SUMMARY
This prospectus supplement summary
highlights selected information included elsewhere in or incorporated by reference into this prospectus supplement and the accompanying
prospectus and does not contain all the information that you should consider before making an investment decision. You should read this
entire prospectus supplement and the accompanying prospectus carefully, including the “Risk Factors” sections and the financial
statements and related notes and other information incorporated by reference, before making an investment decision.
Our Business Overview
We are one of the leading Shenzhen-based
end-to-end supply chain solution providers in China, with a focus on providing cross-border logistics services. Headquartered in Shenzhen,
a key component of the Greater Bay Area in China, we benefit from the unique geographical advantages of providing high degree of support
for ocean, air and overland logistics. A well-connected transportation network enables us to significantly increase efficiency and reduce
transportation costs. As one of the most open and dynamic regions in China, Shenzhen is home to renowned enterprises and the gathering
place of cross-border e-commerce market players, which provides us with a large customer base and enables us to develop long-term in-depth
relationships with our customers. In addition, the sustained and steady growth of local economy and supportive government policies have
backed up our development and brought us great convenience in daily operations.
We offer a comprehensive range of cross-border
supply chain solution services, including: (i) freight forwarding services, (ii) supply chain management, and (iii) other value-added
services.
For a description of our business, financial condition, results of
operations and other important information regarding us, see our filings with the SEC incorporated by reference into this prospectus supplement
and the accompanying prospectus. For instructions on how to find copies of these and our other filings incorporated by reference into
this prospectus supplement and the accompanying prospectus, see “Where You Can Find More Information About Us”.
Our Corporate History and Structure
We are a Cayman Islands holding company
and primarily conduct our operations in China through our PRC subsidiaries. We commenced our commercial operations in September 2009 through
Shenzhen Jiayuda Trading Co., Ltd. In July 2015, Shenzhen Jayud Logistics Technology Co., Ltd. (previously under the name of Shenzhen
Xinyuxiang Supply Chain Co., Ltd.) was established to optimize our resource allocation to further expand our business. On June 10, 2022,
we incorporated Jayud Global Logistics Limited under the laws of the Cayman Islands as our offshore holding company to facilitate offshore
financing. In June 2022, we established Jayud Global Logistics (Hong Kong) Limited, our wholly owned Hong Kong subsidiary.
In April 2023, we completed our initial
public offering and listed our Class A ordinary shares on the Nasdaq Capital Market under the symbol “JYD.” We raised approximately
US$4.86 million in net proceeds from the issuance of new shares from the initial public offering and partial exercise of over-allotment
option after deducting underwriting discounts, commissions and expenses. In the same month, we incorporated Joyed Logistics Services Inc.
in the State of Georgia as our wholly owned U.S. subsidiary to expend our business in the U.S. In July 2023, we obtained 51% of the equity
interests of Shenzhen Ronghai Tongda Supply Chain Management Co., Ltd. In September 2023, we obtained 100% of the equity interest of HK
XINYX Technology Limited. The main business focus of Shenzhen Ronghai Tongda Supply Chain Management Co., Ltd and HK XINYX Technology
Limited is international trading business.
In January 2024, Shenzhen Jayud Logistics
Technology Co., Ltd. (“Shenzhen Jayud”), our wholly-owned PRC subsidiary, entered into an equity purchase agreement to acquire
51% of the equity interests in Shenzhen Jiniu International Logistics Co., Ltd., a logistics company specialized in supply chain management,
domestic cargo transportation agency, loading/unloading, and information consulting services.
In April 2024, Joyed Logistics Services
Inc. (“Joyed Logistics”), our wholly-owned subsidiary, entered into an equity purchase agreement to acquire a 51% controlling
stake in HYTX Warehouse Inc. (“HYTX”), a logistics company headquartered in Azusa, California.
In August 2024, we set up Ezhou Jayud
Logistics Technology Co., Ltd (“JYD Ezhou”), a subsidiary wholly owned by JYD HK. In September 2024, JYD Ezhou set up Ezhou
Jayud International Logistics Co., Ltd. (“ Ezhou GJHY”) with a non-controlling shareholder, acquiring a 51% equity interest
in Ezhou GJHY.
In October 2024, Joyed Logistics acquired
an 95% equity interest in YUKON FLOORING BELLAIRE, LLC, which owns a 28,320 sq.ft. warehouse and the related land located in Houston,
Texas.
The following diagram illustrates our corporate structure
as of the date of this prospectus supplement.
Notes:
(1) |
The English names of our PRC Subsidiaries are directly translated from Chinese and may be different from their names shown on their respective records filed with relevant PRC authorities. |
Our Risks and Challenges
Investing in our Class A ordinary shares
entails a significant level of risk. Before investing in our Class A ordinary shares, you should carefully consider the risks and uncertainties
summarized below, the risks described under the “Risk Factors,” in addition to all of the other information in this prospectus
supplement and documents that are incorporated in this prospectus supplement by reference, as updated by our subsequent filings under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, if applicable, in any accompanying prospectus supplement
or documents incorporated by reference.
Jayud Global Logistics Limited is a
holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries in China, Hong Kong
and the USA. The PRC government has significant influence over China-based operations of any company by allocating resources, providing
preferential treatment to particular industries or companies, or imposing industry-wide policies on certain industries. The PRC government
may also amend or enforce existing rules and regulation or adopt new ones with little advance notice, which could materially increase
our compliance cost, change the relevant industry landscape, or cause significant changes to our business operations. Furthermore, the
PRC government has significant oversight and discretion over the conduct of our business and may intervene with or influence our operations
at any time as the government deems appropriate to further regulatory, political and societal goals. Any such action could materially
and adversely affect our business, financial condition and results of operations, and significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.
See “Risk Factors—Risks Related to Doing Business in China— The Chinese government has substantial oversight and influence
over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could impact
our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer securities
to investors and cause the value of our securities to significantly decline or be worthless.” in the 2023 Form 20-F.
Investors in our Class A ordinary shares
are not purchasing equity securities of our subsidiaries that have substantive business operations in China but instead are purchasing
equity securities of a Cayman Islands holding company. Jayud Global Logistics Limited is a holding company with no material operations
of its own. We conduct our operations primarily through our subsidiaries in China, Hong Kong and the USA. Such structure involves unique
risks to investors in our Class A ordinary shares. Investors may never directly hold equity interests in our subsidiaries with substantive
operations.
See “Risk Factors” on page
S-8 of this prospectus supplement for a discussion of risks related to our ordinary shares and this offering. In addition, you should
carefully consider the matters discussed under “Risk Factors” in our 2023 Form 20-F as well as other documents incorporated
by reference into the accompanying prospectus.
Risks Related to Our Business
and Industry
| ● | Our business and growth are significantly affected by the
development of international commerce and the e-commerce industry, as well as macroeconomic and other factors that affect demand for
supply chain solutions and logistics services, in China and globally. |
| ● | Trade restrictions could materially and adversely affect our
business, financial condition and results of operations. |
| ● | We face intense competition which could adversely affect our
results of operations and market share. |
| ● | We face risks associated with the items we deliver and the
contents of shipments and inventories handled through our logistics networks, including real or perceived quality or health issues with
the products that are handled through our logistics networks, and risks inherent in the logistics industry, including personal injury,
product damage, and transportation-related incidents. |
| ● | We may be exposed to credit risks in relation to defaults
from customers. |
| ● | If we are unable to collect our receivables from our existing
customers, our results of operations and cash flows could be adversely affected. |
| ● | Our strategies and expansion plans may require a significant
amount of capital, and the actual capital requirements may be different from what we anticipate. We may seek equity or debt financing
to finance all or a portion of such capital expenditures. If we cannot obtain sufficient capital on acceptable terms, our business, financial
condition, and prospects will be materially adversely affected. |
| ● | We may fail to successfully enter necessary or desirable strategic
alliances or make acquisitions or investments, and we may not be able to achieve the anticipated benefits from these alliances, acquisitions
or investments we make. |
| ● | We rely on service providers, such as air, ocean and ground
freight carriers, and if they become financially unstable or have reduced capacity to provide services because of pandemics, such as
COVID-19, it may adversely impact our business and operating results. |
| ● | Our business may be affected by fluctuations in China’s
road transportation market. |
| ● | Any disruption to the operation of the warehousing and logistics
facilities operated by us or other third-party transportation companies and couriers that facilitate our logistics services, or to the
development of new warehousing and logistics facilities, could have a material adverse effect on our business, financial condition and
results of operations. |
| ● | If we are unable to utilize our container depots and warehouses
effectively, our business and results of operations may be adversely affected. |
| ● | We may be unable to obtain adequate amount of cargo space
to meet our customers’ needs. |
| ● | We use third parties in some aspects of our operations and
failure to maintain positive relationships with them could have a material adverse effect on our business, financial condition and results
of operations. |
| ● | If we are unable to manage the expansion of our logistics
infrastructure successfully, our business prospects and results of operations may be materially and adversely affected. |
| ● | We depend on a limited number of customers for a significant
portion of our revenues and the loss of one or more of these customers could adversely affect our business, financial condition, and
results of operations. |
| ● | If our customers reduce their expenditure on third-party supply
chain solutions and logistics services or increase utilization of their internal solutions, our business and operating results may be
materially and adversely affected. |
| ● | If we fail to cost-efficiently attract new customers to use
our solutions and services, or to maintain relationships with existing customers, our business and results of operations could be adversely
affected. |
Risks Related to Doing Business
in China
| ● | Change in China’s economic, political or social conditions,
laws, regulations or governmental policies could have a material adverse effect on our business, financial conditions and results of
operations. |
| ● | Uncertainties with respect to the PRC legal system, including
uncertainties regarding the interpretation and enforcement of laws, and sudden or unexpected changes of PRC laws and regulations with
little advance notice could adversely affect us and limit the legal protections available to you and us, and the Chinese government may
exert more oversight and control over offerings that are conducted overseas, which changes could materially hinder our ability to offer
or continue to offer our securities, and cause the value of our securities to significantly decline or become worthless. |
| ● | The Chinese government has substantial oversight and influence
over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could
impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer
securities to investors and cause the value of our securities to significantly decline or be worthless. |
| ● | The PCAOB had historically been unable to inspect auditors
in mainland China and Hong Kong in relation to their audit work. If the PCAOB determines in the future that it no longer has full access
to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of
these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States
under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment. |
| ● | The approval of and the filing with the CSRC or other PRC
government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict
whether or for how long we will be able to obtain such approval or complete such filing. |
| ● | You may experience difficulties in effecting service of legal
process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign
laws. |
| ● | If we are classified as a PRC resident enterprise for PRC
income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. |
| ● | We face uncertainties with respect to indirect transfer of
equity interests in PRC resident enterprises by their non-PRC holding companies. |
| ● | PRC regulations relating to offshore investment activities
by PRC residents may limit our PRC subsidiaries’ ability to change their registered capital or distribute profits to us or otherwise
expose us or our PRC resident beneficial owners to liability and penalties under PRC laws. In addition, any failure to comply with PRC
regulations with respect to registration requirements for offshore financing may subject us to legal or administrative sanctions. |
| ● | We may be materially adversely affected if our shareholders and beneficial owners who are PRC entities fail to comply with the PRC
overseas investment regulations. |
Risks Related to the Class A Ordinary
Shares
| ● | The trading price of our Class A ordinary shares has been
and will likely continue to be volatile, which could result in substantial losses to investors. |
| ● | The dual-class structure of our ordinary shares has the effect
of concentrating voting power with our existing shareholders prior to the IPO, which will limit your ability to influence the outcome
of important transactions, including a change in control. |
| ● | If securities or industry analysts do not publish research
or reports about our business, or if they adversely change their recommendations regarding our Class A ordinary shares, the market price
for our Class A ordinary shares and trading volume could decline. |
| ● | The sale or availability for sale of substantial amounts of
our Class A ordinary shares could adversely affect their market price. |
| ● | There can be no assurance that we will not be a passive foreign
investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our Class
A ordinary shares to significant adverse U.S. federal income tax consequences. |
| ● | Our memorandum and articles of association contain anti-takeover
provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares. |
| ● | You may face difficulties in protecting your interests, and
your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. |
| ● | We are a foreign private issuer within the meaning of the
rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies. |
Recent Developments
On July 22, 2024, the board of directors
of the Company approved and adopted the Company’s 2024 Share Incentive Plan, which became effective on August 15, 2024.
On September 13, 2024, the Company entered
into securities purchase agreements with certain accredited investors, pursuant to which the Company received net proceeds of $800,000
in consideration of the issuance of Convertible Debentures in the principal amount of $800,000. On October 22, 2024, the investors converted
the entire principal amount and accrued interest under the Convertible Debentures into 2,069,382 Class A ordinary shares of the Company.
On October 21, 2024, the Company acquired a 20% equity interest in
HYTX Warehouse No.3 LLC by issuing 1,680,016 Class A ordinary shares as consideration. HYTX Warehouse No.3 LLC operates an approximate
70,000-square-foot warehouse located in California, under a lease agreement that is set to expire on April 30, 2026. On October 21, 2024,
the Company acquired a 49% stake in HYTX Warehouse No.10 LLC by issuing 1,568,457 Class A ordinary shares as consideration. HYTX Warehouse
No.10 LLC operates a 43,000-square-foot warehouse located in California, under a lease agreement that is set to expire on June 30, 2027.
On October 26, 2024, the Company acquired a 20% equity interest in HYTX Warehouse No.11 LLC by issuing 1,704,851 Class A ordinary shares
as consideration. HYTX Warehouse No.11 LLC operates a 52,000-square-foot warehouse located in New Jersey, under a lease agreement that
is set to expire on May 31, 2027.
On October 21,
2024, the Company acquired a 10% equity interest in LD Global Logistics Inc., a licensed customs broker based in Georgia, USA, by
issuing 117,115 Class A ordinary shares as consideration.
On October 25, 2024, the Company acquired
a 95% equity interest in Yukon Flooring Bellaire LLC, which owns a 28,320 sq.ft. warehouse and the related land located in Houston, Texas.
The Company issued 2,219,828 Class A ordinary shares as consideration for the acquisition.
On October 28, 2024, the Company issued
in a private placement an aggregate of 14,793,335 Class A ordinary shares to certain investors at a purchase price of US$0.45 per share,
and the Company received gross proceeds of $6,657,000.
In July 2024, the Company borrowed an
interest-free loan of RMB738,000 (US$103,553) from one of its officers. This loan is due in July 2025.
In September and November 2024, the Company borrowed a total of RMB2,712,100
(US$ 380,549) and RMB 4,775,000 (US$ 670,006) from Xiaogang Geng, respectively. These loans bear an annual interest rate of 6% and were
fully repaid as of the date of this prospectus supplement.
On May 1, 2024, the
Company received a notification letter from NASDAQ indicating that the Company was not in compliance with the NASDAQ Listing Rule
5550(b)(1). On October 28, 2024, the Company received a letter from NASDAQ stating that based on the Company’s Form 6-K filed
with the Commission on October 28, 2024, NASDAQ has determined that the Company has complied with Listing Rule 5550(b)(1). However,
in the future, if the Company fails to evidence compliance upon filing its next periodic report, it may be subject to a delisting
determination, but any such determination may be appealed to a Hearings Panel.
On June 6, 2024, the Company received a notification letter from NASDAQ,
indicating that the Company was not in compliance with NASDAQ Listing Rule 5550(a)(2) due to its failure to maintain a minimum bid price
of US$1 per share. On November 27, 2024, the Company received a letter from NASDAQ stating the staff of Nasdaq has determined that for
the last 14 consecutive business days, from November 7 through November 26, 2024, the closing bid price of the Company’s Class A
ordinary shares has been at $1.00 per share or greater. Accordingly, the Company has regained compliance with Listing Rule 5550(a)(2).
Corporate Information
Our principal
executive offices are located at Building 3, No. 7 Gangqiao Road, Li Lang Community, Nanwan Street, Longgang District, Shenzhen, the People’s
Republic of China. Our telephone number at this address is +86 0755-25595406. We maintain a website at http://www.jayud.com that contains
information about our Company, though no information contained on our website is part of this prospectus supplement.
Our agent for service of process in the United States is Cogency Global Inc. located at 122 East 42nd Street, 18th Floor, New York, NY
10168.
THE OFFERING
Issuer |
|
Jayud Global Logistics Limited |
|
|
|
Class A ordinary shares offered by us pursuant to this prospectus supplement |
|
50,000,000 Class A ordinary shares directly to investors pursuant to a share purchase agreement |
|
|
|
Offering price per Class A ordinary share |
|
The purchase price of each Class A ordinary share is US$0.20. |
|
|
|
Ordinary shares outstanding before this offering |
|
45,522,468 ordinary shares, including (1) 40,112,868 Class A ordinary shares and (2) 5,409,600 Class B ordinary shares. |
|
|
|
Ordinary shares outstanding immediately after this offering |
|
95,522,468 ordinary shares, including (1) 90,112,868 Class A ordinary shares and (2) 5,409,600 Class B ordinary shares. |
Listing |
|
The Class A ordinary shares are listed on the NASDAQ Capital Market under the symbol “JYD.” |
|
|
|
Use of proceeds |
|
We intend to use our net proceeds from this offering for general corporate purposes, working capital, repayment of certain outstanding loans and continued development and expansion of our business. See “Use of Proceeds” for more information. |
|
|
|
Risk factors |
|
Investing in our securities involves a high degree of risk. Before investing in our securities, you should carefully consider the risk factors described in the section titled “Risk Factors” beginning on page S-8 of this prospectus supplement as well as the risks identified in documents that are incorporated by reference in this prospectus supplement. |
RISK FACTORS
An investment in our securities involves
significant risks. You should carefully consider all the information in this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference herein and therein, including the risk factors described in the 2023 Form20-F, and the risks and uncertainties
described below, before making an investment in our securities. Any of the following risks could materially and adversely affect our business,
financial condition and results of operations. In any such case, the market price of the ordinary shares could decline, and you may lose
all or part of your investment.
Risks Related to This Offering
New investors in our Class
A ordinary Shares will experience immediate and substantial dilution after this offering.
Since the price per share of our Class
A ordinary shares being offered is substantially higher than the net tangible book value per share of our Class A ordinary shares, you
will suffer immediate and substantial dilution in the net tangible book value of the our Class A ordinary shares you purchase in this
offering. Based on an offering price of US$0.20 per Class A ordinary share, you will suffer immediate and substantial dilution of $0.04
per our Class A ordinary share with respect to the net tangible book value of the our Class A ordinary shares. See the section entitled
“Dilution” below for a more detailed discussion of the dilution you will incur if you invest in this offering.
A substantial number of Class A ordinary shares
may be sold in the market following this offering, which may depress the market price for the Class A ordinary shares.
Sales of a substantial number of the
Class A ordinary shares in the public market following this offering could cause the market price of the Class A ordinary shares to decline.
All of the Class A ordinary shares sold in this offering upon issuance will be freely tradable without restriction or further registration
under the Securities Act, unless these shares are owned or purchased by “affiliates” as that term is defined in Rule 144 under
the Securities Act.
Since we have broad discretion in how we use
the proceeds from this offering, we may use the proceeds in ways with which you disagree.
We have not allocated specific amounts
of the net proceeds from this offering for any specific purpose. Accordingly, our management will have some flexibility in applying the
net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and
you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It
is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of our
management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results
and cash flow.
You may experience future dilution as a result
of future equity offerings.
In order to raise additional capital,
we may at any time, including during the period of this offering, offer additional Class A ordinary shares or other securities convertible
into or exchangeable for the Class A ordinary shares at prices that may not be the same as the price per Class A ordinary share in this
offering. We may sell the Class A ordinary shares or other securities in any other offering at a price per Class A ordinary share that
is less than the price per Class A ordinary share paid by investors in this offering, and investors purchasing the Class A ordinary shares
or other securities in the future could have rights superior to existing shareholders. The price per Class A ordinary share at which we
sell additional Class A ordinary shares, or securities convertible or exchangeable into Class A ordinary shares, in future transactions
may be higher or lower than the price per Class A ordinary share paid by investors in this offering.
If we fail to maintain the listing of our Class A
ordinary shares with a U.S. national securities exchange, the liquidity and price of our Class A ordinary shares could be adversely
affected.
Our Class A ordinary shares are
currently listed for trading on the Nasdaq Capital Market. In order to maintain our listing on The Nasdaq Capital Market, we must comply
with certain Nasdaq listing rules. If our Class A ordinary shares are delisted, our Class A ordinary shares may be eligible
to trade on the OTC Bulletin Board or another over-the-counter market; however, such delisting could have an adverse impact on the
liquidity and price of our Class A ordinary shares. Any such alternative would likely result in it being more difficult for us to
raise additional capital through the public or private sale of equity securities and for investors to dispose of or obtain accurate quotations
as to the market value of, our Class A ordinary shares. In addition, there can be no assurance that our Class A ordinary shares
would be eligible for trading on any such alternative exchange or markets.
Risks Related to Our Finances and Capital Requirements
Our losses, negative cash flows from operations and
accumulated deficit raise substantial doubt about our ability to continue as a going concern absent obtaining adequate new debt or equity
financing.
