Jiuzi Holdings, Inc F-3, filed Jan 24, 2024
Jiuzi Holdings, Inc. (JZXN)
As filed with the Securities and Exchange Commission on January 24, 2024
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Jiuzi Holdings Inc.
(Exact name of registrant as specified in its charter)
| Cayman Islands | 4953 | Not Applicable | ||
| (State or other jurisdiction of incorporation or organization) |
(Translation of Registrant’s Name into English) |
(I.R.S. Employer Identification No.) |
|
No.168 Qianjiang Nongchang Gengwen Road, 15th Floor Economic and Technological Development Zone Xiaoshan District, Hangzhou City Zhejiang Province 310000 People’s Republic of China (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Puglisi & Associates 850 Library Avenue Suite 204 Newark, Delaware 19711 (Name, address, including zip code, and telephone number, including area code, of agent for service)
With a Copy to:
|
|
Joan Wu, Esq. Hunter Taubman Fischer & Li LLC 950 Third Avenue, 19th Floor New York, NY 10022 212-530-2208 |
Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.
If only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. The selling shareholders named in this prospectus may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and the selling shareholders named in this prospectus are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion, dated January 24, 2024
PROSPECTUS
Jiuzi Holdings Inc.
113,636,360 Ordinary Shares
This prospectus relates to 113,636,360 ordinary shares of the Company, par value $0.00015 per share (“Ordinary Shares”) that may be sold from time to time by the selling shareholders named in this prospectus, issued pursuant to certain Securities Purchase Agreement by and among us and certain non-affiliated investors (the “Investors”), dated as of October 20, 2023 (the “Securities Purchase Agreement”).
We will not receive any of the proceeds from the sale of our Ordinary Shares by the selling shareholders.
The selling shareholders named in this prospectus, may sell all or a portion of the Ordinary Shares held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Ordinary Shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Ordinary Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices.
We will bear all costs, expenses and fees in connection with the registration of the Ordinary Shares offered hereby. For additional information on the methods of sale that may be used by the selling shareholders, see “Plan of Distribution” beginning on page 17 of this prospectus.
Our ordinary shares are traded on the Nasdaq Capital Market under the symbol “JZXN”. On January 23, 2024 the last reported sale price of our ordinary shares on Nasdaq Capital Market was $0.81 per ordinary share.
Investing in our securities involves a high degree of risk. You should carefully consider the risk factors beginning on page 12 of this prospectus and set forth in the documents incorporated by reference herein before making any decision to invest in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or any prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is January 24, 2024
TABLE OF CONTENTS
i
This prospectus describes the general manner in which the selling shareholders identified in this prospectus may offer from time to time up to 113,636,360 Ordinary Shares.
You should rely only on the information contained in this prospectus and the related exhibits, any prospectus supplement or amendment thereto and the documents incorporated by reference, or to which we have referred you, before making your investment decision. We have not, and the selling shareholders have not, authorized any other person to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell, nor are the selling shareholders seeking an offer to buy, the Ordinary Shares offered by this prospectus in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus or in any applicable prospectus supplement is accurate only as of the date on the front cover thereof or the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any applicable prospectus supplement or any sales of the Ordinary Shares offered hereby or thereby.
If necessary, the specific manner in which the Ordinary Shares may be offered and sold will be described in a supplement to this prospectus, which supplement may also add, update or change any of the information contained in this prospectus. To the extent there is a conflict between the information contained in this prospectus and any prospectus supplement, you should rely on the information in such prospectus supplement, 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 incorporated by reference in this prospectus or any prospectus supplement—the statement in the document having the later date modifies or supersedes the earlier statement.
Neither the delivery of this prospectus nor any distribution of Ordinary Shares pursuant to this prospectus shall, under any circumstances, create any implication that there has been no change in the information set forth or incorporated by reference into this prospectus or in our affairs since the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date.
Except where the context otherwise requires and for purposes of this prospectus only, “we,” “us,” “our,” “our company,” and the “Company” refer to Jiuzi Holdings Inc. and its subsidiaries.
| ● | “Guangxi Zhitongche” refers to Guangxi Nanning Zhitongche New Energy Technology Co., Ltd., a PRC company which is 90% owned by Hangzhou Zhitongche; |
| ● | “Hangzhou Zhitongche” refers to Hangzhou Zhitongche Technology Co., Ltd., a PRC company wholly owned by Zhejiang Jiuzi; |
| ● | “Jiuzi HK” refers to Jiuzi (HK) Limited, a limited liability company organized under the laws of Hong Kong; |
| ● | “Jiuzi New Energy” refers to Zhejiang Jiuzi New Energy Network Technology Co., Ltd., a PRC company wholly owned by Zhejiang Jiuzi; |
| ● | “Jiuzi WFOE” refers to Zhejiang Navalant New Energy Automobile Co. Ltd, a limited liability company organized under the laws of the PRC, which is wholly-owned by Jiuzi HK; |
| ● | “Shangli Jiuzi” refers to Shangli Jiuzi New Energy Vehicles Co., Ltd., a PRC company and 59% owned subsidiary of Zhejiang Jiuzi; |
| ● | “Zhejiang Jiuzi” refers to Zhejiang Jiuzi New Energy Vehicles Co., Ltd., a wholly owned subsidiary of Jiuzi WFOE in the PRC |
We have relied on statistics provided by a variety of publicly available sources regarding China’s expectations of growth. We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus. We have sought to provide current information in this prospectus and believe that the statistics provided in this prospectus remain up-to-date and reliable, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus.
ii
This prospectus contains forward-looking statements. All statements contained in this prospectus other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, we undertake no duty to update any of these forward-looking statements after the date of this prospectus or to conform these statements to actual results or revised expectations.
Unless otherwise indicated, information contained in this prospectus concerning our industry and the market in which we operate, including our market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made based on such data and other similar sources and on our knowledge of the markets for our products. These data sources involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.
We have not independently verified any third-party information. While we believe the market position, market opportunity and market size information included in this prospectus is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
iii
Company Overview
This summary highlights information contained in the documents incorporated herein by reference. Before making an investment decision, you should read the entire prospectus, and our other filings with the SEC, including those filings incorporated herein by reference, carefully, including the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”
We, through Zhejiang Jiuzi, franchise and operate retail stores under brand name “Jiuzi”, which sell new energy vehicles, or NEVs, in third-fourth tier cities in China. Almost all of the NEVs we sell are battery-operated electric vehicles. We also sell a few plug-in electric vehicles on demand from vehicle buyers. As of the date hereof, we have 31 operating franchise stores and one company-owned store in China. The business relationship between Jiuzi and its independent franchisees is supported by adhering to standards and policies and is of fundamental importance to the overall performance and protection of the “Jiuzi” brand.
Primarily a franchisor, our franchising model enables an individual to be its own employer and maintain control over all employment-related matters, marketing and pricing decisions, while also benefiting from our Jiuzi brand, resources and operating system. In collaboration with franchisees, we are able to further develop and refine our operating standards, marketing concepts and product and pricing strategies.
Our revenues consist of (i) NEVs sales in our company-owned store and NEVs sales supplied to our franchisees; (ii) initial franchisee fees of RMB 4,000,000, or approximately US$575,500, for each franchise store, payable over time based on performance obligations of the parties, from our franchisees; and (iii) on-going royalties based on 10% percent of net incomes from our franchisees. These fees, along with operating rights, are stipulated in our franchise agreements.
We source NEVs through more than twenty NEV manufacturers, including BYD, Geely, and Chery, as well as battery/component manufacturers such as Beijing Zhongdian Boyu, Shenzhen Jishuchongke and Youbang Electronics which focus on manufacturing charging piles, and Guoxuan Gaoke, and Futesi in battery production. We are able to access more brands and obtain more competitive pricing to attract potential franchisees and to meet customer demands. On the capital side, we introduce franchisees to various capital platforms including Beijing Tianjiu Xingfu Control Group and Qinghua Qidi Zhixing, through which our franchisees and their vehicle buyers can obtain financing. Our business partners help us in providing a variety of products and extend our geographic reach.
Benefiting from favorable state policies subsidizing the NEV industry, China’s NEVs production started flourishing around 2015 and 2016, pursuant to the 2016-2020 New Energy Vehicle Promotion Fiscal Support Guidance and Notice regarding “the Thirteenth Five-year Plan” New Energy Vehicles Battery Infrastructure Support Policy. In 2016, China released a series of financial subsidy policies targeted at NEV production. We conducted market research in 2016 and eventually launched our business in 2017. We have built a full-scale modern business management operation, supported by our operations department and marketing department. We aim to build an online-offline operating system in which our headquarters effectively empowers our franchisees with our brand recognition, client source, financial support, operating and transportation assistance through the online platform. Our fully-developed supply chain will provide solid support for store location expansion. Our franchisees’ conformity to Jiuzi’s standards will help us in our business expansion and implementation of our growth strategy.
We plan to adopt an innovative one-stop vehicle sales model for our vehicle buyers, who is expected to have access to more brands, better services and more affordable pricing. Our current business model is focused on vehicle selection and purchase, which provides buyers with multi-brand price comparison and test-driving experience. Through the online platform, we are currently developing, we expect to provide a multi-dimensional service platform and a one-stop experience covering online vehicle selection and purchase and off-line vehicle delivery and maintenance. Our app will provide potential buyers with information on various car brands and models, as well as services to register vehicles, make appointments for maintenance, repairs, and remote error diagnosis services, etc.
1
Organizational Structure
We are incorporated in the Cayman Islands. As a holding company with no material operations of our own, we conduct our operations in China through our PRC Operating Subsidiaries, Zhejiang Jiuzi New Energy Vehicles Co., Ltd., or Zhejiang Jiuzi.
“Risk Factors – Risks Related to Our Corporate Structure” and “Risk Factors – Risks Related to Doing Business in China.”
The following diagram illustrates the corporate structure of our subsidiaries:
Subsidiaries
Jiuzi Holdings Inc. is a Cayman Islands exempted company incorporated on October 10, 2019. We conduct our business in China through our PRC Operating Subsidiaries. The consolidation of our Company and our PRC Operating Subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.
Jiuzi HK was incorporated on October 25, 2019 under the law of Hong Kong SAR. Jiuzi HK is our wholly-owned subsidiary and is currently not engaging in any active business and merely acting as a holding company.
2
Jiuzi WFOE was incorporated on June 5, 2020 under the laws of the People’s Republic of China. It is a wholly-owned subsidiary of Jiuzi HK and a wholly foreign-owned entity under the PRC laws. The registered principal activity of the company is new energy vehicle retail, new energy vehicle component sales, new energy vehicle battery sales, vehicle audio equipment and electronics sales, vehicle ornament sales, technology service and development, marketing planning, vehicle rentals, etc. Jiuzi WFOE had entered into contractual arrangements with Zhejiang Jiuzi and its shareholders.
Zhejiang Jiuzi was incorporated on May 26, 2017 under the laws of the People’s Republic of China. Its registered business scope includes wholesale and retail of NEVs and NEV components, vehicle maintenance products, technology development of NEVs, Marketing and consulting regarding NEV products, vehicle rentals, event organization, client services regarding vehicle registration, and online business technology. Its registered capital amount is approximately $304,893 (RMB 2,050,000).
Shangli Jiuzi was incorporated on May 10, 2018 under the laws of the People’s Republic of China. Its registered business scope is to engage in retailing NEVs, NEV components, NEV batteries, NEV marketing, vehicle maintenance, used vehicle sales, and car rentals. Zhejiang Jiuzi is the beneficial owner of 59% equity interest of Shangli Jiuzi. Shangli Jiuzi’s registered capital amount is approximately $1,412,789 (RMB 10,000,000).
Hangzhou Zhitongche was incorporated on February 2, 2018 under the laws of the People’s Republic of China. Its registered business scope is technical service, technology development, consultation and exchange, and NEV sales and leasing. On October 28, Zhejiang Jiuzi purchased 100% equity interest of Hangzhou Zhitongche from its shareholders for a nominal consideration, and became the its beneficial owner. Hangzhou Zhitongche’s registered capital amount is RMB 30,000,000.
Jiuzi New Energy was incorporated on July 1, 2021 under the laws of the People’s Republic of China. Its registered business scope is software outsourcing services, industrial internet data services, network and information security software development, artificial intelligence application software development, and cloud computing equipment technical services, among others. Zhejiang Jiuzi is the beneficial owner of 100% equity interest of Jiuzi New Energy. Jiuzi New Energy’s registered capital amount is RMB 10,000,000.
Guangxi Zhitongche was incorporated on December 31, 2021 under the laws of the People’s Republic of China. Its registered business scope is technical service, technology development, consultation and exchange, and NEV sales and leasing, auto parts retail, business management consulting and planning, among others. Hangzhou Zhitongche is the beneficial owner of 90% equity interest of Guangxi Zhitongche. Guangxi Zhitongche’s registered capital amount is approximately RMB1,000,000.
Hangzhou Jiuyao New Energy Automobile Technology Co. Ltd. was incorporated on January 24, 2022 in PRC. Its scope of business includes technical service, technology development, technical consultation and promotion, as well as sales of automobiles and new energy vehicles, and sales of electrical accessories and accessories for new energy vehicles. Hangzhou Jiuyao is 51% owned by Hangzhou Zhitongche, as such Hangzhou Jiuyao is accounted as a subsidiary of Zhejiang Jiuzi.; the remaining 49% equity interest is owned by unrelated third-party investors.
Hangzhou Jiuzi Haoche Technology Co., Ltd. was incorporated on January 21, 2022 under the laws of the People’s Republic of China. Its registered business scope is software outsourcing services, industrial internet data services, network and information security software development, artificial intelligence application software development, technology development, consulting and transfer, market planning, convention planning, and cloud computing equipment technical services. Hangzhou Jiuzi Haoche Technology Co., Ltd. is a wholly owned subsidiary of Jiuzi New Energy and has a registered capital with the amount of RMB5,000,000.
3
The Restructuring
Prior to the restructuring completed in January 20, 2023, Jiuzi WFOE entered into a series of VIE Agreements with Zhejiang Jiuzi and the shareholders of Zhejiang Jiuzi, which established the VIE structure.
As a result of the VIE Agreements, Jiuzi WFOE was regarded as the primary beneficiary of Zhejiang Jiuzi, and we treated Zhejiang Jiuzi and its subsidiaries as variable interest entities under U.S. GAAP for accounting purposes. We have consolidated the financial results of Zhejiang Jiuzi and its subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.
In November 2022, the board of directors of the Company decided to dissolve the VIE structure. On November 10, 2022, Zhejiang Jiuzi entered into a termination agreement (the “Termination Agreement”) with Jiuzi WFOE, pursuant to which the VIE agreements entered into among Zhejiang Jiuzi, Jiuzi WFOE and certain shareholders of Zhejiang Jiuzi shall be terminated effective upon the conditions are met. On November 10, 2022, with approval of Jiuzi WFOE and approval of the board of directors of Zhejiang Jiuzi, Zhejiang Jiuzi issued 0.1% equity interest in Zhejiang Jiuzi to a third-party investor. The issuance was completed on November 27, 2022. On January 20, 2023, Jiuzi WFOE exercised its call option under the Exclusive Option Agreements dated June 15, 2020 with certain shareholder of Zhejiang Jiuzi and entered into equity transfer agreements with all the shareholders of Zhejiang Jiuzi to purchase all the equity interest in Zhejiang Jiuzi. The transaction underlying the equity transfer agreement was completed and the VIE Agreements were terminated pursuant to the Termination Agreement on January 20, 2023. As a result, Zhejiang Jiuzi became a wholly owned subsidiary of Jiuzi WFOE and the VIE structure is dissolved.
Corporate Information
Our principal executive office is located at No.168 Qianjiang Nongchang Gengwen Road, Suite 1501, 15th Floor, Economic and Technological Development Zone, Xiaoshan District, Hangzhou City, Zhejiang Province, China 310000. The telephone number of our principal executive offices is +86-0571-82651956. Our registered agent in the Cayman Islands is Osiris International Cayman Limited. Our registered office and our registered agent’s office in the Cayman Islands are both located at Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc.