As of June 30, 2024, we had an accumulated deficit
of $13.4 million and net working capital deficit of $4.1 million. We expect to continue to incur losses for the foreseeable future
as we continue our efforts to adapt to the evolving competitive environment. These factors, individually and collectively, raise substantial
doubt about our ability to continue as a going concern, and therefore, could materially limit our ability to raise additional funds through
an issuance of debt or equity securities or otherwise. There can be no assurance that we will be able to raise sufficient additional capital
on acceptable terms or at all. If such additional financing is not available on satisfactory terms, or is not available in sufficient
amounts, we may be required to delay, limit or eliminate the development of business opportunities and our ability to achieve our business
objectives, our competitiveness, and our business, financial condition and results of operations will be materially adversely affected.
SPECIAL NOTE REGARDING FORWARD LOOKING
STATEMENTS
This prospectus supplement, the accompanying
prospectus, and the information incorporated by reference herein and therein may contain forward-looking statements that involve risks
and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements
are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements
involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be
materially different from those expressed or implied by the forward- looking statements. Sections of this prospectus supplement and the
accompanying prospectus (including statements incorporated by reference herein and therein) entitled “Risk Factors,” “Business
Overview” and “Operating and Financial Review and Prospects,” among others, discuss factors which could adversely impact
our business and financial performance.
You can identify these forward-looking
statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,”
“estimate,” “intend,” “plan,” “believe,” “is/are likely to” or other similar
expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and
financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These
forward-looking statements include statements about:
| ● | our goals and strategies; |
| ● | our business and operating strategies and plans for the development
of existing and new businesses, ability to implement such strategies and plans and expected time; |
| ● | our future business development, results of operations and
financial condition; |
| ● | expected changes in our revenue, costs or expenditures; |
| ● | our expectations regarding demand for and market acceptance
of our products and services; |
| ● | our projected markets and growth in markets; |
| ● | our potential need for additional capital and the availability
of such capital; |
| ● | competition in our industry; |
| ● | relevant government policies and regulations relating to our industry; |
| ● | general economic and business conditions in China and globally; |
| ● | our use of the proceeds from the offering under this prospectus supplement; and |
| ● | assumptions underlying or related to any of the foregoing. |
The forward-looking statements made in
prospectus supplement, the accompanying prospectus, or the information incorporated by reference herein relate only to events or information
as of the date on which the statements are made in such document. Except as required by U.S. federal securities law, we undertake no
obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus
and any prospectus supplement, and the information incorporated by reference herein, along with any exhibits thereto, completely and
with the understanding that our actual future results may be materially different from what we expect. Other sections of this prospectus
supplement, the accompanying prospectus, or the information incorporated by reference herein include additional factors which could adversely
impact our business and financial performance. We qualify all of our forward-looking statements by these cautionary statements.
This prospectus supplement, the
accompanying prospectus and the information incorporated by reference herein also contains certain data and information that we
obtained from various government and private publications. Statistical data in these publications also include projections based on
a number of assumptions. Failure of the market to grow at the projected rate may have a material adverse effect on our business and
the market price of the Class A ordinary shares. In addition, projections or estimates about our business and financial prospects
involve significant risks and uncertainties. Furthermore, if any one or more of the assumptions underlying the market data are later
found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue
reliance on these forward-looking statements.
USE OF PROCEEDS
We estimate the net proceeds from this
offering will be approximately US$9.9 million, after deducting the estimated offering expenses payable by us. We plan to use the net proceeds
from this offering as follows:
| ● | Approximately 40% of the net proceeds from this offering for
supplementing our operating cash flow and general corporate use; |
| ● | Approximately 30% of the net proceeds from this offering for repayment
of outstanding loans, which had annual interest rates ranging from zero to 6% and maturity dates from December 2024 to September 2025; |
| ● | Approximately 20% of the net proceeds from this offering for
overseas investments and potential mergers and acquisitions in the future; and |
| ● | Approximately 10% of the net proceeds from this offering for
the registration and operation of our overseas business entities, branches and offices. |
The amounts and
timing of any expenditures will vary depending on the amount of cash generated by our operations, and the rate of growth, if any, of our
business, and our plans and business conditions. The foregoing represents our intentions as of the date of this prospectus supplement
based upon our current plans and business conditions to use and allocate the net proceeds of this offering.
However, our management will have significant flexibility and
discretion in applying the net proceeds of this offering. Unforeseen events or changed business conditions may result in application
of the proceeds of this offering in a manner other than as described in this prospectus supplement.
To the extent that
the net proceeds we receive from this offering are not immediately applied for the above purposes, we plan to invest the net proceeds
in bank deposits.
DIVIDEND POLICY
We do not have any present plan to pay
any cash dividends on our ordinary shares in the foreseeable future after this offering. We currently intend to retain most, if not all,
of our available funds and any future earnings to operate and expand our business.
Our board of directors has complete
discretion in deciding the payment of any future dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders
may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under Cayman
Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances
may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business.
The declaration and payment of dividends will depend upon, among other things, our future operations and earnings, capital requirements
and surplus, our financial condition, contractual restrictions, general business conditions and other factors as our board of directors
may deem relevant.
We are a holding company incorporated
in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends
to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us.
CAPITALIZATION
The following table sets forth our capitalization as of
June 30, 2024 presented on:
| ● | a pro forma as adjusted basis to reflect (1) the issuance
and sale of 50,000,000 Class A ordinary shares at the offering price of US$0.20 per Class A ordinary share, after deducting estimated
offering expenses payable by us; and (2) the issuance by us of 24,170,245 Class A ordinary shares for cash proceeds, acquisitions and
the payment of certain expenses subsequent to June 30, 2024 and prior to this offering. |
You should read
this table together with “Item 5. Operating and Financial Review and Prospects” of the 2023 Form 20-F, the “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes included
in the information incorporated by reference into this prospectus supplement and the accompanying prospectus.
| |
As of June 30, 2024 | |
| |
Actual (Unaudited) | | |
Pro Forma As adjusted(1)(2)(3) (4) | |
| |
RMB | | |
US$ | | |
RMB | | |
US$ | |
Cash and cash equivalent | |
| 21,076,691 | | |
| 2,957,385 | | |
| 91,726,613 | | |
| 12,870,659 | |
Short term borrowings | |
| 28,365,914 | | |
| 3,980,176 | | |
| 28,365,914 | | |
| 3,980,176 | |
Long term borrowings | |
| 18,335,567 | | |
| 2,572,763 | | |
| 18,335,567 | | |
| 2,572,763 | |
Total borrowings | |
| 46,701,481 | | |
| 6,552,939 | | |
| 46,701,481 | | |
| 6,552,939 | |
Shareholders’ Equity: | |
| | | |
| | | |
| | | |
| | |
Class A Ordinary shares (par value of US$0.0001 per share; 480,000,000 Class A ordinary shares authorized and 14,942,623 Class A ordinary shares issued and outstanding, actual; 90,112,868 Class A ordinary shares issued and outstanding, pro forma as adjusted as of June 30, 2024, respectively) | |
| 9,787 | | |
| 1,373 | | |
| 64,963 | | |
| 9,115 | |
Class B Ordinary shares (par value of US$0.0001 per share; 20,000,000 Class B ordinary shares authorized and 6,409,600 class B ordinary shares issued and outstanding, actual;5,409,600 class B ordinary shares issued and outstanding pro forma as adjusted as of June 30, 2024, respectively) | |
| 4,087 | | |
| 573 | | |
| 3,855 | | |
| 541 | |
Additional paid in capital | |
| 59,999,981 | | |
| 8,418,923 | | |
| 217,528,097 | | |
| 30,522,548 | |
Statutory reserves | |
| 764,231 | | |
| 107,233 | | |
| 764,228 | | |
| 107,233 | |
Accumulated deficit | |
| (95,650,425 | ) | |
| (13,421,230 | ) | |
| (95,650,422 | ) | |
| (13,421,230 | ) |
Accumulated other comprehensive loss | |
| (1,511,046 | ) | |
| (212,023 | ) | |
| (1,511,046 | ) | |
| (212,023 | ) |
Total Jayud Global Logistics Limited shareholders’ (deficit)/equity | |
| (36,383,385 | ) | |
| (5,105,151 | ) | |
| 121,199,675 | | |
| 17,006,184 | |
| |
| | | |
| | | |
| | | |
| | |
Total capitalization | |
| 10,318,096 | | |
| 1,447,788 | | |
| 167,901,156 | | |
| 23,559,124 | |
(1) | Reflects the sale of Class A ordinary shares in this offering
at an offering price of US$0.20 per Class A ordinary share, deducting the estimated offering expenses payable by us. Additional paid-in
capital includes the aggregate amount of issued and paid-in capital of the entities now comprising our corporate group less consideration
paid to acquire the relevant interest, if any. We estimate that net proceeds will be approximately US$9,913,274. The net proceeds of
US$9,913,274 is calculated as follows: US$ 10,000,000 gross offering proceeds, less estimated offering expenses of US$86,726. The pro
forma as adjusted total shareholders’ equity is the sum of the net proceeds from this offering of US$9,913,274, the increase of
shareholders’ equity resulting from the issuance of Class A ordinary shares subsequent to June 30, 2024 and prior to this offering
of US$12,198,061, and the actual shareholders’ deficit of US$5,105,151. |
(2) | Including 2,069,382 Class A ordinary shares converted from
convertible debentures in October 2024. These convertible debentures were issued in September and October 2024 with a total principal
amount of US$800,000. |
(3) | Including 7,290,267 Class A ordinary shares issued as consideration
for business acquisition and 14,793,335 Class A ordinary shares issued under a private placement in October 2024 and 17,261 Class A ordinary
shares issued to pay certain expenses. |
(4) | In July and September 2024, a total of 1,000,000 Class B
ordinary shares were converted into the same number of Class A ordinary shares. |
DILUTION
Our historical net tangible book value
on June 30, 2024 was negative US$6.6 million, or negative US$0.31 per ordinary share. “Net tangible book value” is total assets
minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided
by the total number of shares outstanding.
Our pro forma net tangible book value
as of June 30, 2024 was $5.6 million, or $0.12 per share, after giving effect to the issuance by us of 24,170,245 Class A ordinary shares
for cash proceeds, acquisitions and the payment of certain expenses subsequent to June 30, 2024 and prior to this offering.
After giving further effect to the sale
of the 50,000,000 Class A ordinary shares in this offering, at an offering price of US$0.20 per Class A ordinary share, and after deducting
the estimated offering expenses payable by us in connection with this offering, our pro forma as-adjusted net tangible book value as of
June 30, 2024 would have been US$15.5 million, or US$0.16 per ordinary share. This represents an immediate increase in net tangible book
value of US$0.04 per ordinary share to our existing shareholders and an immediate decrease in net tangible book value of US$0.04 per ordinary
share to the investor participating in this offering.
The following table illustrates the
net tangible book value dilution per ordinary share to shareholders after the issuance of the ordinary shares in this offering:
| |
Pro Forma
As Adjusted | |
| |
(US$) | |
Offering price per Class A ordinary share | |
$ | 0.20 | |
Net tangible book value per both Class A and Class B ordinary share as of June 30, 2024 | |
| (0.31 | ) |
Net tangible book value per both Class A and Class B ordinary
share after giving effect to issuance of shares subsequent to June 30, 2024 and prior to this offering (1) | |
| 0.12 | |
Pro forma as adjusted net tangible book value per both Class A and Class B ordinary share after giving effect to this offering | |
| 0.16 | |
Amount of dilution in net tangible book value per both Class A and Class B ordinary share to new investors in this offering | |
| 0.04 | |
(1) | We issued 24,170,245 Class A ordinary shares in October 2024. |
DESCRIPTION OF SECURITIES WE ARE
OFFERING
We are offering 50,000,000 Class A ordinary shares pursuant to this
prospectus supplement and the accompanying prospectus. The material terms and provisions of our ordinary shares are described under
Exhibit 2.3 to our annual report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on April 26, 2024, as
amended by our Annual Report on Form 20-F/A filed on September 23, 2024.
PRINCIPAL SHAREHOLDERS
Except as specifically noted, the following table
sets forth information with respect to the beneficial ownership of our ordinary shares as of the date of this prospectus supplement by:
| ● | each of our directors and executive officers; and |
| ● | each person known to us to own beneficially more than 5% of
our ordinary shares. |
The calculations in the table below are based on
45,522,468 ordinary shares, including (1) 40,112,868 Class A ordinary shares and (2) 5,409,600 Class B ordinary shares, outstanding as
of the date of this prospectus supplement, and 95,522,468 ordinary shares, including (1) 90,112,868 Class A ordinary shares and (2) 5,409,600
Class B ordinary shares outstanding immediately after the completion of this offering.
Beneficial ownership is determined in accordance
with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership
of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of
any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation
of the percentage ownership of any other person.
| |
Shares beneficially owned before and after the offering | | |
Percentage
of beneficial | | |
Percentage
of voting | | |
Percentage
of beneficial | | |
Percentage
of voting | |
Directors and Executive Officers:* | |
Class A Ordinary Shares | | |
Class B Ordinary Shares | | |
ownership before the
offering (1) | | |
power before the
offering (1) | | |
ownership after the
offering (1) | | |
power
after the
offering (1) | |
Xiaogang Geng(2) | |
| 1,000,000 | | |
| 5,409,600 | | |
| 14.1 | % | |
| 58.5 | % | |
| 6.7 | % | |
| 38.2 | % |
Feiyong Li | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Steven Gu | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Jian Wang | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Lin Bao | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Dun Zhao(3) | |
| 500,000 | | |
| — | | |
| 1.1 | % | |
| 0.5 | % | |
| 0.5 | % | |
| 0.3 | % |
Jianhong Huang(4) | |
| 3,600,000 | | |
| — | | |
| 7.9 | % | |
| 3.8 | % | |
| 3.8 | % | |
| 2.5 | % |
All directors and executive officers as a group | |
| 5,100,000 | | |
| 5,409,600 | | |
| 23.1 | % | |
| 62.8 | % | |
| 11.0 | % | |
| 41.0 | % |
Principal Shareholders: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Europa Investment Holding Limited(2) | |
| 1,000,000 | | |
| 5,409,600 | | |
| 14.1 | % | |
| 58.5 | % | |
| 6.7 | % | |
| 38.2 | % |
Tucana Investment Holding Limited(4) | |
| 3,600,000 | | |
| — | | |
| 7.9 | % | |
| 3.8 | % | |
| 3.8 | % | |
| 2.5 | % |
Notes:
(1) | For each person or group included in this column, percentage of beneficial
ownership and percentage of total voting power are calculated based on both Class
A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary
shares as a single class. Each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to vote
at our general meetings, and each Class B ordinary share shall entitle the holder thereof to ten (10) votes on all matters subject to
vote at our general meetings. Each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option
of the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. |
(2) | Represents 1,000,000 Class A ordinary shares and 5,409,600 Class B ordinary
shares held of record by Europa Investment Holding Limited, a British Virgin Islands company wholly owned by Mr. Xiaogang Geng. The registered
address of Europa Investment Holding Limited is Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. |
(3) | Represents 500,000 Class A ordinary shares held of record by James Webb Holding
Limited, a British Virgin Islands company wholly owned by Mr. Dun Zhao. The registered address of James Webb Holding Limited is Wickhams
Cay II, Road Town, Tortola, VG1110, British Virgin Islands. |
(4) | Represents 3,600,000 Class A ordinary shares held of record by Tucana Investment
Holding Limited, a British Virgin Islands company wholly owned by Ms. Jianhong Huang. The registered address of Tucana Investment Holding
Limited is Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
|
TAXATION
The following summary of the material Cayman Islands, PRC and U.S.
federal income tax consequences of an investment in our Class A ordinary shares is based upon laws and relevant interpretations thereof
in effect as of the date of this prospectus supplement, all of which are subject to change. This summary does not deal with all possible
tax consequences relating to an investment in our Class A ordinary shares, such as the tax consequences under U.S. state and local tax
laws or under the tax laws of jurisdictions other than the Cayman Islands, PRC and the United States. To the extent that the discussion
relates to matters of Cayman Islands tax law, it represents the opinion of Harney Westwood & Riegels, our Cayman Islands counsel;
to the extent it relates to PRC tax law, it is the opinion of PacGate Law Group, our PRC counsel.
PEOPLE’S REPUBLIC OF CHINA TAXATION
Under the EIT Law, which became effective on January
1, 2008, an enterprise established outside the PRC with “de facto management bodies” within the PRC is considered a “resident
enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide
income. In 2009, the SAT issued SAT Circular 82, which provides certain specific criteria for determining whether the “de facto
management body” of a PRC controlled enterprise that is incorporated offshore is located in China. Further to SAT Circular 82, in
2011, the SAT issued SAT Bulletin 45 (revised in 2018) to provide more guidance on the implementation of SAT Circular 82. In 2014, the
SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Determination of Resident Enterprises on
the Basis of Their Actual Management Bodies that provides more guidance on the implementation of Circular 82.
According to SAT Circular 82, an offshore incorporated
enterprise controlled by a PRC enterprise or a PRC enterprise group will be considered a PRC resident enterprise by virtue of having its
“de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of
the following conditions are met: (a) the senior management and core management departments in charge of its daily operations function
have their presence mainly in the PRC; (b) its financial and human resources decisions are subject to determination or approval by persons
or bodies in the PRC; (c) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’
meetings are located or kept in the PRC; and (d) more than half of the enterprise’s directors or senior management with voting rights
habitually reside in the PRC. Although SAT Circular 82 and SAT Bulletin 45 only apply to offshore incorporated enterprises controlled
by PRC enterprises or PRC enterprise groups and not those controlled by PRC individuals or foreigners, the determination criteria set
forth therein may reflect the SAT’s general position on how the term “de facto management body” could be applied in
determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals
or foreigners.
We believe that we do not meet all of the criteria
described above. We believe that neither we nor our subsidiaries outside of China are PRC tax resident enterprises, because neither we
nor they are controlled by a PRC enterprise or PRC enterprise group, and because our records and their records (including the resolutions
of the respective boards of directors and the resolutions of shareholders) are maintained outside the PRC. However, as the tax resident
status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation
of the term “de facto management body” when applied to our offshore entities, we may be considered as a resident enterprise
and therefore may be subject to PRC enterprise income tax at 25% on our worldwide income. In addition, if the PRC tax authorities determine
that we are a PRC resident enterprise for PRC enterprise income tax purposes, dividends we pay to non-PRC holders may be subject to PRC
withholding tax, and gains realized on the sale or other disposition of ordinary shares may be subject to PRC tax, at a rate of 10% in
the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax
treaty), if such dividends or gains are deemed to be from PRC sources. Any such tax may reduce the returns on your investment in the Class
A ordinary shares.
If we are considered a “non-resident enterprise”
by the PRC tax authorities, the dividends we receive from our PRC subsidiaries will be subject to a 10% withholding tax. The EIT Law also
imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside
of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China
or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless
such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding
arrangement. Under the Arrangement Between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation
and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, the dividend withholding tax rate may be reduced to 5%,
if a Hong Kong resident enterprise that receives a dividend is considered a non-PRC tax resident enterprise and holds at least 25% of
the equity interests in the PRC enterprise distributing the dividends, subject to approval of the PRC local tax authority. However, if
the Hong Kong resident enterprise is not considered to be the beneficial owner of such dividends under applicable PRC tax regulations,
such dividends may remain subject to withholding tax at a rate of 10%. Accordingly, Jayud Global Logistics (Hong Kong) Limited may be
able to enjoy the 5% withholding tax rate for the dividends it receives from its PRC subsidiaries if it satisfies the relevant conditions
under tax rules and regulations, and obtains the approvals as required.
CAYMAN ISLANDS TAXATION
The Cayman Islands currently levies no taxes on
individuals or corporations based on profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties
which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction or produced before a court of
the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company.
There are no exchange control regulations or currency restrictions in the Cayman Islands.
Payments of dividends and capital in respect of
our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend
or capital to any holder of our ordinary shares, nor will gains derived from the disposal of our ordinary shares be subject to Cayman
Islands income or corporation tax.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S.
federal income tax considerations relevant to the acquisition, ownership, and disposition of our Class A ordinary shares by U.S. Holders
(as defined below) that will hold our Class A ordinary shares as “capital assets” (generally, property held for investment)
under the U.S. Internal Revenue Code of 1986, as amended, or the “Code”). This discussion is based upon applicable provisions
of the Code, U.S. Treasury regulations promulgated thereunder, pertinent judicial decisions, interpretive rulings of the U.S. Internal
Revenue Service, or the IRS, and such other authorities as we have considered relevant, all of which are subject to change, possibly with
retroactive effect. This discussion does not address all aspects of U.S. federal income taxation that may be important to particular investors
in light of their individual investment circumstances, including investors subject to special tax and/or reporting rules (for example,
certain financial institutions; insurance companies; broker-dealers; pension plans; regulated investment companies; real estate investment
trusts; tax-exempt organizations (including private foundations); holders who are not U.S. Holders (as defined below); holders who own
(directly, indirectly, or constructively) 10% or more of the voting power or value of our stock; investors that will hold their Class
A ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for U.S. federal income
tax purposes; investors that are traders in securities that have elected the mark-to-market method of accounting; or investors that have
a functional currency other than the U.S. dollar), or holders that acquire ordinary shares through the exercise of options or other convertible
instruments or in connection with the provision of services, all of whom may be subject to tax rules that differ significantly from those
discussed below.