The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.
4
CONDENSED CONSOLIDATING SCHEDULE AND CONSOLIDATED FINANCIAL STATEMENTS
On January 20, 2023, Jiuzi WFOE exercised its call option under the Exclusive Option Agreements dated June 15, 2020 with certain shareholder of Zhejiang Jiuzi and entered into equity transfer agreements with all the shareholders of Zhejiang Jiuzi to purchase all the equity interest in Zhejiang Jiuzi. The transaction underlying the equity transfer agreement was completed and the VIE Agreements were terminated pursuant to the Termination Agreement on January 20, 2023. As a result, the VIE structure is dissolved and Zhejiang Jiuzi became a wholly owned subsidiary of Jiuzi WFOE.
The consolidated financial statements included in this prospectus reflect financial position and cash flows of the registrant, Cayman Islands incorporated parent company, Jiuzi Holdings Inc. together with those of its subsidiaries, on a consolidated basis. The tables below are condensed consolidating schedules summarizing separately the financial position and cash flows of Jiuzi Holdings Inc. (“Cayman” in the tables below), Jiuzi HK (“HK” in the tables below), Jiuzi WOFE (“WOFE” in the tables below) and Zhejiang Jiuzi and its subsidiaries (“Consolidated subsidiaries” in the tables below), together with eliminating adjustments:
Consolidated Statements of Operations Information
| For the year ended October 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
| Cayman | HK | Elimination | Subtotal | WFOE | Consolidated Subsidiaries | Elimination | Subtotal | Elimination | Consolidated | |||||||||||||||||||||||||||||||
| Revenues | - | - | - | - | - | 6,215,718 | - | 6,215,718 | - | 6,215,718 | ||||||||||||||||||||||||||||||
| Cost of revenues | - | - | - | - | - | 6,458,162 | - | 6,458,162 | - | 6,458,162 | ||||||||||||||||||||||||||||||
| Share of income (loss) from subsidiaries | (12,295,546 | ) | (12,228,930 | ) | 12,295,546 | (12,228,930 | ) | (12,235,731 | ) | - | 12,235,731 | - | 12,228,930 | - | ||||||||||||||||||||||||||
| Net Income (loss) | (16,832,101 | ) | (12,295,546 | ) | 12,295,546 | (16,832,101 | ) | (12,228,930 | ) | (12,235,731 | ) | 12,235,731 | (12,228,930 | ) | 12,228,930 | (16,832,101 | ) | |||||||||||||||||||||||
| Comprehensive income | (18,429,093 | ) | (13,610,922 | ) | 13,610,922 | (18,429,093 | ) | (13,544,304 | ) | (12,358,696 | ) | 12,358,696 | (13,544,304 | ) | 13,544,304 | (18,429,093 | ) | |||||||||||||||||||||||
| For the year ended October 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
| Cayman | HK | Elimination | Subtotal | WFOE | Consolidated Subsidiaries | Elimination | Subtotal | Elimination | Consolidated | |||||||||||||||||||||||||||||||
| Revenues | - | - | - | - | - | 9,536,987 | - | 9,536,987 | - | 9,536,987 | ||||||||||||||||||||||||||||||
| Cost of revenues | - | - | - | - | - | 4,909,704 | - | 4,909,704 | - | 4,909,704 | ||||||||||||||||||||||||||||||
| Share of income (loss) from subsidiaries | 1,307,998 | 1,455,984 | (1,307,998 | ) | 1,455,984 | 1,433,167 | - | (1,433,167 | ) | (1,455,984 | ) | - | ||||||||||||||||||||||||||||
| Net Income (loss) | 778,037 | 1,307,998 | (1,307,998 | ) | 778,037 | 1,455,984 | 1,433,167 | (1,433,167 | ) | 1,455,984 | (1,455,984 | ) | 778,037 | |||||||||||||||||||||||||||
| Comprehensive income | 778,037 | 1,307,998 | (1,307,998 | ) | 778,037 | 1,488,184 | 2,008,024 | (1,433,167 | ) | 2,063,041 | (1,455,984 | ) | 1,385,094 | |||||||||||||||||||||||||||
5
Consolidated Balance Sheets Information
| As of October 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
| Cayman | HK | Elimination | Subtotal | WFOE | Consolidated Subsidiaries | Elimination | Subtotal | Elimination | Consolidated | |||||||||||||||||||||||||||||||
| Current assets | 2,000,446 | 61,673 | - | 2,062,119 | 13,587 | 10,172,690 | - | 10,384,852 | - | 12,248,396 | ||||||||||||||||||||||||||||||
| Intercompany receivables | 10,878,595 | - | (10,575,297 | ) | 303,298 | 9,073,749 | - | (9,073,749 | ) | - | (303,298 | ) | - | |||||||||||||||||||||||||||
| Investments in subsidiaries | (3,958,189 | ) | 6,556,413 | 3,958,189 | 6,556,413 | (2,501,756 | ) | - | 2,501,756 | - | (6,556,413 | ) | - | |||||||||||||||||||||||||||
| Non-current assets | 6,920,406 | 6,556,413 | (6,617,108 | ) | 6,859,711 | 6,571,991 | 3,077,780 | (6,571,993 | ) | 2,879,203 | (6,859,711 | ) | 3,077,780 | |||||||||||||||||||||||||||
| Total assets | 8,920,852 | 6,618,086 | (6,617,108 | ) | 8,921,830 | 6,585,578 | 13,250,470 | (6,571,993 | ) | 13,264,055 | - | 15,326,174 | ||||||||||||||||||||||||||||
| Intercompany payables | - | 10,575,297 | (10,575,297 | ) | - | - | 9,377,047 | (9,073,749 | ) | 303,298 | (303,298 | ) | - | |||||||||||||||||||||||||||
| Total liabilities | 2,839,632 | 10,576,275 | (10,575,297 | ) | 2,840,610 | 29,165 | 15,752,226 | (9,073,749 | ) | 6,707,642 | (303,298 | ) | 9,244,954 | |||||||||||||||||||||||||||
| Shareholders’ equity | 6,081,220 | (3,958,189 | ) | 3,958,189 | 6,081,220 | 6,556,413 | (2,501,756 | ) | 2,501,756 | 6,556,413 | (6,556,413 | ) | 6,081,220 | |||||||||||||||||||||||||||
| As of October 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
| Cayman | HK | Elimination | Subtotal | WFOE | Consolidated Subsidiaries | Elimination | Subtotal | Elimination | Consolidated | |||||||||||||||||||||||||||||||
| Current assets | 3,930,303 | 365,515 | - | 4,295,818 | 2,638,437 | 15,285,949 | - | 17,924,386 | - | 22,220,204 | ||||||||||||||||||||||||||||||
| Intercompany receivables | 8,353,208 | - | (8,012,522 | ) | 340,686 | 4,891,978 | - | (4,891,978 | ) | - | (340,686 | ) | - | |||||||||||||||||||||||||||
| Investments in subsidiaries | 10,045,861 | 17,692,868 | (10,045,861 | ) | 17,692,868 | 10,163,310 | - | (10,163,310 | ) | - | (17,692,868 | ) | - | |||||||||||||||||||||||||||
| Non-current assets | 18,399,069 | 17,692,868 | (18,058,383 | ) | 18,033,554 | 15,055,288 | 5,932,720 | (15,055,288 | ) | 5,932,720 | (18,033,554 | ) | 5,932,720 | |||||||||||||||||||||||||||
| Total assets | 22,329,372 | 18,058,383 | (18,058,383 | ) | 22,329,372 | 17,693,725 | 21,218,669 | (15,055,288 | ) | 23,857,106 | (18,033,554 | ) | 28,152,924 | |||||||||||||||||||||||||||
| Intercompany payables | - | 8,012,522 | (8,012,522 | ) | - | - | 5,232,664 | (4,891,978 | ) | 340,686 | (340,686 | ) | - | |||||||||||||||||||||||||||
| Total liabilities | - | 8,012,522 | (8,012,522 | ) | - | 857 | 11,055,359 | (4,891,978 | ) | 6,164,238 | (340,686 | ) | 5,823,552 | |||||||||||||||||||||||||||
| Shareholders’ equity | 22,329,372 | 10,045,861 | (10,045,861 | ) | 22,329,372 | 17,692,868 | 10,163,310 | (10,163,310 | ) | 17,692,868 | (17,692,868 | ) | 22,329,372 | |||||||||||||||||||||||||||
Consolidated Cash Flows Information
| For the year ended October 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
| Cayman | HK | Elimination | Subtotal | WFOE | Consolidated Subsidiaries | Elimination | Subtotal | Elimination | Consolidated | |||||||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | (3,190,669 | ) | (66,617 | ) | - | (3,257,286 | ) | (5,309,275 | ) | (306,089 | ) | - | (5,615,364 | ) | - | (8,872,650 | ) | |||||||||||||||||||||||
| Net cash provided by (used in) investing activities | - | (2,800,000 | ) | - | (2,800,000 | ) | - | 236,884 | - | 236,884 | 2,800,000 | 236,884 | ||||||||||||||||||||||||||||
| Net cash provided by (used in) financing activities | 3,742,490 | - | - | 3,742,490 | 2,800,000 | (115,742 | ) | - | 2,684,258 | (2,800,000 | ) | 3,626,748 | ||||||||||||||||||||||||||||
| For the year ended October 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
| Cayman | HK | Elimination | Subtotal | WFOE | Consolidated Subsidiaries | Elimination | Subtotal | Elimination | Consolidated | |||||||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | (8,878,937 | ) | 8,012,522 | - | (866,415 | ) | (121,627 | ) | (1,160,565 | ) | - | (1,282,192 | ) | (2,662,530 | ) | (4,811,137 | ) | |||||||||||||||||||||||
| Net cash provided by (used in) investing activities | - | (7,500,000 | ) | - | (7,500,000 | ) | - | (1,485,306 | ) | - | (1,485,306 | ) | 7,500,000 | (1,485,306 | ) | |||||||||||||||||||||||||
| Net cash provided by (used in) financing activities | 12,809,240 | - | - | 12,809,240 | 7,500,000 | 38,916 | - | 7,538,916 | (7,500,000 | ) | 12,848,156 | |||||||||||||||||||||||||||||
6
Risk Factors Summary
Investing in our Company involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in our Company. Below please find a summary of the risks and challenges we face organized under relevant headings. These risks are discussed more fully in the section titled “Item 3.D. Risk Factors” in our 2022 Annual Report, as amended, on Form 20-F for the year ended October 31, 2022, which is incorporated in this prospectus by reference.
Risks Related to Our Business and Industry