In addition, this discussion does not address tax
considerations relevant to U.S. Holders under any non-U.S., state or local tax laws, the Medicare tax on net investment income, the one-percent
excise tax on stock repurchases, estate or gift tax, or the alternative minimum tax. Each U.S. Holder is urged to consult its tax advisors
regarding the U.S. federal, state, local, and non-U.S. income and other tax considerations of an investment in Class A ordinary shares.
The discussion below of U.S. federal income tax
consequences applies to you if you are a “U.S. Holder.” You are a U.S. Holder if you are a beneficial owner of our Class A
ordinary shares and you are: (i) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes;
(ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created in, or organized under the
law of any state of the United States, or the District of Columbia; (iii) an estate the income of which is includible in gross income
for U.S. federal income tax purposes regardless of its source; or (iv) a trust (A) the administration of which is subject to the primary
supervision of a U.S. federal or state court and which has one or more U.S. persons who have the authority to control all substantial
decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code.
If you are a partner in a partnership (including
any entity or arrangement treated or elects to be treated as a partnership for U.S. federal income tax purposes) that holds our Class
A ordinary shares, your tax treatment generally will depend on your status and the activities of the partnership (or any such entity or
arrangement treated as or elects to be treated as a partnership for U.S. federal income tax purposes). Partners in a partnership (or any
such entity or arrangement treated as or elects to be treated as a partnership for U.S. federal income tax purposes) holding our Class
A ordinary shares should consult their tax advisors regarding the tax consequences of an investment in the Class A ordinary shares.
We are an exempted company incorporated under the
laws of the Cayman Islands. As such, we believe that we are properly classified as a non-U.S. corporation for U.S. federal income tax
purposes. Under certain provisions of the Code and U.S. Treasury regulations, however, if pursuant to a plan (or a series of related
transactions), a non-U.S. corporation (such as our company) acquires substantially all of the properties constituting a trade or business
of a U.S. corporation or partnership, and after the acquisition 80% or more of the stock (by vote or value) of the non-U.S. corporation
(excluding stock issued in a public offering related to the acquisition) is owned by former stockholder or partners of the U.S. corporation
or partnership by reason of their holding stock or a capital or profits interest in the U.S. corporation or partnership, the non-U.S.
corporation will be considered a U.S. corporation for U.S. federal income tax purposes. You are urged to consult your tax advisor concerning
the income tax consequences of purchasing, holding or disposing of Class A ordinary shares if we were to be treated as a U.S. corporation
for U.S. federal income tax purposes. The remainder of this discussion assumes that our company is treated as a non-U.S. corporation
for U.S. Federal income tax purposes.
Dividends
Subject to the PFIC rules discussed below, any cash
distributions (including the amount of any PRC or other tax withheld) paid on our Class A ordinary shares out of our current or accumulated
earnings and profits, as determined under U.S. federal income tax principles, will generally be includible in your gross income as dividend
income on the day actually or constructively received by you. Because we do not intend to determine our earnings and profits under U.S.
federal income tax principles, any distribution paid will generally be treated as a dividend for U.S. federal income tax purposes by us.
Dividends received by corporations on our Class A ordinary shares may be eligible for the dividends received deduction allowed to U.S.
corporations under the Code.
A non-corporate U.S. Holder generally may be subject
to tax at preferential tax rates applicable to “qualified dividend income,” provided that certain conditions are satisfied,
including that (1) our stock is readily tradable on an established securities market in the United States, or, in the event that we are
deemed to be a PRC tax resident enterprise under the PRC tax law, we are eligible for the benefit of the comprehensive United States-PRC
income tax treaty, or the “Treaty”, (2) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed
below) for the taxable year in which the dividend was paid and the preceding taxable year, and (3) certain holding period requirements
are met. U.S. holders are urged to consult their own tax advisors regarding the availability of the preferential rate for any dividends
paid with respect to our Class A ordinary shares.
In the event that we are deemed to be a PRC tax
resident enterprise under PRC tax law, you may be subject to PRC withholding taxes on dividends paid on our Class A ordinary shares, as
described under “Taxation— People’s Republic of China Taxation”. If we are deemed to be a PRC tax resident enterprise,
you may, however, be eligible for the benefits of the Treaty. If we are eligible for such benefits, dividends we pay on our Class A ordinary
shares may be eligible for the reduced rates of taxation applicable to qualified dividend income, as discussed above.
For U.S. foreign tax credit purposes, dividends
generally will be treated as income from foreign sources and generally will constitute “passive” category income. Depending
on your particular circumstances, you may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect
of any foreign withholding taxes imposed on dividends received on our Class A ordinary shares. If you do not elect to claim a foreign
tax credit for foreign tax withheld, you may instead claim a deduction, for U.S. federal income tax purposes, for the foreign tax withheld,
but only for a year in which you elect to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are
complex. You are urged to consult your tax advisor regarding the availability of the foreign tax credit under your particular circumstances.
Sale or Other Disposition of Class A Ordinary Shares
Subject to the PFIC rules discussed below, you generally
will recognize capital gain or loss upon the sale or other disposition of our Class A ordinary shares in an amount equal to the difference,
if any, between the amount realized upon the disposition and your adjusted tax basis in such Class A ordinary shares. Any capital gain
or loss will be long-term capital gain or loss if you have held the Class A ordinary shares for more than one year, and will generally
be U.S.-source gain or loss for U.S. foreign tax credit purposes. In the event that we are deemed to be a PRC tax resident enterprise
under PRC tax law, gain from the disposition of the Class A ordinary shares may be subject to tax in the PRC, as described under “Taxation—People’s
Republic of China Taxation”. If such income were treated as U.S.-source income for foreign tax credit purposes, you might not be
able to use the foreign tax credit arising from any tax imposed on the sale, exchange, or other taxable disposition of our Class A ordinary
shares unless such credit could be applied (subject to applicable limitations) against tax due on other income derived from foreign sources.
However, if PRC tax were to be imposed on any gain from the disposition of our Class A ordinary shares, if you are eligible for the benefits
of the Treaty, you generally may be able totreat such gain as foreign-source income. The deductibility of a capital loss may be subject
to limitations. You are urged to consult your tax advisor regarding the tax consequences if a foreign tax is imposed on a disposition
of our Class A ordinary shares, including the availability of the foreign tax credit under your particular circumstances.
PFIC Rules
A non-U.S. corporation, such as our company, will
be classified as a PFIC for U.S. federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such
year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (determined on the basis
of a quarterly average) during such year produce or are held for the production of passive income. Passive income generally includes dividends,
interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency
gains. For this purpose, cash is categorized as a passive asset and the company’s goodwill associated with active business activity
is taken into account as an active asset. We will be treated as owning our proportionate share of the assets and income of any other corporation
in which we own, directly or indirectly, more than 25% (by value) of the stock.
Based on the projected composition of our assets
and income, we do not anticipate being classified as a PFIC for our taxable year ending December 31, 2023. While we do not anticipate
being classified as a PFIC, because the value of our assets for purposes of the PFIC asset test will generally be determined by reference
to the market price of our Class A ordinary shares, fluctuations in the market price of our Class A ordinary shares may cause us to become
a PFIC for the current or any subsequent taxable year. The determination of whether we will become a PFIC will also depend, in part, on
the composition of our income and assets, which will be affected by how, and how quickly, we use our liquid assets and the cash raised
in this offering. Whether we are a PFIC is a factual determination and we must make a separate determination each taxable year as to whether
we are a PFIC (after the close of each taxable year). Accordingly, we cannot assure you that we will not be classified as a PFIC for our
taxable year ending December 31, 2023 or any future taxable year. If we are classified as a PFIC for any taxable year during which you
hold our Class A ordinary shares, we generally will continue to be treated as a PFIC, unless you make certain elections, for all succeeding
years during which you hold our Class A ordinary shares even if we cease to qualify as a PFIC under the rules set forth above.
If we are a PFIC for any taxable year during which
you hold our Class A ordinary shares, you will be subject to special tax rules with respect to any “excess distribution” that
you receive and any gain you realize from a sale or other disposition (including a pledge) of our Class A ordinary shares, unless you
make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125%
of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the
Class A ordinary shares will be treated as an excess distribution. Under these special tax rules:
| ● | the excess distribution or gain will be allocated ratably
over your holding period for the Class A ordinary shares; |
| ● | amounts allocated to the current taxable year and any taxable
years in your holding period prior to the first taxable year in which we are classified as a PFIC (a “pre-PFIC year”) will
be taxable as ordinary income; and |
| ● | amounts allocated to each prior taxable year, other than the
current taxable year or a pre-PFIC year, will be subject to tax at the highest tax rate in effect applicable to you for that year, and
such amounts will be increased by an additional tax equal to interest on the resulting tax deemed deferred with respect to such years. |
If we are classified as a PFIC for any taxable year
during which you hold our Class A ordinary shares and any of our non-U.S. subsidiaries is also a PFIC, you will be treated as owning a
proportionate amount (by value) of the shares of each such non-U.S. subsidiary classified as a PFIC for purposes of the application of
these rules.
Alternatively, a U.S. Holder of “marketable
stock” (as defined below) in a PFIC may make a mark-to-market election for such stock of a PFIC to elect out of the tax treatment
discussed in the two preceding paragraphs. If you make a valid mark-to-market election for the Class A ordinary shares, you will include
in income each year an amount equal to the excess, if any, of the fair market value of the Class A ordinary shares as of the close of
your taxable year over your adjusted basis in such Class A ordinary shares. You will be allowed a deduction for the excess, if any, of
the adjusted basis of the Class A ordinary shares over their fair market value as of the close of the taxable year. However, deductions
will be allowable only to the extent of any net mark-to-market gains on the Class A ordinary shares included in your income for prior
taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition
of the Class A ordinary shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion
of any mark-to-market loss on the Class A ordinary shares, as well as to any loss realized on the actual sale or disposition of the ordinary
shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A ordinary
shares. Your basis in the Class A ordinary shares will be adjusted to reflect any such income or loss amounts. If you make a mark-to-market
election, tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us (except that the
preferential rates for qualified dividend income would not apply).
The mark-to-market election is available only for
“marketable stock” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar
quarter (“regularly traded”) on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations.
We expect that the Class A ordinary shares will be listed on the Nasdaq, which is a qualified exchange for these purposes. If the Class
A ordinary shares are regularly traded, and the Class A ordinary shares qualify as “marketable stock” for purposes of the
mark-to-market rules, then the mark-to-market election might be available to you if we were to become a PFIC.
Because, as a technical matter, a mark-to-market
election cannot be made for any lower-tier PFICs that we may own, you may continue to be subject to the PFIC rules with respect to your
indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.
We do not currently intend to provide information
necessary for U.S. Holders to make qualified electing fund elections, which, if available, would result in tax treatment different from
the general tax treatment for PFICs described above.
If you own our Class A ordinary shares during any
taxable year that we are a PFIC, you must file an annual report with the IRS, subject to certain exceptions based on the value of the
Class A ordinary shares held. You are urged to consult your tax advisor concerning the U.S. federal income tax consequences of purchasing,
holding, and disposing of our Class A ordinary shares if we are or become a PFIC, including the possibility of making a mark-to-market
election.
Information Reporting and Backup Withholding
You may be required to submit to the IRS certain
information with respect to your beneficial ownership of our Class A ordinary shares, if such Class A ordinary shares are not held on
your behalf by certain financial institutions. Penalties also may be imposed if you are required to submit such information to the IRS
and fail to do so.
Dividend payments with respect to Class A ordinary
shares and proceeds from the sale, exchange or redemption of Class A ordinary shares may be subject to information reporting to the IRS
and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification
number and makes any other required certification or who is otherwise exempt from backup withholding. U.S. Holders who are required to
establish their exempt status generally must provide such certification on IRS Form W-9 or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Amounts
withheld as backup withholding may be credited against your U.S. Federal income tax liability, and you may obtain a refund of any excess
amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required
information. You are urged to consult your tax advisors regarding the application of the U.S. information reporting and backup withholding
rules.
The U.S. federal income tax discussion set forth
above is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders
are urged to consult their tax advisors with respect to the tax consequences to them of the acquisition, ownership and disposition of
our ordinary shares and warrants, including the tax consequences under state, local, estate, foreign and other tax laws and tax treaties
and the possible effects of changes in U.S. or other tax laws.
PLAN OF DISTRIBUTION
Pursuant to this prospectus supplement and the accompanying prospectus,
we are offering 50,000,000 Class A ordinary shares. The Class A ordinary shares are being sold directly to certain accredited investors
pursuant to a share purchase agreement dated December 3, 2024 (the “Purchase Agreement”).
The Class A ordinary shares are being
sold at a purchase price of $0.20 per share. The Class A ordinary shares were offered directly to the investors without a placement agent,
underwriter, broker or dealer. We are not paying placement agent fees or underwriting discounts in connection with the offering. We will
pay all of the expenses incident to the registration, offering, and sale of the Class A ordinary shares to the investors.
Each investor has represented to us
that at no time prior to the Purchase Agreement has it or its agents, representatives or affiliates engaged in or effected, in any manner
whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the
Class A ordinary shares or any hedging transaction, which establishes a net short position with respect to the Class A ordinary shares.
The investors have agreed not to engage in any short-selling activities involving the Class A ordinary shares, or lend the Class A ordinary
shares to any third party.
The foregoing does not purport to be
a complete statement of the terms and conditions of the Purchase Agreement. A copy of the Purchase Agreement with the investors
will be included as an exhibit to our Current Report on Form 6-K to be filed with the SEC and incorporated by reference into the registration
statement of which this prospectus supplement and the accompanying prospectus form a part. See “Incorporation of Documents By Reference”
and “Where You Can Find More Information.”
The transfer agent and registrar for
our Class A ordinary shares is Transhare Corporation. Our Class A ordinary shares are traded on the Nasdaq Capital Market under the symbol
“JYD.”
LEGAL MATTERS
We are being represented by Zhong Lun
New York LLP with respect to certain legal matters as to United States federal securities and New York State law. The validity of the
Class A ordinary shares offered in this offering will be passed upon for us by Harney Westwood & Riegels, our Cayman Islands counsel.
Certain legal matters as to PRC law will be passed upon for us by PacGate Law Group.
EXPERTS
The financial statements incorporated
by reference in this prospectus supplement for the years ended December 31, 2022 and 2023 have been audited by Marcum Asia CPAs, an independent
registered public accounting firm, as set forth in its 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.
The registered business address
of Marcum Asia CPAs LLP is 7 Penn Plaza, Suite 830, New York, NY 10001.
The financial statements
incorporated by reference in this prospectus supplement for the year ended December 31, 2021 have been audited by Friedman, which, at
the time of issuing its audit report was, an independent registered public accounting firm, as set forth in its 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.
EXPENSES OF THE OFFERING
The following table sets forth the aggregate
expenses to be paid by us in connection with the offering. All amounts shown are estimates, except for the SEC registration fee.
SEC registration fee | |
US$ | 1,476 | |
Legal fees and expenses | |
US$ | 72,000 | |
Audit fees and expenses | |
US$ | 10,300 | |
Other expenses | |
US$ | 2,950 | |
Total | |
US$ | 86,726 | |
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration
statement on Form F-3 (No. 333- 280010), including exhibits, schedules and amendments filed with, or incorporated by reference in, such
registration statement, under the Securities Act with respect to underlying shares represented by the ordinary shares, to be sold in this
offering. This prospectus supplement and the accompanying prospectus, which constitute a part of the registration statement, does not
contain all of the information contained in the registration statement. You should read the registration statement on Form F-3 and its
exhibits and schedules for further information with respect to us and the ordinary shares.
We are subject to periodic reporting
and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to
file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from
the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders, and Section 16 short swing profit
reporting for our officers and directors and for holders of more than 10% of our Class A ordinary shares. All information filed with the
SEC can be obtained over the internet at the SEC’s website at www.sec.gov or inspected and copied at the public reference
facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents, upon payment
of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 or visit the SEC website for further information on
the operation of the public reference rooms. We also maintain a website at www.jayud.com, but information on our website, however,
is not, and should not be deemed to be, a part of this prospectus supplement, the accompanying prospectus or any prospectus supplement.
You should not regard any information on our website as a part of this prospectus supplement, the accompanying prospectus or any prospectus
supplement.
This prospectus supplement is part of
a registration statement we have filed with the SEC. This prospectus supplement omits some information contained in the registration statement
in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further
information on us and the securities we are offering. Statements in this prospectus supplement, the accompanying prospectus and any prospectus
supplement concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not
intended to be comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these
statements.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with them. This means that we can disclose important information to you by referring you to
those documents. Each document incorporated by reference is current only as of the date of such document, and the incorporation by reference
of such documents shall not create any implication that there has been no change in our affairs since the date thereof or that the information
contained therein is current as of any time subsequent to its date. The information incorporated by reference is considered to be a part
of this prospectus supplement and should be read with the same care. When we update the information contained in documents that have been
incorporated by reference by making future filings with the SEC, the information incorporated by reference in this prospectus supplement
is considered to be automatically updated and superseded. In other words, in the case of a conflict or inconsistency between information
contained in this prospectus supplement, the accompanying prospectus and information incorporated by reference into this prospectus supplement,
you should rely on the information contained in the document that was filed later.
We incorporate by reference the documents listed below:
| ● | the Company’s Annual Report on Form 20-F for the year ended December 31, 2023, filed on April 26, 2024, as amended by our Annual
Report on Form 20-F/A filed on September 23, 2024 (the” 2023 Form 20-F”) ; |
| ● | the Company’s Current Reports on Form 6-K, filed with the SEC on January
23, 2024, April 30,
2024, May 3, 2024, July
29, 2024, October 15,
2024, October 25, 2024
(as amended by our Report on Form 6-K/A filed with the SEC on November 27, 2024), October
28, 2024 and October 28,
2024; |
| ● | the description of our securities incorporated by reference in our registration statement on Form
F-1 (File No. 333-269871) filed with the Commission on March 21, 2023, including any amendment and report subsequently filed for
the purpose of updating that description; and |
| ● | with respect to each offering of the securities under this prospectus, all our subsequent annual reports on Form 20-F and any report
on Form 6-K that indicates that it is being incorporated by reference that we file or furnish with the SEC on or after the date on which
the registration statement is first filed with the SEC and until the termination or completion of the offering by means of this prospectus. |
Our 2023 Form 20-F contains a description
of our business and audited consolidated financial statements with reports by independent auditors. The consolidated financial statements
are prepared and presented in accordance with U.S. GAAP.
Unless expressly incorporated by reference,
nothing in this prospectus supplement or the accompanying prospectus shall be deemed to incorporate by reference information furnished
to, but not filed with, the SEC. Copies of all documents incorporated by reference in this prospectus supplement or the accompanying prospectus,
other than exhibits to those documents unless such exhibits are specifically incorporated by reference in this prospectus supplement,
will be provided at no cost to each person, including any beneficial owner, who receives a copy of this prospectus supplement on the written
or oral request of that person made to:
Building 3, No. 7 Gangqiao
Road
Li Lang Community, Nanwan Street
Longgang District, Shenzhen,
People’s Republic of China
Attention: Xiaogang Geng
(86) 0755-25595406.
You should rely only on the information
that we incorporate by reference or provide in this prospectus supplement or the accompanying prospectus. We have not authorized anyone
to provide you with different information. We are not making any offer of these securities in any jurisdiction where the offer is not
permitted. You should not assume that the information in this prospectus supplement or the accompanying prospectus is accurate as of any
date other than the date on the front of those documents.
SUBJECT
TO COMPLETION, DATED JUNE 6, 2024
PROSPECTUS
Jayud Global Logistics Limited
$100,000,000
Class A Ordinary Shares,
Preferred Shares,
Debt Securities
Warrants,
Rights, and
Units
We may, from time to time
in one or more offerings, offer and sell up to $100,000,000 in the aggregate of Class A ordinary shares of par value $0.0001 per share
in the capital of the Company (the “Class A Ordinary Shares”), preferred shares of par value $0.0001 per share in the
capital of the Company (the “Preferred Shares”), warrants, units and rights to purchase Class A Ordinary Shares, Preferred
Shares, debt securities, rights or any combination of the foregoing, either individually or as units comprised of one or more of the other
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 Class A Ordinary Shares in any 12-month period so long as the aggregate market value of
our voting and non-voting common equity 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 Class A Ordinary Shares are listed on the Nasdaq Capital Market
under the symbol “JYD”. On June 5, 2024, the last reported sale price of our Class A Ordinary Shares on the Nasdaq Capital
Market was $0.66 per share. The applicable prospectus supplement will contain information, where applicable, as to other listings, if
any, on the Nasdaq Capital Market or other securities exchange of the securities covered by the prospectus supplement.
We are not a Chinese
operating company but a Cayman Islands holding company with operations conducted by our subsidiaries established in People’s
Republic of China (“PRC” or “China”), Hong Kong Special Administrative Region of the PRC
(“Hong Kong”) and the Cayman Islands. Therefore, investing in our securities being offered pursuant to this
prospectus involves unique and a high degree of risk.
The securities offered in
this offering are of the offshore holding company Jayud Global Logistics Limited (the “Company”), which owns equity
interests, directly or indirectly, of the operating subsidiaries. Subsidiaries conduct operations in China and the holding company does
not conduct operations in China. Unless otherwise stated, as used in this prospectus and in the context of describing our operations and
consolidated financial information, “Jayud” “we,” “us,” “Company,” or “our,”
refers to Jayud Global Logistics Limited, a Cayman Islands exempted company. “PRC Subsidiaries” refer to our subsidiaries
incorporated in mainland China, and “Hong Kong Subsidiaries” refer to our subsidiaries incorporated in Hong Kong. We will
also refer to all of our subsidiaries, “Subsidiaries”.
We are also subject to legal
and operational risks associated with being based in and having the majority of the company’s operations in PRC. The Chinese government
may intervene or influence the operation of our PRC operating entities and exercise significant oversight and discretion over the conduct
of their business and may intervene in or influence their operations at any time, or may exert more control over offerings conducted overseas
and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our Class
A Ordinary Shares. Further, any actions by the Chinese government to exert more oversight and control over offerings that are conducted
overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors and cause the value of such securities to significantly decline or be worthless.
Recently, the PRC
government initiated a series of regulatory actions and statements to regulate business operations in China with little advance
notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of
cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. On July 6, 2021, the General Office of the Central
Committee of the Communist Party of China (the “General Office of CCC”) and the General Office of the State
Council (the “General Office of SC”) jointly released the Opinions on Strictly Cracking Down on Illegal
Securities Activities in Accordance with Law (the “Opinions”). The Opinions emphasized the need to
strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings
by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal
with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements,
etc. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement.
On February 17, 2023,
the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the
“Trial Measures”) and five interpretive guidelines (collectively, the “CSRC Filing Rules”),
which became effective on March 31, 2023. Under the CSRC Filing Rules, a filing-based regulatory system shall be applied to
“indirect overseas offerings and listings” of PRC domestic enterprises, which refers to securities offerings and
listings in an overseas market made under the name of an offshore entity but based on the underlying equity, assets, earnings or
other similar rights of a domestic enterprise that operates its main business domestically. The CSRC Filing Rules state that, any
post-listing follow-on offering by an issuer in the same overseas market where it has previously offered and listed securities,
including issuance of shares, convertible notes and other similar securities, shall be subject to filing requirement within three
business days after the completion of the offering, and if the subsequent offering is conducted in other overseas markets, it shall
be filed with the CSRC within three working days after the applications for such offerings are submitted. Therefore, any of our
future offering and listing of our securities in an overseas market shall be subject to the filing requirements under the CSRC
Filing Rules. In addition, we are required to submit a report to CSRC after the occurrence and public disclosure of the following
material events: (1) change of control; (2) investigations or sanctions imposed by overseas securities regulatory agencies or other
relevant competent authorities; (3) change of listing status or transfer of listing segment and (4) voluntary or mandatory
delisting. If we fail to complete the filing or reporting procedures, under the CSRC Filing Rules or otherwise, for any future
overseas securities offering or listing, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include
orders for correction, warnings and fines. Any adverse regulatory actions or sanctions could have a material adverse effect on our
business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A Ordinary
Shares. As advised by our PRC counsel, PacGate Law Group, we are not required to make filing with the CSRC in connection with our
initial public offering and listing on the Nasdaq Capital Market in April 2023. In addition, as of the date of this registration
statement, we have not received any formal inquiry, notice, warning, sanction, or regulatory objection from the CSRC with respect to
our initial public offering and listing overseas. However, we could be subject to the filing requirements with the CSRC if we
conduct subsequent offerings.
Further, on February 24,
2023, the CSRC, together with the Ministry of Finance of the PRC (the “MOF”), the National Administration of
State Secrets Protection of the PRC (the “NASSP”), and the National Archives Administration of the PRC (the
“NAA”), released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the
Overseas Securities Offering and Listing by Domestic Enterprises (the “Confidentiality Provisions”), which has
come into effect on March 31, 2023 with the Trial Measures. Under the Confidentiality Provisions, domestic companies established in
mainland China seeking overseas offering and listing, by both direct and indirect means, are required to institute a sound
confidentiality and archives system. If such domestic companies established in mainland China intend to, either directly or through
its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies,
securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of
government agencies, they shall obtain approval from competent authorities and complete the relevant filing procedure with the
competent secrecy administrative department prior to their disclosure or provision of such documents and materials. Further, if they
provide or publicly disclose documents and materials which may adversely affect national security or public interests, they shall
strictly follow the corresponding procedures in accordance with relevant laws and regulations. Any failure or perceived failure by
us or our subsidiaries to comply with the above confidentiality and archives administration requirements under the Confidentiality
Provisions and other relevant PRC laws and regulations may cause relevant entities to be held legally liable by competent
authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. As of
the date of this prospectus, we believe that we and our subsidiaries have not provided or publicly disclosed any documents or
materials involving state secrets or work secrets of PRC government agencies or any of which may adversely affect national security
or public interests, to relevant securities companies, securities service institutions, overseas regulatory agencies and other
entities and individuals. We intend to strictly comply with the Confidentiality Provisions and other relevant PRC laws and
regulations in our offering and listing on Nasdaq in future.
However, any failure of us
or our PRC Subsidiaries to fully comply with the CSRC Filing Rules (as defined below) and/or the Confidentiality Provisions, may
significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares on Nasdaq, cause significant
disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results
of operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless. See “Risk Factor —
Risks Related to Doing Business in China — The filing with the CSRC is required, and the approval of, filing or other procedures
with other Chinese regulatory authorities may be required, in connection with issuing securities to foreign investors under PRC law,
and, if required, we cannot predict whether we will be able, or how long it will take us, to obtain such approval or complete such filing
or other procedures”.
We or our Subsidiaries may
also be subject to PRC laws relating to the use, sharing, retention, security and transfer of confidential and private information, such
as personal information and other data. On November 14, 2021, the Cyberspace Administration of China (“CAC”) released
the Regulations on the Network Data Security Management (Draft for Comments) the (“Data Security Management Regulations Draft”),
to solicit public opinion and comments till December 13, 2021, which has not been promulgated as of the date of this prospectus. Pursuant
to the Data Security Management Regulations Draft, data processors holding more than one million users/users’ individual information
shall be subject to cybersecurity review before listing abroad. Data processing activities refers to activities such as the collection,
retention, use, processing, transmission, provision, disclosure, or deletion of data. According to the latest amended Cybersecurity Review
Measures (the “Measures”), which was promulgated on December 28, 2021, and became effective on February 15, 2022,
an online platform operator holding more than one million users/users’ individual information shall be subject to cybersecurity
review before listing abroad. As of the date of this prospectus, we have not been informed by any PRC governmental authority of any requirement
that we or our Subsidiaries file for approval for this offering. We don’t believe that we or any of our Subsidiaries will be subject
to either the Measures or the Data Security Management Regulations Draft since none of us hold more than one million users/users’
individual information. However, it is uncertain how the above-mentioned new laws or regulations will be enacted, interpreted or implemented,
and whether it will affect us. Since the regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation
making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified
or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our Subsidiaries’ daily
business operation, their ability to accept foreign investments, and our ability to continue to list or offer securities on an U.S. exchange.
See “Risk Factor — The Chinese government has substantial oversight and influence over the manner in which we must conduct
our business and may intervene or influence our operations at any time, which actions could impact our operations materially and adversely,
and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of
our securities to significantly decline or be worthless.”
As a holding company, we may
rely upon dividends paid to us by our subsidiaries in the PRC to pay dividends and to finance any debt we may incur. As of the date of
this prospectus, none of our subsidiaries has issued any dividends or distributions to us and we have not made any dividends or distributions
to our shareholders. Our subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in our
business.
Under Cayman Islands law,
we may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this
would result in us being unable to pay our debts due in the ordinary course of business. If we determine to pay dividends, as a holding
company, we will be dependent on receipt of funds from our subsidiaries in PRC through our Hong Kong subsidiaries.
Current PRC regulations permit
our subsidiary in mainland China to pay dividends to the Company only out of its accumulated profits, if any, determined in accordance
with Chinese accounting standards and regulations. Under our current corporate structure, we rely on dividend payments or other distributions
from our subsidiaries to fund any cash and financing requirements we may have, including the funds necessary to pay dividends and other
cash distributions to our shareholders or to service any debt we may incur. If any subsidiary incurs debt on its own behalf in the future,
the instruments governing such debt may restrict its ability to pay dividends to us. In addition, under PRC laws and regulations, each
of our Chinese subsidiaries is required to set aside a portion of their after-tax profit each year to fund a statutory
surplus reserve until such reserve reaches 50% of its registered capital. This reserve is not distributable as dividends. As a result,
our PRC subsidiaries are restricted in their ability to transfer a portion of its net assets to us in the form of dividends, loans or
advances. Further, the PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies
out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign
currency for the payment of dividends from our profits, if any. If we are unable to receive funds from our subsidiaries, we may be unable
to pay cash dividends on our ordinary shares.
Cash dividends, if any, on
our ordinary shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we
pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate
of up to 10%. A 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises. Any gain realized
on the transfer of Class A Ordinary Shares by such investors is also subject to PRC tax at a current rate of 10% which in the case of
dividends will be withheld at source if such gain is regarded as income derived from sources within the PRC.
The Holding Foreign Companies
Accountable Act (the “HFCA Act”), was enacted on December 18, 2020. Pursuant to the HFCA Act, if the Securities and
Exchange Commission (the “SEC”), determines that we have filed audit reports issued by a registered public accounting
firm that has not been subject to inspections by the Public Company Accounting Oversight Board (the “PCAOB”), for two
consecutive years, the SEC will prohibit our Class A ordinary shares from being traded on a national securities exchange or in the over-the-counter
trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB
was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including
our auditor. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China
and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
Our auditor prior to December
8, 2022, Friedman LLP, or (“Friedman”), and current auditor, Marcum Asia CPAs LLP (“Marcum Asia”),
the independent registered public accounting firms that issue the audit reports incorporated into this registration statement by reference,
as auditors of companies that are traded publicly in the United States and firms registered with the PCAOB, have been subject to laws
in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional
standards. Neither Friedman nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021. The PCAOB is
expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China
and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond. For this
reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCA Act. Each year, the PCAOB will determine whether
it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines
in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong
and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed
with the SEC by then, we may be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for
the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal
year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCA Act,
and the value of our Class A ordinary shares may significantly decline or become worthless.
You should read carefully this prospectus and the
documents incorporated by reference into this prospectus before investment.
Please
see the factors set forth under “Risk Factors—Risks Related to Doing
Business in China” beginning on page 27 of in our most recent annual report on Form 20-F, filed on April 26, 2024 for a
detailed description of various risks related to doing business in China and other information that should be considered before
making a decision to purchase any of our securities.
Investing in our
securities involves a high degree of risk. See “Risk Factors” on page 10 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 [●], 2024.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of
a registration statement that we filed with the SEC, under the Securities Act of 1933, as amended (the “Securities Act”),
using a “shelf” registration process. Under this shelf registration process, we may from time to time sell Class A Ordinary
Shares, Preferred Shares, debt securities, warrants, units and rights to purchase Class A Ordinary Shares, Preferred Shares, debt securities
or any combination of the foregoing, either individually or as units comprised of one or more of the other securities, in one or more
offerings up to a total dollar amount of $100,000,000. 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.”
COMMONLY USED DEFINED TERMS
Unless otherwise indicated or the context otherwise
requires in this prospectus:
| ● | “China” or the “PRC” refers to the People’s Republic of China, including
Hong Kong Special Administrative Region and the Macau Special Administrative Region, unless referencing specific laws and regulations
adopted by the PRC and other legal or tax matters only applicable to mainland China, and excluding, for the purposes of this prospectus
only, Taiwan; |
| ● | “PRC subsidiaries” refer to entities established in accordance with PRC laws and regulations; |
| ● | “Class A Ordinary Shares” refers to the Class A ordinary
shares of par value of US$0.0001 per share in the capital of the Company; |
| ● | “Class B Ordinary Shares” refers to the Class B ordinary shares of par value of
US$0.0001 per share in the capital of the Company; |
| ● | “Companies Act” refers to the Companies Act (As Revised) of the Cayman Islands; |
| ● | “Company” refers to Jayud Global Logistics Limited, an
exempted company incorporated in the Cayman Islands with limited liability; |
| ● | “RMB” and “Renminbi” refer to the legal currency of China; |
| ● | “Shares” or “shares” refers to any share in the capital of the Company, including
Class A Ordinary Shares and Class B Ordinary Shares; |
| ● | “US$,” “U.S. dollars,” “$” and “dollars” refer to the
legal currency of the United States; and |
| ● | “we”, “us”, “our company” and “our” refer to Jayud Global
Logistics Limited and its consolidated subsidiaries. We conduct operations in China through our PRC subsidiaries. |
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.
PROSPECTUS SUMMARY
History and Development of the Company
We are a Cayman Islands holding
company and primarily conduct our operations in China through our PRC subsidiaries. We commenced our commercial operations in September
2009 through Shenzhen Jiayuda Trading Co., Ltd. In July 2015, Shenzhen Jayud Logistics Technology Co., Ltd. (previously under the name
of Shenzhen Xinyuxiang Supply Chain Co., Ltd.) was established to optimize our resource allocation to further expand our business. On
June 10, 2022, we incorporated Jayud Global Logistics Limited under the laws of the Cayman Islands as our offshore holding company to
facilitate offshore financing. In June 2022, we established Jayud Global Logistics (Hong Kong) Limited, our wholly owned Hong Kong subsidiary.
In April 2023, we completed
our initial public offering and listed our Class A ordinary shares on the Nasdaq Capital Market under the symbol “JYD.” We
raised approximately US$4.86 million in net proceeds from the issuance of new shares from the initial public offering and partial exercise
of over-allotment option after deducting underwriting discounts, commissions and expenses.
In the same month, we incorporated
Joyed Logistics Service Inc. in the State of Georgia as our wholly owned U.S. subsidiary to expend our business in the U.S. In July 2023,
we obtained 51% of the equity interests of Shenzhen Ronghai Tongda Supply Chain Management Co., Ltd. In September 2023, we obtained 100%
of the equity interest of HK XINYX Technology Limited. The main business focus of Shenzhen Ronghai Tongda Supply Chain Management Co.,
Ltd and HK XINYX Technology Limited is international trading business.
In January 2024, Shenzhen
Jayud Logistics Technology Co., Ltd. (“Shenzhen Jayud”), our wholly-owned PRC subsidiary, entered into an equity purchase
agreement to acquire 51% of the equity interests in Qingdao Oranda Supply Chain Management Co., Ltd., a premier international logistics
company. In the same month, Shenzhen Jayud also entered into an equity purchase agreement to acquire 51% of the equity interests in Shenzhen
Jiniu International Logistics Co., Ltd., a logistics company specialized in supply chain management, domestic cargo transportation agency,
loading/unloading, and information consulting services.
In April 2024, Joyed Logistics
Services Inc. (“Joyed Logistics”), our wholly-owned subsidiary, entered into an equity purchase agreement to acquire
a 51% controlling stake in HYTX Warehouse Inc. (“HYTX”), a prominent logistics company headquartered in Azusa, California. Under the terms of the agreement, the equity interests in HYTX will be transferred
to Joyed Logistics upon execution, with the purchase price based on HYTX’s actual annual average net profit from the acquisition
closing date to December 31, 2026, with part of the payment to be made in cash and the remainder in ordinary shares of Jayud in 2027.
This performance-based approach is the latest example of Jayud’s commitment to investing in successful and synergistic business
operations.
SEC maintains an internet
site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the
SEC on www.sec.gov. You can also find information on our website http://www.jayud.com. The information contained in, or
accessible from, our website or any other website does not constitute a part of this prospectus.
Business Overview
We are one of the leading
Shenzhen-based end-to-end supply chain solution providers in China, with a focus on providing cross-border logistics services. Headquartered
in Shenzhen, a key component of the Greater Bay Area in China, we benefit from the unique geographical advantages of providing high degree
of support for ocean, air and overland logistics. A well-connected transportation network enables us to significantly increase efficiency
and reduce transportation costs. As one of the most open and dynamic regions in China, Shenzhen is home to renowned enterprises and the
gathering place of cross-border e-commerce market players, which provides us with a large customer base and enables us to develop long-term
in-depth relationships with our customers. In addition, the sustained and steady growth of local economy and supportive government policies
have backed up our development and brought us great convenience in daily operations.
We offer a comprehensive range
of cross-border supply chain solution services, including: (i) freight forwarding services, (ii) supply chain management, and (iii) other
value-added services.
Freight Forwarding Services
Our freight forwarding services
primarily comprise (i) integrated cross-border logistics services, (ii) fragmented logistics services, and (iii) chartered airline freight
services.
Integrated Cross-border Logistics Services
Our integrated cross-border
logistics services primarily consist of (i) contract logistics services, where we provide our enterprise customers with customized integrated
logistics services covering the entire delivery process from order origination to the final point of sale or delivery, representing a
customized and seamless combination of order processing, warehousing management, transportation and delivery, and other value-added services;
and (ii) basic logistics services, where our customers may choose from various modularized integrated logistics service offerings that
are designed based on our in-depth understanding of the demands of various industries, such as cross-border e-commerce, chemical industry,
and the retail sector. Leveraging our integrated service capabilities and our self-developed logistic IT systems, we aspire to manage
our distribution network seamlessly, allowing our customers to outsource to us their supply chain process.
Our integrated cross-border
logistics services primarily involve order processing, warehousing management, cross-border transportation and delivery (which could involve
air freight, ocean freight and/or overland freight), and other value-added services. Unlike traditional logistics services providers who
typically only provide fragmented logistics services, leaving the burden of coordination to the customers, we, as an integrated logistics
services provider, efficiently coordinate with ocean, air and overland carriers. We also engage in the operation of depots and warehouses,
customs clearance and ground express transportation services (either by our own fleet or third-party trucking service providers), thus
reducing lead time and hassle while improving fulfillment efficiency.
Contract Logistics Services
We customize our integrated
logistics solutions for our major customers, seamlessly covering their entire supply chain process from order origination to the final
point of sale or delivery. For instance, we provide one of our key customers, a leading technology company headquartered in Dongguan,
with an end-to-end one-stop integrated logistics services solution, including custom brokerage, warehousing, logistics and all other links
in the integrated cross-border logistics service process. We opened exclusive air routes for this customer, namely China to Southeast
Asia and China to India. Over the years, our self-developed IT systems are gradually connecting with this customer’s internal IT
systems in order to realize more efficient logistics management.
Basic Logistics Services
We developed various modularized
integrated logistics service offerings based on our in-depth understanding of the demands of a variety of industries, such as cross-border
e-commerce, chemical industry, and the retail sector. Principal customers of our basic logistics services, such as owners of e-commerce
stores and other small-and-medium-sized enterprises, may easily choose the service module(s) that accommodate their needs.
Fragmented Logistics Services
We may also be engaged by
our customers to provide one or more types of logistics services that only consist part of the entire cross-border cargo delivery process.
Such fragmented logistics services primarily include one or a combination of the following: (i) air freight forwarding; (ii) ocean freight
forwarding; (iii) overland freight services; (iv) warehousing; and (v) other fragmented logistics services, such as port and depot services,
non-time-definite delivery and coordination services.
Warehousing Services
Our customers may use our
warehouses as an intermediate stop for an average period of up to three days, and may store goods or inventory in our warehouses for a
period ranging from three days to months. As of December 31, 2023, we had two self-operated warehouses located in Shenzhen of Guangdong
province, with an aggregate GFA of approximately 27,221 sq. m. As of the same date, we had the rights to use two third-party warehouses
located in Yiwu of Zhejiang province and Hong Kong, with an aggregate GFA of approximately 7,057 sq. m. In May 2022, we, through Shenzhen
Jayud Logistics Technology Co., Ltd., entered into an agreement to obtain the right to use Dachan Bay Warehouse that was located close
to Dachan Bay Terminals, Shenzhen Baoan International Airport and National Highway G4 which connects Beijing, Hong Kong and Macao. As
of the date of this prospectus, we had approximately 5,767 sq. m. of Dachan Bay Warehouse. Besides, we also provide customers with: (i)
labeling services, where we print thermal labels and paste them on the packages as per the customers’ requests; (ii) packaging services,
where, in the event of the damaged packaging, we may replace the damaged packaging as per the customers’ requests; and (iii) after-sales
reverse logistics services, where we provide replacement and return warehousing to support returns management and other aftersales activities,
such as product inspection, refurbishment or disposal.
Chartered Airline Freight Services
We provide a fixed volume
or weight of space capacity on fixed-route air planes for customer transportation. As of December 31, 2023, we had air charter service
agreements with a cargo airlines in Jiangsu for Shenzhen-to-Clark, Philippines (CRK) route and a cargo airlines in Zhengzhou for Shenzhen-to-Davao,
Philippines (DVO) route. These routes significantly enhanced the cargo capacity and efficiency between China and the Philippines, also
narrowed the distances between cargo and end-markets.
Other Fragmented Logistics Services
In addition to the foregoing,
we also provide the following logistics services on a fragmented basis as per our customers’ needs: (i) port and depot services,
where we help to load, upload, store and/or transport containers and cargos; (ii) non-time-definite delivery services, where we provide
last-mile delivery for cross-border e-commerce businesses; and (iii) coordination services, where we connect cross-border supply chain
solution providers, shippers and consignees to improve logistics efficiency.