| ● | We rely on China’s automotive industry for our net revenues and future growth, the prospects of which are subject to many uncertainties, including government regulations and policies. See “Risk Factors- Risks Related to Our Business and Industry- We rely on China’s automotive industry for our net revenues and future growth, the prospects of which are subject to many uncertainties, including government regulations and policies.” on page 5 of the 2022 Annual Report. |
| ● | Our business is substantially dependent on our collaboration with our suppliers, including automakers, auto dealers, and automotive service providers, and our agreements with them typically do not contain long-term contractual commitments. See “Risk Factors- Risks Related to Our Business and Industry-Our business is substantially dependent on our collaboration with our suppliers, including automakers, auto dealers, and automotive service providers, and our agreements with them typically do not contain long-term contractual commitments” on page 5 of the 2022 Annual Report. |
| ● | We may be affected by the perceptions about electric vehicle quality, safety, design, performance, and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, and the speed of the vehicles and battery performance. See “Risk Factors- Risks Related to Our Business and Industry- We may be affected by the perceptions about electric vehicle quality, safety, design, performance, and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, and the speed of the vehicles and battery performance.” on page 6 of the 2022 Annual Report. |
| ● | We may be affected by perceptions about vehicle safety in general, particularly safety issues that may be attributed to the use of advanced technology, including electric vehicle and regenerative braking systems, battery overheating issues, and periodic maintenance requirements. See “Risk Factors- Risks Related to Our Business and Industry- We may be affected by perceptions about vehicle safety in general, particularly safety issues that may be attributed to the use of advanced technology, including electric vehicle and regenerative braking systems, battery overheating issues, and periodic maintenance requirements.” on page 6 of the 2022 Annual Report. |
| ● | We may be affected by the limited range over which electric vehicles may be driven on a single battery charge and the speed at which batteries can be recharged. See “Risk Factors- Risks Related to Our Business and Industry- We may be affected by the limited range over which electric vehicles may be driven on a single battery charge and the speed at which batteries can be recharged.” on page 7 of the 2022 Annual Report. |
| ● | We may fail to successfully grow or operate our franchise business as our franchisees may fail to operate the franchise stores effectively or we may be unable to maintain our relationships with our franchisees. See “Risk Factors- Risks Related to Our Business and Industry- We may fail to successfully grow or operate our franchise business as our franchisees may fail to operate the franchise stores effectively or we may be unable to maintain our relationships with our franchisees.” on page 7 of the 2022 Annual Report. |
| ● | We may not be able to effectively monitor the operations of franchise stores. See “Risk Factors- Risks Related to Our Business and Industry- We may not be able to effectively monitor the operations of franchise stores.” on page 8 of the 2022 Annual Report. |
| ● | We may be affected by the limited range over which electric vehicles may be driven on a single battery charge and the speed at which batteries can be recharged. See “Risk Factors- Risks Related to Our Business and Industry- We may be affected by the limited range over which electric vehicles may be driven on a single battery charge and the speed at which batteries can be recharged.” on page 7 of the 2022 Annual Report. |
| ● | Adverse publicity associated with our network marketing program, or those of similar companies, could harm our financial condition and operating results. See “Risk Factors- Risks Related to Our Business and Industry- Adverse publicity associated with our network marketing program, or those of similar companies, could harm our financial condition and operating results.” on page 9 of the 2022 Annual Report. |
7
Risks Related to Our Corporate Structure
| ● | Previous contractual arrangements in relation to the PRC Operating Entities may be subject to scrutiny by the PRC tax authorities and they may determine that we or the PRC Operating Entities owe additional taxes, which could negatively affect our financial condition and the value of your investment. See “Risk Factors- Risks Related to Our Corporate Structure- Previous contractual arrangements in relation to the PRC Operating Entities may be subject to scrutiny by the PRC tax authorities and they may determine that we or the PRC Operating Entities owe additional taxes, which could negatively affect our financial condition and the value of your investment.” on page 10 of the 2022 Annual Report. |
| ● | We may lose the ability to use and enjoy assets held by our PRC Operating Entities that are critical to the operation of our business if the any of the PRC Operating Entities declare bankruptcy or become subject to a dissolution or liquidation proceeding. See “Risk Factors- Risks Related to Our Corporate Structure- We may lose the ability to use and enjoy assets held by our PRC Operating Entities that are critical to the operation of our business if the any of the PRC Operating Entities declare bankruptcy or become subject to a dissolution or liquidation proceeding.” on page 10 of the 2022 Annual Report. |
| ● | Our current corporate structure and business operations may be substantially affected by the newly enacted Foreign Investment Law. See “Risk Factors- Risks Related to Our Corporate Structure- Our current corporate structure and business operations may be substantially affected by the newly enacted Foreign Investment Law.” on page 10 of the 2022 Annual Report. |
| ● | We are a holding company and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Ordinary Shares. See “Risk Factors-Risks Related to Doing Business in China- We are a holding company and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Ordinary Shares.” on page 10 of the 2022 Annual Report. |
| ● | The approval or filing requirement of the China Securities Regulatory Commission may be required in connection with any future offing we may conduct, and, if required, we cannot predict whether we will be able to obtain such approval or complete such filings. ability to pay our parent company expenses or pay dividends to holders of our Ordinary Shares. See “Risk Factors- Risks Related to Our Corporate Structure- The approval or filing requirement of the China Securities Regulatory Commission may be required in connection with any future offing we may conduct, and, if required, we cannot predict whether we will be able to obtain such approval or complete such filings. ability to pay our parent company expenses or pay dividends to holders of our ordinary shares.” on page 11 of the 2022 Annual Report. |
8
Risks Related to Doing Business in China
| ● | There are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. See “Risk Factors-Risks Related to Doing Business in China- There are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities.” on page 11 of the 2022 Annual Report. |
| ● | PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from the offering and/or future financing activities to make loans or additional capital contributions to our PRC operating subsidiaries. See “Risk Factors-Risks Related to Doing Business in China- PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from the offering and/or future financing activities to make loans or additional capital contributions to our PRC operating subsidiaries.” on page 12 of the 2022 Annual Report. |
| ● | Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations. See “Risk Factors-Risks Related to Doing Business in China- Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations.” on page 14 of the 2022 Annual Report. |
| ● | Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and services and materially and adversely affect our competitive position. See “Risk Factors-Risks Related to Doing Business in China- Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and services and materially and adversely affect our competitive position.” on page 14 of the 2022 Annual Report. |
| ● | Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders. See “Risk Factors-Risks Related to Doing Business in China- Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.” on page 15 of the 2022 Annual Report. |
| ● | The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. See “Risk Factors-Risks Related to Doing Business in China-Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment” page 17 of the 2022 Annual Report. |
| ● | The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if the VIE or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors. See “Risk Factors- The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if the VIE or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors.” on page 19 of the of the 2022 Annual Report. |