Supply Chain Management
Our supply chain management
business primarily consists of two sub-operations, namely, (i) international trading, where we engage in international trading directly,
with our customers being the purchasers or sellers, and (ii) agent services, where we are engaged by customers as their international
trade agent, for the purpose of further streamlining the customers’ supply chain process. We believe our supply chain management
business allows us to enhance the overall customer experience and to create vast cross-selling opportunities to drive customer retention,
thus further differentiating us from our competitors.
International Trading
We also engage in international
trading directly through the wholesaling of certain goods with our customers. Unlike our freight forwarding services, our international
trading business requires us to bear both inventory risks and credit risks.
Agent Services
We may be engaged by our customers
to act as their international trade agent, managing their cross-border supply chains by assisting our customers, pursuant to the agreements
between our customers and designated third-parties, either (i) to procure certain goods from the designated third-party, or (ii) to sell
and deliver certain goods to the designated third-party. Similar to our integrated cross-border logistics services, our agent services
also involve a seamless combination of order processing, warehousing management, transportation and delivery, and other value-added services.
The major difference from integrated cross-border logistics services is that we carry out a substantial portion of the supply chain process
in our own name, and consequently we may have to bear credit risks involved in the supply chain process.
Other Value-Added Services
We endeavor to differentiate
our service offerings by, among other things, developing other value-added services. Our value-added services primarily include (i) custom
brokerage; and (ii) intelligent logistic IT systems, which we develop and customize for our customers.
Custom Brokerage
We were recognized as an Advanced
Certified Enterprise with a China Authorized Economic Operator Certificate issued by the China Customs in 2021. Such certificate allows
us to perform custom brokerage more efficiently, thus ensuring timely delivery. Our services help importers and exporters to clear cargos
primarily with the China Customs, including documentation collection, valuation review, product classification, electronic submission
to customs and the collection and payment of duties, tariffs and fees. Our custom brokerage fees primarily represent costs incurred plus
our commissions.
Intelligent Logistics IT Systems
We have developed proprietary
IT systems that can be categorized into the following types: (i) the Warehouse Management System, which allows a high degree of customization
and can be integrated with our customers’ enterprise resource planning (“ERP”), system to provide end-to-end
supply chain visibility; (ii) the Order Management System, which provides end-to-end supply chain visualization; (iii) the Transportation
Management System, which is an online platform designed to enhance visibility, accessibility and connectivity by enabling prompt information
flow between our customers and their supply chains; and (iv) the Booking Management System, which allows our staff and customers to review
the details of cargo booking and handling information in real-time. Each of our proprietary IT systems can integrate with our ERP system.
We sell and license our proprietary IT systems as per our customers’ requests.
We also develop customized
proprietary IT systems depending on our major customers’ supply chain management needs. For instance, we developed a logistics control
system for Lenovo, the Lenovo Service Control Tower, or the Spider, which expected to contribute to Lenovo’s supply chain strategy
to establish a world-class intelligent global logistics network. The Spider enables end-to-end logistics online management and helps to
realize visualization and cost management. By accumulating logistics big data, the Spider supports the optimization of logistics network
and logistics intelligence improvement.
Our Corporate Structure
The following diagram illustrates
our corporate structure, including our principal subsidiaries, consolidated affiliated entities and subsidiaries of consolidated affiliated
entities as of the date of this prospectus:
Notes:
| (1) | No single shareholder among “other shareholders”
beneficially owns more than 5% of our ordinary shares. |
| (2) | The English names of our PRC Subsidiaries are directly translated
from Chinese and may be different from their names shown on their respective records filed with relevant PRC authorities. |
Corporate Information
Our principal executive offices
are located at Building 3, No. 7 Gangqiao Road, Li Lang Community, Nanwan Street, Longgang District, Shenzhen, the People’s Republic
of China. Our telephone number at this address is +86 0755-25595406. We maintain a website at http://www.jayud.com that contains
information about our Company, though no information contained on our website is part of this prospectus.
Permission Required from the PRC Authorities
for the Company’s Operation and to Issue Our Class A Ordinary Shares to Foreign Investors
We conduct our business in China through our subsidiaries. Our operations
in China are governed by PRC laws and regulations, which require us to obtain certain permissions from the PRC authorities to operate,
issue securities to foreign investors, and transfer certain data under certain circumstances. The PRC government has exercised, and may
continue to exercise, substantial influence or control over virtually every sector of the Chinese economy through regulation and state
ownership. Our ability to operate in China may be undermined if our PRC subsidiaries are not able to obtain or maintain approvals to operate
in China. The central or local governments could impose new, stricter regulations or interpretations of existing regulations that could
require additional expenditures, and efforts on our part to ensure our compliance with such regulations or interpretations. To operate
our general business activities currently conducted in mainland China, each of our PRC subsidiaries is required to obtain a business license
from the local counterpart of the State Administration for Market Regulation (“SAMR”). Each of our PRC Subsidiaries
has obtained a valid business license from the local SAMR, and no application for any such license has been denied. Our PRC subsidiaries
are also required to obtain certain permits and make certain filings, including but not limited to the following material permits and
filings: Road Transportation Operation Permit, Filing of International Freight Forwarding Agencies, Fillings of Non-Vessel Operating Common
Carrier, and Filling of Customs Declaration Entities. As of the date of this prospectus, as advised by our PRC legal counsel, PacGate
Law Group, we and our PRC subsidiaries have received all requisite permits, approvals and certificates from the PRC government authorities
to conduct our business operations in China. To our knowledge, no permission or approval has been denied or revoked. However, given the
uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by government authorities,
we cannot be certain that relevant policies in this regard will not change in the future, which may require us or our subsidiaries to
obtain additional licenses, permits, filings or approvals for conducting our business in the PRC. If we or our subsidiaries do not receive
or maintain required permissions or approvals, or inadvertently conclude that such permissions or approvals are not required, we may be
subject to governmental investigations or enforcement actions, fines, penalties, suspension of operations, or be prohibited from engaging
in relevant business or conducting securities offering, and these risks could result in a material adverse change in our operations, significantly
limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly
decline in value or become worthless.
In connection with our previous
issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this prospectus,
we and our PRC subsidiaries, (i) are not required to obtain permissions from the China Securities Regulatory Commission, or the CSRC,
(ii) are not required to go through cybersecurity review by the CAC, and (iii) have not received or were denied such requisite permissions
by any PRC authority. However, the PRC government has recently indicated an intent to exert more oversight and control over offerings
that are conducted overseas and/or foreign investment in China-based issuers.
On February 17, 2023, with
the approval of the State Council, CSRC issued the relevant system and rules for the management of overseas listing records, which will
be implemented from March 31, 2023. A total of six institutional rules (the “CSRC Filing Rules”) have been issued
this time, including the Trial Measures and five supporting guidelines. Under the CSRC Filing Rules, a company established in mainland
China seeking securities offering and listing, by both direct or indirect means, in an overseas market is required to undertake filing
procedures with the CSRC for its overseas offering and listing activities. The Trial Measures also set forth a list of circumstance under
which overseas offering and listing by domestic companies established in mainland China is prohibit, including: (i) where such securities
offering and listing is explicitly prohibited by the PRC laws; (ii) where the intended securities offering and listing may endanger national
security as reviewed and determined by competent PRC authorities under the State Council in accordance with PRC laws; (iii) where the
domestic company established in mainland China, or its controlling shareholders and the actual controller, have committed crimes such
as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the
latest three (3) years; (iv) where the domestic company established in mainland China seeking securities offering and listing is suspected
of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has
yet been made thereof; and (v) where there are material ownership disputes over equity held by the controlling shareholder of the company
established in mainland China or by other shareholders that are controlled by the controlling shareholder and/or actual controller. In
accordance with the Trial Measures, the listing and trading of our Class A Ordinary Shares on Nasdaq is deemed as an indirect overseas
offering and listing by domestic companies established in mainland China, and thus, we are subject to the CSRC Filing Rules and the
relevant filing procedures as required. Further, we believe, as of the date of this prospectus, none of the circumstances prohibiting
the overseas offering and listing by domestic companies established in mainland China as listed above applies to us, and we can offer
and continue to offer our Class A Ordinary Shares on Nasdaq.
In accordance with the Notice on the Arrangement for the Filing of
Overseas Offering and Listing by Domestic Companies issued by the CSRC along with the CSRC Filing Rules on the same day, we are deemed
as an “Existing Issuer” because we had been approved by Nasdaq for our initial public offering and listing overseas
before March 31, 2023. Under such Notice, we are not required to undertake the initial filing procedure immediately. However, we shall
carry out filing procedures as required in a timely manner for the subsequent events, including any further follow-up offerings on Nasdaq,
dual and/or secondary offering and listing on different overseas markets, and occurrence of material events including change of control,
investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing
status or transfer of listing segment, and voluntary or mandatory delisting. If we or our PRC Subsidiaries in future fail to undertake
filing procedures as stipulated in the Trial Measures, or offer and list securities in an overseas market in violation of the Trial Measures,
the CSRC may order rectification, issue warnings to us and/or our PRC Subsidiaries, and impose a fine of between RMB 1,000,000 and RMB
10,000,000. The CSRC may also inform its regulatory counterparts in the overseas jurisdictions, such as the SEC, via cross-border securities
regulatory cooperation mechanisms.
Further, on February 24, 2023,
the CSRC, together with MOF, the NASSP, and the NAA, released the Confidentiality Provisions, which came into effect on March 31, 2023
with the Trial Measures. Under the Confidentiality Provisions, domestic companies established in mainland China seeking overseas offering
and listing, by both direct and indirect means, are required to institute a sound confidentiality and archives system. If such domestic
companies established in mainland China intend to, either directly or through its overseas listed entity, publicly disclose or provide
to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents
and materials that contain state secrets or working secrets of government agencies, they shall obtain approval from competent authorities
and complete the relevant filing procedure with the competent secrecy administrative department prior to their disclosure or provision
of such documents and materials. Further, if they provide or publicly disclose documents and materials which may adversely affect national
security or public interests, they shall strictly follow the corresponding procedures in accordance with relevant laws and regulations.
Any failure or perceived failure by us or our subsidiaries to comply with the above confidentiality and archives administration requirements
under the Confidentiality Provisions and other relevant PRC laws and regulations may cause relevant entities to be held legally liable
by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.
As of the date of this prospectus, we believe that we and our subsidiaries have not provided or publicly disclosed any documents or materials
involving state secrets or work secrets of PRC government agencies or any of which may adversely affect national security or public interests,
to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. We
intend to strictly comply with the Confidentiality Provisions and other relevant PRC laws and regulations in our offering and listing
on Nasdaq in future.
However, any failure of us
or our PRC Subsidiaries to fully comply with the CSRC Filing Rules and/or the Confidentiality Provisions may significantly limit or completely
hinder our ability to offer or continue to offer our Class A Ordinary Shares on Nasdaq, cause significant disruption to our business operations,
severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our Class
A Ordinary Shares to significantly decline in value or become worthless.
On July 10, 2021, the CAC published a revised draft revision to the
Cybersecurity Review Measures for public comment (the “Previous Measures”). Under these measures, an operator having
more than one million users shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate the
risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled
or maliciously used by foreign governments after going public overseas. The procurement of network products and services, data processing
activities and overseas listing should also be subject to cybersecurity review if they concern or potentially pose risks to national security.
On December 28, 2021, the CAC, the National Development and Reform Commission, and other government agencies jointly issued the
final version of the Cybersecurity Review Measures or the Measures, which took effect on February 15, 2022 and replaced the previously
issued Cybersecurity Review Measures (2020). Under the Measures, an “online platform operator” in possession of personal data
of more than one million users must apply for a cybersecurity review if it intends to list its securities on a foreign stock exchange.
The operators of critical information infrastructure and the online platform operators carrying out data processing activities that affect
or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than one million
users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in
a foreign country. Pursuant to the Measures, we believe we are not subject to the cybersecurity review by the CAC, given that (i) we possess
personal information of a relatively small number of users in our business operations as of the date of this prospectus, significantly
less than one million users; and (ii) data processed in our business does not have a bearing on national security. We don’t
believe that we are an operator within the meaning of the Measures, nor do we control more than one million users’ personal information,
and as such, we should not be required to apply for a cybersecurity review under the Measures. However, the Measures were just recently
released and there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation.
For example, certain terms used in the Measures are not defined and require further clarification on their meaning. Whether the data processing
activities carried out by traditional enterprises (such as food, medicine, manufacturing, and merchandise sales enterprises) are subject
to such review and the scope of the review remain to be further clarified by the regulatory authorities in the subsequent implementation
process.
The PRC government recently
initiated a series of regulatory actions and statements to regulate business operations in China, including adopting new measures to extend
the scope of cybersecurity reviews, cracking down on illegal activities in the securities market, and expanding the efforts in anti-monopoly
enforcement. The PRC government is increasingly focused on data security. In July 2021, the CAC opened cybersecurity probes into several
U.S.-listed technology companies focusing on anti-monopoly regulation, and how companies collect, store, process and transfer data. On
November 14, 2021, the CAC published the Draft Regulations on Network Data Security Management in November 2021 for public comments, which
among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging
a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department
before January 31 of the following year. If the Draft Regulations on Network Data Security Management are enacted in the current form,
we, as an overseas listed company, would be required to carry out an annual data security review and comply with the relevant reporting
obligations. As of the date of this prospectus, the draft regulations have been released for public comment only and have not been formally
adopted. The final provisions and the timeline for its adoption are subject to changes and uncertainties. We have been closely monitoring
the regulatory development in China, particularly regarding the requirements of approvals, annual data security review or other procedures
that may be imposed on us. If any approval, review or other procedure is in fact required, we cannot assure our investors that we will
be able to obtain such approval or complete such review or other procedure timely or at all. For any approval that we may be able to obtain,
it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and/or securities offerings.
The PRC regulatory requirements with respect to cybersecurity and data security are constantly evolving and can be subject to varying
interpretations and significant changes, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to
comply with these cybersecurity and data privacy requirements in a timely manner, or at all, may subject us to government enforcement
actions and investigations, fines, penalties, suspension or disruption of our operations.
Because we are relying on advice of our PRC counsel with regard to
PRC laws, there is uncertainty inherent in relying on an opinion of counsel in connection with whether we are required to obtain permissions
from a governmental agency that is required to approve of our operations and/or listings. In the event that any government approval is
required, we cannot assure our investor that we will be able to receive clearance in a timely manner, or at all. Any failure of us to
fully comply with new regulatory requirements may significantly limit or completely hinder our ability to offer or continue to offer our
Class A Ordinary Shares, cause significant disruption to our business operations, severely damage our reputation, materially and adversely
affect our financial condition and results of operations and cause our shares to significantly decline in value or become worthless.
For more detailed information,
see “Risk Factors - Risks Related to Doing Business in China.”
The Holding Foreign Companies Accountable Act
(HFCA Act)
Our Class A ordinary shares
may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCA Act if the PCAOB determines
it is unable to inspect or investigate completely our auditors for two consecutive years.
In recent years, U.S. regulatory
authorities have continued to express their concerns about challenges in their oversight of financial statement audits of U.S.-listed
companies with significant operations in China. As part of a continued regulatory focus in the United States on access to audit and other
information, the HFCA Act was enacted on December 18, 2020. The HFCA Act includes requirements for the SEC to identify issuers whose audit
work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S.
authority in the auditor’s local jurisdiction. The HFCA Act also requires that, to the extent that the PCAOB has been unable to
inspect an issuer’s auditor for three consecutive years since 2021, the SEC shall prohibit its securities registered in the United
States from being traded on any national securities exchange or over-the-counter markets in the United States.
Pursuant to the HFCA Act,
the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely
registered public accounting firms headquartered in mainland China and Hong Kong. In addition, the PCAOB’s report identified the
specific registered public accounting firms which are subject to these determinations. On August 26, 2022, the CSRC, the MOF, and the
PCAOB signed a Statement of Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. On December
15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms
headquartered in mainland China and Hong Kong and vacated its previous Determinations to the contrary. However, should PRC authorities
obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination.
On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was signed into law as part of the Consolidated Appropriations
Act, 2023, reducing the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three
years to two. Our auditor prior to December 8, 2022, Friedman, and current auditor, Marcum Asia, the independent registered public accounting
firms that issue the audit reports incorporated into this registration statement by reference, are firms registered with the PCAOB and
are required by the laws of the U.S. to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and
professional standards during their time of engagement. Both of them have been subjected to PCAOB inspections during their time of engagement.
Notwithstanding the foregoing, in the future, if it is later determined that the PCAOB is unable to inspect or investigate our auditor
completely, or if there is any regulatory change or step taken by PRC regulators that does not permit our auditors to provide audit documentations
to the PCAOB for inspection or investigation, you may be deprived of the benefits of such inspection. Any audit reports not issued by
auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China
that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack
of assurance that our financial statements and disclosures are adequate and accurate, which could result in limitation or restriction
to our access to the U.S. capital markets and trading of our securities, including trading on the national exchange or “over-the-counter”
markets, may be prohibited under the HFCA Act.
Summary of Risk Factors
Investing in our securities
involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in our
securities. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more
fully in the section titled “Risk factors” below.
Risks Related to Doing Business in China
We are based in China and
have the majority of our operations in China, so we face risks and uncertainties related to doing business in China in general,
including, but not limited to, the following:
| ● | “Change
in China’s economic, political or social conditions, laws, regulations or governmental
policies could have a material adverse effect on our business, financial conditions and results
of operations” as set out on page 10 of this prospectus; |
| ● | “Uncertainties
with respect to the PRC legal system, including uncertainties regarding the interpretation
and enforcement of laws, and sudden or unexpected changes of PRC laws and regulations with
little advance notice could adversely affect us and limit the legal protections available
to you and us, and the Chinese government may exert more oversight and control over offerings
that are conducted overseas, which changes could materially hinder our ability to offer or
continue to offer our securities, and cause the value of our securities to significantly
decline or become worthless” as set out on page 10 of this prospectus; |
| ● | “The
Chinese government has substantial oversight and influence over the manner in which we must
conduct our business and may intervene or influence our operations at any time, which actions
could impact our operations materially and adversely, and significantly limit or completely
hinder our ability to offer or continue to offer securities to investors and cause the value
of our securities to significantly decline or be worthless” as set out on page 11
of this prospectus; |
| ● | “We
may be liable for improper use or appropriation of personal information provided directly
or indirectly by our customers or end users” as set out on page 11 of this prospectus; |
| ● | “You
may experience difficulties in effecting service of legal process, enforcing foreign judgments
or bringing actions in China against us or our management based on foreign laws” as
set out on page 13 of this prospectus; |
| ● | “It
may be difficult for overseas regulators to conduct investigations or collect evidence within
China” as set out on page 13 of this prospectus; |
| ● | “If
we are classified as a PRC resident enterprise for PRC income tax purposes, such classification
could result in unfavorable tax consequences to us and our non-PRC shareholders” as
set out on page 14 of this prospectus; |
| ● | “The
M&A Rules and certain other PRC regulations may make it more difficult for us to pursue
growth through acquisitions” as set out on page 16 of this prospectus; |
| ● | “PRC
regulations relating to offshore investment activities by PRC residents may limit our PRC
subsidiaries’ ability to change their registered capital or distribute profits to us
or otherwise expose us or our PRC resident beneficial owners to liability and penalties under
PRC laws. In addition, any failure to comply with PRC regulations with respect to registration
requirements for offshore financing may subject us to legal or administrative sanctions”
as set out on page 16 of this prospectus; |
| ● | “We
may be materially adversely affected if our shareholders and beneficial owners who are PRC entities fail to comply with the PRC overseas
investment regulations” as set out on page 17 of this prospectus; |
| ● | “We
may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements
we may have, and any limitation on the ability of our PRC and Hong Kong subsidiaries to make payments to us could have a material and
adverse effect on our ability to conduct our business” as set out on page 18 of this prospectus; |
| ● | “PRC
regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion
may delay or prevent us from using the proceeds from our subsequent offerings to make loans or additional capital contributions to our
PRC subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business”
as set out on page 18 of this prospectus; |
| ● | “If
the chops of our PRC subsidiaries are not kept safely, are stolen or are used by unauthorized
persons or for unauthorized purposes, the corporate governance of these entities could be
severely and adversely compromised” as set out on page 20 of this prospectus;
and |
| ● | “The filing with the CSRC is required, and the approval
of, filing or other procedures with other Chinese regulatory authorities may be required, in connection with issuing securities to foreign
investors under PRC law, and, if required, we cannot predict whether we will be able, or how long it will take us, to obtain such approval
or complete such filing or other procedures” as set out on page 20 of this prospectus; |
Risks Related to Our Corporate Structure
and Operation
We are also subject to risks
and uncertainties related to our corporate structure, including, but not limited to “our failure to obtain prior approval of the
CSRC for the listing and trading of our Class A Ordinary Shares on a foreign stock exchange could delay this offering or could have a
material adverse effect upon our business, operating results, reputation and trading price of our Class A Ordinary Shares” as set
out on page 23 of this prospectus.
RISK FACTORS
You should carefully consider
the risk factors set forth below and under “Risk Factors” described in our most recent annual report on Form 20-F, filed on
April 26, 2024, 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. If any of the following events actually occur, our business, operating results, prospects or financial condition could be
materially and adversely affected. This could cause the trading price of our Shares to decline and you may lose all or part of your investment.
The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial
may also significantly impair our business operations and could result in a complete loss of your investment.
Risks Related to Doing
Business in China
Change in China’s economic, political
or social conditions, laws, regulations or governmental policies could have a material adverse effect on our business, financial conditions
and results of operations.