| ● | The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering. See “Risk Factors-Risks Related to Doing Business in China- The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.” on page 26 of the 2022 Annual Report. |
9
Risks Related to Our Securities and this Offering
| ● | The trading price of the Ordinary Shares is volatile, which could result in substantial losses to investors. See “Risk Factors-Risks Related to Our Ordinary Shares- The trading price of the ordinary shares is volatile, which could result in substantial losses to investors.” on page 30 of the 2022 Annual Report. |
| ● | Techniques employed by short sellers may drive down the market price of the Ordinary Shares. See “Risk Factors-Risks Related to Our Ordinary Share- Techniques employed by short sellers may drive down the market price of the ordinary shares.” on page 31 of the 2022 Annual Report. |
| ● | Our memorandum and articles of association contain anti-takeover provisions that could materially adversely affect the rights of holders of our Ordinary Shares. See “Risk Factors-Risks Related to Our Ordinary Share- Our memorandum and articles of association contain anti-takeover provisions that could materially adversely affect the rights of holders of our ordinary shares.” page 32 of the 2022 Annual Report. |
| ● | 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 U.S. domestic public companies. See “Risk Factors-Risks Related to Our Ordinary Share- 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 U.S. domestic public companies.” on page 32 of the 2022 Annual Report. |
| ● | To the extent cash or assets in the business is in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries and the VIE by the PRC government to transfer cash or assets. See “Risk Factors- Risks Related to Our Securities and this Offering- To the extent cash or assets in the business is in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries and the VIE by the PRC government to transfer cash or assets.” on page 12 of this registration statement. |
10
| Ordinary Shares Offered by the Selling Shareholders | Up to 113,636,360 Ordinary Shares, par value $0.00015 per share. | |
| Selling Shareholders | All of the Ordinary Shares are being offered by the selling shareholders named herein. See herein. See “Selling Shareholders” on page 15 of this prospectus for more information on the selling shareholders. | |
| Use of Proceeds | We will not receive any proceeds from the sale of our Ordinary Shares in this offering. See “Use of Proceeds” beginning on page 13 of this prospectus for additional information. | |
| Plan of Distribution | The selling shareholders named in this prospectus, may sell all or a portion of the Ordinary Shares held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Ordinary Shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Ordinary Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. See “Plan of Distribution” beginning on page 17 of this prospectus for additional information on the methods of sale that may be used by the selling shareholders. | |
| Risk Factors | Investing in our shares involves a high degree of risk. See “Risk Factors” beginning on page 12 of this prospectus and in our 2022 Annual Report on Form 20-F filed with the SEC, on March 15, 2023, for a discussion of certain factors you should consider before investing in our shares. | |
| Nasdaq Capital Market Symbol | Our Ordinary Shares on the Nasdaq Capital Market under the symbol “JZXN”. |
11
You should carefully consider the following material risk factors described below, together with other information in this prospectus and our Annual Reports on Form 20-F under Item 3, “Risk Factors” for the year ended October 31, 2022, which is incorporated herein by reference, and may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future, before you make a decision to invest in our shares of Ordinary Shares. If any of the following risks actually occur, our business, financial condition, results of operations and prospects for growth could be seriously impacted. As a result, the trading price, if any, of our Ordinary Shares could decline and you could lose part or all of your investment.
The following disclosure is intended to highlight, update or supplement previously disclosed risk factors facing the Company set forth in the Company’s public filings. These risk factors should be carefully considered along with any other risk factors identified in the Company’s other filings with the SEC.
Risks Related to Our Securities
Future sales of our ordinary shares may cause the prevailing market price of our shares to decrease.
The issuance and sale of additional ordinary shares or securities convertible into or exercisable for ordinary shares could reduce the prevailing market price for our ordinary shares as well as make future sales of equity securities by us less attractive or not feasible. The sale of ordinary shares issued upon the exercise of our outstanding options could further dilute the holdings of our then existing shareholders.
There has been and may continue to be significant volatility in the volume and price of our ordinary shares on the Nasdaq Capital Market.
The market price of our ordinary shares has been and may continue to be highly volatile. Factors, including changes in the industry we operate in, changes in the Chinese economy, potential infringement of our intellectual property, competition, concerns about our financial position, operations results, litigation, government regulation, developments or disputes relating to agreements, patents or proprietary rights, may have a significant impact on the market volume and price of our stock. Unusual trading volume in our shares occurs from time to time.
To the extent cash or assets in the business is in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash or assets.
The transfer of funds and assets among Jiuzi Holdings, its Hong Kong and PRC subsidiaries is subject to restrictions. The PRC government imposes controls on the conversion of the RMB into foreign currencies and the remittance of currencies out of the PRC. In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises, unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the non-PRC resident enterprises are tax resident.
As of the date of this prospectus, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future.
As a result of the above, to the extent cash or assets in the business is in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash or assets.
12
We will not receive any proceeds from the sale of Ordinary Shares by the selling shareholders.
The selling shareholders will pay any underwriting discounts and commissions and expenses incurred by them for brokerage, accounting, tax or legal services or any other expenses incurred by them in disposing of the shares. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares covered by this prospectus, including, without limitation, all registration and filing fees and fees and expenses of our counsel and our accountants.
See “Plan of Distribution” elsewhere in this prospectus for more information.
13
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the Cayman Islands with limited liability. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands corporation, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protections to investors. In addition, Cayman Islands companies may not have standing to sue before the federal courts of the United States.
Substantially all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. Specifically, our chairman of the board and chief executive officer, Tao Li is located in the PRC. Our chief financial officer, Francis Zhang is located in the PRC. Our independent directors Yizhu and Zhenhao Qiu are located in the PRC. Our independent director Jehn Ming Lim is located in Hong Kong. As a result, it may be difficult for investors to effect service of process within the United States upon us or such persons or to enforce against them or against us, 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 thereof.
We have appointed Puglisi & Associates as our agent to receive service of process with respect to any action brought against us in the United States District Court for districts in the State of New York under the federal securities laws of the United States or of any State of the United States or any action brought against us in the Supreme Court of the State of New York under the securities laws of the State of New York.
There is uncertainty as to whether the courts of China would (1) recognize or enforce judgments of United States courts obtained against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or (2) be competent to hear original actions brought in each respective jurisdiction, against us or such persons predicated upon the securities laws of the United States or any state thereof.
The recognition and enforcement of foreign judgments are provided for under the Chinese Civil Procedure Law. Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of the Chinese Civil Procedure Law based either on treaties between China and the country where the judgment is made or in reciprocity between jurisdictions. China does not have any treaties or other agreements with the Cayman Islands or the United States that provide for the reciprocal recognition and enforcement of foreign judgments. As a result, it is uncertain whether a Chinese court would enforce a judgment rendered by a court in either of these two jurisdictions.
We have been advised by Maples and Calder (Hong Kong) LLP our counsel as to Cayman Islands law, that it is uncertain whether the courts of the Cayman Islands will allow shareholders of our company to originate actions in the Cayman Islands based upon securities laws of the United States. In addition, there is uncertainty with regard to Cayman Islands law related to whether a judgment obtained from the U.S. courts under civil liability provisions of U.S. securities laws will be determined by the courts of the Cayman Islands as penal or punitive in nature. If such determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against a Cayman Islands company, such as our company. As the courts of the Cayman Islands have yet to rule on making such a determination in relation to judgments obtained from U.S. courts under civil liability provisions of U.S. securities laws, it is uncertain whether such judgments would be enforceable in the Cayman Islands. We have been further advised that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re- examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment:
| (a) | is given by a foreign court of competent jurisdiction; |
| (b) | imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given; |
| (c) | is final; |
| (d) | is not in respect of taxes, a fine or a penalty; and |
| (e) | was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. |
The United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of courts of the United States in civil and commercial matters and that a final judgment for the payment of money rendered by any general or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal securities laws, may not be enforceable in the Cayman Islands.
14
This prospectus covers an aggregate of up to 113,636,360 Ordinary Shares that previously issued to the selling shareholders, which we issued to the selling shareholders in the Private Placement as described below.
Private Placement of Ordinary Shares and Warrants
The Ordinary Shares and Warrants were issued in reliance upon the exemption from the registration requirements provided in the Securities Act of 1933, as amended (the “Securities Act”) and Regulation S promulgated thereunder. Each Investor represented that it was an “accredited investor” (as defined by Rule 501 under the Securities Act). We are registering the offer and resale of the Ordinary Shares issued pursuant to a certain securities purchase agreement by and between the Company and each of the Investors, dated October 20, 2023 (the “Securities Purchase Agreement”).
On December 21, 2023, pursuant to the Securities Purchase Agreement, we issued and sold to the Investors an aggregate of 113,636,360 units (the “Units”), each Unit consisting of one Ordinary Share and a warrant to purchase three Ordinary Shares with an initial exercise price of $1.10, at a price of $0.44 per Unit, for an aggregate purchase price of approximately $50 million in the Private Placement.
The Warrants are exercisable immediately upon the date of issuance at an initial exercise price of $1.10, for cash. The Warrants may also be exercised cashlessly if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares. The Warrants shall expire five years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting stock dividends and splits or other similar transactions.
Information About the Selling Shareholders
The Ordinary Shares being offered by the selling shareholders are our Ordinary. We are registering the Ordinary Shares in order to permit the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the Ordinary Shares, the selling shareholders have not had any material relationship with us within the past three years.
The table below is based on information supplied to us by the selling shareholders and lists the selling shareholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Exchange Act, and the rules and regulations thereunder) of the Ordinary Shares held by each of the selling shareholders. Generally, a person “beneficially owns” our Ordinary Shares as of a date if the person has or shares with others the right to vote those shares or to dispose of them on that date, or if the person has the right to acquire voting or disposition rights within 60 days of that date. The second column lists the number of Ordinary Shares beneficially owned by the selling shareholders, based on their respective ownership of Ordinary Shares of the Company as of the date of this prospectus.
The fourth column lists the Ordinary Shares being offered by this prospectus by the selling shareholders.
This prospectus generally covers the resale of 100% of the maximum number of Ordinary Shares issued. While the fourth column assumes the sale of all of the Ordinary Shares offered by the selling shareholders pursuant to this prospectus, the selling shareholders may only sell some or none of their Ordinary Shares in this offering. See “Plan of Distribution” below.
15
The number of shares owned and the percentage of beneficial ownership before this offering set forth in these columns are based on 117,701,696 shares outstanding as of the date of this prospectus, assuming the resale of all Ordinary Shares covered by this prospectus and assuming no exercise of any other warrants issued by the Company. For purposes of computing the number of Ordinary Shares beneficially owned after this offering and computing percentage ownership after this offering, we have assumed that all Ordinary Shares held by the selling shareholders will be sold in this offering.
Name of Selling Shareholder | Number of Ordinary Shares Owned Prior to this Offering(1) | Percentage Owned Prior to this Offering(2) | Maximum Number of Ordinary Shares to be Sold Pursuant to this Prospectus(3) | Number of Ordinary Shares Owned After this Offering(4) | Percentage of Outstanding Ordinary Shares Owned Following this Offering(2)(4) | |||||||||||||||
| Chengfei Yu | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Juehui Xiao | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Ying Wu | 5,726,263 | 4.87 | % | 5,681,818 | 44,445 | *% | ||||||||||||||
| Fang Peng | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Qingming Ou | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Nana Feng | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Xing Tao | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Lin Mao | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Xiyun Lei | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Jianping Li | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Surong Zhang | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Youbing Li | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Yanliang Xie | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Lingling Luo | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Hailin Xie | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Lili Deng | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Youwei Yang | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Chao Liang | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Shoucheng He | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| Xufu Yin | 5,681,818 | 4.83 | % | 5,681,818 | 0 | *% | ||||||||||||||
| * | Less than 1% |
| (1) | The selling shareholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
|
| (2) | As of the date of this prospectus, a total of 117,701,969 Ordinary Shares are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1). For each beneficial owner above, any securities that are exercisable or convertible within 60 days have been included in the denominator. |
| (3) | Represents the total number of Ordinary Shares issued and owned by each of the selling shareholders. |
| (4) | We have assumed that all Ordinary Shares held by the selling shareholders will be sold in this offering. |
16
We are registering our Ordinary Shares issued to permit the resale of these Ordinary Shares by the holders of the Ordinary Shares from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of these Ordinary Shares. We will bear all fees and expenses incident to our obligation to register these shares of our Ordinary Shares.
The selling shareholders may sell all or a portion of the Ordinary Shares held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Ordinary Shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Ordinary Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:
| ● | on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
| ● | in the over-the-counter market; |
| ● | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| ● | through the writing or settlement of options, whether such options are listed on an options exchange or otherwise; |
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately negotiated transactions; |
| ● | short sales made after the date this registration statement is declared effective by the SEC; |
| ● | broker-dealers may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share; |
| ● | a combination of any such methods of sale; and |
| ● | any other method permitted pursuant to applicable law. |
The selling shareholders may also sell Ordinary Shares under Rule 144 promulgated under the Securities Act, if available, rather than under this prospectus. In addition, the selling shareholders may transfer the Ordinary Shares by other means not described in this prospectus. If the selling shareholders effect such transactions by selling Ordinary Shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the Ordinary Shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the Ordinary Shares or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Ordinary Shares in the course of hedging in positions they assume. The selling shareholders may also sell Ordinary Shares short and deliver Ordinary Shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge Ordinary Shares to broker-dealers that in turn may sell such shares.
17
The selling shareholders may pledge or grant a security interest in some or all of the Ordinary Shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Ordinary Shares from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the Ordinary Shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
To the extent required by the Securities Act and the rules and regulations thereunder, the selling shareholders and any broker-dealer participating in the distribution of the Ordinary Shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the Ordinary Shares is made, a prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of Ordinary Shares being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws of some states, the Ordinary Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Ordinary Shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance that any selling shareholder will sell any or all of the Ordinary Shares registered pursuant to the registration statement, of which this prospectus forms a part.
The selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Ordinary Shares by the selling shareholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the Ordinary Shares to engage in market-making activities with respect to the Ordinary Shares. All of the foregoing may affect the marketability of the Ordinary Shares and the ability of any person or entity to engage in market-making activities with respect to the Ordinary Shares.
We will pay all expenses of the registration of the Ordinary Shares, estimated to be 13,000 in total, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the selling shareholders specifically for use in this prospectus.