Substantially all of our operations
are located in China. Accordingly, our business, prospects, financial condition and results of operations may be affected to a significant
degree by political, economic and social conditions in China generally.
The Chinese economy differs
from the economies of most developed countries in many respects, including the degree of government involvement, level of development,
growth rate, control of foreign exchange and allocation of resources. 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 are still owned or controlled 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 has significant authority to exert influence on the ability of a China-based company, such as us, to conduct
its business. Therefore, investors of our company and our business face potential uncertainty from the PRC government. 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 and providing preferential treatment to particular industries or companies.
While the Chinese economy
has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the
economy, and the rate of growth has been slowing since 2012. Any adverse changes in economic conditions in China, in the policies of the
PRC government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such
developments could adversely affect our business and operating results, lead to reduction in demand for our services and adversely affect
our competitive position. The PRC government has implemented various measures to encourage economic growth and guide the allocation of
resources. Some of these measures may benefit the overall Chinese economy but may have a negative effect on us. For example, our financial
condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations.
In addition, in the past the PRC government has implemented certain measures, including interest rate adjustment, to control the pace
of economic growth, and the growth rate of the Chinese economy has gradually slowed since 2012. Any prolonged slowdown in the Chinese
economy may reduce the demand for our offerings of products and services and materially and adversely affect our business and results
of operations. Furthermore, the increased global focus on social, ethical and environmental issues may lead to China’s adoption
of more stringent standards in these areas, which may adversely impact the operations of China-based companies including us.
Uncertainties with respect to the PRC legal
system, including uncertainties regarding the interpretation and enforcement of laws, and sudden or unexpected changes of PRC laws and
regulations with little advance notice could adversely affect us and limit the legal protections available to you and us, and the Chinese
government may exert more oversight and control over offerings that are conducted overseas, which changes could materially hinder our
ability to offer or continue to offer our securities, and cause the value of our securities to significantly decline or become worthless.
Our operating subsidiaries
are incorporated under and governed by the laws of the PRC. 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.
In 1979, the PRC government
began to promulgate a comprehensive system of laws and regulations governing economic matters in general, such as foreign investment,
corporate organization and governance, commerce, taxation and trade. As a significant part of our business is conducted in China, our
operations are principally governed by PRC laws and regulations. However, since the PRC legal system continues to evolve rapidly, rules
and regulations in China can change quickly with little advance notice. The interpretations of many laws, regulations and rules are not
always uniform and enforcement of these laws and regulations involve uncertainties, which may limit legal protections available to us.
Uncertainties due to evolving laws and regulations could also impede the ability of a China-based company like us, to obtain or maintain
permits or licenses required to conduct business in China. In the absence of required permits or licenses, governmental authorities could
impose material sanctions or penalties on us. In addition, some regulatory requirements issued by certain PRC government authorities may
not be consistently applied by other PRC government authorities (including local government authorities), thus making strict compliance
with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative
and court proceedings to enforce the legal protection that we enjoy either by law or contract. Since PRC administrative and court authorities
have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate or
predict the outcome of administrative and court proceedings and the level of legal protection available to you and us than in more developed
legal systems.
Furthermore, the PRC legal
system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which
may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after
the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual
property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely
affect our business and impede our ability to continue our operations.
On July 6, 2021, the General
Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to
crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among
other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,
to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application
of the PRC securities laws. Since this announcement is relatively new, uncertainties still exist in relation to how soon legislative or
administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations
will be modified or promulgated, and, if any, the potential impact such modified or new laws and regulations will have on companies like
us and our securities.
Given recent statements by
the Chinese government indicating an intent to exert more oversight and control over securities offerings and other capital markets activities
that are conducted overseas and foreign investment in China-based companies like us. Although we are currently not required to obtain
permission from any of the PRC federal or local government and has not received any denial to list on the U.S. exchange, it is uncertain
whether or when we might be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even if
such permission is obtained, whether it will be later denied or rescinded, which could significantly limit or completely hinder our ability
to offer or continue to offer our securities to investors and cause the value of our shares to significantly decline or be worthless.
Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas could materially
and adversely hinder our ability to offer or continue to offer our securities, and cause the value of our securities to significantly
decline or become worthless.
The Chinese government has substantial oversight
and influence over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions
could impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to
offer securities to investors and cause the value of our securities to significantly decline or be worthless.
The Chinese government has
significant oversight and discretion over the conduct of our business and may intervene or influence our operations at any time as the
government deems appropriate to further regulatory, political and societal goals. For instance, the Chinese government has recently published
new policies that significantly affected certain industries such as the education and internet industries. The Chinese government has
exercised, and continues to exercise, substantial control over virtually every sector of the Chinese economy through regulation and state
ownership, which could materially and adversely impact the results of our operations and future prospects.
Our ability to operate in
the PRC may be further harmed by changes in its laws and regulations. The central or local governments of the PRC may impose new, stricter
regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our
compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue
to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation
of economic policies, could have a significant effect on economic conditions in the PRC or particular regions thereof. We cannot rule
out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our
business, financial condition, results of operations and the value of our Class A ordinary shares.
Our business is also subject
to various government and regulatory interference. We could be subject to regulation by various political and regulatory entities, including
various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing
and newly adopted laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or
indirectly, by existing or future laws and regulations relating to our business or industry, which could result in further material changes
in our operations and adversely impact the value of our securities.
We may be liable for improper use or appropriation
of personal information provided directly or indirectly by our customers or end users.
We may become subject to a
variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. These laws and regulations
are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain
and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy
and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations
often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
We expect to obtain information
about various aspects of our operations as well as regarding our employees and third parties. The integrity and protection of our customers,
employees and company data is critical to our business. Our customers, end users and employees expect that we will adequately protect
their personal information. We are required by applicable laws to keep strictly confidential the personal information that we collect,
and to take adequate security measures to safeguard such information.
The PRC Criminal Law, as amended
by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions,
companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained during the
course of performing duties or providing services or obtaining such information through theft or other illegal ways.
The Civil Code of the PRC
(issued by the PRC National People’s Congress on May 28, 2020 and effective from January 1, 2021) provides main legal
basis for privacy and personal information infringement claims under the Chinese civil laws. PRC regulators, including the CAC, Ministry
of Industry and Information Technology, and the Ministry of Public Security have been increasingly focused on regulation in the areas
of data security and data protection.
The PRC regulatory requirements
regarding cybersecurity are constantly evolving. For instance, various regulatory bodies in China, including the CAC, the Ministry of
Public Security and the Trademark Office of the State Administration for Market Regulation (“SAMR”), have enforced data privacy
and protection laws and regulations with varying and evolving standards and interpretations.
In November 2016, the
Standing Committee of China’s National People’s Congress passed China’s first Cybersecurity Law (“CSL”),
which became effective in June 2017. The CSL is the first PRC law that systematically lays out the regulatory requirements on cybersecurity
and data protection, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny. The legal
consequences of violation of the CSL include penalties of warning, confiscation of illegal income, suspension of related business, winding
up for rectification, shutting down the websites, and revocation of business license or relevant permits. In April 2020, the CAC
and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures (2020), which became effective in June 2020.
Pursuant to the Cybersecurity Review Measures (2020), operators of critical information infrastructure must pass a cybersecurity review
when purchasing network products and services which do or may affect national security.
On June 10, 2021, the
Standing Committee of the National People’s Congress (“SCNPC”) promulgated the PRC Data Security Law, which took effect
on September 1, 2021. The Data Security Law also sets forth the data security protection obligations for entities and individuals
handling personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection
and use of such data should not exceed the necessary limits.
On November 14, 2021,
the CAC published the Regulations on the Network Data Security Management (Draft for Comments), which reiterate that data processors that
process the personal information of more than one million users and intend to list overseas should apply for a cybersecurity review. In
addition, data processors that process important data or are listed overseas shall carry out an annual data security assessment on their
own or by engaging a data security services institution, and the data security assessment report for the prior year should be submitted
to the local cyberspace affairs administration department before January 31 of each year. Currently, the Regulations on the Network
Data Security Management (Draft for Comments) has been released for public comment only, and its implementation provisions and anticipated
adoption or effective date remains substantially uncertain and may be subject to change.
On December 28, 2021,
the CAC issued the Cybersecurity Review Measures (2021), which replaced the Cybersecurity Review Measures (2020) and took into effect
on February 15, 2022. The Cybersecurity Review Measures (2021) required that, in addition to “operator of critical information
infrastructure,” any “operator of internet platform” carrying out data processing activities that affect or may affect
national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the
national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large
amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical
information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously
used by foreign governments after listing abroad. The CAC has said that under the Cybersecurity Review Measures (2021), operators of internet
platforms holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because
of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments.”
The cybersecurity review will also investigate the potential national security risks from overseas IPOs. Given the recency of the issuance
of the Cybersecurity Review Measures (2021), there is a general lack of guidance and substantial uncertainties exist with respect to their
interpretation and implementation. For example, it is unclear whether the requirement of cybersecurity review applies to follow-on offerings
by an “online platform operator” that is in possession of personal data of more than one million users where the offshore
holding company of such operator is already listed overseas. We do not know what regulations will be adopted or how such regulations will
affect we and our listing on Nasdaq. In the event that the CAC determines that we are subject to these regulations, we may be required
to delist from Nasdaq and we may be subject to fines and penalties.
We are not subject to the
cybersecurity review by the CAC, given that: (i) we do not possess a large amount of personal information in our business operations
and (ii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important
data by the authorities. However, there remains uncertainty as to how the Cybersecurity Review Measures (2021) will be interpreted
or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation
and interpretation related to the Cybersecurity Review Measures (2021). If any such new laws, regulations, rules, or implementation and
interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such
laws on us.
On August 20, 2021, SCNPC
approved the Personal Information Protection Law of the PRC (the “PIPL”), which became effective on November 1,
2021. The PIPL regulates collection of personal identifiable information and seeks to address the issue of algorithmic discrimination.
Companies in violation of the PIPL may be subject to warnings and admonishments, forced corrections, confiscation of corresponding income,
suspension of related services, and fines. We mainly interact with corporate clients and has limited direct interactions with individual
customers, which means our potential access or exposure to customers’ personal identifiable information is limited. However, in
the event we inadvertently access or become exposed to end-users’ personal identifiable information, through our corporate
clients’ end-user-facing applications which access or store end users’ personal identifiable information, then we
may face heightened exposure to the PIPL.
We cannot assure you that
PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply
with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC,
we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all. Given such uncertainty,
we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and
adversely affect our business, financial condition, and results of operations.
As of the date of this prospectus,
our Hong Kong subsidiaries have not collected, stored, or managed any personal information in Hong Kong. Therefore, we concluded that
currently we do not expect that laws and regulations in mainland China on data security, data protection, or cybersecurity to be applied
to our Hong Kong subsidiaries or that the oversight of the CAC will be extended to its operations outside of mainland China. In Hong Kong,
the Personal Data (Privacy) Ordinance (Cap. 486 of Hong Kong), or the PDPO, applies to data users, that control the collection, holding,
processing or use of personal data in Hong Kong. Our Hong Kong subsidiaries are subject to the general requirements under PDPO including
the need to obtain the prescribed consent of the data subject and to take all practicable steps to protect the personal data held by data
users against unauthorized or accidental access, loss or use. Breaches of the PDPO may lead to a variety of civil and criminal sanctions
including fines and imprisonment. In addition, data subjects have a right to bring proceedings in court to seek compensation for damage.
We cannot guarantee that we are, or will be, in compliance with all applicable international regulations as they are enforced now or as
they evolve.
You may experience difficulties in effecting
service of legal process, enforcing foreign judgments or bringing actions in China against us or our management based on foreign laws.
We are an exempted company
incorporated under the laws of the Cayman Islands. However, we conduct substantially all of our operations in China and substantially
all of our assets are located in China. In addition, most of our management members reside within China for a significant portion of the
time and many of them are PRC nationals. As a result, it may be difficult for you to effect service of process upon us or our management
inside mainland China. It may also be difficult for you to enforce in U.S. courts of the judgments obtained in U.S. courts based on the
civil liability provisions of the U.S. federal securities laws against us and our officers and directors as none of them currently resides
in the United States or has substantial assets located in the United States. In addition, there is uncertainty as to whether the courts
of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil
liability provisions of the securities laws of the United States or any state.
The recognition and enforcement
of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance
with the requirements of the PRC Civil Procedures Law and other applicable laws, regulations and interpretations based either on treaties
between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. In addition, according
to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide
that the judgment violates the basic principles of PRC laws or national sovereignty, security or public interest. As a result, it is uncertain
whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. Furthermore, class action lawsuits,
which are available in the United States for investors to seek remedies, are generally uncommon in China.
It may be difficult for overseas regulators
to conduct investigations or collect evidence within China.
Shareholder claims or regulatory
investigation that are common in the United States 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 providing information needed for regulatory investigations or litigation
initiated outside China. Although the 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 cooperation with the securities
regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore,
according to Article 177 of the PRC Securities Law, which became effective in March 2020 (“Article 177”), no overseas
securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. In
addition, entities or individuals are prohibited from providing documents and information in connection with any securities business activities
to any organizations and/or persons aboard without the prior consent of the securities regulatory authority of the State Council and the
competent departments of the State Council. Article 26 of the Trial Measures, or the Article 26, which was issued by the CSRC on February
17, 2023 and came into effect on March 31, 2023, sets out that where an overseas securities regulatory agency intends to conduct investigation
and evidence collection regarding overseas offering and listing activities by a domestic company, and request assistance of the CSRC under
relevant cross-border securities regulatory cooperation mechanisms, the CSRC may provide necessary assistance in accordance with law.
Any domestic entity or individual providing documents and materials requested by an overseas securities regulatory agency out of investigative
or evidence collection purposes shall not provide such information without prior approval from the CSRC and competent authorities under
the State Council. In addition, Article 11 of the Provisions on Strengthening Confidentiality and Archives Administration in Respect of
Overseas Issuance and Listing of Securities by Domestic Enterprises, or the Article 11, which was jointly issued by the CSRC, the Ministry
of Finance, the State Secrecy Administration and the State Archives Bureau on February 24, 2023 and came into effect on March 31, 2023,
specifies that, (a) where the overseas securities regulator and the relevant competent authorities request to conduct inspections or investigations
to collect evidence from a domestic enterprise and the domestic securities firms and securities service agencies providing corresponding
services regarding the overseas offering and listing activities of the domestic enterprise, the inspection or investigation shall be carried
out under the cross-border regulatory cooperation mechanism, and the CSRC or the relevant authorities shall provide the requisite assistance
pursuant to the bilateral and multilateral cooperation mechanism, and (b) relevant domestic companies, securities firms and securities
service agencies shall obtain the consent of the CSRC or the relevant administrative authorities prior to cooperating in the inspection
or investigation carried out by the overseas securities regulator or relevant administrative authorities or providing documents and materials
for cooperating in the inspection or investigation. While detailed interpretation of or implementation rules under Article 177, the Article
26 and the Article 11 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation
or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.
It may be difficult for overseas shareholders
and/or regulators to conduct investigations or collect evidence within Hong Kong.
The Securities and Futures
Commission of Hong Kong (“SFC”) is a signatory to the International Organization of Securities Commissions Multilateral
Memorandum of Understanding (“MMOU”), which provides for mutual investigatory and other assistance and exchange of
information between securities regulators around the world, including the SEC. This is also reflected in section 186 of the Securities
and Futures Ordinance (“SFO”) which empowers the SFC to exercise its investigatory powers to obtain information and
documents requested by non-Hong Kong regulators, and section 378 of the SFO which allows the SFC to share confidential information
and documents in its possession with such regulators. However, there is no assurance that such cooperation will materialize, or if it
does, whether it will adequately address any efforts to investigate or collect evidence to the extent that may be sought by the U.S. regulators.
If we are classified as a PRC resident enterprise
for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
Under the PRC Enterprise Income
Tax Law and its implementation rules, an enterprise established outside of the PRC with “de facto management body” within
China is considered a “resident enterprise” and will be subject to the enterprise income tax on its global income at the rate
of 25%. The implementation rules define the term “de facto management body” as the body that exercises full and substantial
control and overall management over the business, productions, personnel, accounts and properties of an enterprise. The Notice Regarding
the Determination of Chinese-Controlled Offshore-Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management
Bodies, which was issued by the State Administration of Taxation on April 22, 2009 and further amended on December 29, 2017,
or Circular 82, provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise
that is incorporated offshore is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises
or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the
State Administration of Taxation’s general position on how the “de facto management body” text should be applied in
determining the tax resident status of all offshore enterprises. According to Circular 82, an offshore incorporated enterprise controlled
by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management
body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are
met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the
enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC;
(iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions,
are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the
PRC.
We believe none of our entities
outside of China is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination
by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”
If the PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, we could be subject to
PRC tax at a rate of 25% on our worldwide income, subject to any reduction set forth in applicable tax treaties. Furthermore, if we are
deemed a PRC resident enterprise, dividends payable to our non-PRC individual shareholders and any gain realized on the transfer
of Class A ordinary shares by such shareholders may be subject to PRC tax at a rate of 10% in the case of non-PRC enterprises
or a rate of 20% in the case of non-PRC individuals unless a reduced rate is available under an applicable tax treaty. It is
unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country
or area of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns
on your investment in the Class A ordinary shares.
We face uncertainties with respect to indirect
transfer of equity interests in PRC resident enterprises by their non-PRC holding companies.
We may face uncertainties
regarding the reporting on and consequences of private equity financing transactions involving the transfer and exchange of shares in
our company by non-resident investors in the future. In February 2015, the State Administration of Taxation issued the Bulletin
on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 7. Pursuant
to Bulletin 7, an “indirect transfer” of PRC assets, including a transfer of equity interests in an unlisted non-PRC holding
company of a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct
transfer of the underlying PRC assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose
of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes,
currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.
On October 17, 2017,
the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding
of Non-resident Enterprise Income Tax at Source, or Bulletin 37, which came into effect on December 1, 2017 and was most-recently
amended on June 15, 2018. Bulletin 37 further clarifies the practice and procedure of the withholding of nonresident enterprise income
tax. We face uncertainties on the reporting and consequences of potential future private equity financing transactions, share exchanges
or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises. The
PRC tax authorities may pursue such non-resident enterprises with respect to a filing or the transferees with respect to withholding
obligation, and request our PRC subsidiaries to assist in the filing. As a result, we and non-resident enterprises in such transactions
may become at risk of being subject to filing obligations or being taxed under Bulletin 7 and Bulletin 37, and may be required to expend
valuable resources to comply with them or to establish that we and our non-resident enterprises should not be taxed under these
regulations, which may have a material adverse effect on our financial condition and results of operations.
The PRC tax authorities have
the discretion under Bulletin 7 to make adjustments to the taxable capital gains based on the difference between the fair value of the
taxable assets transferred and the cost of investment. If the PRC tax authorities make adjustments to the taxable income of the transactions
under Bulletin 7, our income tax costs associated with such transactions will be increased, which may have an adverse effect on our financial
condition and results of operations. We cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital
gains and impose tax return filing obligations on us or require us to provide assistance to them for the investigation of any transactions
we were involved in. Heightened scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential
acquisitions we may pursue in the future.
If our preferential tax treatments are revoked
or become unavailable or if the calculation of our tax liability is successfully challenged by the PRC tax authorities, we may be required
to pay tax, interest and penalties in excess of our tax provisions.
The Chinese government has
provided various tax incentives to our PRC subsidiaries, primarily in the form of reduced enterprise income tax rates. For example, under
the Enterprise Income Tax Law and its implementation rules, the statutory enterprise income tax rate is 25%. However, the income tax of
an enterprise that has been determined to be a small low-profit enterprise can be reduced to a preferential rate of 20% on 12.5%
of its taxable income with respect to the portion of the annual taxable income that does not exceed RMB1 million during certain periods.
In addition, certain of our PRC subsidiaries enjoy preferential tax treatment. Any increase in the enterprise income tax rate applicable
to our PRC subsidiaries in China, or any discontinuation, retroactive or future reduction or refund of any of the preferential tax treatments
and local government subsidies currently enjoyed by our PRC subsidiaries in China, could adversely affect our business, financial condition
and results of operations.
Further, in the ordinary course
of our business, we are subject to complex income tax and other tax regulations, and significant judgment is required in the determination
of a provision for income taxes. Although we believe our tax provisions are reasonable, if the PRC tax authorities successfully challenge
our position and we are required to pay tax, interest and penalties in excess of our tax provisions, our financial condition and results
of operations would be materially and adversely affected.
Failure to make adequate contributions to
various employee benefit plans as required by PRC regulations or comply with laws and regulations on other employment practices may subject
us to penalties.
Companies operating in China
are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds
and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including
bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where
we operate our businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in
China given the different levels of economic development in different locations. Currently, our PRC subsidiaries are making contributions
to the plans based on the minimum standards as required by law for most employees. With respect to the underpaid or unpaid employee benefits,
we may be required to complete registrations, make up the contributions for these plans as well as to pay late fees and fines. If we are
subject to late fees or fines in relation to the underpaid or unpaid employee benefits, our financial condition and results of operations
may be adversely affected. We may also be subject to regulatory investigations and other penalties if our other employment practices are
deemed to be in violation of relevant PRC laws and regulations.