Once sold under the registration statement, of which this prospectus forms a part, the Ordinary Shares will be freely tradable in the hands of persons other than our affiliates.
18
TAXATION
Information regarding taxation is set forth under the heading “Item 10.E. Taxation” in our Annual Report, as amended, on Form 20-F for the year ended October 31, 2022, which is incorporated in this prospectus by reference, as updated by our subsequent filings under the Exchange Act.
Certain legal matters governed by the laws of the Cayman Islands with respect to the validity of the offered securities will be opined upon for us by Maples and Calder (Hong Kong) LLP.
Our consolidated financial statements as of and for the years ended October 31, 2022 and 2021 incorporated by reference in this prospectus and have been so included in reliance on the report of WWC, P.C., an independent registered public accounting firm, given on the authority of said firm as experts in accounting and auditing. The current address of WWC is 2010 Pioneer Court, San Mateo, CA 94403.
19
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
Expenses of Issuance and Distribution
The following is a statement of the expenses to be incurred by us in connection with the registration of the securities under this registration statement, all of which will be borne by us. All amounts shown are estimates except for the SEC registration fee.
| SEC registration fee | $ | 12,143.46 | ||
| Legal fees and expenses | * | |||
| Accounting fees and expenses | * | |||
| Transfer agent fees and expenses | * | |||
| Miscellaneous | * | |||
| Total | $ | 12,143.46 |
20
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with them into this prospectus. This means that we can disclose important information about us and our financial condition to you by referring you to another document filed separately with the SEC instead of having to repeat the information in this prospectus. The information incorporated by reference is considered to be part of this prospectus and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except for information “furnished” to the SEC which is not deemed filed and not incorporated in this prospectus, after the date hereof but before the completion or termination of this offering:
| ● | the Company’s Annual Report on Form 20-F for the fiscal year ended October 22, 2022, filed with the SEC on March 15, 2023; |
| ● | our Reports on Form 6-K filed with the SEC on April 7, 2023, April 26, 2023, May 10, 2023, May 25, 2023, June 29, 2023 July 20, 2023, August 23, 2023, September 19, 2023, October 23, 2023, December 4, 2023, January 2, 2024 and January 17, 2024; and |
| ● | the description of the Company’s Ordinary Shares contained in the Company’s Registration Statement on Form 8-A12B (File No. 001-40848) filed with the SEC on May 11, 2021, pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description. |
We also incorporate by reference any future annual reports on Form 20-F we file with the SEC under the Exchange Act after the date of this prospectus and prior to the termination of the offering of securities by means of this prospectus, and any future reports of foreign private issuer on Form 6-K we furnish with the SEC during such period that are identified in such reports as being incorporated by reference in this prospectus.
Any statement contained in a document that we incorporate by reference herein will be modified or superseded for all purposes to the extent that a statement contained in this prospectus (or in any other document that is subsequently filed with the SEC and incorporated by reference herein prior to the termination of this offering) modifies or is contrary to that previous statement. Any statement so modified or superseded will not be deemed a part of this prospectus except as so modified or superseded.
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 our Corporate Secretary at No. 168 Qianjiang Nonchang Gengwen Road, Economic and Technological Development Zone, Xiaoshan District, Hangzhou City, Zhejiang Province, People’s Republic of China, 310000.
WHERE YOU CAN GET MORE INFORMATION
We have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities described in this prospectus and any accompanying prospectus supplement, as applicable. This prospectus and any accompanying prospectus supplement, which constitute a part of that registration statement, do not contain all of the information set forth in that registration statement and its exhibits. For further information with respect to us and our securities, you should consult the registration statement and its exhibits.
We are subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, we also must file reports with, and furnish other information to, the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as U.S. companies. However, we file with the SEC an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and we submit to the SEC, on Form 6-K, unaudited quarterly financial information.
You may read and copy any document we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains an internet site (www.sec.gov) that makes available reports and other information that we file or furnish electronically with it.
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Amended and Restated Memorandum and Articles of Association permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from dishonesty or fraud which may attach to such directors or officers. This standard of conduct is generally the same as permitted under Delaware corporate law for a Delaware corporation. In addition, we entered into indemnification agreements with our directors and senior executive officers that will provide such persons with additional indemnification beyond that provided in our Amended and Restated Memorandum and Articles of Association.
We have entered into separate indemnity agreements with our directors and officers to indemnify each of them against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.
We have maintained directors’ and officers’ liability insurance for our directors and officers since September 28, 2021.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
At present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be required or permitted. We are not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.
II-1
Item 9. Exhibits
The following exhibits are attached hereto:
| + | Filed herewith |
| * | To be filed, if applicable, after effectiveness of this registration statement by an amendment to the registration statement or incorporated by reference to a report on Form 6-K filed in connection with an underwritten offering of the shares offered hereunder. |
| ** | Filed Previously |
II-2
Item 10. Undertakings.
The undersigned registrant hereby undertakes:
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement, |
provided, however, that subsections (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those subsections is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933 need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933 if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. |
| (5) | That, for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser: |
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was deemed part of and included in this registration statement. |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of this registration statement in reliance on Rule 430B relating to an offer made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933, as amended, shall be deemed to be part of and included in this registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
II-3
| (6) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933, as amended, to any purchaser in the initial distribution of the securities: |
The undersigned registrant undertakes that in an offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (7) | That, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended), that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (8) | Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
II-4
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the People’s Republic of China, on January 24, 2024.
| Jiuzi Holdings Inc. | ||
| By: | /s/ Tao Li | |
| Tao Li | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| By: | /s/ Francis Zhang | |
| Francis Zhang | ||
| Chief Financial Officer | ||
| (Principal Accounting Officer) | ||
|
Signature |
Title |
Date | ||
|
/s/ Tao Li Lei Wang |
Chief Executive Officer and Director (Principal Executive Officer) | January 24, 2024 | ||
|
/s/ Francis Zhang Francis Zhang |
Chief Financial Officer (Principal Financial and Accounting Officer) | January 24, 2024 | ||
|
/s/ Shuibo Zhang Shuibo Zhang |
Chairman of the Board | January 24, 2024 | ||
| /s/ Yi Zhu | Independent Director | January 24, 2024 | ||
| Yi Zhu | ||||
| /s/ Zhenhao Qiu | Independent Director | January 24, 2024 | ||
| Zhenhao Qiu | ||||
| /s/ Jehn Min Lim | Independent Director | January 24, 2024 | ||
| Jehn Min Lim |
II-5
SIGNATURE OF AUTHORIZED UNITED STATES REPRESENTATIVE
Pursuant to the Securities Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America, has signed this registration statement thereto in Newark, Delaware on January 24, 2024.
| Authorized U.S. Representative | ||
| Puglisi & Associates | ||
| By: | /s/ Donald J. Puglisi | |
| Name: | Donald J. Puglisi | |
| Title: | Managing Director | |
II-6
Exhibit 5.1
| Our ref | JVZ/776654-000001/28452982v2 |
Jiuzi Holdings Inc.
No.168 Qianjiang Nongchang Gengwen Road, 15th Floor
Economic and Technological Development Zone
Xiaoshan District, Hangzhou City
Zhejiang Province 310000
People’s Republic of China
24 January 2024
Dear Sirs
Jiuzi Holdings Inc.
We have acted as Cayman Islands legal advisers to Jiuzi Holdings Inc. (the “Company”) in connection with the Company’s registration statement on Form F-3, including all amendments or supplements thereto (the “Registration Statement”), filed on 24 January 2024 with the Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended to date relating to the resale by certain selling shareholders named in the Registration Statement (the “Selling Shareholders”) of up to an aggregate of 113,636,360 ordinary shares, par value US$0.00015 per share in the Company (the “Shares”).
We are furnishing this opinion as Exhibits 5.1 to the Registration Statement.
| 1 | Documents Reviewed |
For the purposes of this opinion, we have reviewed only originals, copies or final drafts of the following documents:
1.1 The certificate of incorporation of the Company dated 10 October 2019 issued by the Registrar of Companies in the Cayman Islands.