The enforcement of the PRC Labor Contract
Law and other labor-related regulations in the PRC may subject us to penalties or liabilities.
The PRC Labor Contract Law,
which was enacted in 2008 and amended in 2012, introduced specific provisions related to fixed-term employment contracts, part-time employment,
probationary periods, consultation with labor unions and employee assemblies, employment without a written contract, dismissal of employees,
severance, and collective bargaining to enhance previous PRC labor laws. Under the Labor Contract Law, an employer is obligated to sign
a non-fixed term labor contract with any employee who has worked for the employer for ten 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, with certain exceptions, must have non-fixed term, subject to certain exceptions. With certain exceptions, an employer
must pay severance to an employee where a labor contract is terminated or expires. In addition, the PRC governmental authorities have
continued to introduce various new labor-related regulations since the effectiveness of the Labor Contract Law.
These laws and regulations
designed to enhance labor protection tend to increase our labor costs. In addition, as the interpretation and implementation of these
regulations are still evolving, our employment practices may not be at all times deemed in compliance with the regulations. As a result,
we could be subject to penalties or incur significant liabilities in connection with labor disputes or investigations.
The M&A Rules and certain other PRC
regulations may make it more difficult for us to pursue growth through acquisitions.
The Regulations on Mergers
and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and
amended in 2009, and some other regulations and rules concerning mergers and acquisitions established complex procedures and requirements
for acquisition of Chinese companies by foreign investors, including requirements in some instances that the Ministry of Commerce of the
PRC be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic
enterprise. Moreover, the Anti-Monopoly Law promulgated by SCNPC, which became effective in 2008 and was recently amended in June 2022,
requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the
Ministry of Commerce before they can be completed. In addition, the Rules on Implementation of Security Review System for the Merger and
Acquisitions of Domestic Enterprises by Foreign Investors issued by the Ministry of Commerce and became effective in September 2011 specify
that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions
through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns
are subject to strict review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security review,
including by structuring the transaction through a proxy or contractual control arrangement.
In the future, we may pursue
potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of the above-mentioned
regulations and other rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining
approval or clearance from the Ministry of Commerce, may delay or inhibit our ability to complete such transactions, which could affect
our ability to expand our business or maintain our market share. Furthermore, according to the M&A Rules, if a PRC entity or individual
plans to merge or acquire its related PRC entity through an overseas company legitimately incorporated or controlled by such entity or
individual, such a merger and acquisition will be subject to examination and approval by the Ministry of Commerce. The application and
interpretations of M&A Rules are still uncertain, and there is possibility that the PRC regulators may promulgate new rules or explanations
requiring that we obtain approval of the Ministry of Commerce for our completed or ongoing mergers and acquisitions. There is no assurance
that we can obtain such approval from the Ministry of Commerce for our mergers and acquisitions, and if we fail to obtain those approvals,
we may be required to suspend our acquisition and be subject to penalties. Any uncertainties regarding such approval requirements could
have a material adverse effect on our business, results of operations and corporate structure.
PRC regulations relating to offshore investment
activities by PRC residents may limit our PRC subsidiaries’ ability to change their registered capital or distribute profits to
us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws. In addition, any failure to
comply with PRC regulations with respect to registration requirements for offshore financing may subject us to legal or administrative
sanctions.
In July 2014, the State Administration
of Foreign Exchange (“SAFE”) promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’
Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37. SAFE Circular 37 requires
PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for
foreign exchange administration purpose) to register with SAFE or its local branches in connection with their direct or indirect offshore
investment activities. SAFE Circular 37 further requires amendment to the SAFE registrations in the event of any changes with respect
to the basic information of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term,
or any significant changes with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution,
share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may
be applicable to any offshore acquisitions that we make in the future.
Under these foreign exchange
regulations, PRC residents who make, or have previously made, prior to the implementation of these foreign exchange regulations, direct
or indirect investments in offshore companies are required to register those investments. In addition, any PRC resident who is a direct
or indirect shareholder of an offshore company is required to update its previously filed SAFE registration, to reflect any material change
involving its round-trip investment. If any PRC shareholder fails to make the required registration or update the previously filed registration,
the PRC subsidiary of that offshore parent company may be restricted from distributing their profits and the proceeds from any reduction
in capital, share transfer or liquidation to their offshore parent company, and the offshore parent company may also be restricted from
injecting additional capital into its PRC subsidiary. Moreover, failure to comply with the various foreign exchange registration requirements
described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions, including (i) the
requirement by SAFE to return the foreign exchange remitted overseas or into the PRC within a period of time specified by SAFE, with a
fine of up to 30% of the total amount of foreign exchange remitted overseas or into PRC and deemed to have been evasive or illegal and
(ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amount of remitted foreign
exchange deemed evasive or illegal.
We are committed to complying
with and to ensuring that our shareholders who are subject to these regulations will comply with the SAFE rules and regulations. However,
due to the inherent uncertainty in the implementation of the regulatory requirements by the PRC authorities, such registration might not
be always practically available in all circumstances as prescribed in those regulations. In addition, we may not always be able to compel
them to comply with SAFE Circular 37 or other related regulations. We cannot assure you that SAFE or its local branches will not release
explicit requirements or interpret the PRC laws and regulations otherwise. We may not be fully informed of the identities of all our shareholders
or beneficial owners who are PRC residents, and we cannot provide any assurance that all of our shareholders and beneficial owners who
are PRC residents will comply with our request to make, obtain or update any applicable registrations or comply with other requirements
under SAFE Circular 37 or other related rules in a timely manner.
Because there is uncertainty
concerning the reconciliation of these foreign exchange regulations with other approval requirements, it is unclear how these regulations,
and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the governmental
authorities. We cannot predict how these regulations will affect our business operations or future strategy. For example, we may be subject
to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated
borrowings, which may adversely affect our results of operations and financial condition. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and prospects.
In addition, our offshore
financing activities, such as the issuance of foreign debt, are also subject to PRC laws and regulations. In accordance with such laws
and regulations, we may be required to complete filing and registration with NDRC, prior to such activities. Failure to comply with the
requirements may result in administrative meeting, warning, notification and other regulatory penalties and sanctions.
We may be materially adversely affected
if our shareholders and beneficial owners who are PRC entities fail to comply with the PRC overseas investment regulations.
On December 26, 2017,
the NDRC promulgated the Administrative Measures on Overseas Investments by Enterprises, which took effect as of March 1, 2018. According
to this regulation, non-sensitive overseas investment projects are subject to record-filing requirements with the local branch of the
NDRC. On September 6, 2014, the Ministry of Commerce promulgated the Administrative Measures on Overseas Investments, which took
effect as of October 6, 2014. According to this regulation, overseas investments of PRC enterprises that involve non-sensitive countries
and regions and non-sensitive industries are subject to record-filing requirements with a local branch of Ministry of Commerce. According
to the Circular of the State Administration of Foreign Exchange on Issuing the Regulations on Foreign Exchange Administration of the Overseas
Direct Investment of Domestic Institutions, which was promulgated by SAFE, on July 13, 2009 and took effect on August 1, 2009,
and Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, which was promulgated
by the SAFE on February 13, 2015 and took effect on June 1, 2015, PRC enterprises must register for overseas direct investment
with a local SAFE branch or its authorized banks.
We may not be fully informed
of the identities of all our shareholders or beneficial owners who are PRC entities, and we cannot provide any assurance that all of our
shareholders and beneficial owners who are PRC entities will comply with our request to complete the overseas direct investment procedures
under the aforementioned regulations or other related rules in a timely manner, or at all. If they fail to complete the filings or registrations
required by the overseas direct investment regulations, the authorities may order them to suspend or cease the implementation of such
investment and make corrections within a specified time, which may adversely affect our business, financial condition and results of operations.
Any failure to comply with PRC regulations
regarding the registration requirements for employee stock incentive plans may subject our plan participants for us to fines and other
legal or administrative sanctions.
In February 2012, SAFE promulgated
the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of
Overseas Publicly Listed Company, replacing earlier rules promulgated in 2007. Pursuant to these rules, PRC citizens and non-PRC citizens
who reside in China for a continuous period of not less than one year and participate in any stock incentive plan of an overseas publicly
listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the
PRC subsidiaries of such overseas-listed company, and complete certain other procedures. In addition, an overseas-entrusted institution
must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests.
We and our executive officers and other employees who are PRC citizens or who reside in China for a continuous period of not less than
one year and who may be granted options will be subject to these regulations when our company grants options after it became an overseas-listed
company. Failure to complete SAFE registrations may subject them to fines and legal sanctions, and may also limit our ability to contribute
additional capital into our PRC subsidiaries and limit our PRC subsidiaries’ ability to distribute dividends to us. We also face
regulatory uncertainties that could restrict our ability to adopt incentive plans for our directors, executive officers and employees
under PRC law.
In addition, the State Administration
of Taxation has issued certain circulars concerning employee share options and restricted shares. Under these circulars, our employees
working in China who exercise share options and/or are granted restricted shares will be subject to PRC individual income tax. Our PRC
subsidiaries have obligations to file documents related to employee share options and/or restricted shares with 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 laws and regulations, we may face sanctions imposed by the tax authorities or other PRC government authorities.
We may rely on dividends and other distributions
on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the
ability of our PRC and Hong Kong subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct
our business.
We are a Cayman Islands holding
company and we rely principally on dividends and other distributions on equity from our PRC and Hong Kong subsidiaries for our cash requirements,
including the funds necessary to pay dividends and other cash distributions to our shareholders for services of any debt we may incur.
If our PRC and Hong Kong subsidiaries incur debt on its own behalf in the future, the instruments governing the debt may restrict its
ability to pay dividends or make other distributions to us. Under PRC laws and regulations, our PRC subsidiary, which is a foreign-owned
enterprise, may pay dividends only out of its respective accumulated profits as determined in accordance with PRC accounting standards
and regulations. In addition, a foreign-owned enterprise, according to the PRC companies law, is required to set aside at least 10% of
its accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of
such fund reaches 50% of its registered capital. Such reserve funds cannot be distributed to us as dividends.
Our PRC subsidiaries generate
essentially all of their revenue in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency
exchange may limit the ability of our PRC subsidiary to use their Renminbi revenues to pay dividends to us.
The PRC government may continue
to strengthen its capital controls, and more restrictions and substantial vetting process may be put forward by SAFE for cross-border
transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC subsidiary to pay
dividends or make other kinds of payments 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.
In addition, the Enterprise
Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by
Chinese 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.
You may be subject to PRC income tax on
dividends from us or on any gain realized on the transfer of our Class A ordinary shares.
Under the Enterprise Income
Tax Law and its implementation rules, PRC withholding tax at a rate of 10% is generally applicable to dividends from PRC sources paid
to investors that are resident enterprises outside of China and that do not have an establishment or place of business in China, or that
have an establishment or place of business in China if the income is not effectively connected with the establishment or place of business.
Any gain realized on the transfer of shares by such investors is subject to 10% PRC income tax if this gain is regarded as income derived
from sources within China. Under the PRC Individual Income Tax Law and its implementation rules, dividends from sources within China paid
to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from
PRC sources realized by these investors on the transfer of shares are generally subject to 20% PRC income tax. Any such PRC tax liability
may be reduced by the provisions of an applicable tax treaty.
Although substantially all
of our business operations are in China, it is unclear whether the dividends we pay with respect to our Class A ordinary shares, or the
gains realized from the transfer of our Class A ordinary shares, would be treated as income derived from sources within China and as a
result be subject to PRC income tax if we are considered a PRC resident enterprise. If PRC income tax is imposed on gains realized through
the transfer of our Class A ordinary shares or on dividends paid to our non-resident investors, the value of your investment
in our Class A ordinary shares may be materially and adversely affected. Furthermore, our shareholders whose jurisdictions of residence
have tax treaties or arrangements with China may not qualify for benefits under these tax treaties or arrangements.
In addition, pursuant to the
Double Tax Avoidance Arrangement between Hong Kong and China, if a Hong Kong resident enterprise owns more than 25% of the equity interest
of a PRC company at all times during the twelve-month period immediately prior to obtaining a dividend from such company, the 10% withholding
tax on the dividend is reduced to 5%, provided that certain other conditions and requirements are satisfied at the discretion of the PRC
tax authority. However, based on the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties,
issued in 2009 by the State Administration of Taxation, if the PRC tax authorities determine, in their discretion, that a company benefits
from the reduced income tax rate due to a structure or arrangement that is primarily tax-driven, the PRC tax authorities may
adjust the preferential tax treatment. If our Hong Kong subsidiaries are determined by PRC government authorities as receiving benefits
from reduced income tax rates due to a structure or arrangement that is primarily tax-driven, the dividends paid by our PRC
subsidiaries to our Hong Kong subsidiaries will be taxed at a higher rate, which will have a material adverse effect on our financial
performance.
PRC regulation of loans to and direct investment
in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds
from our subsequent offerings to make loans or additional capital contributions to our PRC subsidiaries in China, which could materially
and adversely affect our liquidity and our ability to fund and expand our business.
We are an offshore holding
company conducting our operations in China through our PRC subsidiaries. We may make loans to our PRC subsidiaries, or we may make additional
capital contributions to our PRC subsidiaries, or we may establish new PRC subsidiaries and make capital contributions to these new PRC
subsidiaries, or we may acquire offshore entities with business operations in China in an offshore transaction.
Most of these ways are subject
to PRC regulations and approvals or registration. For example, loans by us to our wholly owned PRC subsidiary to finance its activities
cannot exceed statutory limits and must be registered with the local counterpart of SAFE. If we decide to finance our wholly owned PRC
subsidiary by means of capital contributions, these capital contributions are subject to registration with the State Administration for
Market Regulation or its local branch, reporting of foreign investment information with the PRC Ministry of Commerce, or registration
with other governmental authorities in China.
SAFE promulgated the Notice
of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested
Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the
Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Notice
from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses,
and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign
Exchange Businesses. According to SAFE Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered
capital of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the
repayment of inter-enterprise loans or the repayment of banks loans that have been transferred to a third party. Although SAFE Circular
19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity
investments within China, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested
company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such
capital to be used for equity investments in China in actual practice. SAFE promulgated the Notice of the State Administration of Foreign
Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or SAFE Circular 16, effective
on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular 19, but changes the prohibition against using RMB
capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a
prohibition against using such capital to issue loans to non-associated enterprises. Violations of SAFE Circular 19 and SAFE
Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to
transfer any foreign currency we hold, including the net proceeds from our subsequent offering, to our PRC subsidiary, which may adversely
affect our liquidity and our ability to fund and expand our business in China. On October 23, 2019, the SAFE promulgated the Notice
for Further Advancing the Facilitation of Cross-border Trade and Investment, or the SAFE Circular 28, which, among other things, allows
all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in China, as
long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment.
However, since the SAFE Circular 28 is newly promulgated, it is unclear how SAFE and competent banks will carry this out in practice.
In light of the various requirements
imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that
we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, or
at all, with respect to future loans to our PRC subsidiary or future capital contributions by us to our PRC subsidiary. As a result, uncertainties
exist as to our ability to provide prompt financial support to our PRC subsidiary when needed. If we fail to complete such registrations
or obtain such approvals, our ability to use the proceeds we expect to receive from our subsequent offerings and to capitalize or otherwise
fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund
and expand our business.
Fluctuations in exchange rates could have a material and adverse
effect on our results of operations and the value of your investment.
The conversion of Renminbi
into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated
against the U.S. dollar, at times significantly and unpredictably. The value of Renminbi against the U.S. dollar and other currencies
is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other
things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S.
dollar in the future. From time to time, we are exposed to currency risk primarily through sales and purchases which give rise to receivables,
payables and cash balances that are denominated in currencies other than the functional currency of the operations to which the transactions
relate.
Substantially all of our income
and expenses are denominated in Renminbi and our reporting currency is Renminbi. Significant revaluation of the Renminbi may have a material
and adverse effect on your investment. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations,
appreciation of the Renminbi against the U.S. dollar would reduce the Renminbi amount we would receive from the conversion. Conversely,
a significant depreciation of Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which
in turn could adversely affect the price of our Class A ordinary shares.
Very limited hedging options
are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions
in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future,
the availability and effectiveness of these hedges may be limited and we may not be able to hedge our exposure adequately or at all. In
addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi
into foreign currency.
Governmental control of currency conversion
may limit our ability to utilize our income effectively and affect the value of your investment.
The PRC government imposes
controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China.
We receive substantially all of our income in Renminbi. Under our current corporate structure, our Cayman Islands holding company may
rely on dividend payments from our PRC subsidiary to fund any cash and financing requirements payable outside of China. Under existing
PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related
foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements.
Specifically, under the existing exchange restrictions, cash generated from the operations of our PRC subsidiary in China may be used
to pay dividends to our company without prior approval of SAFE. However, approval from or registration with appropriate government authorities
is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment
of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of
our PRC subsidiary to pay any debts they may incur in a currency other than Renminbi owed to entities outside China, or to make other
capital expenditure payments outside China in a currency other than Renminbi.
In addition, if any of our
shareholders who is subject to SAFE regulations fails to satisfy the applicable overseas direct investment filing or approval requirement,
the PRC government may restrict our access to foreign currencies for current account transactions. If we are prevented from obtaining
sufficient foreign currency to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our
shareholders.
If the chops of our PRC subsidiaries are
not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities
could be severely and adversely compromised.
In China, a company chop or
seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered
company in China is required to maintain a company chop, which must be registered with the local Public Security Bureau. In addition to
this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of our PRC subsidiaries
are generally held securely by personnel designated or approved by us in accordance with our internal control procedures. To the extent
those chops are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance
of these entities could be severely and adversely compromised and those corporate entities may be bound to abide by the terms of any documents
so chopped, even if they were chopped by an individual who lacked the requisite power and authority to do so.
We may be subject to penalties for failure
to register our lease with the PRC real estate administration department.
Pursuant to the Law on Administration
of Urban Real Estate which took effect in January 1995 with the latest amendment in August 2019 and the Administrative Measures
on Leasing of Commodity Housing which was promulgated by Ministry of Housing and Urban-Rural Development on December 1, 2010 and
took effect on February 1, 2011, lessors and lessees are required to enter into a written lease contract and to register the lease
with the real estate administration department, and failure to comply with the registration requirement may result in a fine ranging from
RMB1,000 to RMB10,000. Our PRC subsidiaries only registered three of their leases with the real estate administration department. With
respect to the unregistered lease, we may be required to complete such registration or subject to fines, which may materially affect our
financial position or operation.
The filing with the CSRC is required, and the approval of, filing
or other procedures with other Chinese regulatory authorities may be required, in connection with issuing securities to foreign investors
under PRC law, and, if required, we cannot predict whether we will be able, or how long it will take us, to obtain such approval or complete
such filing or other procedures.
The Chinese government has
exercised, and may continue to exercise, substantial influence or control over virtually every sector of the Chinese economy through regulation
and state ownership. Our ability to operate in mainland China could be undermined if our Chinese subsidiaries are not able to obtain or
maintain approvals to operate in mainland China. The central or local governments could impose new, stricter regulations or interpretations
of existing regulations that could require additional expenditures and efforts on our part to ensure our compliance with such regulations
or interpretations.
The Regulations on Mergers
and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), appear to require that offshore
special purpose vehicles, controlled by Chinese companies or individuals formed for the purpose of seeking a public listing on an overseas
stock exchange through acquisitions of Chinese domestic companies or assets in exchange for the shares of the offshore special purpose
vehicles, obtain CSRC approval prior to publicly listing their securities on an overseas stock exchange.
Further, on July 6, 2021,
the General Office of the CCC and the General Office of SC jointly promulgated the Opinions on Severely Cracking Down on Illegal Securities
Activities in Accordance with the Law, pursuant to which Chinese regulators are required to accelerate rulemaking related to the overseas
issuance and listing of securities, and update the existing laws and regulations related to data security, cross-border data flow, and
management of confidential information. Numerous regulations, guidelines and other measures have been or are expected to be adopted in
addition to the Cybersecurity Law of the PRC (the “Cybersecurity Law”) and the Data Security Law of the PRC (the
“Data Security Law”).
On February 17, 2023, with
the approval of the State Council, the CSRC issued the CSRC Filing Rules, including the Trial Measures, for the administration of
overseas listing filing system, which will be implemented from March 31, 2023. Under the CSRC Filing Rules, a company established
in mainland China seeking securities offering and listing, by both direct or indirect means, in an overseas market are required to undertake
filing procedures with the CSRC for its overseas offering and listing activities. Further, the Trial Measures set forth a list of circumstance
under which overseas offering and listing by PRC domestic companies is prohibit, including: (i) where such securities offering and listing
is explicitly prohibited by the PRC laws; (ii) where the intended securities offering and listing may endanger national security as reviewed
and determined by competent PRC authorities under the State Council in accordance with PRC laws; (iii) where the company established in
mainland China , or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement,
misappropriation of property or undermining the order of the socialist market economy during the latest three (3) years; (iv) where the
company established in mainland China seeking securities offering and listing is suspected of committing crimes or major violations of
laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; and (v) where there are
material ownership disputes over equity held by the controlling shareholder of company established in mainland China or by other shareholders
that are controlled by the controlling shareholder and/or actual controller. In accordance with the Trial Measures, the listing and trading
of our Class A Ordinary Shares on Nasdaq is deemed as an indirect overseas offering and listing by companies established in China, and
thus, we are subject to the CSRC Filing Rules and the relevant filing procedures as required. Further, we believe, as of the date
of this prospectus, none of the circumstances prohibiting the overseas offering and listing by companies established in China as listed
above applies to us, and we can offer and continue to offer our Class A Ordinary Shares on Nasdaq.