1.2 The third amended and restated memorandum and articles of association of the Company adopted by a special resolution passed on 30 November 2023 (the “Memorandum and Articles”).
1.3 The written resolutions of the board of directors of the Company (the “Board”) dated 12 January 2024 (the “Resolutions”).
1.4 A certificate from a director of the Company, a copy of which is attached hereto (the “Director’s Certificate”).
1.5 A certificate of good standing dated 11 January 2024, issued by the Registrar of Companies in the Cayman Islands (the “Certificate of Good Standing”).
1.6 The Registration Statement.
1.7 The Prospectus Supplement.
1.8 Executed copies of the transaction documents listed in the Schedule (the “Transaction Documents”).
| 2 | Assumptions |
The following opinions are given only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving the following opinions, we have relied (without further verification) upon the completeness and accuracy, as at the date of this opinion letter, of the Director’s Certificate and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
2.1 Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals.
2.2 All signatures, initials and seals are genuine.
2.3 The Transaction Documents have been or will be authorised and duly executed and unconditionally delivered by or on behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of the Cayman Islands).
2.4 The Transaction Documents are, or will be, legal, valid, binding and enforceable against all relevant parties in accordance with their terms under the laws of the State of New York and all other relevant laws (other than, with respect to the Company, the laws of the Cayman Islands).
2.5 The choice of the laws of the State of New York as the governing law of the Transaction Documents has been made in good faith and would be regarded as a valid and binding selection which will be upheld by the state and federal courts sitting in the City of New York, Borough of Manhattan and any other relevant jurisdiction (other than the Cayman Islands) as a matter of the laws of the State of New York and all other relevant laws (other than the laws of the Cayman Islands).
2.6 The Company will have sufficient authorized but unissued Shares in its authorized share capital to enable the Company to issue the Shares.
2.7 The Company will receive money or money’s worth in consideration for the issue of the Shares, and none of the Shares will be issued for less than their par value.
2.8 The capacity, power, authority and legal right of all parties under all relevant laws and regulations (other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally deliver and perform their respective obligations under the Transaction Documents.
2.9 There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Transaction Documents.
2.10 No monies paid to or for the account of any party under the Transaction Documents or any property received or disposed of by any party to the Transaction Documents in each case in connection with the Transaction Documents or the consummation of the transactions contemplated thereby represent or will represent proceeds of criminal conduct or criminal property or terrorist property (as defined in the Proceeds of Crime Act (As Revised) and the Terrorism Act (As Revised), respectively).
2
2.11 There is nothing under any law (other than the laws of the Cayman Islands) which would or might affect the opinions set out below. Specifically, we have made no independent investigation of the laws of the State of New York.
| 3 | Opinions |
Based upon, and subject to, the foregoing assumptions and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of the opinion that:
3.1 The Company has been duly incorporated as an exempted company with limited liability and is validly existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands.
3.2 The authorised share capital of the Company is US$150,000.00 divided into 1,000,000,000 Shares each of a par value of US$0.00015 each.
3.3 The issue and allotment of the Shares to be offered and sold by the Selling Shareholders as contemplated in the Registration Statement have been duly authorised. The Shares are legally issued and allotted and (assuming the purchase price therefor has been paid in full) fully paid and non-assessable.
| 4 | Qualifications |
The opinions expressed above are subject to the following qualifications:
4.1 To maintain the Company in good standing with the Registrar of Companies under the laws of the Cayman Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law.
4.2 Under the Companies Act, the register of members of a Cayman Islands company is by statute regarded as prima facie evidence of any matters which the Companies Act directs or authorises to be inserted therein. A third party interest in the shares in question would not appear. An entry in the register of members may yield to a court order for rectification (for example, in the event of fraud or manifest error).
4.3 The phrase “non-assessable” means, with respect to the Shares in the Company, that a shareholder shall not, solely by virtue of its status as a shareholder, be liable for additional assessments or calls on the Shares by the Company or its creditors (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).
4.4 We express no opinion as to the meaning, validity or effect of any references to foreign (i.e. non-Cayman Islands) statutes, rules, regulations, codes, judicial authority or any other promulgations and any references to them in the Transaction Documents.
Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject of this opinion.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our name under the headings “Enforceability of Civil Liabilities”, “Taxation” and “Legal Matters” and elsewhere in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Maples and Calder (Hong Kong) LLP
3
Schedule
Transaction Documents
| 1. | Securities Purchase Agreement dated 10 October 2023 entered into between, among others, the Company and the Purchasers (the “Securities Purchase Agreement”). |
| 2. | Form of Warrant to be signed by the Company. |
4
Director’s Certificate
Director’s Certificate
19 January 2024
| To: | Maples and Calder (Hong Kong) LLP 26th Floor, Central Plaza |
18 Harbour Road
Wanchai, Hong Kong
Dear Sirs
Jiuzi Holdings Inc. (the “Company”)
I, the undersigned, being a director of the Company, am aware that you are being asked to provide a legal opinion (the “Opinion”) in relation to certain aspects of Cayman Islands law. Capitalised terms used in this certificate have the meaning given to them in the Opinion. I hereby certify that:
| 1 | The Memorandum and Articles remain in full and effect and are unamended. |
| 2 | The Resolutions were duly passed in the manner prescribed in the Memorandum and Articles (including, without limitation, with respect to the disclosure of interests (if any) by directors of the Company) and have not been amended, varied or revoked in any respect. |
| 3 | The minute book and corporate records of the Company as maintained at its registered office in the Cayman Islands and made available to you are complete and accurate in all material respects, and all minutes and resolutions filed therein represent a complete and accurate record of all meetings of the Shareholders and directors (or any committee thereof) of the Company (duly convened in accordance with the Memorandum and Articles) and all resolutions passed at the meetings or passed by written resolution or consent, as the case may be. |
| 4 | The authorised share capital of the Company is US$150,000.00 divided into 150,000,000 Shares each of a par value of US$0.001 each. |
| 5 | The shareholders of the Company have not restricted or limited the powers of the directors in any way and there is no contractual or other prohibition (other than as arising under Cayman Islands law) binding on the Company prohibiting it from issuing and allotting the Shares or otherwise performing its obligations under the Registration Statement. |
| 6 | The directors of the Company at the date of the Resolutions and this Certificate were and are as follows: Shuibo Zhang, Tao Li, Jehn Min Lim, Yi Zhu, and Zhenhao Qiu. |
| 7 | All of the issued shares in the capital of the Company have been duly and validly authorised and issued and are fully paid and non-assessable (meaning that no further sums are payable to the Company on such shares and the Company has received payment therefor). |
| 8 | Each director considers the transactions contemplated by the Registration Statement to be of commercial benefit to the Company and has acted bona fide in the best interests of the Company, and for a proper purpose of the Company in relation to the transactions which are the subject of the Opinion. |
| 9 | To the best of my knowledge and belief, having made due inquiry, the Company is not the subject of legal, arbitral, administrative or other proceedings in any jurisdiction and neither the Directors nor Shareholders have taken any steps to have the Company struck off or placed in liquidation. Further, no steps have been taken to wind up the Company or to appoint restructuring officers or interim restructuring officers, and no receiver has been appointed in relation to any of the Company’s property or assets. |
| 10 | The Company is not subject to the requirements of Part XVIIA of the Companies Act (As Revised). |
I confirm that you may continue to rely on this Certificate as being true and correct on the day that you issue the Opinion unless I shall have previously notified you personally to the contrary.
[signature page follows]
| Signature: | /s/ Tao Li | |
| Name: | Tao Li | |
| Title: | Director |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation of our report dated March 15, 2023 in the Registration Statement on Form F-3, under the Securities Act of 1933 with respect to the consolidated balance sheets of Jiuzi Holdings, Inc., its subsidiaries, and its variable interest entities as of October 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended October 31, 2022, and the related notes (collectively referred to as financial statements) included herein.
| /s/ WWC, P.C. | |
| San Mateo, California | WWC, P.C. |
| January 24, 2024 | Certified Public Accountants |
| PCAOB ID: 1171 |