In accordance with the Notice
on the Arrangement for the Filing of Overseas Offering and Listing by Domestic Companies issued by the CSRC along with the CSRC Filing
Rules on the same day, we are deemed as an “Existing Issuer” because we had been approved by Nasdaq for our initial public
offering and listing overseas before March 31, 2023. Under such Notice, we are not required to undertake the initial filing procedure
immediately. However, we shall carry out filing procedures as required by the Trial Measures in a timely manner for the subsequent events,
including any further follow-up offerings on Nasdaq, dual and/or secondary offering and listing on different overseas markets, and occurrence
of material events including change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other
relevant competent authorities, change of listing status or transfer of listing segment, and voluntary or mandatory delisting. If we
or our PRC Subsidiaries in future fail to undertake filing procedures as stipulated in the Trial Measures, or offer and list securities
in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us and/or our PRC Subsidiaries,
and impose a fine of between RMB 1,000,000 and RMB10,000,000. The CSRC may also inform its regulatory counterparts in the overseas jurisdictions,
such as the SEC, via cross-border securities regulatory cooperation mechanisms.
Further, on February 24, 2023,
the CSRC, together with the MOF, the NASSP, and the NAA, released the Confidentiality Provisions, which came into effect on March 31,
2023 with the Trial Measures. Under the Confidentiality Provisions, companies established in China seeking overseas offering and listing,
by both direct and indirect means, are required to institute a sound confidentiality and archives system. If such companies established
in China intend to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities
including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets
or working secrets of government agencies, they shall obtain approval from competent authorities and complete the relevant filing procedure
with the competent secrecy administrative department prior to their disclosure or provision of such documents and materials. Further,
if they provide or publicly disclose documents and materials which may adversely affect national security or public interests, they shall
strictly follow the corresponding procedures in accordance with relevant laws and regulations. Any failure or perceived
failure by us or our subsidiaries to comply with the above confidentiality and archives administration requirements under the Confidentiality
Provisions and other relevant PRC laws and regulations may cause relevant entities to be held legally liable by competent authorities,
and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.
Any failure of us or our PRC
Subsidiaries to fully comply with the CSRC Filing Rules, may significantly limit or completely hinder our ability to offer or continue
to offer our Class A Ordinary Shares on Nasdaq, cause significant disruption to our business operations, severely damage our reputation,
materially and adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly
decline in value or become worthless.
To operate our general business
activities currently conducted in mainland China, each of our Chinese subsidiaries is required to obtain a business license from the local
counterpart of the SAMR. Each of our PRC Subsidiaries has obtained a valid business license from the local counterpart of the SAMR, and
no application for any such license has been denied.
We must remit the offering proceeds to China
before they may be used to benefit our business in China, the process of which may be time-consuming, and we cannot assure that we can
finish all necessary governmental registration processes in a timely manner.
The proceeds of this offering
may be sent back to the PRC, and the process for sending such proceeds back to the PRC may be time-consuming after the closing of this
offering. We may be unable to use these proceeds to grow our business until our PRC Subsidiaries receive such proceeds in the PRC. Any
transfer of funds by us to our PRC Subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to
approval by or registration or filing with relevant governmental authorities in China. Any foreign loans procured by our PRC Subsidiaries
is required to be registered with China’s State Administration of Foreign Exchange (“SAFE”) or its local branches
or satisfy relevant requirements, and our PRC Subsidiaries may not procure loans which exceed the difference between their respective
total project investment amount and registered capital or 3 times (which may be varied year by year due to the change of PRC’s national
macro-control policy) of the net worth of our PRC Subsidiary. According to the relevant PRC regulations on foreign-invested enterprises
in China, capital contributions to our PRC Subsidiaries are subject to the approval of or filing with State Administration for Market
Regulation in its local branches, the Ministry of Commerce in its local branches and registration with a local bank authorized by SAFE.
To remit the proceeds of the
offering, we must take the steps legally required under the PRC laws, for example, we will open a special foreign exchange account for
capital account transactions, remit the offering proceeds into such special foreign exchange account and apply for settlement of the foreign
exchange. The timing of the process is difficult to estimate because the efficiencies of different SAFE branches can vary materially.
In light of the various requirements
imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that
we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if
at all, with respect to future loans by us to our PRC Subsidiary or with respect to future capital contributions by us to our PRC Subsidiaries.
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from this offering and to capitalize
or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity, our ability
to fund and expand our business and our Class A Ordinary Shares.
Risks Related to Our
Corporate Structure and Operation
Our failure to obtain prior approval of
the CSRC for the listing and trading of our Class A Ordinary Shares on a foreign stock exchange could delay this offering or could have
a material adverse effect upon our business, operating results, reputation and trading price of our Class A Ordinary Shares
On August 8, 2006, six Chinese
regulatory agencies, including the Ministry of Commerce of China, jointly issued the M&A Rules, which became effective on September
8, 2006 and were amended on June 22, 2009. The M&A Rules contains provisions that require that an offshore SPV formed for listing
purposes and controlled directly or indirectly by Chinese companies or individuals shall obtain the approval of the CSRC prior to the
listing and trading of such SPV’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published procedures
specifying documents and materials required to be submitted to it by an SPV seeking CSRC approval of overseas listings. However, the application
of the M&A Rule remains unclear with no consensus currently existing among leading Chinese law firms regarding the scope and applicability
of the CSRC approval requirement. We have not chosen to voluntarily request approval under the M&A Rules. Based on the understanding
of the current PRC law, rules and regulations, we believe that the CSRC’s approval may not be required for the listing and trading
of our Class A Ordinary Shares on Nasdaq in the context of this offering, given that the Company was not established by a merger with
or an acquisition of any PRC domestic companies as defined under the M&A Rules.
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. |
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
third amended and restated memorandum and articles of association (the “M&A”) and by the applicable provisions
of Cayman Islands law.
Our authorized share capital
comprises of (i) 480,000,000 Class A ordinary shares of par value of US$0.0001 each and (ii) 20,000,000 Class B ordinary shares of par
value US$0.0001 each (however designated) as our board of directors may determine in accordance with the M&A.
As of the date of this prospectus,
14,942,623 Class A Ordinary Shares and 6,409,600 Class B Ordinary Shares were issued and outstanding.
The following description of our share capital is intended as a summary
only and is qualified in its entirety by reference to the 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 $100,000,000 in the aggregate
of:
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Class A ordinary shares of par value of US$0.0001 each; |
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preferred shares of par value of US$0.0001 each; |
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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. |
We may issue the debt securities
as exchangeable for or convertible into Class A Ordinary Shares or other securities. The debt securities, the Class A 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.
Class A Ordinary Shares
As of the date of this prospectus,
there were 14,942,623 Class A Ordinary Shares issued and outstanding.
Dividends
The holders of our ordinary shares are entitled to such dividends as
may be declared by our board of directors subject to the Companies Act and to our M&A.
Conversion
Each Class B Ordinary Share is convertible into one (1) Class A Ordinary
Share at any time at the option of the holder thereof. The right to convert shall be exercisable by the holder of the Class B Ordinary
Share delivering a written notice to the Company that such holder elects to convert a specified number of Class B Ordinary Share into
Class A Ordinary Share. In no event shall Class A Ordinary Share be convertible into Class B Ordinary Share. Any conversion of Class B
Ordinary Shares into Class A Ordinary Shares pursuant to the M&A shall be effected by means of the re-designation and re-classification
of each relevant Class B Ordinary Share as a Class A Ordinary Share.
Voting Rights
Holders of our Class A Ordinary
Shares and our Class B Ordinary Shares shall, at all times, vote together as one class on all resolutions submitted to a vote by our shareholders
at any general meeting of our company. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject
to a vote at general meetings of our company, and each Class B Ordinary Share shall entitle the holder thereof to ten (10) votes on all
matters subject to a vote at general meetings of our company. At any general meeting a resolution put to the vote of the meeting shall
be decided by a poll.
A quorum required for a meeting
of shareholders consists of at least 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 carry in aggregate not less than one-third (1/3) of all votes attaching
to all issued and outstanding shares of our company and entitled to vote at such general meeting. An annual general meeting may (but shall
not be obliged to) be held in each calendar year. Extraordinary general meetings may be held at such times as may be determined by our
board of directors and may be convened by our board of directors (acting by a resolution of our board of directors) or the chairman of
our board of directors or upon a requisition of shareholders holding at the date of deposit of the requisition shares which carry in aggregate
not less than one-third (1/3) of all votes attaching to all the issued and outstanding shares that as at the date of the deposit carry
the right to vote at general meetings of the Company. Advance notice of at least seven (7) calendar days is required for the convening
of any general meeting.
An ordinary resolution to be passed by the shareholders requires the
affirmative votes of a simple majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies
are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting, while a special
resolution requires the affirmative votes of no less than two-thirds (2/3) of the votes cast by such shareholders as, being entitled to
do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives,
at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given. A
special resolution is required for important matters such as a change of name of our company.
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 shares by an instrument of
transfer in writing and in the usual or common form or any other form approved by our board of directors.
Our board of directors may,
in its sole discretion, decline to register any transfer of any share which is not fully paid up or on which we have a lien. Our directors
may also decline to register any transfer of any share unless (a) the instrument of transfer is lodged with us, accompanied by the certificate
for the 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; and (e) a fee of such maximum sum as the Nasdaq 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 three (3) calendar months after the date on
which the instrument of transfer was lodged with us, send to
each of the transferor and the transferee notice of such refusal. The registration of transfers may, on ten (10) calendar days’
notice being given by advertisement in such one or more newspapers, by electronic means or by any other means in accordance with the Nasdaq
listing rules, be suspended and the register closed at such times and for such periods as our board of directors may from time to time
determine, provided always that the registration of transfers shall not be suspended nor the register closed for more than thirty (30)
calendar days in any calendar year.
Liquidation
If the Company shall be wound up, and the assets available for distribution
amongst the shareholders shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly
as may be, the losses shall be borne by the shareholders in proportion to the par value of the shares held by them. If in a winding up
the assets available for distribution amongst the 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 amongst the 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 the Company for unpaid calls or otherwise.
Redemption of Shares
Subject to the provisions
of the Companies Act, we may issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such
terms and in such manner as may be determined before the issue of such shares, by our board of directors or
by an ordinary resolution of our shareholders. Our company 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 articles of association. Under the Companies Act, the redemption or repurchase of any share may be paid out of our company’s
profits or out of the proceeds of a 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 Act no such share may be redeemed or repurchased (a) unless it
is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company has commenced
liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.
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
fourteen (14) calendar 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.
Variation of Rights of Shares
Whenever the capital of
the Company is divided into different classes, the rights attached to any class may, subject to any rights or restrictions for the
time being attached to any class, only be materially and adversely varied with the written consent of the holders of at least
two-thirds (2/3) of the issued shares of that class or with the sanction of an ordinary resolution passed at a separate meeting of
the holders of the shares of that class.
Inspection of Books and Records
Holders of our ordinary
shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate
records (other than copies of our memorandum
and articles of association and register of mortgages and charges, and any special resolutions passed by our shareholders). Under
Cayman Islands law, the names of our current directors can be obtained from a search conducted at the Registrar of Companies in the Cayman
Islands.
Changes in Capital
Our company may from time to time by ordinary
resolution:
| ● | increase its share capital by new shares of such amount as it thinks expedient; |
| ● | consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares; |
| ● | sub-divide its shares, or any of them into shares of an amount smaller than that fixed by our memorandum of association,
provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be
the same as it was in case of the share from which the reduced share is derived; and |
| ● | 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 canceled. |
Subject to the Companies Act and M&A, we may, by special resolution,
reduce our share capital and any capital redemption reserve in any manner authorized by the Companies Act.
Issuance of Additional Shares
Our M&A authorizes our
board of directors to issue, allot 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.
Our M&A authorizes our
board of directors to issue from time to time, out of the authorised share capital of our company (other than the authorised but unissued
ordinary shares), series of preferred shares in their absolute discretion and without approval of our shareholders and to determine, with
respect to any series of preferred shares, the terms and rights of that series, including:
(a) the
designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from
the par value thereof;
(b) whether
the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms
of such voting rights, which may be general or limited;
(c) the
dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions
and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends
payable on any shares of any other class or any other series of shares;
(d) whether
the preferred shares of such series shall be subject to redemption by our company, and, if so, the times, prices and other conditions
of such redemption;
(e) whether
the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the shareholders
upon the liquidation of our company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference
shall bear to the entitlements of the holders of shares of any other class or any other series of shares;
(f) whether
the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for
retirement or other corporate purposes and the terms and provisions relative to the operation thereof;
(g) whether
the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of preferred
shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any,
of adjusting the same, and any other terms and conditions of conversion or exchange;
(h) the
limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends
or the making of other distributions on, and upon the purchase, redemption or other acquisition by our company of, the existing shares
or shares of any other class of shares or any other series of preferred shares;
(i) the
conditions or restrictions, if any, upon the creation of indebtedness of our company or upon the issue of any additional shares, including
additional shares of such series or of any other class of shares or any other series of preferred shares; and
(j) any other powers, preferences
and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof.
Anti-Takeover Provisions
Some provisions of our M&A may discourage,
delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:
| ● | authorize our board of directors to issue preferred shares
in their absolute discretion and without approval of the shareholders and to determine, with respect to any series of preferred shares,
the terms and rights of that series; and |
| ● | limit the ability of shareholders to requisition and convene
general meetings of shareholders. |
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 Act. The Companies Act 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:
| ● | does not have to file an annual return of its shareholders with the Registrar of Companies; |
| ● | is not required to open its register of members for inspection; |
| ● | does not have to hold an annual general meeting; |
| ● | may issue negotiable or bearer shares or shares with no par value; |
| ● | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first
instance); |
| ● | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
| ● | may register as a limited duration company; and |
| ● | may register as a segregated portfolio company. |
“Limited
liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the
company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper
purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Register of Members
Under the Companies Act,
we must keep a register of members and there should be entered therein:
| ● | the names and addresses of our members, a statement of the shares held by each member, of the amount paid
or agreed to be considered as paid, on the shares of each member, and of whether each relevant category of shares held by a member carries
voting rights under the articles of association of the company, and if so, whether such voting rights are conditional; |
| ● | the date on which the name of any person was entered on the register as a member; and |
| ● | the date on which any person ceased to be a member. |
Under Cayman Islands law,
the register of members of our company is prima facie evidence of the matters set out therein (i.e. the register of members will raise
a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members is deemed as
a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. We will perform the
procedure necessary to immediately update the register of members to record and give effect to any issuance of shares by us. Once our
register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares
set against their name.
If the name of any person is incorrectly entered
in or omitted from our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any
person having ceased to be a member of our company, the person or member aggrieved (or any member of our company or our company itself)
may apply to the Grand Court of the Cayman Islands for an order that the register be rectified, and the Court may either refuse such application
or it may, if satisfied of the justice of the case, make an order for the rectification of the register.
Preferred Shares
As
our current authorized share capital of is comprised of Class A Ordinary Shares and Class B Ordinary Shares, a special resolution will
be required to amend the M&A to alter our authorized share capital if we decide to issue preferred shares. After such special resolution
is passed, all shares for the time being unissued shall be under the control of the directors of the Company who may, in their absolute
discretion and without the approval of the shareholder, cause the Company to issue, allot 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 and grant options with respect to shares issue warrants
or similar instruments with respect thereto. The directors may issue from time to time, out of the authorised share capital of the Company
(other than the authorised but unissued ordinary shares), series of preferred shares in their absolute discretion and without approval
of the shareholders; provided, however, before any preferred shares of any such series are issued, the directors shall by resolution of
directors determine, with respect to any series of preferred shares, the terms and rights of that series.
You
should refer to the prospectus supplement relating to any preferred shares being offered for the specific terms of those shares.
Upon
issuance, the preferred shares will be fully paid and non-assessable, which means that its holders will have paid their purchase price
in full and we may not require them to pay additional funds.
Any
terms of preferred share determined by our board of directors may decrease the amount of earnings and assets available for distribution
to holders of our Class A Ordinary Shares or adversely affect the rights and power, including voting rights, of the holders of our Class
A Ordinary Shares without any further vote or action by the shareholders. The rights of holders of our Class A 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.
Transfer Agent and Registrar
The transfer agent and registrar
for our Class A Ordinary Shares is Transhare Corporation, located at Bayside Center 1. 17755 US Highway 19 N. Suite 140. Clearwater FL
33764. Their phone number is (303) 662-1112.
NASDAQ Capital Market Listing
Our Class A Ordinary Shares
are listed on the NASDAQ Capital Market under the symbol “JYD”.
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. |
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 shares, 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 Class A Ordinary 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. |
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 Class A Ordinary 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. |
Exercise of Warrants
Each warrant will entitle
the holder of warrants to purchase the number of Class A Ordinary 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 Class A Ordinary Shares, holders of the warrants will not have any of the rights of holders of Class A Ordinary 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 Class A Ordinary Shares purchasable upon exercise, if any.
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 exercise price; |
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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. |
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. |
The provisions described in
this section, as well as those described under “Description of Share Capital - Class A Ordinary Shares” and “Description
of Warrants” will apply to each unit and to any Class A Ordinary 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.
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 re-allowed 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. |
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 re-allowed 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 Class A Ordinary Shares, 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
Loeb & Loeb LLP is acting
as counsel for us with respect to certain legal matters as to United States federal securities law in this offering. 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 Harney Westwood & Riegels, our Cayman Islands counsel to the extent governed by the laws of the Cayman
Islands. The address of Harney Westwood & Riegels is 3501 The Center, 99 Queen’s Road Central, Hong Kong. Certain legal matters
as to PRC law will be passed upon for us by PacGate Law Group. Additional legal matters may be passed on for us, or any underwriters,
dealers or agents, by counsel that we will name in the applicable prospectus supplement.
EXPERTS
The financial statements incorporated
by reference in this prospectus for the years ended December 31, 2022 and 2023 have been audited by Marcum Asia CPAs, an independent registered
public accounting firm, as set forth in its 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.
The financial statements incorporated
by reference in this prospectus for the year ended December 31, 2021 have been audited by Friedman, which, at the time of issuing its
audit report was, an independent registered public accounting firm, as set forth in its 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 fiscal years ended December 31, 2021, 2022 and 2023 are included in our Annual Report on Form 20-F for the year ended December 31,
2023, filed on April 26, 2024, 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) |
the Company’s Annual Report on Form 20-F for the year ended December 31, 2023, filed on April 26, 2024; |
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(2) |
the Company’s Current Reports on Form 6-K, filed with the SEC on January 23, 2024, April 30, 2024, May 3, 2024 |
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(3) |
the description of our securities incorporated by reference in our registration statement on Form F-1 (File No. 333-269871) filed with the Commission on March 21, 2023, including any amendment and report subsequently filed for the purpose of updating that description. |
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 Building 3, No. 7 Gangqiao Road, Li Lang Community, Nanwan Street, Longgang District, Shenzhen, People’s Republic
of China, Attention: Xiaogang Geng, (86) 0755-25595406.
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.jayud.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.
Most 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.
We have been advised by Harney
Westwood & Riegels that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state
courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such
judgments), the Cayman Islands Grand Court will at common law enforce final and conclusive in personam judgments of state and/or federal
courts of the United States of America, or the Foreign Court, of a debt or definite sum of money against the Company (other than a sum
of money payable in respect of taxes or other charges of a like nature, a fine or other penalty (which may include a multiple damages
judgment in an anti-trust action) or where enforcement would be contrary to public policy). The Grand Court of the Cayman Islands will
also at common law enforce final and conclusive in personam judgments of the Foreign Court that are non-monetary against the Company,
for example, declaratory judgments ruling upon the true legal owner of shares in a Cayman Islands company. The Grand Court will exercise
its discretion in the enforcement of non-money judgments by having regard to the circumstances, such as considering whether the principles
of comity apply. To be treated as final and conclusive, any relevant judgment must be regarded as res judicata by the Foreign Court. A
debt claim on a foreign judgment must be brought within six years of the date of the judgment, and arrears of interest on a judgment debt
cannot be recovered after six years from the date on which the interest was due. The Cayman Islands courts are unlikely to enforce a judgment
obtained from the Foreign Court under civil liability provisions of U.S. federal securities law if such a judgment is found by the courts
of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Such a determination has not
yet been made by the Grand Court of the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings
are being brought elsewhere. A judgment entered in default of appearance by a defendant who has had notice of the Foreign Court’s
intention to proceed may be final and conclusive notwithstanding that the Foreign Court has power to set aside its own judgment and despite
the fact that it may be subject to an appeal the time-limit for which has not yet expired. The Grand Court may safeguard the defendant’s
rights by granting a stay of execution pending any such appeal and may also grant interim injunctive relief as appropriate for the purpose
of enforcement.
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.
Jayud Global Logistics Limited
$100,000,000
Class A Ordinary Shares,
Preferred Shares,
Debt Securities,
Warrants,
Rights and
Units
PROSPECTUS
[●], 2024
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